Benjamin Franklin Bancorp Reports Results for Second Quarter of 2008; Declares Quarterly Dividend

Business Wire, July 23, 2008

Non-interest income decreased by $289,000, to $1.5 million in the 2008 second quarter from $1.8 million in the second quarter of 2007. The most significant reason for the decline is a $301,000 decrease in ATM servicing fees, caused by both a reduction in the average cash outstanding under the program and contractual reductions in the yield earned on those balances. The yield on ATM cash balances is tied to the prime rate, which has declined by 325 basis points since the second quarter of 2007. Other noteworthy changes in non-interest income, comparing the second quarter of 2008 against 2007 were: a) a $106,000 increase in deposit account service fees, caused primarily by an increase in fees earned for cash management services provided to business customers and in overdraft fees, and b) a $111,000 decrease in gains earned on sales of residential mortgage loans, the result of the Bank's decision in late 2007 to hold most new residential loan production in portfolio.

The Company's operating expenses decreased by $515,000 or 8.0% in the second quarter of 2008, compared to the second quarter of 2007. The reduction in operating expenses contributed to a marked improvement in the Company's efficiency ratio, to 72.6% from 80.3% in the second quarter of 2007. The largest contributor to this $515,000 decline was a $424,000 decrease in salaries and benefits, supplemented by smaller reductions in data processing, professional fees and marketing expenses. These year-over-year savings are due primarily to cost containment measures instituted by the Company in the second half of 2007. Within salaries and benefits, most of the reduction was in benefits costs (specifically in employee retirement costs, medical benefits and stock incentive expenses). Other general and administrative expenses increased by $127,000 year-over-year, reflecting an increase in the reserve for losses on unfunded loan commitments, offset in part by decreases in expenses associated with the Bank's ATM cash management program.

Certain statements herein constitute "forward-looking statements" and actual results may differ from those contemplated by these statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the businesses in which Benjamin Franklin Bancorp is engaged and changes in the securities market. The Company disclaims any intent or obligation to update any forward-looking statements, whether in response to new information, future events or otherwise.

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