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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED SEPTEMBER 30, 2005


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-51194

Benjamin Franklin Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)


Massachusetts		04 -3336598
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

58 Main Street, Franklin, MA		02038
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (617) 528-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Shares outstanding of the registrant’s common stock (no par value) at November 14, 2005: 8,488,898

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BENJAMIN FRANKLIN BANCORP, INC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	September 30,			December 31,
	2005			2004
	(In thousands)
ASSETS

Cash and due from banks	$	20,641		$	8,691
Cash supplied by CSSI to ATM customers		27,508			—
Short-term investments		13,546			5,513

Total cash and cash equivalents		61,695			14,204

Securities available for sale, at fair value		117,105			86,070
Securities held to maturity, at amortized cost		133			217
Restricted equity securities, at cost		10,015			6,975

Total securities		127,253			93,262

Loans:
Residential real estate mortgage		290,195			241,090
Commercial real estate mortgage		215,776			85,911
Construction mortgage		47,297			28,651
Commercial business		18,931			4,375
Consumer		35,226			25,370
Net deferred loan costs		1,292			1,148

Total loans		608,717			386,545
Allowance for loan losses		(5,631	)		(3,172	)

Loans, net		603,086			383,373

Premises and equipment, net		9,217			11,147
Accrued interest receivable		2,988			1,490
Goodwill		33,762			4,248
Core deposit intangible		4,489			—
Bank-owned life insurance		7,386			7,182
Other assets		6,299			2,487

	$	856,175		$	517,393


LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits:
Regular savings accounts	$	103,455		$	95,875
Money market accounts		99,243			53,167
Now accounts		29,508			22,460
Demand deposit accounts		127,425			87,776
Time deposit accounts		244,855			137,221

Total deposits		604,486			396,499

Short-term borrowings		—			4,250
Long-term debt		137,926			81,000
Other liabilities		6,031			4,316

Total liabilities		748,443			486,065


Common stock, no par value; authorized 75,000,000 shares; issued 8,488,898 shares at September 30, 2005		—			—
Additional paid-in capital		82,845			—
Unallocated common shares held by ESOP; 422,073 shares at September 30, 2005		(4,797	)		—
Retained earnings		31,860			32,997
Accumulated other comprehensive loss		(2,176	)		(1,669	)

Total stockholders’ equity		107,732			31,328

	$	856,175		$	517,393

See accompanying notes to condensed consolidated financial statements.

BENJAMIN FRANKLIN BANCORP, INC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2005		2004		2005			2004
	(In thousands)				(In thousands)
Interest and dividend income:
Loans, including fees	$	8,716	$	4,578	$	21,656		$	12,567
Debt securities		1,103		744		2,657			2,374
Equity securities		110		76		271			175
Short-term investments		100		21		344			107

Total interest and dividend income		10,029		5,419		24,928			15,223


Interest expense:
Interest on deposits		2,375		1,085		5,798			3,221
Interest on short-term borrowings		33		—		55			—
Interest on long-term debt		1,301		672		3,068			1,804

Total interest expense		3,709		1,757		8,921			5,025

Net interest income		6,320		3,662		16,007			10,198

Provision for loan losses		152		150		648			470

Net interest income, after provision for loan losses		6,168		3,512		15,359			9,728

Other income (charges):
Deposit service fees		356		198		857			682
Loan servicing fees		126		11		331			188
CSSI ATM servicing fees		493		—		1,002			—
Gain on sale of loans, net		52		8		72			106
Gain on sales of securities, net		—		—		—			8
Loss on sale/write-down of bank-owned land, net		—		—		(1,020	)		—
Income from bank-owned life insurance		83		48		204			145
Miscellaneous		204		179		605			538

Total other income		1,314		444		2,051			1,667


Operating expenses:
Salaries and employee benefits		2,529		1,962		7,010			5,679
Occupancy and equipment		654		289		1,753			1,035
Data processing		468		345		1,339			1,047
Professional fees		257		74		624			191
Contribution to Benjamin Franklin Bank Charitable Foundation		—		—		4,000			—
Amortization of core deposit intanglible		445		45		1,044			136
Other general and administrative		986		430		2,174			1,369

Total operating expenses		5,339		3,145		17,944			9,457


Income (loss) before income taxes		2,143		811		(534	)		1,938

Provision for income taxes		814		277		348			626

Net income (loss)	$	1,329	$	534	$	(882	)	$	1,312


Earnings per share
Basic	$	0.16		n/a		n/a			n/a
Diluted	$	0.16		n/a		n/a			n/a

Weighted-average shares outstanding:
Basic		8,148,113		n/a		n/a			n/a
Diluted		8,148,113		n/a		n/a			n/a

See accompanying notes to condensed consolidated financial statements.

BENJAMIN FRANKLIN BANCORP, INC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

(Unaudited)

(Dollars in thousands)


							Unallocated						Accumulated
					Additional		Common						Other			Total
	Common Stock				Paid-in		Stock Held			Retained			Comprehensive			Stockholders’
	Shares		Amount		Capital		by ESOP			Earnings			Loss			Equity
Balance at December 31, 2003		—	$	—	$	—	$	—		$	31,308		$	(2,007	)	$	29,301
Comprehensive income (loss):
Net income		—		—		—		—			1,312			—			1,312
Net unrealized loss on securities available for sale, net of reclassification adjustment and tax effects											—			(27	)		(27	)

Total comprehensive loss																	1,285

Balance at September 30, 2004		—	$	—	$	—	$	—		$	32,620		$	(2,034	)	$	30,586


Balance at December 31, 2004		—	$	—	$	—	$	—		$	32,997		$	(1,669	)	$	31,328

Comprehensive loss:
Net loss		—		—		—		—			(882	)		—			(882	)
Net unrealized gain on securities available for sale, net of tax effects		—		—		—		—			—			(507	)		(507	)

Total comprehensive loss																	(1,389	)

Dividends paid		—		—		—		—			(255	)		—			(255	)
Issuance of common stock for initial public offering, net of expenses of $2.1 million		5,577,419		—		53,721		—			—			—			53,721
Issuance of common stock to Benjamin Frankin Bank Charitable Foundation		400,000		—		4,000		—			—			—			4,000
Issuance of common stock for acquisition of Chart Bank, A Cooperative Bank		2,511,479		—		25,115		—			—			—			25,115
Stock purchased for ESOP				—				(4,911	)								(4,911	)
Release of ESOP stock				—		9		114			—			—			123

Balance at September 30, 2005		8,488,898	$	—	$	82,845	$	(4,797	)	$	31,860		$	(2,176	)	$	107,732

See accompanying notes to condensed consolidated financial statements.

BENJAMIN FRANKLIN BANCORP, INC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30,
	2005			2004
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	(882	)	$	1,312
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Amortization of securities, net		99			703
Amortization (accretion) of loans, net		(88	)		214
Loss (gain) on sales of securities, net		—			(8	)
Provision for loan losses		648			470
Accretion of certificates of deposit and borrowings		(249	)		—
Amortization of mortgage servicing rights		214			423
Depreciation expense		709			509
Amortization of core deposit intangible		1,044			136
Amortization of unearned compensation		123			—
Deferred income tax (benefit) provision		(1,760	)		48
Income from bank-owned life insurance		(204	)		(145	)
Gains on sales of loans, net		(72	)		(106	)
Loans originated for sale		(11,203	)		(28,566	)
Proceeds from sales of loans		11,275			28,672
Increase in accrued interest receivable		(1,498	)		(107	)
Gain on sale of bank-owned land		(380	)		—
Writedown of bank-owned land		1,400			—
Charitable Foundation Contribution		4,000			—
Other, net		1,980			(804	)

Net cash provided by operating activities		5,156			2,751


Cash flows from investing activities:
Activity in available-for-sale securities:
Sales		—			2,015
Maturities, calls, and principal repayments		34,127			35,829
Purchases		(33,495	)		(30,411	)
Principal repayments on held-to-maturity securities		84			120
Net change in restricted equity securities		798			360
Purchases of mortgage loans		—			(34,207	)
Loan originations, net		(36,237	)		(53,131	)
Proceeds from sales of bank-owned land		868			—
Additions to premises and equipment		(343	)		(590	)
Purchases of bank-owned life insurance		—			(1,400	)
Net cash purchased in acquisition of Chart Bank		9,879			—

Net cash used for investing activities		(24,319	)		(81,415	)

See accompanying notes to condensed consolidated financial statements.

BENJAMIN FRANKLIN BANCORP, INC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Concluded)

(Unaudited)


	Nine Months Ended September 30,
	2005			2004
	(In thousands)
Cash flows from financing activities:
Net increase (decrease) in deposits		(9,406	)		19,305
Net proceeds (repayments) from short-term borrowings		(24,750	)		29,000
Net proceeds from long-term debt		52,000			10,000
Net proceeds from common stock offering		53,721			—
Acquisition of Common Stock by ESOP		(4,911	)		—

Net cash provided by financing activities		66,654			58,305


Net change in cash and cash equivalents		47,491			(20,359	)

Cash and cash equivalents at beginning of the period		14,204			35,485


Cash and cash equivalents at end of the period	$	61,695		$	15,126


Supplemental cash flow information:
Interest paid on deposits	$	5,794		$	3,222
Interest paid on short-term borrowings		55			39
Interest paid on long-term debt		2,873			1,726
Income taxes paid (refunded)		665			640

Assets acquired and liabilities assumed were as follows:
Fair value of noncash assets acquired	$	259,008
Fair value of liabilities assumed		243,772
Fair value of common stock issued		25,115

See accompanying notes to condensed consolidated financial statements.

BENJAMIN FRANKLIN BANCORP, INC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.		*Basis of presentation and consolidation*

		The accompanying unaudited consolidated interim financial statements include the accounts of Benjamin Franklin Bancorp, Inc and subsidiaries (the “Company’’) including its main wholly-owned subsidiary, Benjamin Franklin Bank (the “Bank’’). These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation have been included.

		These consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2004.

		*Stock Conversion and Merger* The Company completed its mutual-to-stock conversion and related stock offering with the issuance of 5,977,419 shares (including 400,000 shares contributed to the Benjamin Franklin Bank Charitable Foundation) on April 4, 2005. An additional 2,511,479 shares were issued in connection with the acquisition of Chart Bank, which was consummated immediately following the stock conversion. The cash portion of the consideration paid to Chart Bank shareholders totaled $21,534,960. The Company’s stock began trading on April 5, 2005, on the Nasdaq National Market, under the symbol “BFBC”.

		In connection with the stock conversion, the Company established the Benjamin Franklin Bank Charitable Foundation (the “Foundation”), funded with a contribution of 400,000 shares of newly-issued Benjamin Franklin common stock. This contribution resulted in the recognition of expense in the second quarter of 2005 equal to the $10 offering price for each of the shares contributed, net of tax benefits. The effect of this transaction on the Company’s results for the second quarter was $2.6 million ($4.0 million expense, net of $1.4 million in tax benefits). The Foundation provides funding to support charitable causes and community development activities in the communities served by the Company.

		The acquisition of Chart Bank was accounted for using the purchase method of accounting in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations. The allocation of purchase price is as follows:


	Chart Bank		Purchase			Final Allocation of
	Balance at		Accounting			Purchase
	April 4, 2005		Adjustments			Price
			(In thousands)
Assets:
Cash and cash equivalents	$	35,643	$	(4,229	)	$	31,414
Securities		36,743		(607	)		36,136
Loans, less allowance for loan losses		185,022		(987	)		184,035
Premises and equipment		2,054		569			2,623
Goodwill		—		29,515			29,515
Core deposit intangible		—		5,488			5,488
Other assets		1,211					1,211

		260,673		29,749			290,422

Liabilities:
Deposits		216,903		473			217,376
Borrowed funds		25,500		(101	)		25,399
Other liabilities		725		272			997

		243,128		644			243,772

Net assets acquired						$	46,650

The goodwill created in the acquisition of Chart Bank, in the amount of $29.5 million, is not tax deductible. In accordance with SFS No. 142, “Goodwill and Other Intangibles”, goodwill will not be amortized, but will be subject to periodic testing for impairment. Any impairment detected in the future as a result of such testing would result in a charge to earnings. Certain other purchase accounting adjustments are being amortized/accreted into income over the estimated lives of those adjustments. The following table summarizes the Company’s current estimates for the future amortization or accretion of the most significant of the purchase accounting adjustments:


				Estimated Accretion/(Amortization)
	Actual-
	Quarter			Three Months
	Ended			Ended			Year Ended			Year Ended			Year Ended			Year Ended			After
	September 30,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2005			2005			2006			2007			2008			2009			2009
	(In thousands)
Core deposit intangible	$	(445	)	$	(356	)	$	(1,064	)	$	(779	)	$	(574	)	$	(408	)	$	(1,308	)

Loan discount		144			126			337			154			53			21			16

Investments discount		93			98			252			62			8			—			—

Time deposit premium		131			67			66			31			20			13

Borrowed funds discount		(11	)		(10	)		(33	)		(20	)		(11	)

The forecasted accretion and amortization of the fair market value adjustments for loans, investments, time deposits and borrowed funds approximates the level yield method and may vary in the future if actual prepayments or other dispositions differ from current estimates. The core deposit intangible is

		being amortized on an accelerated basis over its estimated life of 15 years. The core deposit intangible will be tested periodically for impairment which, if detected, would result in a charge to earnings.

		The results of Chart Bank are included in the results of the Company subsequent to April 3, 2005. The unaudited condensed pro forma consolidated statements of operations for the nine months ended September 30, 2005 and 2004 assume that Chart Bank had been acquired as of January 1, 2005 and 2004. The pro forma information is theoretical in nature and is not necessarily indicative of future consolidated results of operations of the Company or the consolidated results of operations that would have resulted had the Company acquired the stock of Chart Bank during the periods presented:


	For the Nine Months Ended Sept 30,
	2005			2004
	(In thousands except share and per share amounts)
Interest and dividend income	$	28,346		$	24,079
Interest expense		9,923			7,454


Net interest income		18,423			16,625

Provision for loan losses		678			560
Non-interest income		2,776			3,570
Non-interest expense		21,232			16,592


Income (loss) before income taxes		(711	)		3,043

Income tax provision		556			1,177


Net income (loss)	$	(1,267	)	$	1,866


Earnings (loss) per share — diluted	$	(0.16	)	$	0.23


Weighted average shares outstanding — diluted		8,124,296			8,124,296

The pro forma results of operations for the nine months ended September 30, 2005 include a net $1.0 million loss on sale/write-down of bank-owned land and a $4.0 million expense item for the contribution of 400,000 shares of Benjamin Franklin Bancorp common stock to the Foundation. Tax benefits have been reflected for the $4.0 million Foundation contribution, but no tax benefit has been recognized for the $1.0 loss on sale/write-down of bank owned land. These results also include $709,000 of non-tax deductible merger-related expenses recorded by Chart Bank during the period from January 1, 2005 to April 4, 2005.

Recent Accounting Pronouncements

On December 16, 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share-Based Payment,” which changes, among other things, the manner in which share-based compensation, such as stock options, will be accounted for by both public and non-public companies. SFAS No. 123R will be effective beginning with the first interim or annual reporting period of the Company’s first fiscal year that begins after June 15, 2005, which would be January 1, 2006 for the Company. For public companies, the cost of employee services

		received in exchange for equity instruments including options and restricted stock awards generally will be measured at fair value at the grant date. The grant date fair value will be estimated using option-pricing models adjusted for the unique characteristics of those options and instruments, unless observable market prices for the same or similar options are available. The cost will be recognized over the requisite service period, often the vesting period, and will be re-measured subsequently at each reporting date through settlement date. On March 29, 2005, the SEC staff issued Staff Accounting Bulletin No. 107 (“SAB 107”). SAB 107 expresses the views of the SEC staff regarding SFAS No. 123R and certain rules and regulations and provides the SEC’s view regarding the valuation of share-based payment arrangements for public companies.

		The provisions of SFAS No. 123R and SAB 107 do not have an impact on the Company’s results of operations at this time. However, as disclosed in the prospectus used in the Company’s stock offering related to the mutual-to-stock conversion and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, the Company expects to adopt a stock-based incentive plan in 2006, subject to shareholder approval. The granting of restricted stock awards and stock options under the stock-based incentive plan will increase the Company’s compensation costs in the periods in which such awards and options vest.

		In May 2005, FASB issued SFAS No. 154, “Accounting Changes and Error Corrections” (“SFAS 154”). This Statement replaces Accounting Principles Board Opinion No. 20 (“APB 20”), “Accounting Changes” and Statement of Financial Accounting Standard No. 3, “Reporting Accounting Changes in Interim Financial Statements”, and changes the requirements for the accounting for and reporting of a change in accounting principle. In accordance with the prior guidance of APB 20, most voluntary changes in an accounting principle required recognizing the cumulative effect of a change in accounting principle in net income in the period of change. SFAS 154 requires retrospective application to prior periods’ financial statements for the direct effects of a change in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. Indirect effects of a change in accounting principle should be recognized in the period of accounting change. SFAS 154 carries forward the guidance of APB 20 relating to the reporting for correction of an error in previously issued financial statements, change in accounting estimate and the justification requirement for a change in accounting principle on the basis of preferability. Provisions of this statement are effective for accounting changes made in the fiscal years beginning after December 15, 2005. At this time, the Company is uncertain how the application of SFAS 154 will impact prior period financial statements for the implementation of future accounting pronouncements.

2.		*Commitments*

		Outstanding loan commitments totaled $122.3 million at September 30, 2005, compared to $70.6 million as of December 31, 2004. Loan commitments consist of commitments to originate new loans as well as the outstanding undrawn portions of lines of credit.

		The Bank recently received approval from the Massachusetts Commissioner of Banks to open a new branch in Wellesley Hills, Massachusetts. It is anticipated that this branch will become operational in the second quarter of 2006. The annual direct costs of operating this branch are estimated at $610,000.

3.		*Earnings per share*

		Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Earnings per share were not meaningful for the nine months ended September 30, 2005 and for the 2004 periods presented, because the Company did not complete its public offering until April 4, 2005.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following analysis discusses the changes in financial position and results of operations of the Company, and should be read in conjunction with the Company’s unaudited consolidated interim financial statements and the notes thereto, appearing in Part I, Item 1 of this document.

Forward-Looking Statements

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 the Company is engaged and changes in the securities market.

Critical Accounting Policies

Critical accounting policies are those that involve significant judgments and assessments by management, and which could potentially result in materially different results under different assumptions and conditions. As discussed in the Company’s 2004 Annual Report on Form 10-K, the Company considers its critical accounting policies to be those associated with income taxes, intangible assets and the determination of the allowance for loan losses. The Company’s critical accounting policies have not changed since December 31, 2004.

Comparison of Financial Condition at September 30, 2005 and December 31, 2004

Overview

Total assets increased by $338.8 million, or 65.5%, from $517.4 million at December 31, 2004 to $856.2 million at September 30, 2005. The Chart Bank acquisition added $290.4 million to total assets on April 4, 2005, consisting primarily of loans ($184.0 million), investments ($39.3 million), and goodwill and other intangibles ($35.0 million). Funding liabilities added through the Chart Bank acquisition included $217.4 million in deposits and $25.4 million of borrowed funds. The mutual-to-stock conversion and acquisition added $82.8 million to stockholders’ equity. The Company has also grown internally since December 31, 2004, with additions to loans and cash/cash equivalents totaling $38.1 and $16.1 million, respectively. Funding that internal asset growth was $27.2 million of additional borrowed funds, offset by net of deposit outflows of $9.4 million.

Investment Activities

Cash and correspondent bank balances increased by $47.5 million to $61.7 million as of September 30, 2005 when compared to December 31, 2004. Of that increase, $27.5 million consists of cash supplied by Creative Strategic Solutions, Inc. (“CSSI”) to its ATM customers. CSSI is a wholly-owned subsidiary of Benjamin Franklin Bank that supplies cash to ATMs owned by independent service organizations and provides related cash management services to a nationwide customer base. Over the same period, short-term investments, comprised of overnight fed funds sold ($10.5 million) and money market funds ($3.0 million), increased $8.0 million to $13.5 million at September 30, 2005. The higher level of short-term investments at quarter-end was caused by normal fluctuations in the Bank’s short-term liquidity accounts.

At September 30, 2005, the Company’s investment portfolio amounted to $127.3 million, or 14.9% of total assets. The following table sets forth certain information regarding the amortized cost and market values of the Company’s investment securities at the dates indicated:


	At September 30, 2005				At December 31, 2004
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(In thousands)
Securities available for sale:
U.S. Government and agency obligations	$	76,162	$	75,649	$	33,607	$	33,306
Corporate bonds and other obligations		4,523		4,502		5,056		5,014
Municipal bonds		1,708		1,702		—		—
Mortgage-backed securities		37,097		35,252		49,246		47,750


Total available for sale securities	$	119,490	$	117,105	$	87,909	$	86,070


Securities held to maturity:

Mortgage-backed securities	$	133	$	133	$	217	$	221


Restricted equity securities:
Federal Home Loan Bank of Boston stock	$	7,497	$	7,497	$	4,459	$	4,459
Access Capital Strategies
Community Investment Fund		2,000		2,000		2,000		2,000
SBLI & DIF stock		518		518		516		516


Total equity securities	$	10,015	$	10,015	$	6,975	$	6,975

Increases in the investment portfolio during the nine months ended September 30, 2005 were the result of the acquisition of the Chart Bank securities portfolio, consisting primarily of U.S. Government and agency obligations.

Lending Activities

The Company’s net loan portfolio aggregated $603.1 million on September 30, 2005, or 70.4% of total assets on that date. The following table sets forth the composition of the loan portfolio at the dates indicated:


	At September 30, 2005						At December 31, 2004
	Amount			Percent			Amount			Percent
	(Dollars in thousands)
Mortgage loans on real estate:
Residential	$	290,195			47.77	%	$	241,090			62.56	%
Commercial		215,776			35.52	%		85,911			22.29	%
Construction		47,297			7.79	%		28,651			7.43	%
Home equity		32,915			5.42	%		23,200			6.02	%

		586,183			96.50	%		378,852			98.30	%


Other loans:
Commercial		18,931			3.12	%		4,375			1.14	%
Consumer		2,311			0.38	%		2,170			0.56	%

		21,242			3.50	%		6,545			1.70	%


Total loans		607,425			100.00	%		385,397			100.00	%


Deferred loan origination costs		1,292						1,148
Allowance for loan losses		(5,631	)					(3,172	)


Total loans, net	$	603,086					$	383,373

The net loan portfolio increased by $219.7 million, or 57.3%, during the first nine months of 2005. While the Chart Bank acquisition accounted for $184.0 million of that growth, another $35.7 million of net loan growth was generated internally, primarily in commercial real estate loans. With the addition of the Chart Bank loan portfolio and internal growth, commercial loans (including commercial real estate, construction and commercial business loans) have grown to 46.8% of total loans, compared to 30.9% at December 31, 2004. The Company remains committed to expanding its commercial lending business, and to that end has increased the size of its commercial lending staff to twelve at present, compared to four at year-end 2004. Commercial credit analysis, processing, review and monitoring resources have also been increased to support this effort.

Concurrent with its mutual-to-stock conversion and acquisition of Chart Bank, the Company increased its policy guideline for maximum loans to one borrower (or related entity) to $10.0 million. Exceptions to this limit require the approval of the Executive Committee of the Board prior to loan origination. As of September 30, 2005, Benjamin Franklin had no borrower relationships over the $10.0 million policy guideline. Benjamin Franklin Bank’s internal lending limit is lower than the Massachusetts legal lending limit, which is 20.0% of a bank’s surplus and capital stock accounts, or $18.2 million for Benjamin Franklin Bank as of September 30, 2005. The Company has also increased other loan authorities in light of its larger size and increased lending limit, including individual loan officer authorities and management Credit Committee authority.

Non-performing Assets

The table below sets forth the amounts and categories of the Company’s non-performing assets at the dates indicated. At each date presented, the Company had no troubled debt restructurings (loans for which a portion of interest or principal has been forgiven and loans modified at interest rates materially less than current market rates):


	At September 30, 2005			At December 31, 2004
	(In thousands)
Non-accrual loans:
Residential mortgage	$	184		$	—
Commercial mortgage		8			—
Construction		—			—
Commercial		274			334
Consumer and other		—			—

Total non-performing loans		466			334


Loans greater than 90 days delinquent and still accruing:
Residential mortgage		—			—
Commercial mortgage		—			—
Construction		—			—
Commercial		—			—
Consumer and other		—			3

Total loans 90 days and still accruing		—			3


Total non-performing assets	$	466		$	337


Ratios:
Non-performing loans to total loans		0.08	%		0.09	%
Non-performing assets to total assets		0.05	%		0.07	%

Allowance for Loan Losses

In originating loans, the Company recognizes that losses will be experienced on loans and that the risk of loss will vary with many factors, including the type of loan being made, the creditworthiness of the borrower over the term of the loan, general economic conditions and, in the case of a secured loan, the quality of the security for the loan over the term of the loan. The Company maintains an allowance for loan losses to absorb losses inherent in the loan portfolio, and as such, this allowance represents management’s best estimate of the probable known and inherent credit losses in the loan portfolio as of the date of the financial statements.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, portfolio volume and mix, geographic and large borrower concentrations, estimated credit losses based on internal and external portfolio reviews, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as doubtful, substandard or special mention. The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated

component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Impairment is measured on a loan by loan basis for commercial loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment disclosures. At September 30, 2005, impaired loans totaled $235,000 and in the aggregate carried a specific reserve allocation of $100,000, as compared to $334,000 of impaired loans with a specific reserve allocation of $210,000 at December 31, 2004.

While the Company believes that it has established adequate specific and general allowances for losses on loans, adjustments to the allowance may be necessary if future conditions differ substantially from the information used in making the evaluations. In addition, as an integral part of their examination process, the Company’s regulators periodically review the allowance for loan losses. These regulatory agencies may require the Company to recognize additions to the allowance based on their judgments of information available to them at the time of their examination, thereby negatively affecting the Company’s financial condition and earnings.

The following table sets forth activity in the Company’s allowance for loan losses for the periods indicated:


	At or For the						At or For the
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
	(In thousands)						(In thousands)
Balance at beginning of period	$	5,531		$	2,861		$	3,172		$	2,523

Allowance added from acquisition of Chart Bank		—			—			1,812			—


Charge-offs:
Mortgage loans on real estate		—			—			—			—

Other loans:
Commercial		(57	)		—			(68	)		—
Consumer		(5	)		(5	)		(8	)		(9	)

		(62	)		(5	)		(76	)		(9	)

Total charge-offs		(62	)		(5	)		(76	)		(9	)

Recoveries:
Mortgage loans on real estate		—			—			—			—

Other loans:
Commercial		8			7			68			28
Consumer		2			4			7			11

		10			10			75			39

Total recoveries		10			10			75			39

Net (charge-offs) recoveries		(52	)		5			(1	)		30
Provision for loan losses		152			150			648			470

Balance at end of period	$	5,631		$	3,017		$	5,631		$	3,023


Ratios:
Net (charge-offs) recoveries to average loans outstanding (annualized)		(0.03	%)		0.01	%		0.00	%		0.01	%
Allowance for loan losses to non-performing loans at end of period		1208.37	%		845.01	%		1208.37	%		846.85	%
Allowance for loan losses to total loans at end of period		0.93	%		0.80	%		0.93	%		0.81	%

Deposits

The following table sets forth the Company’s deposit accounts for the periods indicated:


	September 30,		% of			December 31,		% of
	2005		Total			2004		Total
	(In thousands)					(In thousands)
Deposit type:
Demand deposit accounts	$	127,425		21.08	%	$	87,776		22.14	%
NOW accounts		29,508		4.88			22,460		5.66
Regular savings accounts		103,455		17.11			95,875		24.18
Money market accounts		99,243		16.42			53,167		13.41

Total non-certificate accounts		359,631		59.49			259,278		65.39


Term certificates less than $100,000		149,504		24.74			97,114		24.49
Term certificates of $100,000 or more		95,351		15.77			40,107		10.12

Total certificate accounts		244,855		40.51			137,221		34.61


Total deposits	$	604,486		100.00	%	$	396,499		100.00	%

The $208.0 million increase in the Bank’s deposits is attributable to an increase of $217.4 million in deposits as a result of the Chart Bank acquisition, offset by a $9.4 million decline since December 31, 2004, due primarily to outflows of deposits in the former Chart Bank branches. These outflows occurred mainly in certificate accounts, and as a result of this and competitive pressures generally, the Bank has since increased interest rates on most certificate products. Some of those rate increases, particularly for short-term certificates, were significant, and may have the effect of narrowing the Bank’s net interest margin over the next twelve months. Interest rates paid by the Bank on money market accounts have tended to lag the rise in market interest rates over the past year. Management considers it likely that those rates may rise significantly in the coming months, another factor that may cause the net interest margin to narrow from its current level of 3.34%.

The Bank recently received approval from the Massachusetts Commissioner of Banks to open a new branch in Wellesley Hills, Massachusetts. It is anticipated that this branch will become operational in the second quarter of 2006. The annual direct costs of operating this branch are estimated at $610,000. The Company will continue to search for promising de novo branch locations, with the goal of identifying two to three additional sites over the next two years.

Borrowed Funds

Funds borrowed from the Federal Home Loan Bank of Boston (“FHLBB”) increased during the first nine months of 2005 by $52.7 million to $128.9 million at September 30, 2005. Of this increase, $25.4 million was provided by the Chart Bank acquisition. Of the borrowed funds acquired from Chart, $20.5 million matured during the second and third quarters of 2005. Those borrowings and the remainder of the increase, or $27.3 million, were placed in new FHLBB borrowings with original maturities of three to five years, in order to match the estimated repricing characteristics of the net growth in earning assets year to date. The $9.0 million balance in subordinated debt remained unchanged during the first nine months of 2005.

Stockholder’s Equity

Total stockholders’ equity was $107.7 million as of September 30, 2005, an increase of $76.4 million when compared to the balance at December 31, 2004. The increase was primarily attributable to the Company’s mutual-to-stock conversion and issuance of shares in connection with the acquisition of Chart Bank. The components of

the net increase were: a) the recording of common stock and additional paid-in capital in the initial public offering in the amount of $53.7 million, net of offering expenses of $2.1 million, b) shares issued to the Benjamin Franklin Bank Charitable Foundation in the amount of $4.0 million, c) shares issued to Chart Bank shareholders in the amount of $25.1 million, d) a net loss of $882,000, e) dividends paid in the amount of $255,000, f) a change of $507,000 in other comprehensive income resulting from a decrease in the fair market value of investments available for sale, and g) a decrease of $4.8 million, representing the $4.9 million purchase price of the shares purchased by the employee stock ownership plan, net of $123,000 attributable to shares released from the ESOP suspense account.

Comparison of Operating Results for the Three Months and Nine Months Ended September 30, 2005 and 2004

The Company earned net income of $1.3 million for the quarter ended September 30, 2005, an increase of $795,000 when compared to net income of $534,000 earned in the third quarter of 2004. The growth in net income was primarily due to the acquisition of the operations of Chart Bank and to internally generated growth. For the nine months ended September 30, 2005, the Company incurred a loss of 882,000, primarily as a result of two non-recurring charges incurred in the second quarter of 2005: i) a $4.0 million contribution made to the Benjamin Franklin Bank Charitable Foundation, and ii) the recognition of a net loss of $1.0 million on the sale/write-down of bank-owned land. Partially offsetting the non-recurring charges were significant increases in net interest income and non-interest income, due to the acquisition of the operations of Chart Bank and to internally generated balance sheet growth. Operating expenses also increased significantly when compared to the three and nine-month periods ended September 30, 2004, due to the addition of Chart Bank’s operations, as well as to higher costs related to generating internal growth and meeting the demands of operating as a public company.

Analysis of Net Interest Income

Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income also depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them.

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. Most average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense:


	Three Months Ended September 30,
	2005							2004
	Average							Average
	Outstanding							Outstanding
	Balance		Interest		Yield/Rate⁽¹⁾			Balance		Interest		Yield/Rate⁽¹⁾
Interest-earning assets:
Loans	$	607,136	$	8,716		5.70	%	$	365,231	$	4,578		4.99	%
Securities		128,734		1,213		3.74	%		103,982		820		3.14	%
Short-term investments		15,139		100		2.62	%		7,185		21		1.16	%

Total interest-earning assets		751,009		10,029		5.30	%		476,398		5,419		4.53	%
Non-interest-earning assets		111,195							30,449

Total assets	$	862,204						$	506,847


Interest-bearing liabilities:
Savings deposits	$	106,123		133		0.50	%	$	100,300		125		0.50	%
Money market		106,015		432		1.62	%		52,500		124		0.94	%
NOW accounts		36,438		12		0.13	%		23,736		9		0.15	%
Certificates of deposits		247,960		1,798		2.88	%		135,643		827		2.43	%

Total deposits		496,536		2,375		1.90	%		312,179		1,085		1.38	%
Borrowings		121,854		1,334		4.34	%		69,427		672		3.85	%

Total interest-bearing liabilities		618,390		3,709		2.38	%		381,606		1,757		1.83	%
Non-interest bearing liabilities		134,899							95,111

Total liabilities		753,289							476,717
Equity		108,915							30,130

Total liabilities and equity	$	862,204						$	506,847


Net interest income			$	6,320						$	3,662

Net interest rate spread ⁽²⁾						2.92	%						2.70	%
Net interest-earning assets ⁽³⁾	$	132,619						$	94,792

Net interest margin ⁽⁴⁾						3.34	%						3.06	%
Average interest-earning assets to interest-bearing liabilities						121.45	%						124.84	%


⁽¹⁾		Yields and rates for the three months ended September 30, 2005 and 2004 are annualized.

⁽²⁾		Net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities.

⁽³⁾		Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

⁽⁴⁾		Net interest margin represents net interest income as a percent of average interest-earning assets.


	Nine Months Ended September 30,
	2005							2004
	Average							Average
	Outstanding							Outstanding
	Balance		Interest		Yield/Rate⁽¹⁾			Balance		Interest		Yield/Rate⁽¹⁾
Interest-earning assets:
Loans	$	528,411	$	21,656		5.48	%	$	327,700	$	12,567		5.12	%
Securities		116,350		2,928		3.37	%		109,897		2,549		3.10	%
Short-term investments		19,230		344		2.39	%		15,382		107		0.93	%

Total interest-earning assets		663,991		24,928		5.02	%		452,979		15,223		4.49	%
Non-interest-earning assets		84,433							31,055

Total assets	$	748,424						$	484,034


Interest-bearing liabilities:
Savings deposits	$	103,492		391		0.50	%	$	99,172		369		0.50	%
Money market		93,744		1,099		1.57	%		51,779		331		0.85	%
NOW accounts		31,584		52		0.22	%		23,955		27		0.15	%
Certificates of deposits		211,602		4,256		2.69	%		133,492		2,494		2.50	%

Total deposits		440,422		5,798		1.76	%		308,398		3,221		1.40	%
Borrowings		100,931		3,123		4.14	%		53,421		1,804		4.51	%

Total interest-bearing liabilities		541,353		8,921		2.20	%		361,819		5,025		1.86	%
Non-interest bearing liabilities		125,076							92,257

Total liabilities		666,429							454,076
Equity		81,995							29,958

Total liabilities and equity	$	748,424						$	484,034


Net interest income			$	16,007						$	10,198

Net interest rate spread ⁽²⁾						2.82	%						2.63	%
Net interest-earning assets ⁽³⁾	$	122,638						$	91,160

Net interest margin ⁽⁴⁾						3.22	%						3.01	%
Average interest-earning assets to interest-bearing liabilities						122.65	%						125.20	%


⁽¹⁾		Yields and rates for the nine months ended September 30, 2005 and 2004 are annualized.

⁽²⁾		Net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities.

⁽³⁾		Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

⁽⁴⁾		Net interest margin represents net interest income as a percent of average interest-earning assets.


	Three Months Ended September 30,
	2005 vs. 2004
	Increase (Decrease)
	Due to					Total
						Increase
	Volume		Rate			(Decrease)
	(In thousands)
Interest-earning assets:
Loans	$	3,393	$	745		$	4,138
Securities		216		177			393
Short-term investments		37		42			79

Total interest-earning assets		3,646		964			4,610


Interest-bearing liabilities:
Savings deposits		7		1			8
Money market		180		128			308
NOW accounts		4		(1	)		3
Certificates of deposits		789		182			971

Total deposits		980		310			1,290

Borrowings		564		98			662

Total interest-bearing liabilities		1,544		408			1,952

Change in net interest income	$	2,102	$	556		$	2,658


	Nine Months Ended September 30,
	2005 vs. 2004
	Increase (Decrease)
	Due to					Total
						Increase
	Volume		Rate			(Decrease)
	(In thousands)
Interest-earning assets:
Loans	$	8,172	$	917		$	9,089
Securities		155		224			379
Short-term investments		33		204			237

Total interest-earning assets		8,360		1,345			9,705


Interest-bearing liabilities:
Savings deposits		16		6			22
Money market		379		389			768
NOW accounts		10		15			25
Certificates of deposits		1,558		204			1,762

Total deposits		1,963		614			2,577

Borrowings		1,482		(163	)		1,319

Total interest-bearing liabilities		3,445		451			3,896

Change in net interest income	$	4,915	$	894		$	5,809

Net interest income for the quarter ended September 30, 2005 was $6.3 million, an increase of $2.6 million when compared to net interest income of $3.7 million for the three months ended September 30, 2004. This increase was the result of an increase in average interest-earning assets of $274.6 million, greater than the $236.8 million increase in interest-bearing liabilities, coupled with a 28 basis point increase in the net interest margin. The funds received in the Company’s public stock offering and an increase in non-interest bearing deposit accounts were the primary reasons that average interest-earning assets grew by more than average interest-bearing liabilities, when compared to the comparable quarter in 2004.

Interest income for the quarter ended September 30, 2005 was $10.0 million, compared to $5.4 million for the quarter ended September 30, 2004, an increase of $4.6 million or 85.2%. Most of the increase was the result of the $274.6 million increase in average interest earning assets, augmented by a 77 basis point increase in the yield earned on average interest-earning assets. The increase in average interest-earning assets was primarily the result of the acquisition of Chart Bank and the Company’s public stock offering. The largest increase was seen in average loan balances, which increased by $241.9 million due to the acquisition of the $184.0 million Chart Bank loan portfolio and internally generated growth. Increases in average balances of securities and short-term investments of $24.8 million and $8.0 million, respectively, were also related to both the acquisition of Chart Bank and the stock offering. The increases in yields earned on securities and short-term investments of 60 basis points and 146 basis points, respectively, were due mainly to the increase in market interest rates during the twelve months ended September 30, 2005. The increase in the loan yield of 71 basis points was due to the increase in market interest rates, to the addition of the Chart Bank loan portfolio, which was more heavily weighted toward higher-yielding commercial loans than that of Benjamin Franklin, and to internally-generated growth in higher-yielding commercial loans.

Interest expense for the quarter increased $2.0 million compared to the prior year, due primarily to the Chart Bank acquisition, which added $242.8 million to the Company’s funding liabilities. The remainder of the increase in average funding liabilities between the comparable quarters in 2005 and 2004 of $32.8 million consists of increases in borrowed funds ($27.0 million), interest-bearing deposits ($4.0 million) and non-interest bearing liabilities ($1.8 million). Overall, the cost of interest-bearing deposits increased by 55 basis points in the third quarter of 2005 compared to the third quarter of 2004. This is due in part to the increase in market interest rates over the twelve months ended September 30, 2005 and to the composition of the Chart Bank deposit base, which had a greater proportion of higher-cost certificate balances than did that of Benjamin Franklin. The cost of borrowed funds also increased between periods, by 49 basis points, as new borrowings and rollovers of existing borrowings were more expensive than in the comparable 2004 period due to increases in market interest rates.

Net interest income for the first nine months of 2005 increased by $5.8 million to $16.0 million, compared to $10.2 million earned in the first nine months of 2004. The increase was the result of an increase in average interest-earning assets of $211.0 million, greater than the increase in average interest-bearing liabilities of $179.5 million, and to an increase in the net interest margin of 21 basis points. The increase in interest earning assets was due primarily to the Chart Bank acquisition, which added $144.4 million on average for the nine months ended September 30, 2005, and to internally generated growth in loans outstanding, which increased by $80.0 million on average, independent of the addition of the Chart Bank loan portfolio. Funding liabilities also increased due to the Chart Bank acquisition, which added average interest-bearing deposits of $118.3 million, average non-interest bearing balances of $24.3 million and average borrowed funds of $16.6 million. Internally generated interest-bearing deposit growth added $13.7 million on average, while the average balances of outstanding borrowings, exclusive of the Chart Bank addition, increased by $30.9 million. The Company also grew the average balances outstanding in demand deposits and other non-interest bearing funds by $8.5 million over and above those balances provided by Chart Bank. Rates earned on interest-earning assets increased by 53 basis points, due to the increase in market interest rates and the favorable mix of the Chart Bank assets. Rates paid on interest-bearing liabilities increased by 34 basis points, as an increase in deposit costs was offset in part by a reduction in the weighted average rate paid on borrowed funds.

Provision for Loan Losses

The Company recorded provisions for loan losses of $152,000 and $150,000 for the three months ended September 30, 2005 and 2004, respectively. For the first nine months of 2005 and 2004, provisions for loan losses amounted to $648,000 and $470,000, respectively. The provisions were reflective of growth in the loan portfolio and net charge-offs/recoveries recorded in each period. At September 30, 2005, the allowance for loan losses totaled $5.6 million, or .93% of the loan portfolio, as compared to $3.2 million, or .82% of total loans, at December 31, 2004.

Non-interest Income

Non-interest income for the three month period ended September 30, 2005 rose to $1.3 million, an increase of $870,000, or 195.9%, when compared to non-interest income of $444,000 earned during the third quarter of 2004. This increase was produced by growth in fee-based deposit accounts and the acquisition of Chart Bank. These same factors, offset in part by a $1.0 million net loss on the sale/write-down of bank-owned land in June 2005, caused non-interest income to increase by $384,000 or 23.0% to $2.1 million for the nine month period ended September 30, 2005, compared to the same period in 2004.

During the second quarter of 2005, two parcels of land that had been held as future branch sites were sold for an aggregate gain of $380,000. A third parcel that had been held as a future branch site was written down by $1.4 million to its estimated net fair market value, once the decision was made by the Company to market the parcel for sale. The Company’s determination to sell the property followed a decision by the town planning board to reject the Company’s proposed plans for combined retail-banking development of the parcel, after the Company had reworked the plans to deal with the concerns previously raised by the planning board. Although the Company’s Executive Committee considered whether to again revise and resubmit development plans that would be acceptable both to the Company and the planning board, the Committee decided that under the circumstances it would not continue to pursue its combined retail-banking development plans. This decision was consistent with the Company’s emerging strategy of opting in favor of leasing rather than owning future branch locations. The Company’s current strategy contemplates the opening of several new branches over the next few years and in all likelihood future branch locations will be leased rather than owned.

In the third quarter of 2005, fees earned on deposit accounts and other miscellaneous income increased by 79.8% and 14.0%, respectively, when compared to the third quarter of 2004. This growth was mainly the result of the addition of the Chart Bank deposit accounts and branch locations, plus the addition of a new overdraft checking account offering to the Bank’s product line. Increases in loan servicing fees in both the three month and nine month periods amounting to $115,000 and $143,000, respectively, were largely independent of the Chart Bank acquisition and were instead the result of growth in the Bank’s portfolio of fixed rate loans serviced for others. The Chart Bank acquisition also provided a new non-interest income source, fees earned on ATM servicing performed by CSSI, which yielded $493,000 in the third quarter of 2005. CSSI provides cash to ATMs owned by independent service organizations nationwide. Fees are collected from the independent service organizations for managing the ATMs and for the use of the cash in the machines. A summary of CSSI’s operating performance, pre-tax, for the third quarter of 2005 is as follows:


	For the Three
	Months Ended
	September 30, 2005
	(In thousands)
Income:
Fees earned on ATM servicing contracts	$	493

Expenses:
Interest expense		281
Personnel costs		78
Occupancy and equipment		9

Total expenses		368

Pre-tax contribution margin	$	125

The expenses shown reflect direct expenses only and do not include any allocation for overhead costs or support services provided to CSSI by the Bank. Interest expense is charged to CSSI by the Bank on the amount of cash CSSI employs, based on a short-term FHLBB advance rate. The average balance of the cash deployed by CSSI in the third quarter of 2005 was $27.4 million. A recent expansion by one customer and the addition of a sizable new customer have the potential to increase the cash deployed by CSSI by $14.0 million over the next twelve months.

Non-interest Expense

Non-interest expenses increased significantly in the third quarter of 2005 when compared to the same period in 2004, due primarily to the acquisition of Chart Bank, expansion of the Company’s lending capabilities and the stock conversion, which has brought new costs associated with operating a public company. These same factors caused the increase in the nine month period ended September 30, 2005, as expenses rose to $17.9 million from $9.5 million in the first nine months of 2004. Also contributing to the rise in the first nine months of 2005 was the $4.0 million contribution made to the Benjamin Franklin Bank Charitable Foundation in April of 2005. The contribution to the Foundation was one-time in nature, since the Company has no intention of making future contributions to the Foundation.

Expenses increased by $2.2 million, or 69.8%, to $5.3 million in the third quarter of 2005, compared to $3.1 million recorded in the three months ended September 30, 2004. The largest increase was in salaries and employee benefits expense, which rose by $567,000 or 28.9%, attributable to the acquisition of Chart Bank and to a lesser degree to the addition of loan origination and support staff in 2005. Amortization of the core deposit intangible asset created in the Chart Bank acquisition added $445,000 to expense for the quarter, an increase of $400,000 over the comparable period in 2004. Occupancy and equipment expenses increased by $365,000 or 126.3%, mainly due to the addition of costs associated with Chart Bank’s three branch locations and its former corporate headquarters. The rental expense associated with the lease of the headquarters location ceased at the end of July 2005. Increases in data processing costs ($123,000 or 35.7%) and miscellaneous expenses ($556,000 or 129.3%) were both due primarily to the effect of adding Chart Bank operations. Professional fees for the third quarter of 2005 amounted to $257,000, an increase of $183,000 over the comparable period in 2004, due to increased legal, consulting and audit fees that for the most part were related to the Company’s conversion to public company status.

Year-to date, operating expenses excluding the $4.0 million Foundation contribution increased by $4.5 million to $13.9 million, compared to $9.5 million incurred in the first nine months of 2004. The reasons for the increases in various expense categories are essentially the same as those described above for the third quarter of 2005 compared to the third quarter of 2004.

Income Taxes

The income tax provision of $814,000 recorded for the three months ended September 30, 2004 resulted in an effective tax rate of 38.0%, compared to a provision of $277,000 recorded for the three months ended September 30, 2004, which resulted in an effective tax rate of 34.2%. The effective tax rate for the first nine months of 2004 was 32.3%, while for the nine months ended September 30, 2005, the Company recorded income tax expense of $348,000 despite incurring a pre-tax loss of $534,000 for the period. This occurred because no tax benefit was recognized on the $1.0 million net loss on sale/write-down of bank-owned land.

Liquidity and Capital Resources

The Company’s primary sources of funds are from deposits, borrowings, amortization of loans, loan prepayments and the maturity of loans, mortgage-backed securities and other investments, and other funds provided by operations. While scheduled payments from amortization of loans and mortgage-backed securities and maturing loans and investment securities are relatively predictable sources of funds, deposit flows and loan prepayments can be greatly influenced by general interest rates, economic conditions and competition. The Company maintains excess funds in cash and short-term interest-bearing assets that provide additional liquidity. At September 30, 2005, cash and due from banks, short-term investments and debt securities maturing within one year totaled $75.5 million (excluding cash supplied by CSSI to ATM customers) or 8.8% of total assets.

The Company borrows from the Federal Home Loan Bank of Boston as an additional funding source. As of September 30, 2005, the Company had the ability to borrow an additional $72.7 million from the Federal Home Loan Bank of Boston.

The Company uses its liquidity to fund existing and future loan commitments, to fund maturing certificates of deposit and borrowings, to fund other deposit withdrawals, to invest in other interest-earning assets and to meet operating expenses. The Company anticipates that it will continue to have sufficient funds and alternative funding sources to meet its current commitments.

The following tables present information indicating various contractual obligations and commitments of the Company as of the dates indicated and the respective maturity dates:

Contractual Obligations:


	At September 30, 2005
					More than		More than
					One Year		Three Years
			One Year		through Three		through five		Over Five
	Total		or Less		Years		Years		Years
					(In thousands)
Federal Home Loan Bank advances⁽¹⁾	$	128,926	$	1,969	$	56,957	$	40,000	$	30,000
Subordinated Debt		9,000		—		—		—		9,000
Other ⁽²⁾		5,671		1,732		3,363		576		—

Total Contractual Obligations	$	143,597	$	3,701	$	60,320	$	40,576	$	39,000


⁽¹⁾		Secured under a blanket security agreement on qualifying assets, principally 1-4 Family Residential mortgage loans. Advances totalling $36 million shown with maturities of greater than three years may be called by the FHLB during the period remaining to maturity. These advances bear rates ranging from 3.99% to 4.91%, with a weighted average rate of 4.47%. Based on the current and predicted level of market interest rates, management considers it likely that these advances will be called by the FHLBB in the next 12 months. One “knock-out” advance in the amount of $10 million maturing in June, 2010 will become immediately payable if 3-month LIBOR rises above 6.0% (measured on a quarterly basis, beginning in June 2006).

⁽²⁾		Represents contracts for technology services and employee compensation.

Loan Commitments


	At September 30, 2005
					More than		More than
					One Year		Three Years
			One Year		through Three		through five		Over Five
	Total		or Less		Years		Years		Years
					(In thousands)
Commitments to grant loans ⁽¹⁾	$	37,507	$	37,507	$	—	$	—	$	—
Commercial loan lines of credit		18,230		18,230		—		—		—
Unused portion of home equity loans ⁽³⁾		38,790		—		—		—		38,790
Unused portion of construction loans ⁽⁴⁾		25,288		18,632		6,656		—		—
Unused portion of personal lines of credit ⁽²⁾		2,460		—		—		—		2,460


Total Loan Commitments	$	122,275	$	74,369	$	6,656	$	—	$	41,250

General: Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract, and generally have fixed expiration dates or other termination clauses.


⁽¹⁾		Commitments for loans are typically extended to customers for up to 180 days, after which they expire.

⁽²⁾		Unused portions of checking overdraft lines of credit are available to customers in “good standing” indefinitely.

⁽³⁾		Unused portions of home equity loans are available to the borrower for up to 10 years.

⁽⁴⁾		Unused portions of construction loans are available to the borrower for up to 2 years for development loans and up to 1 year for other construction loans.

Minimum Regulatory Capital Requirements:

As of September 30, 2005, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following table. There are no conditions or events since the notification that management believes have changed the Bank’s category. Prompt corrective action provisions are not applicable to bank holding companies. The Company’s and the Bank’s actual capital amounts and ratios as of September 30, 2005 and December 31, 2004 are also presented in this table:


											Minimum
											To Be Well
						Minimum					Capitalized Under
						Capital					Prompt Corrective
	Actual					Requirements					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
						(Dollars in thousands)
September 30, 2005:

Total capital to risk weighted assets:
Consolidated	$	86,287		15.5	%	$	44,600		8.0	%		N/A		N/A
Bank		60,435		10.9			44,494		8.0		$	55,617		10.0	%

Tier 1 capital to risk weighted assets:
Consolidated		80,656		14.5			22,300		4.0			N/A		N/A
Bank		54,804		9.9			22,247		4.0			33,370		6.0

Tier 1 capital to average assets:
Consolidated		80,656		9.8			32,958		4.0			N/A		N/A
Bank		54,804		6.7			32,883		4.0			41,103		5.0

December 31, 2004:

Total capital to risk weighted assets:
Consolidated	$	40,875		12.5	%	$	26,200		8.0	%		N/A		N/A
Bank		40,022		12.3			26,125		8.0		$	32,656		10.0	%

Tier 1 capital to risk weighted assets:
Consolidated		37,703		11.5			13,100		4.0			N/A		N/A
Bank		36,850		11.3			13,062		4.0			19,594		6.0

Tier 1 capital to average assets:
Consolidated		37,703		7.3			20,545		4.0			N/A		N/A
Bank		36,850		7.2			20,513		4.0			25,641		5.0

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The Company’s Asset/Liability Committee’s primary method for measuring and evaluating interest rate risk is income simulation analysis. This analysis considers the maturity and repricing characteristics of assets and liabilities, as well as the relative sensitivities of these balance sheet components over a range of interest rate scenarios. Interest rate scenarios tested generally include instantaneous rate shocks, rate ramps over a one year period, and static (or flat) rates. The simulation analysis is used to measure the exposure of net interest income to changes in interest rates over a specified time horizon, usually a two-year period.

The table below sets forth, as of September 30, 2005 the estimated changes in Benjamin Franklin’s net interest income that would result from the designated instantaneous changes in the U.S. Treasury yield curve. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results.


		Percentage Change in Estimated
		Net Interest Income over 12
		months
200 basis point increase in rates		1.04%
100 basis point increase in rates		.62%
Flat interest rates		—
100 basis point decrease in rates		(2.50)%

As indicated in the table above, an immediate 100 basis point increase in interest rates is estimated to increase net interest income by .62% over a 12-month horizon, when compared to the flat rate scenario. For an immediate 200 basis point parallel increase in the level of interest rates, net interest income is estimated to increase by 1.04% over a 12-month horizon, when compared against the flat rate scenario. Inherent in these estimates is the assumption that savings account deposit rates would only increase by 25 basis points and that money market deposit account rates would only increase by 36 basis points for each 100 basis point increase in market interest rates. These scenarios also assume no change in checking account interest rates. These assumptions are based on the Bank’s past experience with the changes in rates paid on these non-maturity deposits coincident with changes in market interest rates. The estimated change in net interest income from the flat rate scenario for a 100 basis point decline in the level of interest rates is a decrease of 2.50%, which assumes no decrease in interest-bearing checking rates, a 25 basis point decrease in savings rates and an average decrease in money market rates of 35 basis points.

There are inherent shortcomings in income simulation, given the number and variety of assumptions that must be made in performing the analysis. The assumptions relied upon in making these calculations of interest rate sensitivity include the level of market interest rates, the shape of the yield curve, the degree to which certain assets and liabilities with similar maturities or periods to repricing react to changes in market interest rates, the degree to which non-maturity deposits react to changes in market rates, the expected prepayment rates on loans and mortgage-backed securities, the degree to which early withdrawals occur on certificates of deposit and the volume of other deposit flows. As such, although the analysis shown above provides an indication of the Company’s sensitivity to interest rate changes at a point in time, these estimates are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on the Company’s net interest income and will differ from actual results.

In its management of interest rate risk, Benjamin Franklin also relies on the analysis of its interest rate “gap,” which is the measure of the mismatch between the amount of Benjamin Franklin’s interest-earning assets and

interest-bearing liabilities that mature or reprice within specified timeframes. An asset-sensitive position (positive gap) exists when there are more rate-sensitive assets than rate-sensitive liabilities maturing or repricing within a particular time horizon, and generally signifies a favorable effect on net interest income during periods of rising interest rates and a negative effect during periods of falling interest rates. Conversely, a liability-sensitive position (negative gap) would generally indicate a negative effect on net interest income during periods of rising rates and a positive effect during periods of falling rates.

The table below shows Benjamin Franklin’s interest sensitivity gap position as of September 30, 2005, indicating the amount of interest-earning assets and interest-bearing liabilities that are anticipated to mature or reprice in each of the future time periods shown. Generally, these assets and liabilities are shown in the table based on the earlier of the time remaining to repricing or contractual maturity. However, residential mortgage loans and mortgage-backed securities have been presented in a manner that also incorporates the estimated effects of prepayment assumptions. Interest-bearing checking, savings and money market deposit accounts are assumed to have annual rates of withdrawal (decay rates) of 9.2%, 38.3% and 59.5%, respectively.


	Up to			More than			More than			More than			More than			More than
	one			one year to			two years to			three years to			four years to			five
	year			two years			three years			four years			five years			years			Total
							(Dollars in thousands)
Interest-earning assets:
Loans (1)	$	243,867		$	107,930		$	89,224		$	81,758		$	37,875		$	46,304		$	606,958
Securities (2)		47,922			37,677			10,049			5,846			2,068			26,076			129,638
Short-term investments		13,546																		13,546

Total interest-earning assets		305,335			145,607			99,273			87,604			39,943			72,380			750,142


Interest-bearing liabilities:
Savings deposits		39,623			24,448			15,084			9,307			5,742			9,251			103,455
Money market		59,050			23,915			9,686			3,923			1,589			1,081			99,243
NOW accounts		2,715			2,465			2,238			2,032			1,845			18,212			29,508
Certificates of deposits		171,877			56,444			10,350			4,258			1,926						244,855
Short-term borrowings		—																		—
Long-term debt		38,000			24,000			33,000			—			33,926			9,000			137,926

Total interest-bearing liabilities	$	311,265		$	131,272		$	70,358		$	19,520		$	45,028		$	37,545		$	614,987


Interest rate sensitivity gap		(5,930	)		14,335			28,915			68,084			(5,085	)		34,835			135,155

Interest rate sensitivity gap as a % of total assets		-0.69	%		1.67	%		3.38	%		7.95	%		-0.59	%		4.07	%
Cum. interest rate sensitivity gap		(5,930	)		8,406			37,321			105,405			100,320			135,155

Cum. interest rate sensitivity gap as a % of total assets		-0.69	%		0.98	%		4.36	%		12.31	%		11.72	%		15.79	%


(1)		Excludes the allowance for loan losses, deferred fees and costs, and non-performing loans.

(2)		Securities are shown at amortized cost.

Certain factors may serve to limit the usefulness of the measurement of the interest rate gap. For example, interest rates on certain assets and liabilities are discretionary and may change in advance of, or may lag behind, changes in market rates. The gap analysis does not give effect to changes Benjamin Franklin may undertake to mitigate interest rate risk. Certain assets, such as adjustable-rate loans, have features that may restrict the magnitude of changes in interest rates both on a short-term basis and over the life of the assets. Further, in the event of changes in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in the gap analysis. Lastly, should interest rates increase, the ability of borrowers to service their debt may decrease.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. The Company’s President and Chief Executive Officer, its Chief Financial Officer, and other members of its senior management team have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on such evaluation, the President and Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures, as of the end of the periods covered by this report, were adequate and effective to provide reasonable assurance that information required to be disclosed by the Company, including its consolidated subsidiaries, in reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.

The effectiveness of a system of disclosure controls and procedures is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of internal controls, and fraud. Due to such inherent limitations, there can be no assurance that any system of disclosure controls and procedures will be successful in preventing all errors or fraud, or in making all material information known in a timely manner to the appropriate levels of management.

(b) Changes in Internal Controls Over Financial Reporting. There were no changes in the Company’s internal control over financial reporting during the first nine months of 2005 that have materially affected, or that are reasonably likely to materially affect, its internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

	(a)		Unregistered Sale of Equity Securities. Not applicable.

	(b)		Use of Proceeds. Not applicable. The Use of Proceeds from the Company’s stock offering, which closed on April 4, 2005, was reported in the Company’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 2005.

	(c)		Repurchases of Our Equity Securities. The Company’s employee stock ownership plan, an affiliated purchaser, purchased the following shares of the Company’s common stock during the quarter:


	(a) Total				(c) Total Number of			(d) Maximum number (or
	Number of		(b) Average		Shares Purchased as Part			approximate dollar value) of
	Shares		Price Paid per		of Publicly Announced			shares that may yet be purchased
Period	Purchased		Share		Plans or Programs (1)			under the Plans or Programs (1)
July 1-31		0					0		178,194
August 1-31		77,500	$	14.15		77,500			100,694
September 1-30		55,200	$	13.96		55,200			45,494


(1)		In a press release issued on March 31, 2005 and in a Current Report on Form 8-K filed on April 1, 2005, the Company announced that its employee stock ownership plan (the “ESOP”) intended to purchase in the public offering after market up to 478,194 shares of the Company’s common stock, or 8% of the shares sold in the offering and issued to the Benjamin Franklin Bank Charitable Foundation. In the second quarter of 2005, the ESOP purchased 300,000 shares, resulting in a total of 432,700 shares purchased through September 30, 2005. There is no expiration date for these planned purchases. These purchases have been and will continue to be effected by the independent corporate trustee of the Company’s ESOP.

Item 3. Defaults on Senior Securities.

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 5. Other Information.

Not applicable

Item 6. Exhibits.

The following exhibits, required by Item 601 of Regulation S-K, are filed as part of this Quarterly Report on Form 10-Q. Exhibit numbers, where applicable, in the left column correspond to those of Item 601 of Regulation S-K.


Exhibit No.	Description	Footnotes
2.1	Plan of Conversion of Benjamin Franklin Bancorp.		3


Exhibit No.	Description	Footnotes
2.2	Agreement and Plan of Merger among Benjamin Franklin Bancorp, M.H.C., Benjamin Franklin Savings Bank and Chart Bank, a Cooperative Bank, dated as of September 1, 2004.		2
3.1	Articles of Organization of Benjamin Franklin Bancorp, Inc.		2
3.2	Bylaws of Benjamin Franklin Bancorp, Inc.		2
4.1	Form of Common Stock Certificate of Benjamin Franklin Bancorp, Inc.		5
10.1.1	Form of Employment Agreement with Thomas R. Venables. *		6
10.1.2	Form of Employment Agreement with Claire S. Bean. *		6
10.2	Form of Change in Control Agreement with five other Executive Officers, providing one year’s severance to Brian E. Ledwith, Michael J. Piemonte and Kathleen P. Sawyer, and two years’ severance to Mariane E. Broadhurst and Rose M. Buckley. This form contains all material information concerning the agreement and the only differences are the name and contact information of the executive officer who is party to the agreement and the number of years of severance provided. *		2
10.3	Form of Benjamin Franklin Bank Benefit Restoration Plan. *		2
10.4.1	Benjamin Franklin Bank Salary Continuation Agreement with Thomas R. Venables dated as of August 22, 2002. *		2
10.5	Benjamin Franklin Bancorp Director Fee Continuation Plan. *		4
10.6	Benjamin Franklin Bancorp Employee Salary Continuation Plan. *		2
10.7.1	Payments and Waiver Agreement among Richard E. Bolton, Jr., Benjamin Franklin Bancorp, M.H.C., Benjamin Franklin Savings Bank and Chart Bank, a Cooperative Bank, dated as of September 1, 2004. *		2
10.7.2	Consulting and Noncompetition Agreement between Richard E. Bolton, Jr. and Benjamin Franklin Bancorp, M.H.C., dated as of September 1, 2004. *		2
11	See Note 3 to the Financial Statements for a discussion of earnings per share.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.		1
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.		1
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.		1
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.		1


*		Relates to compensation.


1		Filed herewith.

2		Incorporated by reference to the Registrant’s Registration Statement on Form S-1, File No. 333-121154, filed on December 10, 2004.

3		Incorporated by reference to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1, File No. 333-121154, filed on January 24, 2005.

4		Incorporated by reference to the Registrant’s Registration Statement on Form S-4, File No. 333-121608, filed on December 23, 2004.


	Benjamin Franklin Bancorp, Inc.

Date: November 14, 2005			By:	/s/ Thomas R. Venables

		Thomas R. Venables
		President and Chief Executive Officer

Date: November 14, 2005			By:	/s/ Claire S. Bean

		Claire S. Bean
		Treasurer and Chief Financial Officer

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


			Page
PART I — FINANCIAL INFORMATION

	Item 1.	Consolidated Financial Statements

		Consolidated Balance Sheets at September 30, 2005 and December 31, 2004		3

		Consolidated Statements of Operations for the three and nine months ended September 30, 2005 and 2004		4

		Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2005 and 2004		5

		Consolidated Statements of Cash Flows for the nine months ended September 30, 2005 and 2004		6

		Notes to Condensed Consolidated Financial Statements		8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk		30

	Item 4.	Controls and Procedures		32

PART II — OTHER INFORMATION

	Item 1.	Legal Proceedings		33

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		33

	Item 3.	Defaults on Senior Securities		33

	Item 4.	Submission of Matters to a Vote of Security Holders		33

	Item 5.	Other Information		33

	Item 6.	Exhibits		33

SIGNATURES				36
Ex-31.1 Section 302 Certification of CEO
Ex-31.2 Section 302 Certification of CFO
Ex-32.1 Section 906 Certification of CEO
Ex-32.2 Section 906 Certification of CFO

	a)		designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	c)		disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


Date: November 14, 2005

/s/ Thomas R. Venables Thomas R. Venables
Chief Executive Officer


/s/ Claire S. Bean

Claire S. Bean
Chief Financial Officer

B. Date: November 14, 2005