Benjamin Franklin Bancorp (BFBC) 8-K Benjamin Franklin Bancorp Reports 2008 Annual Results; Declares Quarterly Dividend

Exhibit 99.1

Press Release

For Immediate Release
Contact: Claire S. Bean, Executive Vice President and Chief Financial Officer
1-508-520-8002

Benjamin Franklin Bancorp Reports 2008 Annual Results; Declares Quarterly Dividend

FRANKLIN, MASSACHUSETTS (January 27, 2009): Benjamin Franklin Bancorp, Inc. (the “Company” or “Benjamin Franklin”) (Nasdaq: BFBC), the bank holding company for Benjamin Franklin Bank (the “Bank”), today reported net income of $3.7 million or $.50 per share (basic and diluted), for the year ended December 31, 2008. For the 2007 year, net income was $3.6 million, or $.48 and $.47 per share (basic and diluted, respectively). For the fourth quarter of 2008, net income was $164,000, or $.02 per share (basic and diluted), compared to $1.2 million or $.15 per share (basic and diluted) earned in the fourth quarter of 2007. The decline in quarterly earnings was primarily due to increases in the loan loss provision and operating expenses, the latter principally the result of costs incurred in connection with the Company’s pending merger with Independent Bank Corp. (“Independent”). On November 8, 2008 the Company entered into an Agreement and Plan of Merger with Independent, a Massachusetts corporation (NASDAQ: INDB) and parent of Rockland Trust Company.

The Company also today announced that its Board of Directors declared a quarterly cash dividend of $.08 per common share, payable on February 24, 2009 to stockholders of record as of February 10, 2009.

Said Thomas R. Venables, President and CEO: “We are pleased to report a 6% increase in diluted EPS in 2008, especially in light of the challenges in the economic environment affecting all financial institutions. Despite the slowdown, we have been able to sustain our growth, with loans and core deposits up 14% and 15%, respectively. Our focus on our basic community banking strategy has been key to our success during these difficult economic times. Now, with our pending merger on the horizon, we are focused on ensuring a seamless transition for our customers.”

Items of note in the Company’s fourth quarter 2008 results are:

1. The net interest margin (“NIM”) widened to 3.22%, as compared to 3.13% on a linked-quarter basis and 3.04% in the comparable 2007 quarter. Average earning assets increased by $105.7 million since the fourth quarter of 2007, which, in conjunction with the increased NIM resulted in an increase in net interest income of $1.2 million or 20.0% in the current quarter compared to the fourth quarter of 2007;

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2.	Operating expenses increased by $791,000 measured against the fourth quarter of 2007, due primarily to costs incurred in connection with the proposed merger with Independent, which totaled $550,000 during the quarter. Of that amount, $500,000 is not deductible for Federal and state income tax purposes, resulting in an after-tax impact on net income of approximately $530,000 or $.07 per share. The remainder of the year over year quarterly increase was largely the result of loan costs (legal, security, insurance) in connection with the work-out of one commercial loan relationship (see 3. below), as well as substantially higher FDIC deposit insurance premiums;
3.	The Company’s loan loss provision was $1.2 million for the quarter, compared to $447,000 in the third quarter of 2008 and $165,000 in the fourth quarter of 2007. The increase was due in large part to the addition of $726,000 in reserves for one $6.4 million non-performing commercial loan relationship secured primarily by a mixed use building in Boston MA;
4.	Non-performing assets (“NPAs”) were unchanged on a linked-quarter basis, at 0.90% of total assets as of December 31, 2008 and September 30, 2008. NPAs have increased from 0.18% of total assets at December 31, 2007, primarily due to the addition of the aforementioned $6.4 million commercial loan relationship to non-performing status at the end of the second quarter of 2008;
5.	Other income rose to $1.4 million from $1.3 million in the previous quarter, but was less than the $2.0 million earned in the fourth quarter of 2007. In the comparable 2007 quarter, one-time gains aggregated $267,000. Further, fees for providing cash to independently owned ATMs, which are tied to the prime rate, were lower by $344,000 in the 2008 quarter, a change caused both by the sharp drop in the prime rate and in the loss of two customers in the past year.

In 2008, total assets increased by $94.5 million or 10.5%, driven primarily by growth in net loans outstanding, which increased by $81.9 million or 13.5% during the year. Commercial business loans grew by $21.0 million, or 13.2% and commercial real estate credits increased by $15.2 million or 9.0% during the year. Residential loans also increased significantly, by $52.3 million or 27.8%. Offsetting these increases was a reduction of $8.3 million (14.8%) in construction loans outstanding. While loan demand was generally strong in the first half of 2008, growth slowed in the third and fourth quarters, and in the fourth quarter of 2008, loans increased by a more modest 2.5% on a linked-quarter basis. The Bank has not originated and does not own any sub-prime residential mortgage loans.

The Company’s core deposit accounts (savings, money market, demand and NOW accounts) grew significantly during 2008, increasing by a total of $54.7 million or 15.4% since year end 2007. This growth is primarily attributable to increases in commercial deposits in conjunction with growth in commercial business loans, growth in the Bank’s premium NOW account product, municipal account growth and the opening of two new branch locations in the past two years.

The Company’s securities portfolio increased by $31.3 million or 18.6% since year end 2007. The increase consists principally of purchases of government-sponsored enterprise

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(“GSE”) bonds and GSE-guaranteed mortgage-backed securities. All of the Company’s bond and mortgage-backed security portfolios are either issued or guaranteed by government-sponsored enterprises.

Federal Home Loan Bank of Boston (“FHLBB”) borrowings increased by $58.3 million (35.3%) over the course of 2008. These additional borrowed funds were used primarily to help fund the growth in fixed-rate residential loans during the year, and to fill a funding gap as the Company allowed higher-cost certificates of deposit to run off.

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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BENJAMIN FRANKLIN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	December 31,			December 31,
	2008			2007
	(Unaudited)			(Audited)
ASSETS
Cash and due from banks	$	9,289		$	12,226
Cash supplied to ATM customers		28,092			42,002
Short-term investments		8,246			10,363
Total cash and cash equivalents		45,627			64,591
Securities available for sale, at fair value		187,956			156,761
Restricted equity securities, at cost		11,695			11,591
Total securities		199,651			168,352
Loans
Residential real estate		241,003			188,654
Commercial real estate		183,857			168,649
Construction		47,485			55,763
Commercial		180,274			159,233
Consumer		44,139			40,436
Total loans, gross		696,758			612,735
Allowance for loan losses		(7,929	)		(5,789	)
Loans, net		688,829			606,946
Premises and equipment, net		4,979			5,410
Accrued interest receivable		3,667			3,648
Bank-owned life insurance		11,110			10,700
Goodwill		33,763			33,763
Other intangible assets		1,914			2,474
Other assets		8,200			7,394
	$	997,740		$	903,278
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Regular savings accounts	$	80,691		$	79,167
Money market accounts		145,951			110,544
NOW accounts		73,029			52,000
Demand deposit accounts		109,743			113,023
Time deposit accounts		243,514			262,634
Total deposits		652,928			617,368
Short-term borrowings		34,500			2,500
Long-term debt		189,046			162,784
Deferred gain on sale of premises		3,279			3,531
Other liabilities		8,192			9,651
Total liabilities		887,945			795,834
Common stock, no par value; 75,000,000 shares authorized; 7,842,015 shares issued and 7,713,788 shares outstanding at December 31, 2008; 8,030,415 shares issued and 7,856,172 shares outstanding at December 31, 2007		—			—
Additional paid-in capital		75,140			77,370
Retained earnings		39,923			38,515
Unearned compensation		(6,303	)		(7,094	)
Accumulated other comprehensive income (loss)		1,035			(1,347	)
Total stockholders’ equity		109,795			107,444
	$	997,740		$	903,278

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BENJAMIN FRANKLIN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share and per share data)

	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2008		2007		2008		2007
	(Unaudited)				(Unaudited)
Interest and dividend income:
Loans, including fees	$	10,423	$	9,909	$	40,575	$	39,182
Debt securities		1,843		1,889		7,651		7,432
Dividends		98		196		503		707
Short-term investments		21		207		418		852
Total interest and dividend income		12,385		12,201		49,147		48,173
Interest expense:
Interest on deposits		2,939		4,153		13,401		16,985
Interest on short-term borrowings		21		50		64		272
Interest on long-term debt		2,178		1,957		8,709		7,231
Total interest expense		5,138		6,160		22,174		24,488
Net interest income		7,247		6,041		26,973		23,685
Provision for loan losses		1,169		165		2,298		634
Net interest income, after provision for loan losses		6,078		5,876		24,675		23,051
Other income:
ATM servicing fees		208		552		1,144		2,534
Deposit servicing fees		464		394		1,769		1,487
Other loan-related fees		261		165		782		935
Gain on sale of loans, net		49		166		265		680
Gain on sale of securities, net		—		38		—		38
Gain on sale of premises, net		63		73		252		450
Gain on trading assets		—		126		—		264
Gain on sale of CSSI customer list		—		103		92		203
Income from bank-owned life insurance		109		102		410		402
Miscellaneous		248		246		957		817
Total other income		1,402		1,965		5,671		7,810
Operating expenses:
Salaries and employee benefits		3,514		3,614		13,477		14,687
Occupancy and equipment		850		869		3,507		3,456
Data processing		570		607		2,299		2,411
Professional fees		585		208		1,126		859
Marketing and advertising		169		123		555		611
Amortization of intangible assets		143		183		627		803
Other general and administrative		1,186		622		3,117		2,860
Total operating expenses		7,017		6,226		24,708		25,687
Income before income taxes		463		1,615		5,638		5,174
Provision for income taxes		299		465		1,969		1,532
Net income	$	164	$	1,150	$	3,669	$	3,642
Weighted-average shares outstanding:
Basic		7,302,413		7,477,366		7,300,611		7,644,470
Diluted		7,400,889		7,534,710		7,383,386		7,686,543
Earnings per share:
Basic	$	0.02	$	0.15	$	0.50	$	0.48
Diluted	$	0.02	$	0.15	$	0.50	$	0.47

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BENJAMIN FRANKLIN BANCORP, INC. AND SUBSIDIARY
SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS AND OTHER DATA
(Dollars in thousands, except share and per share data)

	At or For the Three Months						At or For the Twelve Months
	Ended December 31,						Ended December 31,
	2008			2007			2008			2007
	(Unaudited)						(Unaudited)
Financial Highlights:
Net interest income	$	7,247		$	6,041		$	26,973		$	23,685
Net income	$	164		$	1,150		$	3,669		$	3,642
Weighted average shares outstanding :
Basic		7,302,413			7,477,366			7,300,611			7,644,470
Diluted		7,400,889			7,534,710			7,383,386			7,686,543
Earnings per share:
Basic	$	0.02		$	0.15		$	0.50		$	0.48
Diluted	$	0.02		$	0.15		$	0.50		$	0.47
Stockholders’ equity — end of period	$	109,795		$	107,444
Book value per share — end of period	$	14.23		$	13.68
Tangible book value per share — end of period	$	9.61		$	9.06
Ratios and Other Information:
Return on average assets		0.07	%		0.50	%		0.38	%		0.40	%
Return on average equity		0.60	%		4.26	%		3.41	%		3.36	%
Net interest rate spread(1)		2.78	%		2.51	%		2.59	%		2.40	%
Net interest margin(2)		3.22	%		3.04	%		3.10	%		3.00	%
Efficiency ratio(3)		79.48	%		76.94	%		73.95	%		80.13	%
Non-interest expense to average total assets		2.83	%		2.72	%		2.56	%		2.84	%
Average interest-earning assets to average interest-bearing liabilities		118.67	%		116.71	%		118.75	%		118.34	%
At period end:
Non-performing assets to total assets		0.90	%		0.18	%
Non-performing loans to total loans		1.30	%		0.26	%
Allowance for loan losses to total loans		1.14	%		0.94	%
Equity to total assets		11.00	%		11.89	%
Tier 1 leverage capital ratio		7.66	%		8.29	%
Total risk-based capital ratio		11.72	%		12.26	%
Number of full service offices		11			11

(1)	The 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 for the period.
(2)	The net interest margin represents net interest income as a percent of average interest-earning assets for the period.
(3)	The efficiency ratio represents non-interest expense minus expenses related to the amortization of intangible assets divided by the sum of net interest income (before the loan loss provision) plus non-interest income (excluding non-recurring net gains (losses) on sale of bank assets).

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BENJAMIN FRANKLIN BANCORP, INC. AND SUBSIDIARY
ANALYSIS OF NET INTEREST INCOME
(Dollars in thousands) (Unaudited)

	Three Months Ended December 31,
	2008							2007
	Average							Average
	Outstanding							Outstanding
	Balance		Interest		Yield/Rate(1)			Balance		Interest		Yield/Rate(1)
Interest-earning assets:
Loans	$	690,642	$	10,423		5.95	%	$	606,145	$	9,909		6.44	%
Securities		194,077		1,941		4.00	%		163,495		2,085		5.10	%
Short-term investments		9,798		21		0.84	%		19,147		207		4.23	%
Total interest-earning assets		894,517		12,385		5.47	%		788,787		12,201		6.11	%
Non-interest-earning assets		93,250							119,896
Total assets	$	987,767						$	908,683
Interest-bearing liabilities:
Savings accounts	$	80,808		81		0.40	%	$	79,769		91		0.45	%
Money market accounts		153,245		629		1.63	%		117,669		750		2.53	%
NOW accounts		70,367		282		1.59	%		48,536		301		2.46	%
Certificates of deposit		248,869		1,947		3.11	%		267,736		3,011		4.46	%
Total deposits		553,289		2,939		2.11	%		513,710		4,153		3.21	%
Borrowings		200,483		2,199		4.29	%		162,132		2,007		4.84	%
Total interest-bearing liabilities		753,772		5,138		2.69	%		675,842		6,160		3.60	%
Non-interest bearing liabilities		125,848							125,766
Total liabilities		879,620							801,608
Equity		108,147							107,075
Total liabilities and equity	$	987,767						$	908,683
Net interest income			$	7,247						$	6,041
Net interest rate spread(2)						2.78	%						2.51	%
Net interest-earning assets(3)	$	140,745						$	112,945
Net interest margin(4)						3.22	%						3.04	%
Average interest-earning assets to interest-bearing liabilities						118.67	%						116.71	%

(1)	Yields and rates for the three months ended December 31, 2008 and 2007 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 divided by average total interest-earning assets.

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BENJAMIN FRANKLIN BANCORP, INC. AND SUBSIDIARY
ANALYSIS OF NET INTEREST INCOME
(Dollars in thousands) (Unaudited)

	Years Ended December 31,
	2008							2007
	Average							Average
	Outstanding							Outstanding
	Balance		Interest		Yield/Rate			Balance		Interest		Yield/Rate
Interest-earning assets:
Loans	$	662,079	$	40,575		6.06	%	$	608,811	$	39,182		6.38	%
Securities		187,532		8,154		4.34	%		162,349		8,139		5.01	%
Short-term investments		20,033		418		2.05	%		17,861		852		4.70	%
Total interest-earning assets		869,644		49,147		5.60	%		789,021		48,173		6.06	%
Non-interest-earning assets		96,652							116,246
Total assets	$	966,296						$	905,267
Interest-bearing liabilities:
Savings accounts	$	80,849		323		0.40	%	$	81,691		397		0.49	%
Money market accounts		135,511		2,426		1.79	%		109,123		2,917		2.67	%
NOW accounts		62,651		1,129		1.80	%		40,607		922		2.27	%
Certificates of deposit		260,589		9,523		3.65	%		281,138		12,749		4.53	%
Total deposits		539,600		13,401		2.48	%		512,559		16,985		3.31	%
Borrowings		192,711		8,773		4.48	%		154,206		7,503		4.80	%
Total interest-bearing liabilities		732,311		22,174		3.01	%		666,765		24,488		3.66	%
Non-interest bearing liabilities		126,525							130,067
Total liabilities		858,836							796,832
Equity		107,460							108,435
Total liabilities and equity	$	966,296						$	905,267
Net interest income			$	26,973						$	23,685
Net interest rate spread(1)						2.59	%						2.40	%
Net interest-earning assets(2)	$	137,333						$	122,256
Net interest margin(3)						3.10	%						3.00	%
Average interest-earning assets to interest-bearing liabilities						118.75	%						118.34	%

(1)	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.
(2)	Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(3)	Net interest margin represents net interest income divided by average total interest-earning assets.

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Reconciliation of Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. These measures typically adjust GAAP performance measures to exclude significant gains or losses that are expected to be non-recurring and to exclude the effects of amortization of intangible assets (in the case of the efficiency ratio). Because these items and their impact on the Company’s performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

	Three months ended						Year ended
	December 31,						December 31,
	2008			2007			2008			2007
Efficiency ratio based on GAAP numbers		81.13	%		77.77	%		75.69	%		81.56	%
Effect of amortization of intangible assets		(1.65	)		(2.33	)		(1.93	)		(2.59	)
Effect of net gain on non-recurring sales of bank assets		—			1.50			0.19			1.16
Efficiency ratio — Reported		79.48	%		76.94	%		73.95	%		80.13	%

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