UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2024

OR

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

For the transition period from __________ to _________

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Commission File Number 2-27985

1st FRANKLIN FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Georgia	58-0521233
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
135 East Tugalo Street Post Office Box 880 Toccoa , Georgia	30577
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (706) 886-7571

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

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 x No o

(Cover page 1 of 2 pages)

Indicate by check mark whether registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer x

Smaller Reporting Company o Emerging Growth Company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of it internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes o No x

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter: $0.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date:

Class	Outstanding at April 29, 2025
Common Stock, $100 Par Value	1,700 Shares
Non-Voting Common Stock, No Par Value	168,300 Shares

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Registrant's Annual Report to security holders for the fiscal year ended December 31, 2024, included as Exhibit 13 hereto, are incorporated by reference into Parts I, II and IV of this Form 10-K.

(Cover page 2 of 2 pages)

TABLE OF CONTENTS

	Page
Part I	2
Item 1. Business	2
Item 1A. Risk Factors	2
Item 1B. Unresolved Staff Comments	8
Item 1C. Cybersecurity	8
Item 2. Properties	10
Item 3. Legal Proceedings	10
Item 4. Mine Safety Disclosures	10
Part II	10
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	10
Item 6. [Reserved]	10
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	10
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	10
Item 8. Financial Statements and Supplementary Data	10
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure:	10
Item 9A. Controls and Procedures	11
Item 9B. Other Information	14
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	14
Part III	15
Item 10. Directors, Executive Officers and Corporate Governance	15
Item 11. Executive Compensation	20
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	26
Item 13. Certain Relationships and Related Transactions, and Director Independence	28
Item 14. Principal Accountant Fees and Services	28
Part IV	30
Item 15. Exhibits and Financial Statement Schedules	30
Item 16. Form 10-K Summary	34
Signatures	35

PART I

Item 1.    BUSINESS:

References in this Annual Report to “1st Franklin”, the “Company”, “we”, “our” and “us” refer to 1st Franklin Financial Corporation and its subsidiaries.

The information under the headings “The Company”, page 3 and “Business”, pages 5-12, of the Company’s Annual Report to security holders for the fiscal year ended December 31, 2024 (the “Annual Report”) are incorporated herein by reference.

Item 1A.    RISK FACTORS:

You should carefully consider the risks described below, as well as the other risks and information disclosed from time to time by 1st Franklin, before deciding whether to invest in the Company. Additional risks and uncertainties not described below, not presently known to us or that we currently do not consider to be material, could also adversely affect us. If any of the situations described in the following risk factors actually occur, our business, financial condition or results of operations could be materially adversely affected. In any of these events, an investor may lose part or all of his or her investment.

Risks Related to Our Business

Because we require a substantial amount of cash to service our debt, we may not be able to pay all of the obligations under our indebtedness.

To service our indebtedness, including paying interest and principal on outstanding debt securities and any amounts due under our credit facility, we require a significant amount of cash. Our ability to generate cash depends on many factors, including our successful financial and operating performance. We cannot assure you that our business strategy will continue to be successful, or that we will achieve our anticipated or required financial results.

If we do not achieve our anticipated or required results, we may not be able to generate sufficient cash flow from operations or obtain sufficient funding to satisfy all of our obligations. The failure to do this would result in a material adverse effect on our business.

Because we depend on liquidity to operate our business, a decrease in the sale of our debt securities, an increase in requests for their redemption or the unavailability of borrowings under our credit facility may make it more difficult for us to operate our business and pay our obligations in a timely manner.

Our liquidity depends on, and we fund our operations through, the sale of our debt securities, the collection of our receivables and the continued availability of borrowings under our credit facility. Numerous available investment alternatives have resulted in investors evaluating more critically their investment opportunities. We cannot assure you that our debt securities will offer interest rates and redemption terms which will generate sufficient sales to meet our liquidity requirements.

Holders of our senior demand notes may request their redemption at any time without penalty. Our variable rate subordinated debentures also may request that we redeem debentures at the end of any interest rate adjustment period or within the 14-day grace period thereafter without penalty. As a result, it is possible that a significant number of redemption requests could adversely affect our liquidity.

In addition, borrowings under our credit facility are subject to, among other things, a borrowing base. In the event we are not able to borrow amounts under our credit facility, whether as a result of having reached our maximum borrowing availability thereunder or otherwise or if our current or any future credit facility matures or is terminated without our entering into a replacement facility on acceptable

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terms, conditions and timing, or at all, we may not be able to fund loans to customers, redeem securities when required or invest in our operations as needed.

Our failure to be able to obtain or maintain sufficient liquidity could have a material adverse effect on our business, financial condition and results of operations.

Adverse changes in the ability or willingness of our customers to meet their repayment obligations to the Company could adversely impact our liquidity, financial condition and results of operations.

Our business consists mainly of making loans to salaried people or other wage earners who generally depend on their earnings to meet their repayment obligations, and our ability to collect on loans depends on the willingness and repayment ability of our customers. Adverse changes in the ability or willingness of a significant portion of our customers to repay their obligations to the Company, whether due to changes in general economic, political or social conditions, the cost of consumer goods, interest rates, natural disasters, acts of war or terrorism, prolonged public health crisis or a pandemic (such as COVID-19), or other causes, or events affecting our customers individually such as unemployment, major medical expenses, bankruptcy, divorce or death, could have a material effect on our liquidity, financial condition and results of operations.

We maintain an allowance for credit losses in our financial statements at a level considered adequate by Management to absorb expected credit losses inherent in the loan portfolio as of the statement of financial position date based on estimates and assumptions at that date. However, the amount of actual future credit losses we may incur is susceptible to changes in economic, operating and other conditions within our various local markets, which may be beyond our control, and such losses may exceed current estimates. Although Management believes that the Company’s allowance for credit losses is adequate to absorb losses on any existing loans that may become uncollectible, we cannot estimate credit losses with certainty, and we cannot provide any assurances that our allowance for credit losses will prove sufficient to cover actual credit losses in the future. Credit losses in excess of our reserves may adversely affect our financial condition and results of operations.

In any event, any reduced liquidity could negatively impact our ability to be able to fund loans, or to pay the principal and interest on any of our outstanding debt securities at any time, including when due.

An increase in the interest we pay on our debt and borrowings could materially and adversely affect our net interest margin.

Net interest margin represents the difference between the amount that we earn on loans and investments and the amount that we pay on debt securities and other borrowings. The loans we make in the ordinary course of our business are subject to interest rate and regulatory provisions of each applicable state's lending laws and are made at fixed rates which are not adjustable during the term of the loan. Since our loans are made at fixed interest rates and are made using the proceeds from the sale of our fixed and variable rate securities, we may experience a decrease in our net interest margin because increased interest costs cannot be passed on to our loan customers. A reduction in our net interest margin could adversely affect our liquidity, including our ability to make payments on our outstanding debt securities.

We operate in a highly competitive environment.

The consumer financing industry is highly competitive, and the barriers to entry for new competitors are relatively low in the markets in which we operate. We compete for customers, locations and other important aspects of our business with, among others, large national and regional finance companies, as well as a variety of local finance companies. Increased competition, or any failure on our part to compete successfully, could adversely affect our ability to attract and retain business and reduce the profits that would otherwise arise from operations.

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We may not be able to make technological improvements as quickly as some of our competitors, which could harm our competitive ability and adversely affect our business, prospects, financial condition and results of operations.

The financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-driven products, services and marketing channels. We rely on our branch offices as the primary point of contact with our active accounts. In order to serve consumers who want to reach us over the internet, we make available an online loan application on our consumer website, and we provide customers an online customer portal, giving them online access to their account information and an electronic payment option. Our future success will depend, in part, on our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demand for convenience, as well as to create additional efficiencies in our operations. We expect that new technologies and business processes applicable to the consumer finance industry will continue to emerge, and these new technologies and business processes may be more efficient than those that we currently use. We cannot ensure that we will be able to effectively implement new technology-driven products and services as quickly as some of our competitors or be successful in marketing these products and services to our customers. Failure to successfully keep pace with technological change affecting the financial services industry could cause disruptions in our operations, harm our ability to compete with our competitors, and adversely affect our business, prospects, financial condition and results of operations.

We are exposed to the risk of technology failures.

Our daily operations depend heavily on our computer systems, data system networks and service providers to consistently provide efficient and reliable service. The Company has been, and in the future may be, subject to disruptions to its operating systems arising from events that are wholly or partially beyond its control, which in turn may give rise to disruption of service to our customers. If our systems were to become unreliable, fail, or experience a breach of security, our ability to maintain accurate financial records, maintain the security and availability of our data, or operate our business may be impaired. In addition, we could be required to spend significant additional amounts to maintain, repair, upgrade or replace our systems. Any such failures or expenditures could materially adversely impact our business operations and financial condition or harm our reputation.

We could incur significant liability, and our business, financial condition, results of operations and reputation could be harmed, if our information systems are breached or we otherwise fail to protect customer, investor, employee or Company data or systems.

In operating our business, we collect, use, store, transmit and otherwise process certain electronic information, including personal, confidential, proprietary and sensitive data about our customers, investors and employees. We also share and receive electronic information with our vendors and other third parties. This electronic information comprises sensitive and confidential data, including personally identifiable information ("PII") and Company data. We rely on the efficient, uninterrupted and secure operation of complex information technology systems and networks to operate our business and securely store, transmit and process electronic information. Our information technology systems, and those of our third-party service providers and vendors, are potentially vulnerable to unauthorized access, damage or interruption from a variety of threats, including cybersecurity breaches, computer viruses, malware, ransomware, theft, lost or misplaced data, scams, misappropriation of data and other types of data and systems-related modes of attack.

We have been, and in the future may be, the target of cyberattacks, including social engineering attacks, phishing attacks and denial-of-service attacks, as well as ransomware cyberattacks where hackers have requested “ransom” payments in exchange for not disclosing stolen electronic information or for unlocking or not disabling our computer or other information systems. Any disruption to the safety, integrity or accessibility of such information or systems could impact our ability to operate our business.

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We continue to enhance our data security infrastructure to prevent unauthorized access to our systems and the data we maintain. Despite our efforts to ensure the integrity of our software, computers, systems and information, we may not be able to anticipate, detect or recognize all threats to our systems and assets, or to implement effective preventive measures against all cyber threats, especially because the techniques used by bad actors are increasingly sophisticated, change frequently, are complex, and are often not recognized until launched. Such cyberattacks have involved and in the future may involve, the dissemination, theft, destruction or other compromise of Company or confidential information, including PII. Efforts to resolve future cyberattacks may be unsuccessful, and these efforts involve costs that can be significant. Although we maintain insurance coverage relating to certain cybersecurity risks, our insurance may not be sufficient to provide adequate loss coverage in all circumstances (including if the insurer denies future claims) and may not continue to be available to us on economically reasonable terms, or at all.

We could suffer significant financial losses or liabilities, loss of customers and business opportunities, reputational damage, litigation, regulatory fines, penalties or intervention, reimbursement or other compensatory costs, as a result of actual or alleged cyberattacks or data security breaches, and these attacks or breaches and their impacts are hard to predict. Further, we cannot ensure that any limitations of liability provisions in our agreements with customers, vendors and other third parties with which we do business would be enforceable or adequate to otherwise protect us from liabilities or damages with respect to a particular claim in connection with a cyberattack, breach or other information security incident.

In addition, the legal and regulatory environment related to data privacy and cybersecurity is constantly changing. Privacy and cybersecurity are currently areas of considerable legislative and regulatory attention, with new or modified laws, regulations, rules and standards being frequently adopted and potentially subject to divergent interpretation or application in different states in a manner that may create inconsistent or conflicting requirements for businesses. The uncertainty and compliance risks created by these legislative and regulatory developments are compounded by the rapid pace of technology development that may affect the use or security of data, including PII. Privacy and cybersecurity laws and regulations often impose strict requirements on the collection, storage, handling, use, disclosure, transfer, security, and other processing of PII. An actual or perceived failure by us or our vendors or service providers to comply with privacy, data protection and information security laws, regulations, standards, policies and contractual obligations could result in legal liabilities, fines, regulatory action and reputational harm that could have a material adverse impact on our business, financial results and financial condition.

We have identified a material weaknesses in our internal control over financial reporting. If we are unable to remediate this material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations.

As further described below in Part II, Item 9A. “Controls and Procedures,” Management has identified a material weakness in the Company’s internal control over financial reporting relating to the recent conversion of the Company’s loan servicing system. During this conversion process, certain transaction codes were not properly mapped to the Company’s general ledger accounts, which led to incomplete or inaccurate system-generated financial data. As a result, the Company was unable to provide sufficient audit evidence to support the completeness and accuracy of certain general ledger balances without performing extensive manual reconciliation procedures. The material weakness did not result in any identified material misstatements to our financial statements. As a result, there were no changes to any of our previously-released financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis. Although we have initiated a comprehensive remediation plan to address the identified material weakness, we cannot assure you that these initiatives will ultimately have the intended effects or that we will implement and maintain

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adequate controls over our financial processes and reporting in the future in order to avoid additional material weaknesses or control deficiencies.

If we are unable to successfully remediate our existing or any future material weakness in our internal control over financial reporting, the accuracy and timing of our financial reporting may be negatively impacted, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports, and investors may lose confidence in our financial reporting. For example, we were unable to file this Annual Report on Form 10-K within the prescribed time period because we required additional time to complete our evaluation of our internal controls and reconcile all material balances. Moreover, ineffective controls could significantly hinder our ability to prevent fraud. The identified material weakness in our internal control over financial reporting will not be considered remediated until the controls operate for a sufficient period of time and Management has concluded through appropriate testing that these controls operate effectively. For further information, see Part II, Item 9A. “Controls and Procedures.”

Our business could be adversely affected by the loss of one or more key employees.

We are heavily dependent upon our senior management and the loss of services of any of our senior executives could adversely affect our business. Our success has been, and will continue to be, dependent on our ability to retain the services of key employees. The loss of the services of key employees or senior management could adversely affect the quality and profitability of our business operations.

Risks Related to Our Debt Securities

Our offers and sales of securities must comply with applicable securities laws, or we could be liable for damages, which could impact our ability to make payments on our outstanding debt securities.

Offers and sales of all of our securities must comply with all applicable federal and state securities laws, including Section 5 of the Securities Act of 1933. If any of our offers, including those deemed made pursuant to newspaper or radio advertisements or on our website, or sales are found not to be in compliance with any of these laws, we could be liable to certain purchasers of the security, could be required to offer to repurchase the security, or could be liable for damages or other penalties. If we are required to repurchase any of our securities other than in the ordinary course of our business as a result of any such violation, or we are otherwise found to be liable for any damages or penalties as a result of any such violation, our financial condition could be materially adversely affected. Any such adverse effect on our financial condition could materially impair our ability to fund loans in the ordinary course of business or pay principal and interest on our outstanding debt securities.

Neither the Company nor any of its debt securities are or will be rated by any nationally recognized statistical rating agency, and this may increase the risk of your investment.

Neither 1st Franklin nor any of its debt securities are, or are expected to be, rated by any nationally recognized statistical rating organization. Typically, credit ratings assigned by such organizations are based upon an assessment of a company’s creditworthiness and are often a measure used in establishing the interest rate that a company offers on debt securities it issues. Without any such rating, it is possible that fluctuations in general economic, or industry specific, business conditions, changes in results of operations, or other factors that affect the creditworthiness of a debt issuer may not be fully reflected in the interest rate on any outstanding indebtedness of that issuer. Investors in the Company’s securities must depend solely on their own evaluation of the creditworthiness of 1st Franklin for the payment of principal and interest on those securities. In the absence of any third party credit rating, it is possible that the interest rates offered by the Company on its debt securities may not represent the credit risk that an investor assumes in purchasing any of these securities.

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General Risk Factors

Uncertain economic conditions could negatively affect our results and profitability.

Increases in unemployment levels or other factors indicative of recessionary economic cycles could affect our investors’, customers’, and potential investors’ and customers’ disposable income, confidence, and spending patterns and preferences, which in turn could negatively impact the making of loans, our cost of loans, our sales of investment securities and our customers’ ability to repay their obligations to us.

The effects of a pandemic, epidemic or other widespread public health emergency may adversely affect our business, financial condition and results of operations.

Our business, financial condition and results of operations could be materially and adversely affected by the effects of a pandemic, epidemic or other widespread public health emergency. Widespread health emergencies can disrupt our operations through their impact on our employees, investors, customers and the communities in which we operate. Such impacts to our customers could result in increased risk of delinquencies, defaults and losses on our loans, negatively impact regional economic conditions, and result in a decline in loan demand and loan originations, which in turn may adversely affect out business, financial condition or results of operations.

Risks Related to Our Regulatory Environment

Consumer finance companies and other companies that offer and sell securities to the public such as the Company are subject to an increasing number of laws and government regulations. Compliance with these regulations requires significant time and attention of management, and is costly. Further, if we fail to comply with these laws or regulations, our business may suffer and our ability to pay our obligations may be impaired.

Our lending operations continue to be subject to significant focus by federal, state and local government authorities, and are subject to various laws and judicial and administrative decisions imposing various requirements and restrictions on certain lending practices by companies in the consumer finance industry; sometimes referred to as "predatory lending" practices. These requirements and restrictions, among other things:

•require that we obtain and maintain certain licenses and qualifications;

•limit the interest rates, fees and other charges that we are allowed to charge;

•require specified disclosures to borrowers;

•limit or prescribe other terms of our loans;

•govern the sale and terms of insurance products that we offer and the insurers for which we act as agent; and

•define our rights to repossess and sell collateral.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) has significantly increased the regulation of financial institutions and the financial services industry in recent periods. The Dodd-Frank Act established the Bureau of Consumer Financial Protection (the CFPB) as an independent entity given the authority to promulgate additional consumer protection regulations applicable to all entities offering consumer financial services or products such as the Company. These and other applicable regulations have increased and are expected to further increase our cost of doing business and time spent by Management on regulatory matters which may have a material adverse effect on the Company’s operations and results.

In addition, other state and local laws, public policy and general principles of equity relating to the protection of consumers, unfair and deceptive practices and other debt collection practices may apply to the loans we make and our related services. There can be no assurance that a change in any of those laws, or in their interpretation, will not make our compliance therewith more difficult or

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expensive, further restrict our ability to originate loans or other financial services, further limit or restrict the amount of interest and other charges we earn under such loans or services, or otherwise adversely affect our financial condition or business operations. The burdens of complying with these laws and regulations, and the possible sanctions if we do not so comply, are significant, and may result in a downturn in our business or our inability to carry on our business in a manner similar to how we currently operate.

If we experience unfavorable litigation or proceedings, our ability to timely meet our obligations may be impaired.

As a consumer finance company, in addition to being subject to stringent regulatory requirements, we may, from time to time, be subject to various consumer claims and litigation seeking damages and statutory penalties. The damages and penalties claimed by consumers and others can often be substantial. The relief may vary but generally would be expected to include requests for compensatory, statutory and punitive damages. Unfavorable outcomes in any litigation or statutory proceedings could materially and adversely affect our results of operations, financial condition and cash flows and our ability to make payments on our outstanding obligations.

While we would expect to vigorously defend ourselves against any of these proceedings, there is a chance that our results of operations, financial condition and cash flows in any period could be materially and adversely affected by unfavorable outcomes which, in turn, could affect our ability to fund loans or make payments on, or repay, our outstanding obligations, any of which could materially adversely affect our business, results of operations and financial condition.

Item 1B.    UNRESOLVED STAFF COMMENTS:

Not Applicable.

Item 1C.    CYBERSECURITY:

RISK MANAGEMENT AND STRATEGY

1st Franklin is committed to maintaining the confidentiality, integrity and availability of our data and information systems. We understand the risks presented by existing and emerging cybersecurity threats against our electronic infrastructure and the information it stores and processes, as well as against our customers and employees. We also recognize that there are cybersecurity risks associated with remote work environments which are utilized by some of 1st Franklin’s employees, our use of cloud-based infrastructure and networks, and our use of third parties to support our operations.

As a part of our overall risk management processes, we have implemented a comprehensive cybersecurity program designed to identify and manage cybersecurity risks. This program includes a robust risk assessment process designed to identify security vulnerabilities, incorporates regulatory requirements and also provides the foundation for the Information Security department’s annually updated multi-year project roadmap, which is used to continually enhance 1st Franklin’s cybersecurity program to respond to new threats and challenges.

We employ a comprehensive set of cybersecurity policies and guidelines and a strong security training and awareness program to communicate policy directives and current threats to 1st Franklin employees. Additionally, we have a strong due diligence and risk assessment process to identify and manage risks associated with our use of third-party service providers.

Some of the other features of our cybersecurity program include:

•Monthly phishing simulations and additional training as required for incorrect identification of phishing attempts

•Ongoing vulnerability scanning and annual penetration testing of our internal and external environments

•IDS/IPS ( Intrusion Detection Device / Intrusion Prevention System)

•Firewalls

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•Endpoint Detection and Response

•24x7x365 Security Operations Center

•Security Incident and Event Monitoring

•Cloud alerting and monitoring

•Disaster recovery and business continuity planning and backup strategy

•Incident response process

•Network segmentation

•Data classification labeling and data loss prevention

•Privileged access management

•Secure builds

•Multi-factor and adaptive authentication

•Physical security

•Internet filtering, email spam filtering and anti-phishing

•Brand protection and phishing takedown service

•Database security

•Data transfer and encryption

Additionally, we maintain cybersecurity insurance coverage to help mitigate risk in the event of a potential breach or attack. Although we maintain insurance coverage at levels we deem appropriate for our business, it is possible that such coverage could be insufficient to cover all losses or types of claims that may arise.

We have been, and in the future may be, the target of cyberattacks, including the previously disclosed November 2022 cyberattack on the Company and related data breach. We do not believe any risks from cybersecurity threats have materially affected or are reasonably likely to materially affect the Company or our business strategy, results of operations, or financial condition. We continue to enhance our data security infrastructure and take further steps to prevent unauthorized access to our systems and the data we maintain. For additional information regarding the risks from cybersecurity threats we face, see "Risks Related to Our Business – We could incur significant liability, and our business, financial condition, results of operations and reputation could be harmed, if our information systems are breached or we otherwise fail to protect customer, investor, employee or Company data or systems" under Part I, Item 1A. “Risk Factors” above.

GOVERNANCE

The Board of Directors maintains the ultimate responsibility for oversight of the Company’s risks, including cybersecurity risks. The Board regularly receives presentations on matters of cybersecurity risk from management. Management discusses matters of particular importance or concern as they may be materially impacted by risk on an ongoing basis, and members of the Company's Executive Committee ("EXCO") are also available to members of the Board for discussion and review both during meetings of the Board of Directors and at other times.

The Company’s information security efforts are led by our Chief Information Security Officer ("CISO"). The CISO meets at least quarterly with each of the Board of Directors, the EXCO, and the Senior Leadership Team ("SLT"), facilitating the Company's robust cybersecurity oversight and strategies that help us to assess, identify, and manage cybersecurity risks. This includes performing tabletop exercises at least annually with the Board, the EXCO and the SLT to evaluate our incident response processes and keeping them informed of the evolving threat landscape and how 1st Franklin is managing such risks.

The CISO is supported by a team of highly technical and experienced security professionals who are responsible for implementing and maintaining the security program for 1st Franklin, including security engineers and a cybersecurity analyst.

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Item 2.    PROPERTIES:

Paragraph 1 of “The Company”, page 3; paragraph 1 (and the accompanying table) of Footnote 8 (Leases) of the Notes to Consolidated Financial Statements, pages 48-49; and the 1st Franklin Financial Corporation Branch Offices directory of branch offices, pages 63-64 of the Annual Report are incorporated herein by reference.

Item 3.    LEGAL PROCEEDINGS:

From time to time, the Company is involved in various claims and lawsuits incidental to its business. In the opinion of Management based on currently available facts, the ultimate resolution of any such known claims and lawsuits is not expected to have a material adverse effect on the Company’s financial position, liquidity, or results of operations.

Item 4.    MINE SAFETY DISCLOSURES:

Not Applicable.

PART II

Item 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES:

"Sources of Funds and Common Stock Matters", page 12 of the Annual Report is incorporated herein by reference.

Item 6.    [Reserved]

Item 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS:

"Management’s Discussion and Analysis of Financial Condition and Results of Operations", pages 13-21 of the Annual Report is incorporated herein by reference. This section generally discusses 2024 and 2023 operating results and year-to-year comparisons between 2024 and 2023. Discussion of 2022 operating results and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed on April 1, 2024.

Item 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:

"Quantitative and Qualitative Disclosures About Market Risk”, page 17-20 of the Annual Report is incorporated herein by reference.

Item 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:

"Report of Independent Registered Public Accounting Firm" and the Company’s Consolidated Financial Statements and Notes thereto, pages 22-58 of the Annual Report are incorporated herein by reference.

Item 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE:

Not applicable.

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Item 9A.    CONTROLS AND PROCEDURES:

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Executive Vice President and Chief Financial Officer ("CFO"), we evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2024. Based on that evaluation, the CEO and CFO concluded that the Company's disclosure controls and procedures were not effective as of December 31, 2024, because of the material weaknesses in our internal control over financial reporting further described below.

Notwithstanding the identified material weaknesses, our CEO and the CFO have concluded that the consolidated financial statements in this Annual Report on Form 10-K present fairly, in all material respects, our financial position, results of operations and cash flows as of and for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING:

Management of the Company, including our CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a- 15(f) and 15d-15(f) under the Exchange Act and based upon the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“the COSO framework”). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with U.S. GAAP. Management recognizes that there are inherent limitations in the effectiveness of any internal control system. Because of these inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Under the supervision and with the participation of the Company’s management, including our CEO and CFO, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based on the COSO Framework. Based on evaluation under these criteria, management determined that we did not maintain effective internal control over financial reporting as of December 31, 2024 due to the material weaknesses described below.

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MATERIAL WEAKNESS IN INTERNAL CONTROL OVER FINANCIAL REPORTING

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.

As a result of Management’s evaluation, we identified certain deficiencies in internal control that we believe rise to the level of material weaknesses, which deficiencies relate to the Company’s conversion to and implementation of a new loan servicing system, and which conversion began in June 2024:

•The Company lacks a formal risk assessment process to identify and analyze risks of misstatement due to error and/or fraud. Specifically, the Company did not adequately assess the risks associated with the conversion of the Company’s loan servicing system, such as data migration risks, system integration risks, or operational risks. The Company’s lack of sufficient technical accounting resources during the implementation of the new loan servicing system led to delays or omissions in the critical control activities, increasing the risk of misstatements.

•The Company does not have a formal process for monitoring the effectiveness of their internal controls due to a lack of ongoing monitoring of the system's performance, failure to conduct post-implementation reviews, or inadequate follow-up on identified issues.

•Due to the material weaknesses described above, additional material weaknesses were identified related to the lack of design and implementation of the necessary controls related to the conversion to and implementation of the Company’s new loan servicing system to identify that certain transaction codes were incorrectly configured in the system. As a result, business process controls (automated and manual) that rely on data produced from the new system were also deemed ineffective, which affects the Company’s loan, unearned finance charge, finance charge, and provision for credit loss account balances and related disclosures. In addition, the Company was unable to provide sufficient audit evidence to support the completeness and accuracy of certain general ledger balances without performing extensive manual reconciliation procedures.

These control deficiencies created a reasonable possibility that a material misstatement in the Company’s financial statements would not be prevented or detected on a timely basis and, therefore, constituted material weaknesses.

REMEDIATION PLAN

We have initiated a comprehensive remediation plan to remediate the identified material weaknesses described above, which remediation efforts began in the quarter ended March 31, 2025 and have continued into the quarter ending June 30, 2025. Steps taken or underway include:

•Designing and implementing procedures to identify and evaluate changes in our business and the impact on our internal controls in order to plan and perform more timely and thorough monitoring activities and risk assessment analyses;

•Ensuring locations that have not yet transitioned to the new system have appropriate implementation and monitoring controls;

•Engaging external system consultants to assist in correcting general ledger mapping logic;

•Revalidating all transaction code mappings to financial statement accounts;

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•Enhancing internal controls and testing procedures around system data flow and reconciliation; and

•Strengthening the oversight of the new loan servicing system implementation and configuration process.

ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM

This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding the effectiveness of internal controls over financial reporting. Management’s report is not subject to attestation by the Company’s registered public accounting firm pursuant to certain rules of the Securities and Exchange Commission that permit the Company to provide only Management’s report in this Annual Report.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

Other than as described above, there have been no changes in the Company's internal control over financial reporting that occurred during the fourth quarter of 2024 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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Item 9B.    OTHER INFORMATION:

Not Applicable.

Item 9C.    DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS:

Not Applicable.

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Forward Looking Statements:

Certain statements contained or incorporated by reference herein, including under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” may constitute “forward-looking statements” within the meaning of the federal securities laws. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, those set out under the caption “Risk Factors”, the ability to manage cash flow and working capital, the accuracy of Management’s estimates and judgments, adverse developments in economic conditions including within the interest rate environment, unfavorable outcomes of litigation, ability to control credit losses, federal and state regulatory changes and other factors referenced elsewhere herein or incorporated herein by reference.

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PART III

Item 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE:

DIRECTORS

Name of Director	Age	Director Since	Position(s) with Company
Ben F. Cheek, III (3)(4)(5)	88	1967	Chairman Emeritus
Ben F. Cheek, IV (3)(4)(5)	63	2001	Chairman of the Board
David W. Cheek (4)(5)	57	2024	None
Virginia C. Herring (3)(4)(5)	61	2020	President and Chief Executive Officer
A. Roger Guimond (2)(5)	70	2004	None
Jerry J. Harrison, Jr. (3)(2)(5)	62	2020	Executive Vice President and Chief Strategy Officer
Donata Ison (1)(2)(5)	40	2023	None
John G. Sample, Jr. (1)(2)(5)	68	2004	None
Sheryl Smith (1)(2)(5)	66	2024	None
Keith D. Watson (1)(2)(5)	67	2004	None

(1)Member of Audit Committee.

(2)Mr. Guimond is the retired EVP and Chief Financial Officer of 1st Franklin Financial Corporation where he served for more than 45 years until his retirement in April 2021. Mr. Harrison, Jr. is presently employed by the Company as Executive Vice President and Chief Strategy Officer. Previously Mr. Harrison, Jr. was the Chief Operating Officer at Crider Foods, Inc. Ms. Donata Ison is the Vice President of Finance at Armhr; she has previous experience with an international public accounting firm. Mr. Sample is the retired Senior Vice President and Chief Financial Officer of Atlantic American Corporation, an insurance holding company, where he served from 2002 through July 31, 2017. Ms. Smith’s career spans over 40 years in banking, money transmission, and finance. She is an associate member of the Bar Association and holds a CRCM designation. She has also previously served on the Board of a global currency transmission organization. Mr. Watson is Chairman of the Board of Bowen & Watson, Inc., a general contracting company. Mr. Watson has been with Bowen & Watson since 1980.

(3)Reference is made to “Executive Officers” for a discussion of business experience.

(4)Messrs. Ben F. Cheek, III, Ben F. Cheek, IV and David W. Cheek are father and sons. Mr. Ben F. Cheek, III and Ms. Virginia C. Herring are father and daughter. Messrs. Ben F. Cheek, IV, David W. Cheek, and Ms. Virginia C. Herring are brothers and sister.

(5)The term of office of each director continues until the next meeting of shareholders of the Company. The board will consist of 7 to 11 directors. The departure of a director will not necessitate replacement, provided the Company meets the minimum number of required directors.

There was no, nor is there presently any, arrangement or understanding between any director and any other person (except directors and officers of the registrant acting solely in their capacities as such) pursuant to which the director was selected.

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1st Franklin Financial Corporation is a family controlled company, with Mr. Ben F. Cheek, III‘s family directly or indirectly owning all of the Company's stock. Mr. Cheek, III, who has significant knowledge of all aspects of the Company's business and operations, served as Chairman and Chief Executive Officer through 2014. Effective January 1, 2015, Mr. Cheek, III transitioned to the role of Vice Chairman and Ben F. Cheek, IV, who previously served as Vice Chairman and has been with the Company since 1988 in roles of increasing responsibility, was appointed Chairman of the Board. At that time, Mrs. Virginia C. Herring, the Company’s President, took on the additional role of Chief Executive Officer. In light of the additional responsibilities assumed by Mr. Cheek, IV and Ms. Herring, and in order to allow them to each focus on the significant responsibilities contained within these new roles, the Board determined at that time that it was appropriate to separate the roles of Chairman and Chief Executive Officer. Given the separation of the Chairman and Chief Executive Officer roles, relatively low historical turnover of members of the Board of Directors and the strong working relationship between such members, the Board has determined there is not a need to appoint a lead independent director. The Board continues to believe that such determination is in the best interests of the Company. During 2020, Mr. Cheek, III transitioned to Chairman Emeritus.

The day-to-day management of the Company, including identifying and evaluating current and potential risks within financial operations, compensation related and other processes and development is primarily the responsibility of the Company’s Executive Committee (the “EXCO”). Individuals comprising the EXCO are as follows: Ms. Abernathy, Ms. Dunn, Ms. Zimmerman, Messrs. Clevenger II, Gyomory, Harrison, McQuain, Niemiec, Scarpitti, and Shaw . The Board of Directors maintains the ultimate responsibility for oversight of the Company’s risks. The Audit Committee has specific responsibility for oversight of risks associated with financial accounting, reporting and audits, as well as internal control over financial reporting. The Board regularly receives, evaluates and discusses presentations, at least quarterly, on the financial condition and operating results of the Company. Management discusses matters of particular importance or concern as they may be materially impacted by risk on an ongoing basis, and members of the EXCO remain available to members of the Board for discussion and review both during meetings of the Board of Directors and at other times.

Notwithstanding the fact that the Company’s equity securities are not currently traded on any national securities exchange or with any national securities association, as a matter of good corporate governance, the Board of Directors has determined that it is important to have Board members who are independent from management represented on the Board of Directors. For this purpose, the Board has adopted and considers the independence requirements for companies whose securities are listed for trading on the NASDAQ Stock Market. The Board has determined that Ms. Ison, Ms. Smith, Messrs. Sample, and Watson, are “independent” (as such term is defined in the rules of the Securities and Exchange Commission (the “SEC”) and the NASDAQ Listing Rules). In making this determination, the Board concluded that none of such persons have a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

The Audit Committee is composed of Ms. Ison, Ms. Smith, Messrs. Sample, and Watson. In accordance with the provisions of the charter of the Audit Committee, the Board of Directors has determined that all of the members thereof are “independent” and that Ms. Ison, and Mr. Sample are an “audit committee financial expert” as defined by the SEC in Rule 407(d)(5) of Regulation S-K. In making such determination, the Board of Directors took into consideration, among other things, the express provision in Item 407(d)(5) of Regulation S-K that the designation of a person as an audit committee financial expert shall not impose any greater responsibility or liability on that person than the responsibility and liability imposed on that person as a member of the Audit Committee, nor shall it affect the duties or obligations of other Audit Committee members. A copy of the Company’s Audit Committee charter is publicly available on the Company’s website at: https://www.1ffc.com.

The Company is a family owned business. Because of the closely held nature of ownership, the Company does not have an official compensation committee (or other official committee of the Board of Directors performing equivalent functions) or a charter outlining the responsibilities thereof. The EXCO establishes the bases for all executive compensation, which compensation is subject to approval by the shareholders in their capacities as such. Additional information concerning the processes and procedures for the consideration and determination of executive officer and director compensation is contained under the heading “Compensation Discussion and Analysis” below.

Because of the closely held nature of the ownership of the Company, the Board has determined that it is not necessary for the Company to have a formal process for shareholders to send communications to the Board.

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Director Qualifications:

The members of the Board of Directors each have the qualifications we believe necessary and desirable to appropriately perform their duties. Each member has an exemplary record of professional integrity, a dedication to their respective professions and a strong work ethic.

Director	Summary of Qualifications
Ben F. Cheek, III	Retired executive officer of the Company. Previously served as director of a Habersham Bancorp. Has legal background as an attorney. Has 64 years of experience with the Company. Has previously served as board member of various consumer industry associations. He has served as director of the Company for 57 years.
Ben F. Cheek, IV	Executive officer of the Company. Highly knowledgeable of the banking and consumer finance industry. Has been with the Company for 36 years. Currently serves on two of the industry’s state association boards and has previously served as a board member of our industry’s national association.
Virginia C. Herring	Executive officer of the Company. Highly knowledgeable of the banking and consumer finance industry. Has been with the Company for 36 years.
David W. Cheek	Over 20 years of experience and an extensive background in Commercial Real Estate development. Partner of CFL Properties, LLC.
A. Roger Guimond	Retired executive officer of the Company. Highly knowledgeable of the banking and consumer finance industry. Had been with the Company for more than 45 years. Significant experience in finance and related areas.
Jerry J. Harrison, Jr.	Executive Officer of the Company. Extensive experience in private equity and technology services industry. Has a law degree and significant financial and technology related experience.
Donata Ison	Independent director. Extensive knowledge of accounting and reporting standards and specialty finance industry. Prior experience at an international public accounting firm as well as management experience at middle market operating companies.
John G. Sample, Jr.	Independent director. Extensive knowledge of accounting and reporting standards. Prior experience as an audit partner in an international public accounting firm. Experience and knowledge of the insurance industry through prior executive management positions at operating companies. Serves as board member and Chairman of the Audit Committee at Capital City Bank Group, Inc. (a Tallahassee, Florida bank holding company). Has served as director of the Company for 20 years and is the Company’s Audit Committee Chairman.
Sheryl Smith	Independent director. Extensive knowledge of compliance and regulatory standards with over 40 years of financial institution experience. Certified Regulatory and Compliance Manager and a member of the American Bar Association. Serves as a board member for Omega Intercontinental, Inc. and World First USA, Inc.
Keith D. Watson	Independent director. Previously served on board of a community bank. Has served as director of the Company for 20 years. Maintains executive position with significant oversight responsibility in self-owned corporation.

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EXECUTIVE OFFICERS
Name, Age, Position(s) and Family Relationships	Business Experience
Ben F. Cheek, IV, 63 Chairman of Board Son of Ben F. Cheek, III, Brother of Virginia C. Herring	Joined the Company in 1988 working in Statistics and Planning, Became Vice Chairman in 2001 and Chairman of Board effective January 2015.
Ben F. Cheek, III, 88 Chairman Emeritus Father of Ben F. Cheek, IV and Virginia C. Herring	Joined the Company in 1961 as attorney and became Vice President in 1962, President in 1972 and Chairman of Board in 1989. Effective January 2015, assumed role of Vice Chairman of the Board. During 2020, Mr. Cheek, III transitioned to Chairman Emeritus.
Virginia C. Herring, 61 President and Chief Executive Officer Daughter of Ben F. Cheek, III, Sister of Ben F. Cheek, IV	Joined the Company on a full time basis in 1988 as Developmental Officer. Since then, she has worked throughout the Company in different departments on special assignments and consultant projects. Became President in 2001. Effective January 2015 promoted to Chief Executive Officer in addition to retaining her position as President.
Kelly E. Abernathy, 44 Executive Vice President and Chief Compliance Officer No Family Relationship	Joined the company in March 2023 as Vice President, Fair and Responsible Lending; and was promoted to Executive Vice President of Compliance in January 2025. Prior thereto, served the consumer finance industry as Chief Compliance Officer for Heights Finance Corp. | CURO Financial Technologies from August 2021 to February 2023, and as Sr. Director of Compliance and Chief Privacy Officer at Regional Management Corp. (Regional Finance) from August 2015 to August 2021. Prior to that, served the traditional banking industry as a Bank Secrecy Act (BSA) Officer, Privacy Officer, and Security Officer, from 2011 to 2015.
Daniel E. Clevenger, II, 51 Executive Vice President and Chief Administrative Officer No Family Relationship	Joined the Company in February 2015 as Executive Vice President - Compliance. Prior thereto, served as General Counsel and Chief Compliance Officer at Millennium Capital and Recovery Corporation, a collateral recovery company, from 2014 to 2015 and prior thereto provided legal services at Day Kettierer, LTD from 2006 to 2013. Served in private practice of law from 1998 to 2006.
Kristin M. Dunn, 48 Executive Vice President and Chief Marketing Officer No Family Relationship	Joined the Company in May 2024 as Senior Vice President – Marketing, and was promoted to Executive Vice President – Marketing effective January 2025. Prior thereto, was VP of Marketing for Brundage Management (Sun Loan) 2021-2024. Prior to that was SVP of Marketing 2015-2020 at World Acceptance.
Brian J. Gyomory, 57 Executive Vice President and Chief Financial Officer No Family Relationship	Joined the Company in December 2019 as Senior Vice President of Finance. Became Executive Vice President and Chief Financial Officer in April 2021. Prior thereto, was Vice President of Finance at Global Lending Services, LLC beginning 2012.

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EXECUTIVE OFFICERS (continued)
Name, Age, Position(s) and Family Relationships	Business Experience
Jerry J. Harrison, Jr., 62 Executive Vice President and Chief    Strategy Officer No Family Relationship	Joined the Company in September 2022 as Project Engineer - Special Projects. Became Executive Vice President and Chief Strategy Officer in July 2023. Prior thereto, was Chief Operating Officer at Crider Foods, Inc.
Gary L. McQuain, 59 Executive Vice President and Chief Operating Officer No Family Relationship	Joined the Company in October 2019 as Senior Operations Vice President. Became Executive Vice President and Chief Operating Officer in May 2020. Prior thereto, was President and CEO of Southern Management Corporation, a financial services company, from October 2017 to August 2019. Prior to that, served as a financial services professional at MidCountry Financial Corp., a financial services holding company, from January 2016 to October 2017, and President of Pioneer Services, a financial services company from January 2016 to October 2017.
John D. Niemiec, 56 Executive Vice President and Chief Credit Risk Officer No Family Relationship	Joined the Company in April 2024 as Senior Vice President of Credit Risk and Analytics after serving as a contractor in the Credit Risk Group since January 2024. Became Executive Vice President of Credit Risk and Analytics in January 2025. Prior to that, serviced as Chief Risk Officer at Heights Finance from 2019 through 2023 and Deputy Chief Risk Office at Regional Finance from 2015 through 2019.
Mark J. Scarpitti, 52 Executive Vice President and General Counsel and Secretary / Treasurer No Family Relationship	Joined the Company in November 2015 as Vice President – Deputy General Counsel. Became Executive Vice President and General Counsel in August 2021.
Joseph A. Shaw, 54 Executive Vice President and Chief Information Officer No Family Relationship	Joined the Company in July 2017 as Chief Information Officer and became Executive Vice President and Chief Information Officer in January 2018. Prior thereto, he was a Technology Strategist for a Microsoft consulting firm he founded in 2007.
Mary S. Zimmerman, 55 Executive Vice President and Chief Human Resources Officer No Family Relationship	Joined the Company's investment center in October 2011 and transferred to HR in 2012 as Benefits Administrator, Named Benefits Mgr. in 2020, then Director in 2022. Became Vice President of Human Resources in 2023, Senior Vice President in 2024, and named Executive Vice President and Chief Human Resources Officer on January 1st 2025. Benefits Director 2022, Prior thereto, Accounting Manager, Currahee Club from 2005 to 2011.

The term of office of each executive officer expires when a successor is approved by the Chief Executive Officer. There was no, nor is there presently any, arrangement or understanding between any officer and any other person (except directors or officers acting solely in their capacities as such) pursuant to which the officer was elected.

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The Company has adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer and controller, or any persons performing similar functions, as well as to its directors and other employees. A copy of this code of ethics is publicly available on the Company’s website at: https://www.1ffc.com. The Company will provide a copy of this code of ethics, free of charge, upon any written request. Requests should be directed to Mark Scarpitti, Secretary and Treasurer, 1st Franklin Financial Corporation, P.O. Box 880, Toccoa, Georgia 30577. If we enter into any amendment to this code of ethics, other than a technical, administrative, or non-substantive amendment, or we grant any waiver from a provision of the code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or any persons performing similar functions, we will disclose the nature of the amendment or waiver on our website. Also, we may elect to disclose the amendment or waiver in a report on Form 8-K filed with the SEC.

The Company maintains an “Ethics Hotline” which enables employees to report any questionable ethics actions including, but not limited to, fraud or deliberate error in recording and/or maintaining accurate records, deficiencies or noncompliance with the Company’s policies. The reporting is strictly confidential and is reviewed by our Chief Human Resources Officer and the Chairman of the Audit Committee. Ethics violations that are reported are promptly investigated and appropriate corrective action is taken as warranted by the results of the investigation.

As described elsewhere herein, the Company’s stock is not traded or quoted on any national securities exchange or association, but is closely held by Ms. Virginia C. Herring and Messrs. Ben F. Cheek, IV, and David W. Cheek. As a result, the Company has not adopted any insider trading policies or procedures governing the purchase, sale, or other dispositions of the Company’s securities.

Item 11. EXECUTIVE COMPENSATION:

Compensation Discussion and Analysis

Overall Philosophy:

The overall financial objective of the Company is to achieve or exceed specific annual and long-term strategic goals set by the Executive Committee (described below, the “EXCO”), from time to time, while maintaining a healthy and stable financial position. It is part of the overall responsibility of our executive officers to successfully manage the Company to reach this objective. Our compensation philosophy revolves around the motivation to achieve, and achievement of, these goals and is designed to attract and retain top executives, and to incentivize and reward the executive officers for their efforts and successes, while properly balancing the encouragement of risk-taking behavior.

Role of Executive Officers in Compensation Decisions:

The Company is a family-owned business. Because of the closely-held nature of ownership, the Company does not have an official compensation committee (or other official committee of the Board of Directors performing equivalent functions). The EXCO, which consists of certain executive officers of the Company, establishes the bases for all executive officer compensation, which compensation is approved by Mr. Cheek IV, and Ms. Herring, who are shareholders of the Company and Mr. Cheek, III, retired executive officer. Effective January 1, 2025, the EXCO consisted of Ms. Abernathy, Ms. Dunn, Ms. Zimmerman, Messrs. Clevenger, Gyomory, Harrison, McQuain, Niemiec, Scarpitti, and Shaw. For the foregoing reasons the Company has not historically engaged any independent compensation consultant to advise on compensation related matters.

Components of Compensation:

The principal components of the Company’s executive compensation program include base salary, discretionary bonus awards and non-equity incentive plan compensation. The Company also expects that earnings on non-qualified deferred compensation amounts and other compensation opportunities, including certain perquisites as detailed below, will meaningfully add to each executive officer’s overall total compensation each year. Given the closely held nature of the Company, the Company does not have available for grant, and does not deem it

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appropriate to pay, any equity-based compensation. The EXCO takes into account this fact annually when determining other components and amounts of compensation.

Base Salary:

The Company provides executive officers, and other employees, with a base salary intended to provide a level of financial security and appropriately compensate them for services rendered throughout the year. Salaries for all executive officers are established annually by Mr. Cheek, IV and Ms. Herring, based on the level of each executive officer’s responsibility, tenure with the Company and certain publicly available market data with respect to salaries paid for like positions at comparable companies. In addition, base salaries are set at a level designed to take into account the fact that the Company does not provide equity-based compensation, as described elsewhere.

Each executive officer has goals set annually which are reviewed with the officer by the President and Chief Executive Officer throughout the year. These goals typically vary depending on the nature of the executive’s responsibilities but are set at a level that is expected to be challenging but achievable. A formal individual performance and development review is also held each year with each executive office, in which the level of achievement with respect to such goals is reviewed. Merit based adjustments to salaries are based on the assessment of each executive’s performance review and overall Company performance.

Bonus Awards:

Bonus amounts payable to the executive officers include discretionary bonuses and may include certain cash bonuses from time to time for special recognition, each determined at the discretion of the EXCO and approved by Mr. Cheek IV and Ms. Herring, who are shareholders of the Company. The EXCO considers, among other factors, the Company’s inability to grant equity-based awards to its officers and employees, as described below, when determining whether and to what extent to make awards. As in prior years, in 2024 it was determined appropriate to award the executive officers a bonus of 4% of their respective base salaries, which was awarded and paid in November as a “holiday” bonus. In addition to this 4% bonus, Mr. Cheek, IV and Ms. Herring retain the discretion to award certain additional amounts.

Non-Equity Incentive Compensation:

As described elsewhere herein, the Company’s stock is not traded or quoted on any national securities exchange or association, but is closely held by Ms. Virginia C. Herring and Messrs. Ben F. Cheek, IV, and David W. Cheek. As a result, the Company does not grant stock or other equity based awards. In consideration of this and other factors, and in order to establish quantitative financial targets, the achievement of which would trigger the payment of additional compensation, the EXCO has, historically, adopted annual incentive compensation plans. Consistently therewith, in the first quarter of 2024 the EXCO approved the Company’s 2024 Executive Bonus Plan (the “2024 Bonus Plan”). Mr. Cheek, III voluntarily elected not to participate in the 2024 Bonus Plan.

The 2024 Bonus Plan was a cash-based incentive plan designed to promote high performance and the achievement of various short-term corporate goals. Under the 2024 Bonus Plan, at inception, a minimum pre-tax income requirement of $11.5 million was established as a threshold goal required to be achieved in order for any payouts to be made under such plan. The minimum pre-tax income threshold was determined by reference to the average trailing three years' pre-tax income of the Company, plus the Company's projected accrued incentive bonus at December 31, 2023, multiplied by 50%. The EXCO believed using a trailing three-year average metric would incent management to focus on long-term growth, and not be disproportionately focused on short-term results. The EXCO determined that pre-tax income was an appropriate measure upon which to provide a threshold evaluation of our annual performance because the EXCO believes pre-tax income represents an appropriate measure of profitability for the Company.

If that threshold was met, payouts under the 2024 Bonus Plan were based on the achievement of personal and department goals and the performance evaluation. The bonus will be paid on an individual basis as a percentage of the participant’s base salary. The plan allows for a bonus range of 0% to 63% of the participant's base salary.

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In 2024, the Company did not achieve the $11.5 million pre-tax income threshold goal; therefore, executive officers did not receive payouts under the 2024 Bonus Plan.

Deferred Compensation:

The Company offers all eligible employees, including executive officers, the opportunity to participate in a Company-sponsored deferred compensation plan in accordance with Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). The Company “matches” employee contributions of up to 6% of their salary, using the following formula: 100% of the first 1% and 70% of the next 5% of salary deferred.

As a result of certain federal limitations on the ability of management or highly compensated employees (within the respective meanings of Section 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of the Employee Retirement Income Security Act of 1974) to participate in such plans, the Company has established the Company’s Executive Nonqualified Deferred Compensation Plan (the “Deferred Compensation Plan”). Pursuant to the Deferred Compensation Plan, the Company annually credits the account of each participant who received more than the Section 401(a)(17) salary limit (as described in the Code) with a discretionary amount that is usually, but not always, equal to the amount the participant would have received as a 401(k) Company matching contribution on the amount of their salary above the Section 401(a)(17) limit had they been allowed to defer 6% of that amount into the qualified plan. The EXCO determined that it was appropriate to offer the Deferred Compensation Plan, and the matching contribution consistent with the level provided by employees generally, to such persons as if they were eligible to participate in Company sponsored plans open to other employees.

Perquisites and Other Compensation:

The Company believes that providing its executive officers with certain reasonable perquisites and other compensation is appropriate and consistent with the Company’s overall compensation philosophy designed to attract and retain top executives. The EXCO periodically reviews the types and amounts of perquisites and other compensation provided to the Company’s executive officers. In conducting this review, the EXCO considers, among other things, the types and ranges of compensation provided at various similar sized or situated companies and, in 2024, determined that these amounts were appropriate.

Select Company executive officers are provided the use of Company-owned automobiles. These amounts are included in the taxable income of the executive officers. In addition, the Company generally provides certain insurance benefits to its executive officers. This includes long-term disability and travel accident insurance (which pays a benefit upon the occurrence of certain specific events), as well as basic life and accidental death insurance coverage, which coverage is provided on a graduated scale based on seniority. In addition, in recognition of the commitment to the Company by those individuals with twenty or more years of service to the Company, the Company also pays the premiums for their personal medical benefits. In 2024, Messrs. Cheek, IV and Ms. Herring received this benefit. In addition, during 2024, Messrs. Ben Cheek, III and Ben Cheek, IV, David Cheek, Jerry Harrison and Ms. Virginia Herring, based on positions as shareholders and executive officers, were determined eligible to participate in the Company’s medical expenses reimbursement program (“MERP”), which provides reimbursement for amounts not otherwise covered under policies for which these officers are eligible to participate in.

These amounts for each named executive officer are reflected in the Summary Compensation Table and related notes below.

Employment Agreements and Change in Control Arrangements:

The Company generally does not enter into employment agreements with its executive officers. Given the nature of its business, and the fact that the Company is a family owned business whose stock is not publicly traded, the Company has not had significant turnover among its senior management, and has determined that it is generally not necessary to enter into such agreements with its executives.

For similar reasons, due to the nature of compensation and the fact that a change in control of the Company is unlikely without significant input and approval from the EXCO and the Company’s closely-held ownership, the EXCO has determined that it is not necessary to condition any payments upon, or make any amounts contractually payable upon, any change in control of the Company.

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Compensation Committee Report:

In the absence of a standing compensation committee, the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with Management and, based on such review and discussions, determined that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

The Board of Directors:
Ben F. Cheek, III	Jerry L. Harrison, Jr.
Ben F. Cheek. IV	Donata Ison
Virginia C. Herring	John G. Sample, Jr.
David W. Cheek	Sheryl Smith
A. Roger Guimond	Keith D. Watson

Summary Compensation Table

Name and Principal Position	Year	Salary		Bonus		Non-Equity Incentive Plan Compensation		All Other Compensation		Total
				(1)		(2)		(3)
Ben F. Cheek, IV Chairman	2024	$	141,667	$	73,801	$	—	$	62,819	$	278,287
	2023	$	234,167	$	91,859	$	—	$	78,576	$	404,602
	2022	$	328,564	$	95,816	$	—	$	93,344	$	517,724
Virginia C. Herring President and CEO	2024	$	393,750	$	204,957	$	—	$	92,667	$	691,374
	2023	$	390,833	$	252,908	$	—	$	104,752	$	748,493
	2022	$	417,000	$	252,208	$	122,211	$	118,036	$	909,455
Brian J. Gyomory Executive Vice President and Chief Financial Officer	2024	$	332,453	$	13,778	$	—	$	12,820	$	359,051
	2023	$	324,000	$	13,440	$	—	$	13,694	$	351,134
	2022	$	300,500	$	12,500	$	91,585	$	23,441	$	428,026
Gary L. McQuain Executive Vice President and Chief Operating Officer	2024	$	475,000	$	19,350	$	—	$	6,672	$	501,022
	2023	$	423,300	$	17,892	$	—	$	34,471	$	475,663
	2022	$	416,500	$	17,345	$	125,582	$	39,719	$	599,146
Jerry J. Harrison, Jr. Executive Vice President and Chief Strategy Officer	2024	$	500,000	$	20,000	$	—	$	55,882	$	575,882
	2023	$	208,333	$	65,000	$	—	$	8,969	$	282,302
	2022	$	—	$	—	$	—	$	—	$	—

(1)For additional information on the payments of discretionary bonus awards, see “Compensation Discussion and Analysis – Bonus Awards” above.

(2)For additional information on the payments of non-equity incentive plan compensation, see “Compensation Discussion and Analysis – Non-Equity Incentive Compensation” above.

(3)All other compensation for the Company’s named executive officers for 2024 is detailed as follows:

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All Other Compensation
Name	Personal Use of Company Auto or Airplane		Insurance Premiums		Director Fees and/or Deferred Salary (a)		Company Contribution To Deferred Compensation Plan		Total
Ben F. Cheek, IV	$	16,154	$	11,665	$	35,000	$	—	$	62,819
Virginia C. Herring	$	46,281	$	9,192	$	35,000	$	2,194	$	92,667
Brian J. Gyomory	$	—	$	820	$	12,000	$	—	$	12,820
Gary L. McQuain	$	—	$	822	$	—	$	5,850	$	6,672
Jerry J. Harrison, Jr.	$	—	$	13,907	$	35,000	$	6,975	$	55,882

(a)Mr. Harrison elected to defer $35,000 director fees. Mr. Gyomory elected to defer $12,000 in salary. See "Executive Nonqualified Deferred Compensation Plan" and "Director Compensation" below.

Grants of Plan-Based Awards

In 2024, the named executive officers were eligible to receive non-equity incentive plan payouts under the Company’s 2024 Bonus Plan. The following table sets forth certain information with respect to award eligibility and payments for the fiscal year ended December 31, 2024 to our named executive officers.

		Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)
Name	Grant Date	Threshold $		Target $		Maximum $
Ben F. Cheek, IV	3/1/2024	$	—	$	44,625	$	89,250
Virginia C. Herring	3/1/2024	$	—	$	124,031	$	248,063
Brian J. Gyomory	3/1/2024	$	—	$	104,723	$	209,445
Gary L. McQuain	3/1/2024	$	—	$	149,625	$	299,250
Jerry J. Harrison, Jr.	3/1/2024	$	—	$	157,500	$	315,000

(1)Represented estimated possible payouts under the 2024 Bonus Plan. The “Threshold” column reflects the payout which would have occurred if each performance goal as set out in the 2024 Bonus Plan was met, and payouts were made at the minimum level (0%) of salary. The “Target” column reflects the payout which would have occurred if each performance goal as set out in the 2024 Bonus Plan was met, and payouts were made at the midpoint of bonus payout as a percent of salary (31.5%). The “Maximum” column reflects the payout which would have occurred if each performance goal as set out in the 2024 Bonus Plan was met, and payouts were made at the maximum level (63.0%) of salary.

Compensation Committee Interlocks and Insider Participation

The Company is a family owned business and because of the closely held nature of ownership, the Company does not have an official compensation committee (or other official committee of the Board of Directors performing equivalent functions) or a charter outlining the responsibilities thereof. The EXCO establishes the bases for all executive compensation, which compensation is approved by shareholders Mr. Cheek, IV and Ms. Herring.

During 2024, none of the Company’s executive officers served as a member of the board of directors or compensation committee of any entity for which a member of our Board served as an executive officer.

Executive Nonqualified Deferred Compensation Plan

Any management or highly compensated employee who has been designated by the Administrative Committee for the Company’s Deferred Compensation Plan as an eligible employee may participate in the Company’s

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Executive Nonqualified Deferred Compensation Plan (the “Plan”). Non-employee directors are also eligible to defer their respective director fees into the Deferred Compensation Plan.

The Plan does not require any contribution to be made by a participant therein.

Interest is credited on the participant’s account on the last day of each quarter at an interest rate equal to the average of the interest rate during such quarter paid on the Company’s Variable Rate Subordinated Debentures with a one-year interest adjustment period.

Nonqualified Deferred Compensation Table
Name	Executive Contributions In Last Fiscal Year(1)		Registrant Contributions In Last Fiscal Year(2)		Aggregate Earnings In Last Fiscal Year		Aggregate Withdrawals / Distributions		Aggregate Balance At Last Fiscal Year End
Ben F. Cheek, IV	$	—	$	—	$	22,143	$	—	$	798,044
Virginia C. Herring	$	—	$	2,194	$	4,327	$	—	$	199,354
Brian J. Gyomory	$	12,000	$	—	$	272	$	—	$	23,728
Gary L. McQuain	$	—	$	5,850	$	701	$	—	$	47,600
Jerry J. Harrison, Jr.	$	—	$	6,975	$	206	$	—	$	13,905

(1)Mr. Gyomory elected to defer $12,000 in salary. See the "All Other Compensation" portion of the "Summary Compensation Table" above, and "Director Compensation" below.

(2)Company contributions are included in the “All Other Compensation” portion of the Summary Compensation Table above.

Director Compensation

Name	Fees Earned Or Paid In Cash		All Other Compensation		Total
Ben F. Cheek, III	$	—	$	—	$	—
Ben F. Cheek, IV	$	35,000	$	—	$	35,000
Virginia C. Herring	$	35,000	$	—	$	35,000
David W. Cheek	$	35,000	$	—	$	35,000
A. Roger Guimond	$	35,000	$	—	$	35,000
Jerry J. Harrison, Jr.	$	35,000	$	—	$	35,000
Donata Ison	$	35,000	$	—	$	35,000
John G. Sample, Jr.	$	40,000	$	—	$	40,000
Dean Scarborough (1)	$	17,500	$	—	$	17,500
Sheryl Smith	$	35,000	$	—	$	35,000
Keith D. Watson	$	35,000	$	—	$	35,000

(1) Mr. Scarborough retired from the Board effective June 12, 2024 and, therefore, received 50% of the annual director fee.

In 2024, each member of the Board was entitled to receive $35,000 per year for service as a member of the Board of Directors, including service on any committee thereof. The Chairman of the Audit Committee was entitled to additional $5,000. Mr. Cheek IV elected to receive 2024 director fees as deferred compensation (see “Executive Nonqualified Deferred Compensation Plan” above).

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Chief Executive Officer Compensation Ratio

For the 2024 fiscal year, the ratio of the annual total compensation of Ms. Virginia C. Herring, our Chief Executive Officer (“CEO Compensation”), to the median of the annual total compensation of all of our employees other than our Chief Executive Officer (“Median Annual Compensation”) was 14.6 to 1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions summarized below. In this summary, we refer to the employee who received such Median Annual Compensation as the “Median Employee.” For purposes of this disclosure, the date used to identify the Median Employee was December 31, 2024 (the “Determination Date”).

CEO Compensation for purposes of this disclosure represents the total compensation reported for Ms. Virginia C. Herring for 2024 under the “Total” column of the “Summary Compensation Table” for the 2024 fiscal year. For purposes of this disclosure, Median Annual Compensation was $47,436, and was calculated by totaling for our Median Employee all applicable elements of compensation for the 2024 fiscal year in accordance with Item 402(c)(2)(x) of Regulation S-K.

To identify the Median Employee, we first determined our employee population as of the Determination Date. We had 1,713 employees, representing all full-time and part-time employees. This number does not include any independent contractors, as permitted by the applicable SEC rules. We then measured compensation for the period beginning on January 1, 2024 and ending on December 31, 2024. This compensation measurement was calculated by totaling for each employee gross taxable earnings salary, bonus, sick pay, vacation pay and other compensation as shown in our payroll and human resources records for 2024.

Item 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS:

(a)Security Ownership of Certain Beneficial Owners:

Information listed below represents ownership in the Company with respect to any person (including any “group” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) who is known to the Company to be the beneficial owner of more than five percent of any class of the Company’s voting securities as of December 31, 2024. Each such person has sole “beneficial” ownership of such shares (as determined in accordance with applicable SEC rules relating to share ownership).

Name and Address of Beneficial Owner	Title of Class	Amount and Nature of Beneficial Ownership	Percent of Class
Ben F. Cheek, IV	Voting Common Stock	644 Shares - Direct	37.88%
135 East Tugalo Street
Toccoa, Georgia 30577
Virginia C. Herring	Voting Common Stock	644 Shares - Direct	37.88%
135 East Tugalo Street
Toccoa, Georgia 30577
David W. Cheek	Voting Common Stock	412 Shares - Direct	24.24%
4726 Quailwood Dr.
Flowery Branch, GA 30542

(b)Security Ownership of Management:

Ownership listed below represents ownership in each class of equity securities of the Company as of December 31, 2024, by (i) Our directors and our executive officers of the Company named in the

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summary compensation table and (ii) all directors and executive officers of the Company as a group. Except as described below, each person has sole “beneficial” ownership of such shares.

Name	Title of Class	Amount and Nature of Beneficial Ownership	Percent of Class
Ben F. Cheek, III	Voting Common Stock	None	None
	Non-Voting Common Stock	None	None
Ben F. Cheek, IV	Voting Common Stock	644 Shares - Direct	37.88%
	Non-Voting Common Stock	7,405 Shares - Direct	4.40%
	Non-Voting Common Stock	38,089 Shares – Indirect (1)	22.63%
Virginia C. Herring	Voting Common Stock	644 Shares - Direct	37.88%
	Non-Voting Common Stock	7,911 Shares - Direct	4.70%
	Non-Voting Common Stock	38,088 Shares – Indirect (1)	22.63%
David W. Cheek	Voting Common Stock	412 Shares - Direct	24.24%
	Non-Voting Common Stock	8,111 Shares - Direct	4.82%
	Non-Voting Common Stock	38,089 Shares – Indirect (1)	22.63%
Brian J. Gyomory	Voting Common Stock	None	None
	Non-Voting Common Stock	None	None
A. Roger Guimond	Voting Common Stock	None	None
	Non-Voting Common Stock	None	None
Jerry J. Harrison, Jr.	Voting Common Stock	None	None
	Non-Voting Common Stock	None	None
Donata Ison	Voting Common Stock	None	None
	Non-Voting Common Stock	None	None
John G. Sample, Jr.	Voting Common Stock	None	None
	Non-Voting Common Stock	None	None
Sheryl Smith	Voting Common Stock	None	None
	Non-Voting Common Stock	None	None
Keith D. Watson	Voting Common Stock	None	None
	Non-Voting Common Stock	None	None
All directors and executive officers as a group (11 persons)	Voting Common Stock	1,700 Shares - Direct	100.00%
	Non-Voting Common Stock	23,427 Shares - Direct	13.92%
	Non-Voting Common Stock	114,266 Shares- Indirect (1)	67.89%

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(1)Various trusts have been established for the benefit of each of Ben F. Cheek, IV, Virginia C. Herring and David W. Cheek. The trustees of each of the trusts, who by virtue of dispositive power over the assets thereof are deemed to be the beneficial owners of shares of the Company’s non-voting common stock contained therein, are the children of Ben F. Cheek, III named above who are not the named beneficiaries of each of the respective trusts.

Trustees	Trust for Benefit of	Number of Shares	%
David W. Cheek and Virginia C. Herring	Ben F. Cheek, IV	38,089	22.63%
David W. Cheek and Ben F. Cheek, IV	Virginia C. Herring	38,088	22.63%
Ben F. Cheek, IV and Virginia C. Herring	David W. Cheek	38,089	22.63%

(c)The Company knows of no contractual arrangements which may at a subsequent date result in a change in control of the Company.

Item 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE:

Related Party Transactions:

The Company leased a portion of its properties (see Note 8) for an aggregate of $0.5 million per year from certain officers or stockholders.

The Company has an outstanding loan to a real estate development partnership of which David Cheek (son of Ben F. Cheek, III) who beneficially owns 24.24% of the Company’s voting stock, is a partner. The balance on this commercial loan (including principal and accrued interest) was $2.3 million at December 31, 2024. The loan is a variable-rate loan with the interest based on the prime rate plus 1%. The interest rate adjusts whenever the prime rate changes.

Certain directors, officers and stockholders have funds personally invested in the Company’s debt securities. The rates on these debt securities are the same rates provided to other customers.

Effective September 23, 1995, the Company entered into a Split-Dollar Life Insurance Agreement with the Trustee of a member of the board of directors and a retired executive officer’s irrevocable life insurance trust. The life insurance policy insures a member of the Company’s board of directors and a retired executive officer. As a result of certain changes in tax regulations relating to split-dollar life insurance policies, the agreement was amended effectively making the premium payments a loan to the Trust. The interest on the loan is a variable rate adjusting monthly based on the federal mid-term Applicable Federal Rate. A payment of $20.0 thousand for interest accrued during 2024 was applied to the loan on December 31, 2024. No principal payments on this loan were made in 2024. The balance on this loan at December 31, 2024 was $485.4 thousand. This was the maximum loan amount outstanding during the year.

Director Independence:

See Part III, Item 10. Directors, Executive Officers and Corporate Governance, of this Annual Report on Form 10-K for a discussion on director independence matters, which discussion is incorporated herein by reference.

Item 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES:

The Company was billed for professional services provided during fiscal years 2024 and 2023 by Deloitte & Touche LLP, the Company's independent registered public accounting firm, in the amounts set out in the following table, all of which were pre-approved by the Audit Committee. Other than as set out below, the Company was not billed for any services provided by Deloitte & Touche LLP.

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The Audit Committee of the Board of Directors has considered the services rendered by Deloitte & Touche LLP for services other than the audit of the Company’s financial statements and has determined that the provision of these services is compatible with maintaining the independence of Deloitte & Touche LLP.

Services Provided:	2024		2023
Audit Fees (1)	$	723,901	$	494,934
Audit Related Fees (2)	1,895		—
Tax Fees (3)	163,781		169,724
Total	$	889,577	$	664,658

(1)Fees in connection with the audit of the Company’s annual financial statements for the fiscal years ended December 31, 2024 and 2023, and reviews of the financial statements included in the Company’s quarterly reports on Form 10-Q during the 2024 and 2023 fiscal years.

(2)Fees in connection with the audit of the Company’s 401(k) retirement plan.

(3)Fees billed by Deloitte Tax LLP for professional services rendered for tax compliance, tax advice and tax planning. The services included the preparation of the Company’s and its subsidiaries’ tax returns.

All audit and non-audit services to be performed by the Company’s independent registered public accounting firm must be approved in advance by the Audit Committee. Pursuant to the Audit Committee Pre-Approval Policy (the “Policy”), and as permitted by SEC rules, the Audit Committee may delegate pre-approval authority to any of its members, provided that any service approved in this manner is reported to the full Audit Committee at its next meeting. The Policy provides for a general pre-approval of certain specifically enumerated services that are to be provided within specified fee levels. With respect to requests to provide services not specifically pre-approved pursuant to the general grant, such requests must be submitted to the Audit Committee by the Company’s independent registered public accounting firm and the Company's Chief Financial Officer and must include a joint statement as to whether, in their view, the request is consistent with SEC rules on auditor independence.

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PART IV

Item 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES:

(a)	(1)	The following Report of Independent Registered Public Accounting Firm and financial statements are incorporated by reference herein from Exhibit 13 hereto:
		Report of Independent Registered Public Accounting Firm.
		Consolidated Statements of Financial Position at December 31, 2024 and 2023.
		Consolidated Statements of Income for the three years ended December 31, 2024, 2023, and 2022.
		Consolidated Statements of Comprehensive Income for the three years ended December 31, 2024, 2023, and 2022.
		Consolidated Statements of Stockholders’ Equity for the three years ended December 31, 2024, 2023, and 2022.
		Consolidated Statements of Cash Flows for the three years ended December 31, 2024, 2023, and 2022.
		Notes to Consolidated Financial Statements.
	(2)	Financial Statement Schedule:
		Report of Independent Registered Public Accounting Firm.
		Condensed Statements of Financial Position at December 31, 2024 and 2023.
		Condensed Statements of Income for the three years ended December 31, 2024, 2023, and 2022.
		Condensed Statements of Comprehensive Income for the three years ended December 31, 2024, 2023, and 2022.
		Condensed Statements of Stockholders’ Equity for the three years ended December 31, 2024, 2023, and 2022.
		Condensed Statements of Cash Flows for the three years ended December 31, 2024, 2023, and 2022.

(3)Exhibits:
3.	(a)	Restated Articles of Incorporation as amended January 26, 1996 (incorporated by reference to Exhibit 3(a) to Form 10-K for the year ended December 31, 1995).

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	(b)	Bylaws (incorporated by reference to Exhibit 3(b) to Form 10-K for the year ended December 31, 1995).
	(c)	Amended and Restated Articles of Incorporation as amended March 26, 2024 (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on March 29, 2024).
	(d)	Amended and Restated Articles of Incorporation as amended March 26, 2024 (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on March 29, 2024).
4.	(a)	Indenture dated October 31, 1984, between the Company and The First National Bank of Gainesville, Trustee (incorporated by reference to Exhibit 4(a) to Amendment No. 1 to the Registration Statement on Form S-2 dated April 24, 1998, File No. 333-47515).
	(b)	Form of Series 1 Variable Rate Subordinated Debenture (incorporated by reference to Exhibit 4(b) to Amendment No. 3 to the Registration Statement on Form S-2 dated November 14, 2005, File No. 333-126589).
	(c)	Agreement of Resignation, Appointment and Acceptance dated as of May 28, 1993 between the Company, The First National Bank of Gainesville, and Columbus Bank and Trust Company (incorporated by reference to Exhibit 4(c) to the Company’s Post-Effective Amendment No. 1 to the Registration Statement on Form S-2 dated June 8, 1993, File No. 33-49151).
	(d)	Modification of Indenture, dated March 30, 1995, by and among Columbus Bank and Trust Company, Synovus Trust Company and the Company (incorporated by reference to Exhibit 4(b) to the Company’s Form 10-K for the year ended December 31, 1994).
	(e)	Second Modification of Indenture dated December 2, 2004 by and among Synovus Trust Company and the Company (incorporated by reference to Exhibit 4(e) to the Registration Statement on Form S-2 dated July 14, 2005, File No. 333-126589).
	(f)	Form of Indenture by and between the Company and U.S. Bank National Association (incorporated by reference to Exhibit 4(a) to the Company’s Registration Statement on Form S-1 dated December 27, 2007, File No. 333-148331).
	(g)	Third Modification of Indenture dated March 26, 2010 by and between U.S. Bank National Association and the Company (incorporated by reference to Exhibit 4(h) to the Company’s Form 10-K for the year ended December 31, 2009).
	(h)	Tri-party Agreement by and among the Company, Synovus Trust Company and U.S. Bank National Association (incorporated by reference to Exhibit 4(i) to the Company’s Form 10-K for the year ended December 31, 2009).
	(i)	Fourth Modification of Indenture dated March 26, 2010 by and between U.S. Bank National Association and the Company (incorporated by reference to Exhibit 4(j) to the Company’s Form 10-K for the year ended December 31, 2009).

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	(j)	Form of Series 1 Variable Rate Subordinated Debenture (incorporated by reference to Exhibit 4(b) to Pre-Effective Amendment No. 2 to Registration Statement on Form S-1, filed with the SEC on June 30, 2011, File No. 333-173684).
	(k)	Form of Indenture by and between the Company and U.S. Bank National Association as of April 3, 2008 (incorporated by reference to Exhibit 4(a) to Pre-Effective Amendment No. 2 to Registration Statement on Form S-1, filed with the SEC on June 30, 2011, File No. 333-173685).
	(l)	Form of Senior Demand Note (incorporated by reference to Exhibit 4(b) to Pre-Effective Amendment No. 2 to Registration Statement on Form S-1, filed with the SEC on June 30, 2011, File No. 333-173685).
	(m)	Form of Overdraft Protection Agreement, Security Agreement and Assignment (incorporated by reference to Exhibit 4(c) to Pre-Effective Amendment No. 2 to Registration Statement on Form S-1, filed with the SEC on June 30, 2011, File No. 333-173685).
	(n)	Form of Senior Demand Note Check Redemption Agreement (incorporated by reference to Exhibit 4(d) to Pre-Effective Amendment No. 2 to Registration Statement on Form S-1, filed with the SEC on June 30, 2011, File No. 333-173685).
	(o)	Form of Check (incorporated by reference to Exhibit 4(e) to Pre-Effective Amendment No. 2 to Registration Statement on Form S-1, filed with the SEC on June 30, 2011, File No. 333-173685).
10.	(a)	Amended and Restated Loan and Security Agreement, dated as of November 19, 2019, by and among the Company, Wells Fargo Bank, N.A., as Agent for the lenders, and other financial institutions from time to time party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on November 22, 2019).
	(b)	First Amendment to Amended and Restated Loan and Security Agreement, dated as of August 17, 2020, by and among the Company, Wells Fargo Bank, N.A., as agent for the lenders, and other financial institutions party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on August 19, 2020).
	(c)	Second Amendment to Amended and Restated Loan and Security Agreement, dated as of March 25, 2021, by and among the Company, Wells Fargo Bank, N.A., as Agent for the lenders, and other financial institutions from time to time party thereto (incorporated by reference to the Company's Form 10-K filed with the SEC on March 31, 2022).
	(d)	Third Amendment to the Amended and Restated Loan and Security Agreement, dated as of November 17, 2021, by and among the Company, Wells Fargo Bank, N.A. as Agent for the lenders, and other financial institutions party thereto (incorporated by reference to Exhibit 10(d) to the Company's Form 8-K filed with the SEC on November 19, 2021). *

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	(e)	Fourth Amendment to the Amended and Restated Loan and Security Agreement, dated as of November 7, 2022, by and among the Company, Wells Fargo Bank, N.A. as Agent for the lenders, and other financial institutions party thereto (incorporated by reference to Exhibit 10(d) to the Company's Form 8-K filed with the SEC on November 14, 2022). *
	(f)	Fifth Amendment to the Amended and Restated Loan and Security Agreement, dated May 12, 2023, by and among the Company, Wells Fargo Bank, N.A. as Agent for the lenders, and other financial institutions party thereto (incorporated by reference to Exhibit 10(d) to the Company's Form 8-K filed with the SEC on May 16, 2023.
	(g)	Sixth Amendment to the Amended and Restated Loan and Security Agreement, dated December 27, 2023, by and among the Company, Wells Fargo Bank, N.A. as Agent for the lenders, and other financial institutions party thereto (incorporated by reference to the Exhibit 10(d) to the Company's Form 8-K filed with the SEC on January 4, 2024.
	(h)	Seventh Amendment to Amended and Restated Loan and Security Agreement, dated as of April 1, 2024, by and among the Company, Wells Fargo Bank, N.A., as agent for the lenders, and the other financial institutions from time to time party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC April 3, 2024).
	(i)	Loan and Security Agreement, dated December 6, 2024, by and among the Company and BMO Bank N.A., as agent for the lenders, and the other financial institutions party thereto (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed with the SEC on December 11, 2024).
	(j)	Director Compensation Summary Term Sheet. *
	(k)	Form of the Company’s 2025 Executive Bonus Plan. *
13.	Annual Report.
21.	Subsidiaries of the Company (incorporated by reference to Exhibit 21 to the Company’s Form 10-K for the year ended December 31, 2010).
23.	Consent of Independent Registered Public Accounting Firm.
31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934.
31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934.
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.

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101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).
*	Management contract or compensatory plan or arrangement filed pursuant to Item 601(b)(10)(iii) of Regulation S-K.

Item 16.    FORM 10-K SUMMARY:

NONE.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized:

	1st FRANKLIN FINANCIAL CORPORATION
April 29, 2025	By: /s/ Virginia C. Herring
Date	Virginia C. Herring
	President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signatures	Title	Date
/s/ Ben F. Cheek, IV
(Ben F. Cheek, IV)	Chairman of Board	April 29, 2025
/s/ Ben F. Cheek, III
(Ben F. Cheek, III)	Chairman Emeritus	April 29, 2025
/s/ Virginia C. Herring
(Virginia C. Herring)	Director, President and Chief Executive Officer	April 29, 2025
/s/ David W. Cheek
(David W. Cheek)	Director	April 29, 2025
/s/ Brian J. Gyomory
(Brian J. Gyomory)	Executive Vice President and Chief Financial Officer	April 29, 2025
/s/ A. Roger Guimond
(A. Roger Guimond)	Director	April 29, 2025
/s/ Jerry J. Harrison, Jr.
(Jerry J. Harrison, Jr.)	Director, Executive Vice President and Chief Strategy Officer	April 29, 2025
/s/ Donata Ison
(Donata Ison)	Director	April 29, 2025
/s/ John G. Sample, Jr.
(John G. Sample, Jr.)	Director	April 29, 2025
/s/ Sheryl Smith
(Sheryl Smith)	Director	April 29, 2025
/s/ Keith D. Watson
(Keith D. Watson)	Director	April 29, 2025

- 35 -

Supplemental Information to be Furnished with Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act.

(a)Except to the extent that the materials enumerated in (1) and/or (2) below are specifically incorporated into this Form by reference, every registrant which files an annual report on this Form pursuant to Section 15(d) of the Act shall furnish to the Commission for its information, at the time of filing its report on this Form, four copies of the following:

(1)Any annual report to security holders covering the registrant's last fiscal year; and

(2)Every proxy statement, form of proxy or other proxy soliciting material sent to more than ten of the registrant's security holders with respect to any annual or other meeting of security holders.

(b)The foregoing material shall not be deemed to be "filed" with the Commission or otherwise subject to the liabilities of Section 18 of the Act, except to the extent that the registrant specifically incorporates it in its annual report on this Form by reference.

(c)This Annual Report on Form 10-K incorporates by reference portions of the Registrant's Annual Report to security holders for the fiscal year ended December 31, 2024, which is filed as Exhibit 13 hereto. The Registrant is a privately held corporation and therefore does not distribute proxy statements or information statements to its shareholders.

- 36 -

Schedule I

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of 1st Franklin Financial Corporation

Opinion on the Financial Statement Schedule

We have audited the consolidated financial statements of 1st Franklin Financial Corporation and subsidiaries (the “Company”) as of December 31, 2024 and 2023, and for each of the three years in the period ended December 31, 2024, and have issued our report thereon dated April 29, 2025; such consolidated financial statements and report are included in your 2024 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the financial statement schedule of the Company listed in the Index at Item 15. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statement schedule based on our audits. In our opinion, such financial statement schedule, when considered in relation to the consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ Deloitte & Touche LLP

Atlanta, Georgia

April 29, 2025

- 37 -

SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

1st FRANKLIN FINANCIAL CORPORATION

(Parent Company Only)

STATEMENTS OF FINANCIAL POSITION

DECEMBER 31, 2024 AND 2023

ASSETS

	2024		2023
CASH AND CASH EQUIVALENTS	$	3,996,655	$	4,348,911
RESTRICTED CASH	1,097,384		627,628
LOANS:
Direct Cash Loans	1,080,370,655		972,567,737
Real Estate Loans	23,364,743		29,812,798
Sales Finance Contracts	154,677,310		175,548,110
	1,258,412,708		1,177,928,645
Less: Unearned Finance Charges	199,844,507		174,043,203
Unearned Insurance Commissions	29,098,177		27,944,898
Allowance for Credit Losses	73,365,842		71,361,745
	956,104,182		904,578,799
INVESTMENTS IN SUBSIDIARIES	298,900,662		278,856,873
INVESTMENT SECURITIES:
Available for Sale, at fair market value	—		485,051
OTHER ASSETS:
Land, Buildings, Equipment and Leasehold Improvements,
Less accumulated depreciation and amortization of $60,361,530 and $55,304,631 in 2024 and 2023, respectively	15,515,210		17,215,898
Operating Lease Right-of-Use Assets	40,737,215		41,938,371
Miscellaneous	29,723,386		23,228,957
	85,975,811		82,383,226
TOTAL ASSETS	$	1,346,074,694	$	1,271,280,488

- 38 -

SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

1st FRANKLIN FINANCIAL CORPORATION

(Parent Company Only)

STATEMENTS OF FINANCIAL POSITION

DECEMBER 31, 2024 AND 2023

LIABILITIES AND STOCKHOLDERS' EQUITY

	2024		2023
SENIOR DEBT:
Bank Borrowings	$	151,868,570	$	122,050,000
Subsidiary Borrowings (Note 1)	30,000,000		30,000,000
Senior Demand Notes, including accrued interest	91,100,482		100,568,430
Commercial Paper	718,724,910		661,573,356
	991,693,962		914,191,786
ACCOUNTS PAYABLE AND ACCRUED EXPENSES:
Operating Lease Liabilities	42,026,593		43,034,942
Other Accounts Payable and Accrued Expenses	30,873,646		20,936,706
	72,900,239		63,971,648
SUBORDINATED DEBT	30,769,476		28,533,940
Total Liabilities	1,095,363,677		1,006,697,374
STOCKHOLDERS' EQUITY:
Preferred Stock; $100 par value
6,000 shares authorized; no shares issued or outstanding	—		—
Common Stock:
Voting Shares; $100 par value;
2,000 shares authorized; 1,700 shares issued and outstanding as of December 31, 2024 and 2023	170,000		170,000
Non-Voting Shares; no par value;
198,000 shares authorized; 168,300 shares issued and outstanding as of December 31, 2024 and 2023	—		—
Accumulated Other Comprehensive Loss	(27,222,450)		(18,955,725)
Retained Earnings	277,763,467		283,368,839
Total Stockholders' Equity	250,711,017		264,583,114
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,346,074,694	$	1,271,280,488

- 39 -

SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

1st FRANKLIN FINANCIAL CORPORATION

(Parent Company Only)

STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

	2024		2023		2022
INTEREST INCOME:
Finance Charges	$	296,507,429	$	276,974,396	$	266,963,826
Investment Income	241,035		124,042		(18,381)
	296,748,464		277,098,438		266,945,445
INTEREST EXPENSE:
Senior Debt	57,185,642		43,951,125		27,483,876
Subordinated Debt	1,481,765		1,099,749		971,958
	58,667,407		45,050,874		28,455,834
NET INTEREST INCOME	238,081,057		232,047,564		238,489,611
PROVISION FOR CREDIT LOSSES	83,387,023		87,387,765		84,287,916
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	154,694,034		144,659,799		154,201,695
NET INSURANCE INCOME	25,739,322		21,544,942		21,957,943
OTHER REVENUE	7,093,345		7,882,862		6,939,179
OPERATING EXPENSES:
Personnel Expense	124,597,000		111,763,367		113,732,789
Occupancy Expense	22,241,147		20,705,383		18,173,248
Other Expense	74,599,530		65,182,973		56,955,705
	221,437,677		197,651,723		188,861,742
LOSS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES	(33,910,976)		(23,564,120)		(5,762,925)
PROVISION FOR INCOME TAXES	5,000		39,339		655,722
EQUITY IN EARNINGS OF SUBSIDIARIES, Net of Tax	28,310,604		24,133,548		22,578,274
NET (LOSS) / INCOME	$	(5,605,372)	$	530,089	$	16,159,627

- 40 -

SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

1st FRANKLIN FINANCIAL CORPORATION

(Parent Company Only)

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

	2024		2023		2022
Net (Loss) / Income	$	(5,605,372)	$	530,089	$	16,159,627
Other Comprehensive Loss:
Net changes related to available-for-sale securities
Unrealized (loss) gain	(10,175,433)		9,743,321		(45,165,474)
Income tax benefit (provision)	2,183,398		(2,026,463)		9,479,082
Net unrealized (loss) gain	(7,992,035)		7,716,858		(35,686,392)
Less reclassification of gain to net income	274,690		270,767		452,074
Total Other Comprehensive (Loss) Income	(8,266,725)		7,446,091		(36,138,467)
Total Comprehensive (Loss) Income	$	(13,872,097)	$	7,976,180	$	(19,978,840)

- 41 -

SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

1st FRANKLIN FINANCIAL CORPORATION

(Parent Company Only)

STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

	Common Stock			Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total
	Shares	Amount
Balance at December 31, 2021	170,000	170,000		286,851,102		9,736,651		296,757,753
Comprehensive Loss:
Net Income for 2022	—	—		16,159,627		—
Other Comprehensive Loss	—	—		—		(36,138,467)
Total Comprehensive Loss	—	—		—		—		(19,978,840)
Cash Distributions Paid	—	—		(17,485,889)		—		(17,485,889)
Balance at December 31, 2022	170,000	$	170,000	$	285,524,840	$	(26,401,816)	$	259,293,024
Comprehensive Loss:
Net Income for 2023	—	—		530,089		—
Other Comprehensive Income	—	—		—		7,446,091
Total Comprehensive Income	—	—		—		—		7,976,180
Cash Distributions Paid	—	—		(2,686,090)		—		(2,686,090)
Balance at December 31, 2023	170,000	$	170,000	$	283,368,839	$	(18,955,725)	$	264,583,114
Comprehensive Loss:
Net Loss for 2024	—	—		(5,605,372)		—
Other Comprehensive Loss	—	—		—		(8,266,725)
Total Comprehensive Loss	—	—		—		—		(13,872,097)
Cash Distributions Paid	—	—		—		—		—
Balance at December 31, 2024	170,000	$	170,000	$	277,763,467	$	(27,222,450)	$	250,711,017

- 42 -

SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

1st FRANKLIN FINANCIAL CORPORATION

(Parent Company Only)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

	2024		2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) / Income	$	(5,605,372)	$	530,089	$	16,159,627
Adjustments to reconcile net (loss) / income to net cash provided by operating activities:
Provision for credit losses	83,387,023		87,387,765		84,287,916
Depreciation and amortization	9,479,026		6,606,132		4,425,985
Equity in undistributed earnings of subsidiaries	(28,310,604)		(24,133,548)		(22,578,274)
Net (gains) losses due to called redemptions of marketable securities, gain on sales of equipment and amortization on securities	(221,028)		(104,735)		38,232
Increase in miscellaneous assets and other	(7,722,469)		(5,737,477)		(7,647,230)
Decrease in other liabilities	9,648,814		(8,792,129)		(2,135,176)
Net Cash Provided	60,655,390		55,756,097		72,551,080
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans originated or purchased	(619,849,662)		(642,891,708)		(602,792,430)
Loan payments	484,937,256		489,822,223		471,094,166
Sale of securities, available for sale	706,079		—		—
Capital expenditures	(6,061,948)		(11,493,546)		(5,219,242)
Proceeds from sale of equipment	13,122		—		22,929
Net Cash Used	(140,255,153)		(164,563,031)		(136,894,577)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in Senior Demand Notes	(9,488,397)		(11,757,244)		8,282,195
Advances on bank credit line	424,542,649		239,172,362		213,677,200
Payments on bank credit line	(394,724,079)		(184,653,362)		(206,446,200)
Advances on subsidiary credit line	—		30,000,000		—
Commercial paper issued	243,815,087		146,377,614		135,878,572
Commercial paper redeemed	(186,663,533)		(109,389,811)		(63,485,901)
Subordinated debt issued	9,725,581		6,795,654		5,759,655
Subordinated debt redeemed	(7,490,045)		(7,267,540)		(6,446,173)
Dividends / distributions paid	—		(2,686,090)		(17,485,889)
Net Cash Provided	79,717,263		106,591,583		69,733,459
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	117,500		(2,215,351)		5,389,962
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning	4,976,539		7,191,890		1,801,928
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ending	5,094,039		4,976,539		7,191,890
Supplemental Cash Flow Information:
Cash paid during the period for:
Interest paid	54,881,513		41,752,170		27,264,793
Income taxes paid	5,000		39,000		309,000
Non-Cash Transactions
ROU assets and associated liabilities	9,241,050		10,311,099		9,553,566

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NOTES TO PARENT COMPANY FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

Basis of Presentation

The parent company financial statements should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes thereto. For purposes of these condensed financial statements, the Company’s wholly owned subsidiaries are recorded based on the subsidiaries' net assets (similar to presenting them on the equity method).

Substantially all of the other comprehensive income included in these condensed financial statements is attributable to the Company's wholly owned subsidiaries.

Guarantees

Frandisco Life Insurance Company (“Guarantor”) executed a guaranty in favor of BMO Bank, N.A. (“Agent”) on December 6, 2024, in conjunction with 1st Franklin Financial Corporation executing an amended and restated loan and security agreement as described in the Company’s consolidated financial statements and accompanying notes thereto. The Guarantor’s liability shall be limited to an amount equal to the lesser of (a) one-half of one percent (0.50%) of Guarantor’s admitted assets or (b) ten percent (10%) of surplus as regards policy holders as of December 31, 2018.

Frandisco Property and Casualty Insurance Company (“Guarantor”) executed a guaranty in favor of BMO Bank, N.A. (“Agent”) on December 6, 2024, in conjunction with 1st Franklin Financial Corporation executing an amended and restated loan and security agreement as described in the Company’s consolidated financial statements and accompanying notes thereto. The Guarantor’s liability shall be limited to an amount equal to the lesser of (a) one-half of one percent (0.50%) of Guarantor’s admitted assets or (b) ten percent (10%) of surplus as regards policy holders as of December 31, 2018.

1.    SENIOR DEBT

Frandisco Property and Casualty Insurance Company advanced $30.0 million to the Company on its credit line in August 2023. The advance of $30.0 million was outstanding at December 31, 2024 with an additional accrued interest of $4.1 million outstanding.

- 44 -

Exhibit 13

1st FRANKLIN FINANCIAL CORPORATION

ANNUAL REPORT

DECEMBER 31, 2024

- 1 -

TABLE OF CONTENTS

The Company	3
Chairman's Letter	4
Business	5
Sources of Funds and Common Stock Matters	12
Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)	22
Consolidated Financial Statements	24
Directors and Executive Officers	60
Corporate Information	61
Ben F. Cheek, Jr. Office of the Year	63

- 2 -

THE COMPANY

1st Franklin Financial Corporation, a Georgia corporation, has been engaged in the consumer finance business since 1941, particularly in making direct cash loans and real estate loans. As of December 31, 2024, the business was operated through 115 branch offices in Georgia, 48 in Alabama, 43 in South Carolina, 40 in Mississippi, 39 in Tennessee, 37 in Louisiana, 23 in Texas, 17 in Kentucky, and 7 in Virginia. The Company had 1,713 employees as of December 31, 2024.

As of December 31, 2024, the resources of the Company were invested principally in loans, which comprised 70% of the Company's assets. The majority of the Company's revenues are derived from finance charges earned on loans and sales finance contracts. Our remaining revenues are derived from earnings on investment securities, insurance income and other miscellaneous income.

Our corporate website address is www.1FFC.com. The information posted on our website is not incorporated into this Annual Report.

- 3 -

To our Investors, Customers, Employees, Business partners and Friends-

Being able to report to you the highlights of our accomplishments and growth in this 2024 Annual Report brings me much delight. While 2024 was not without the headwinds of rising interest rates, inflation fears, the political environment of a national election, a push to complete the conversion of our lending and servicing platform and the waning effects of our 2022 cyber event, 1st Franklin Financial was still able to meet many of our corporate goals and objectives. The following pages reflect the strength and resiliency of a team that was committed to making 2024 successful at all levels.

Our core values--T.I.P.S.—Team, Impact, People and Service—were a part of every decision that we made. Our team of resolute employees are exceptional people in their communities. They are volunteers, leaders in civic groups, churches, school groups, sports teams and the list goes on and on. As a service provider of financial products, we strive to humbly acknowledge our customers and the communities in which we serve. Together we work to help people do life.

The following financial statements show the strength of 1st Franklin Financial Corporation. This concise list of accomplishments is a testament to hard work, leadership, and humble service.

In 2024:

•We opened eight new offices (4 in Kentucky, 3 in Texas, and 1 in Alabama)

•We grew our loan portfolio to over $1 billion in Net Outstanding

•Our State Recovery Centers recovered $30.2 million in bad debt.

•We completed four debt sales that contributed $5.3 million to our bottom line.

•Our year-over-year Charge-offs fell from 9.16% to 7.7%.

•Our Investment Center grew $48.9 million.

•We did all these amazing accomplishments while growing our gross loan portfolio by 6.8%.

On December 6, 2024, 1st Franklin Financial Corporation entered into a Loan and Security Agreement with BMO Bank, N.A. as agent for $300.0 million. This partnership will provide us with the funds to continue our growth goals and expansion for years to come. We are grateful for this funding relationship and fully expect that it will be mutually beneficial to both BMO and 1st Franklin Financial.

As you will be able to see from your reading of this full report we have enjoyed a busy year. 1st Franklin Financial continues to capitalize on opportunities in the marketplace and we evaluate every chance to expand our footprint in markets that we feel are a good fit for what we offer. Even though our products and services are remarkably similar to those of our competitors, we feel that the friendliness and gracious customer service provided by our co-workers makes 1st Franklin Financial Corporation stand apart from all the rest. Thanks to all of you that make this possible. We appreciate you.

Sincerely yours,

/s/ Ben F. “Buddy” Cheek, IV

Ben F. Cheek, IV

Chairman of the Board

- 4 -

BUSINESS

References in this Annual Report to “1st Franklin”, the “Company”, “we”, “our” and “us” refer to 1st Franklin Financial Corporation and its subsidiaries.

1st Franklin is engaged in the consumer finance business, primarily in making direct cash loans to individuals in relatively small amounts for relatively short periods of time, and in making first and second mortgage loans on real estate in larger amounts and for longer periods of time. We also purchase sales finance contracts from various retail dealers. At December 31, 2024, direct cash loans comprised 86%, real estate loans comprised 2% and sales finance contracts comprised 12% of our outstanding loans, respectively.

In connection with our business, we also offer optional single premium credit insurance products to our customers when making a loan. Such products may include credit life insurance, credit accident and health insurance, credit involuntary unemployment insurance and/or credit property insurance. Customers may request credit life insurance coverage to help assure any outstanding loan balance is repaid if the customer dies before the loan is repaid or they may request accident and health insurance coverage to help continue loan payments if the customer becomes sick or disabled for an extended period of time. In certain states where offered, customers may choose involuntary unemployment insurance for payment protection in the form of loan payment assistance due to an unexpected job loss. Customers may also choose property insurance coverage to protect the value of loan collateral against damage, theft or destruction. We write these various insurance products as an agent for a non-affiliated insurance company. Under various agreements, our wholly owned insurance subsidiaries, Frandisco Life Insurance Company and Frandisco Property and Casualty Insurance Company, reinsure the insurance coverage on our customers written by this non-affiliated insurance company.

Finance charges account for the majority of our revenues. The following table shows the sources of our earned finance charges in each of the past five years (in thousands):

	Year Ended December 31
	2024		2023		2022		2021		2020
Direct Cash Loans	$	267,810	$	247,829	$	240,542	$	213,527	$	192,976
Real Estate Loans	4,423		5,769		7,285		7,245		6,555
Sales Finance Contracts	24,275		23,376		19,137		15,880		13,556
Total Finance Charges	$	296,508	$	276,974	$	266,964	$	236,652	$	213,087

Our business consists mainly of making loans to individuals (consumer loans) who depend primarily on their earnings to meet their repayment obligations. We make direct cash loans primarily to people who need money for some non-recurring or unforeseen expense, for debt consolidation, or to purchase household goods such as furniture and appliances. These loans are generally repayable in 6 to 60 monthly installments and generally do not exceed $15,000 in amount financed. We believe that the interest and fees we charge on these loans are in compliance with applicable federal and state laws.

First and second mortgage loans secured by real estate are made to homeowners who typically use funds to improve their property or who wish to restructure their financial obligations. We generally make such loans in amounts from $3,000 to $75,000 and with maturities of 35 to 240 months. We believe that the interest and fees we charge on these loans are in compliance with applicable federal and state laws.

Our decision making on loan originations is based on both a judgmental underwriting system which includes an analysis of the following factors (i) ability to pay, (ii) creditworthiness, (iii) income stability, (iv) willingness to pay and (v) as appropriate, collateral security, and a risk based underwriting system that evaluates (i) credit score, (ii) annual income, (iii) payment history to other creditors and (iv) debt to income ratios. As part of our loan decision making process, we review each customer's credit report to verify income and total indebtedness, debt payment history and overall credit related performance to other creditors. The Company uses this information to evaluate a potential borrower's debt-to-income ratios and, depending on the result of the overall credit evaluation process, may require internal review and senior supervisory approval prior to originating the potential borrower's loan.

- 5 -

Sales finance contracts are contracts purchased from retail dealers. These contracts have maturities that generally range from 3 to 60 months and generally do not individually exceed $25,000 in amount financed. We believe that the interest and fees we charge on these contracts are in compliance with applicable federal and state laws.

1st Franklin competes with several national and regional finance companies, as well as a variety of local finance companies, in the communities we serve. Competition is based primarily on interest rates and terms offered and on customer service, as well as, to some extent, reputation. We believe that our emphasis on customer service helps us compete effectively in the markets we serve.

Because of our reliance on the continued income stream of most of our loan customers, our ability to continue the profitable operation of our business depends to a large extent on the continued employment of our customers and their ability to meet their obligations as they become due. Therefore, economic uncertainty or downturns in economic conditions, increases in unemployment or continued increases in the number of personal bankruptcies within our typical customer base may have a material adverse effect on our collection ratios and profitability.

The average annual yield on loans we make (the percentage of finance charges earned to average net outstanding balance) has been as follows:

	As of December 31
	2024		2023		2022		2021		2020
Direct Cash Loans	30.82	%	31.51	%	31.12	%	31.22	%	31.45	%
Real Estate Loans	16.59		17.53		17.48		17.33		17.16
Sales Finance Contracts	18.17		19.16		19.36		19.66		19.13

The following table contains certain information about our operations:

	As of December 31
	2024		2023		2022		2021		2020
Number of Branch Offices	369		364		343		325		320
Number of Employees	1,713		1,709		1,575		1,442		1,476
Average Total Loans Outstanding Per Branch (in thousands)	$	3,410	$	3,227	$	3,177	$	3,176	$	2,860
Average Number of Loans Outstanding Per Branch	1,004		960		944		886		849

- 6 -

DESCRIPTION OF LOANS

	Year Ended December 31
	2024			2023			2022			2021			2020
DIRECT CASH LOANS:
Number of Loans Made	360,339			329,720			308,833			278,418			252,258
Volume of Loans Made (in thousands)	$	1,251,947		$	1,101,316		$	1,049,088		$	1,048,154		$	891,358
Average Size of Loan Made	$	3,474		$	3,340		$	3,397		$	3,765		$	3,534
Number of Loans Outstanding	343,501			320,454			299,418			266,028			249,880
Loans Outstanding (in thousands)	$	1,080,371		$	972,568		$	911,822		$	873,433		$	777,569
Average Balance on Outstanding Loan	$	3,145		$	3,035		$	3,045		$	3,283		$	3,112
Percent of Total Loans Outstanding	86		%	83		%	84		%	84		%	85		%
REAL ESTATE LOANS:
Number of Loans Made	0			6			73			622			480
Volume of Loans Made (in thousands)	$	—		$	23		$	2,106		$	17,419		$	11,871
Average Size of Loan Made	$	—		$	3,814		$	28,845		$	28,005		$	24,731
Number of Loans Outstanding	1,113			1,383			1,690			2,034			1,880
Loans Outstanding (in thousands)	$	23,365		$	29,813		$	37,323		$	45,972		$	39,960
Average Balance on Outstanding Loan	$	20,993		$	21,557		$	22,085		$	22,602		$	21,255
Percent of Total Loans Outstanding	2		%	2		%	3		%	4		%	4		%
SALES FINANCE CONTRACTS:
Number of Contracts Purchased	11,396			17,062			12,812			11,515			14,556
Volume of Contracts Purchased (in thousands)	$	85,379		$	126,187		$	106,620		$	86,448		$	97,371
Average Size of Contract Purchased	$	7,492		$	7,396		$	8,322		$	7,507		$	6,689
Number of Contracts Outstanding	25,972			28,415			22,705			19,790			19,961
Contracts Outstanding (in thousands)	$	154,677		$	175,548		$	146,507		$	118,960		$	103,258
Average Balance on Outstanding Contract	$	5,956		$	6,178		$	6,453		$	6,011		$	5,173
Percent of Total Loans Outstanding	12		%	15		%	13		%	12		%	11		%

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LOANS ORIGINATED, ACQUIRED, LIQUIDATED AND OUTSTANDING (in thousands)

	Year Ended December 31
	2024		2023		2022		2021		2020
	LOANS ORIGINATED OR ACQUIRED
Other Consumer (Live Check and Premier) New Loans	532,158		$	426,393	$	470,803	$	436,278	$	392,898
Other Consumer (Live Check and Premier) Loan Renewals	706,631		630,677		567,392		589,624		485,948
Real Estate Loans	—		—		2,106		17,345		11,846
Sales Finance Contracts	82,133		122,654		106,620		82,688		96,003
Net Bulk Purchases	16,326		47,802		10,893		26,086		13,905
Total Loans Originated / Acquired	$	1,337,248	$	1,227,526	$	1,157,814	$	1,152,021	$	1,000,600
	LOANS LIQUIDATED *
Other Consumer (Live Check and Premier) New Loans	$	507,308	$	449,910	$	483,042	$	398,846	$	382,952
Other Consumer (Live Check and Premier) Loan Renewals	636,836		605,703		526,315		553,444		468,091
Real Estate Loans	6,448		(7,510)		10,694		11,407		9,166
Sales Finance Contracts	106,250		97,146		79,146		70,746		64,132
Total Loans Liquidated	$	1,256,842	$	1,145,249	$	1,099,197	$	1,034,443	$	924,341
	LOANS OUTSTANDING AT YEAR END
Direct Cash Loans	$	1,080,371	$	972,568	$	911,822	$	873,433	$	777,569
Real Estate Loans	23,365		29,813		37,323		45,972		39,960
Sales Finance Contracts	154,677		175,548		146,507		118,960		103,258
Total Loans Outstanding	$	1,258,413	$	1,177,929	$	1,095,652	$	1,038,365	$	920,787
	UNEARNED FINANCE CHARGES
Direct Cash Loans	$	167,047	$	133,663	$	119,804	$	122,455	$	107,850
Real Estate Loans	—		—		—		—		6
Sales Finance Contracts	32,798		40,380		34,826		28,626		24,847
Total Unearned Finance Charges	$	199,845	$	174,043	$	154,630	$	151,081	$	132,703

COMPONENTS OF GROSS LOAN LIQUIDATIONS (in thousands)
	2024		2023		2022		2021		2020
Customer Loan Payments	$	756,795	$	698,044	$	676,935	$	633,979	$	573,685
Other Consumer (Live Check and Premier) Loan Renewals*	326,490		318,660		313,843		332,292		280,199
Gross Charge-offs	115,143		117,469		90,826		57,439		57,981
Refunds on precomputed finance charges	15,064		11,076		17,594		10,733		12,477
Total Loans Liquidated	$	1,213,492	$	1,145,249	$	1,099,197	$	1,034,443	$	924,341

*Liquidations include customer loan payments, refunds on precomputed finance charges, renewals and charge- offs.

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Components of net loss/charge-offs include the loan's amortized cost basis based on ASC 326 Financial Instruments - Credit Losses. The following are included in the Company's amortized cost basis:

•For pre-computed loans, the amortized cost basis includes the principal balance, fees, and accrued interest, less unearned finance charges and unearned insurance. As of December 31, 2024, the amount charged off related to the principal balance was $73.7 million.

•For interest-bearing loans, the amortized cost basis includes the balance, fees, and accrued interest, net of unearned insurance. As of December 31, 2024, the amount charged off related to the principal balance was $41.4 million.

DELINQUENCIES

We classify delinquent accounts at the end of each month according to the number of installments past due at that time, based on the then-existing terms of the contract. Accounts are classified in delinquency categories based on the number of days past due. When three installments are past due, we classify the account as being 60-89 days past due; when four or more installments are past due, we classify the account as being 90 days or more past due. Once an account becomes greater than 149 days past due, our charge-off policy governs when the account must be charged off. For more information on our charge-off policy, see Note 2 "Loans" in the Notes to the Consolidated Financial Statements.

In connection with some accounts that are secured by real estate, when the bankruptcy court confirms a repayment plan differing from the contractual obligation, the Company will change the delinquency rating of the account after receiving two consecutive full payments. Thereafter, the account falls under normal delinquency rating guidelines. For non-real estate secured accounts, delinquency categories are not altered unless the borrower had a pre-existing partial payment that exceeds any court-mandated new payment amount. In that case, the partial payment is applied at the new payment amount, which may advance the due date, thus causing the delinquency rating to change (lowering the delinquency rating).

The Company tracks the dollar amount of loans in bankruptcy on which the delinquency rating was changed. During 2024 and 2023, the delinquency rating changed as a result of court-initiated repayment plans $3.9 million and $1.5 million, respectively. This represented approximately 0.31% and 0.13% of the average principal loan portfolios outstanding during 2024 and 2023, respectively. The following table shows the amount of certain classifications of delinquencies and the ratio of such delinquencies to related outstanding loans (in thousands, except % data):

	As of December 31
	2024			2023			2022			2021			2020
DIRECT CASH LOANS:
60-89 Days Past Due	$	21,574		$	16,257		$	20,199		$	12,272		$	10,779
Percentage of Principal Outstanding	2.01		%	1.68		%	2.22		%	1.41		%	1.39		%
90 Days or More Past Due	$	31,168		$	32,694		$	37,465		$	23,437		$	18,094
Percentage of Principal Outstanding	2.90		%	3.38		%	4.12		%	2.69		%	2.33		%
REAL ESTATE LOANS:
60-89 Days Past Due	$	299		$	334		$	436		$	440		$	223
Percentage of Principal Outstanding	1.32		%	1.14		%	1.19		%	0.97		%	0.57		%
90 Days or More Past Due	$	1,308		$	1,403		$	1,380		$	1,118		$	1,438
Percentage of Principal Outstanding	5.75		%	4.79		%	3.77		%	2.47		%	3.66		%
SALES FINANCE CONTRACTS:
60-89 Days Past Due	$	3,298		$	2,226		$	2,066		$	1,134		$	1,341
Percentage of Principal Outstanding	2.15		%	1.27		%	1.42		%	0.96		%	1.31		%
90 Days or More Past Due	$	3,801		$	4,142		$	3,316		$	2,385		$	2,261
Percentage of Principal Outstanding	2.47		%	2.37		%	2.28		%	2.02		%	2.21		%

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LOSS EXPERIENCE

Net losses (charge-offs less recoveries) and the percent such net losses represent of average net loans (loans less unearned finance charges) and liquidations (loan payments, refunds on unearned finance charges, renewals and charge-offs of customers' loans) are shown in the following table (in thousands, except % data):

	Year Ended December 31
	2024			2023			2022			2021			2020
	DIRECT CASH LOANS
Average Net Loans	$	840,848		$	792,724		$	782,093		$	691,635		$	577,978
Liquidations	$	1,144,144		$	1,041,159		$	1,009,357		$	952,290		$	851,044
Net Losses	$	72,290		$	82,905		$	70,567		$	37,635		$	42,143
Net Losses as % of Average Net Loans	8.60		%	10.46		%	9.02		%	5.44		%	7.29		%
Net Losses as % of Liquidations	6.32		%	7.96		%	6.99		%	3.95		%	4.95		%
	REAL ESTATE LOANS
Average Net Loans	$	25,852		$	32,641		$	41,384		$	42,593		$	36,128
Liquidations	$	6,448		$	(7,510)		$	10,694		$	11,407		$	9,166
Net Losses	$	—		$	15		$	20		$	26		$	42
Net Losses as a % of Average Net Loans	—		%	0.05		%	0.05		%	0.06		%	0.12		%
Net Losses as a % of Liquidations	—		%	(0.20)		%	0.19		%	0.23		%	0.46		%
	SALES FINANCE CONTRACTS
Average Net Loans	$	129,229		$	123,476		$	100,244		$	82,192		$	66,681
Liquidations	$	106,250		$	97,146		$	79,285		$	70,746		$	64,132
Net Losses	$	9,093		$	8,317		$	5,802		$	3,539		$	3,335
Net Losses as % of Average Net Loans	7.04		%	6.74		%	5.79		%	4.31		%	5.00		%
Net Losses as % of Liquidations	8.56		%	8.56		%	7.32		%	5.00		%	5.20		%

ALLOWANCE FOR CREDIT LOSSES

The Company utilizes a Probability of Default (“PD”) / Loss Given Default (“LGD”) technique to estimate the allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. We engaged a major rating service provider to assist with estimating the instances of loss (PDs) and the average severity of losses (LGDs) using the characteristics of our loan portfolio, along with incorporating a reasonable and supportable forecast which is utilized to support the adjustments to historical loss experience of loans with similar credit risk. Key segmentation in the technique is origination vintage, remaining contractual term, risk score and state of origination. The technique produces a variety of alternative economic scenarios. We consider how macroeconomic and/or other factors might impact expected credit losses over the remaining maturity of the portfolio and determine which scenario(s) and specific scenario weights are applied within the estimation. The allowance for credit losses recorded in the balance sheet reflects Management’s best estimate of expected credit losses, see Note 2 "Loans" in the Notes to the Consolidated Financial Statements.

SEGMENT FINANCIAL INFORMATION

For additional financial information about our reportable segments and the divisions of our operations, see Note 13 "Segment Financial Information" in the Notes to Consolidated Financial Statements.

CREDIT INSURANCE

On consumer loans (excluding real estate and sales finance contracts), we offer optional single premium credit insurance products to our customers when making a loan. Such products may include credit life insurance, credit accident and health insurance, credit unemployment insurance and/or credit property

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insurance. Customers may request credit life insurance coverage to help assure any outstanding loan balance is repaid if the customer dies before the loan is repaid or they may request credit accident and health insurance coverage to help continue loan payments if the customer becomes sick or disabled for an extended period of time. In certain states where offered, Customers may request credit involuntary unemployment insurance for payment protection in the form of loan payment assistance due to an unexpected job loss. Customers may also choose property insurance coverage to protect the value of loan collateral against damage, theft or destruction. We write these various insurance products as an agent for a non-affiliated insurance company. Under various agreements, our wholly owned insurance subsidiaries, Frandisco Life Insurance Company and Frandisco Property and Casualty Insurance Company, reinsure the insurance coverage on our customers written on behalf of this non-affiliated insurance company.

REGULATION AND SUPERVISION

The Company is subject to regulation under numerous state and federal laws and regulations as enforced and interpreted by various state and federal governmental agencies. State laws require each of our loan branch offices to be licensed by the state and to conduct business according to the applicable statutes and regulations. The granting of a license depends on the financial responsibility, character and fitness of the applicant. As a condition to obtaining such license, the applicant must consent to state regulation and examination and to the make periodic reports to the appropriate governing agencies. Licenses are revocable for cause, and their continuance depends upon an applicant's continued compliance with applicable laws. We are also subject to state regulations governing insurance agents in the states in which we sell credit insurance. State insurance regulations require, among other things, that insurance agents be licensed and, in some cases, limit the premiums that insurance agents can charge. The Company has never had any of its licenses revoked and has never been subject to an enforcement order or regulatory settlement.

We conduct our lending operations under the provisions of various federal laws and implementing regulations. These laws and regulations are interpreted, implemented, and enforced by the Bureau of Consumer Financial Protection (the "CFPB"). Chief among these federal laws with which the Company must comply are the Federal Truth-in-Lending Act ("TILA"), the Equal Credit Opportunity Act ("ECOA"), the Fair Credit Reporting Act ("FCRA") and the Federal Real Estate Settlement Procedures Act ("RESPA"). The TILA requires us, among other things, to disclose to our customers the finance charge, the annual percentage rate, the total number and amount of payments, the total cost of credit, and other material information on all loans. A Federal Trade Commission regulation prevents consumer lenders such as the Company from using certain household goods as collateral on direct cash loans. As a result, we generally seek to secure such loans with non-prohibited household goods such as automobiles, boats and other exempt items of personal property. We continually monitor our compliance with these regulatory requirements.

Changes in the current regulatory environment, or in the interpretation or application of current regulations, could impact our business. Significant additional regulation or costs of compliance could materially adversely affect our business and financial condition.

HUMAN CAPITAL RESOURCES

As of December 31, 2024, the Company had 1,713 employees, located in Alabama, Georgia, Kentucky, Louisiana, Mississippi, South Carolina, Tennessee, Texas, and Virginia. The development, attraction and retention of employees is a strong focus of the Company, as is fostering and maintaining a strong, healthy corporate culture.

Our employees play an important role in the success of the Company. We are committed to attracting, retaining and promoting high quality talent regardless of sex, race, color, national origin, age or religion. The Company is dedicated to providing a place of work for employees that is supportive, free from discrimination and harassment, and rewarding for employees. Benefit programs offered to employees include competitive salaries, incentive awards and 401(k) retirement savings plans with company match. Various health insurance plans are also available for employees.

We are committed to advancing a safe work environment for our employees. We adhere, and expect all of our employees to adhere, to our Code of Business Conduct and Ethics, which, among other things, sets forth

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numerous policies designed to provide for a safe, ethical, respectful and compliant work environment. We expect our employees to follow our core values listed below:

Team:	Be Trustworthy
Impact:	Be Intentional
People:	Be Exceptional
Service:	Be Humble

SOURCES OF FUNDS AND COMMON STOCK MATTERS

The Company is dependent upon the availability of funds from various sources in order to meet its ongoing financial obligations and to make new loans as a part of its business. Our various sources of funds as a percent of total liabilities and stockholders' equity and the number of persons investing in the Company's debt securities were as follows:

	As of December 31
	2024		2023		2022		2021		2020
Bank Borrowings	11.58	%	9.84	%	5.81	%	5.39	%	11.73	%
Senior Debt	61.74	%	61.45	%	63.37	%	58.69	%	51.19	%
Subordinated Debt	2.35	%	2.30	%	2.49	%	2.66	%	2.97	%
Other Liabilities	5.22	%	5.08	%	6.03	%	6.73	%	6.64	%
Stockholders’ Equity	19.11	%	21.33	%	22.30	%	26.53	%	27.47	%
Total	100.00	%	100.00	%	100.00	%	100.00	%	100.00	%
Number of Investors	4,689		4,681		4,809		4,713		4,543

The average interest rates we pay on borrowings, computed by dividing the interest paid by the average indebtedness outstanding, have been as follows:

	Year Ended December 31
	2024	2023	2022	2021	2020
Senior Borrowings	5.80%	5.08%	3.50%	3.39%	3.42%
Subordinated Borrowings	4.69%	3.63%	3.16%	3.12%	3.01%
All Borrowings	5.76%	5.02%	3.49%	3.38%	3.40%

Certain financial ratios relating to our debt have been as follows:

	As of December 31
	2024	2023	2022	2021	2020
Total Liabilities to Stockholders' Equity	4.23	3.69	3.48	2.77	2.64
Unsubordinated Debt to Subordinated Debt Plus Stockholders' Equity	3.42	3.23	2.79	2.43	2.29

As of April 29, 2025, all of our voting common stock was closely held by three related individuals and all of our non-voting common stock was held by thirteen related shareholders. None of our common stock was listed on any securities exchange or traded on any established public trading market. The Company does not maintain any equity compensation plans, and did not repurchase any of its equity securities during any period represented. No cash distributions were paid to shareholders in 2024. Cash distributions of $15.80 per share were paid to shareholders in 2023, primarily in amounts to enable the Company's shareholders to pay their related income tax obligations which arise as a result of the Company's status as an S Corporation. No other distributions were paid during the applicable periods. For the foreseeable future, the Company expects to pay annual cash distributions equal to an amount sufficient to enable the Company's shareholders to pay their respective income tax obligations as a result of the Company's status as an S Corporation.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis provides a narrative discussion of the Company’s financial condition and performance during 2024 and 2023. The narrative reviews the Company’s results of operations, liquidity and capital resources, critical accounting policies and estimates, and certain other matters. It includes Management’s interpretation of our financial results, the factors affecting these results and the significant factors that we currently believe may materially affect our future financial condition, operating results and liquidity. This discussion should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained elsewhere in this Annual Report. Discussion of 2022 results and year-to-year comparisons between 2023 and 2022 can be found in the Company’s 2023 Annual Report filed as Exhibit 13 to the Company’s Annual Report on Form 10-K which was filed with the SEC on April 1, 2024.

Our significant accounting policies are disclosed in Note 1 "Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements. Certain information in this discussion and other statements contained in this Annual Report which are not historical facts are forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. Possible factors which could cause our actual future results to differ from any expectations expressed or implied by any forward-looking statements, or otherwise, include, but are not limited to, changes in our ability to manage liquidity and cash flow, the accuracy of Management’s estimates and judgments, adverse developments in economic conditions including the interest rate environment, unforeseen changes in our net interest margin, federal and state regulatory changes, unfavorable outcomes of litigation and other factors referenced in the “Risk Factors” section of the Company’s Annual Report and elsewhere herein, or otherwise contained in our filings with the Securities and Exchange Commission from time to time.

General:

The Company is a privately-held corporation that has been engaged in the consumer finance industry since 1941. Our operations focus primarily on making installment loans to individuals in relatively small amounts for short periods of time. Other lending-related activities include the purchase of sales finance contracts from various dealers and the making of first and second mortgage real estate loans. The Company de-prioritized mortgage originations while advanced systems for origination and servicing are being developed. All of our loans are at fixed rates, and contain fixed terms and fixed payments. We operate branch offices in nine southern states and had a total of 369 branch locations at December 31, 2024. The Company and its operations are guided by a strategic plan which includes planned growth through strategic expansion of our branch office network. The majority of our revenues are derived from finance charges earned on loans outstanding. Additional revenues are derived from earnings on investment securities, insurance income and other miscellaneous income.

Financial Condition:

The Company’s total assets increased $71.4 million (6%) to $1.3 billion as of December 31, 2024 compared to $1.2 billion as of December 31, 2023. The increase in assets was primarily due to growth in the Company’s net loan portfolio, investment securities portfolio, cash and cash equivalents, and increases in other assets.

Cash and cash equivalents increased $13.2 million (58%) at December 31, 2024 compared to December 31, 2023.

The Company maintains an amount of funds in restricted accounts at its insurance subsidiaries in order to comply with certain requirements imposed on insurance companies by the State of Georgia and to meet the reserve requirements of its reinsurance agreements. Restricted cash also includes escrow deposits held by the Company on behalf of certain mortgage real estate customers.

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At December 31, 2024, restricted cash was $8.8 million compared to $12.1 million at December 31, 2023. See Note 3, “Investment Securities” in the accompanying “Notes to Consolidated Financial Statements” for further discussion of amounts held in trust.

Gross loan originations increased $116.4 million (9%) during 2024 compared to 2023. Our net loan portfolio increased $48.9 million (6%) at December 31, 2024 compared to 2023. The percent of the loan portfolio greater than 30 days delinquent is 8.43% at December 31, 2024 compared to 7.48% at December 31, 2023. The ratio of bankrupt accounts to the net principal balance was 1.38% and 1.43% at December 31, 2024 and December 31, 2023, respectively. Our allowance for credit losses reflects Management's estimate of expected credit losses in the loan portfolio as of the date of the statement of financial position. See Note 2, “Allowance for Credit Losses,” in the accompanying “Notes to Consolidated Financial Statements” for further discussion of the Company’s allowance for credit losses. Management believes the current allowance for credit losses is adequate to cover expected losses in our existing portfolio as of December 31, 2024; however, changes in trends or deterioration in economic conditions could result in additional changes in the allowance or an increase in actual losses. Any increase could have a material adverse impact on our results of operation or financial condition in the future.

Our investment securities portfolio increased $5.9 million (2%) to $256.0 million at December 31, 2024 compared to $250.1 million at December 31, 2023. The portfolio consists primarily of invested surplus funds generated by the Company's insurance subsidiaries. Management maintains what it believes to be a conservative approach when formulating its investment strategy. The Company does not participate in hedging programs, interest rate swaps or other similar activities. This investment portfolio consists mainly of U.S. Treasury bonds, government agency bonds, and various municipal bonds. Investment securities have been designated as “available for sale” at December 31, 2024 with any unrealized gain or loss accounted for in the equity section of the Company’s consolidated statement of financial position, net of deferred income taxes for those investments held by the insurance subsidiaries as well as the statement of comprehensive income.

Other assets increased $6.7 million (7%) to $99.3 million at December 31, 2024 compared to $92.6 million at December 31, 2023. Increases in capitalized internal use software costs, prepaid expenses for furniture, fixtures, and leasehold improvements, miscellaneous accounts receivables for rebates for medical claims, and prepaid income taxes were main factors contributing to the increase in other assets. Offsetting a portion of the increase was a decline in loan purchase premium and lease right of use assets.

Our senior debt is comprised of a bank line of credit, the Company’s senior demand notes and commercial paper debt securities. Our subordinated debt is comprised of the variable rate subordinated debentures sold by the Company. The aggregate amount of senior and subordinated debt outstanding at December 31, 2024 increased $79.7 million (9%) to $992.5 million compared to $912.7 million outstanding at December 31, 2023. Higher usage of the line of credit and sales of the Company’s debt securities were the primary factors contributing to the increase. The line of credit usage increased $29.8 million (24%) to $151.9 million at December 31, 2024 and the Company's debt securities increased $49.9 million (6%) to $840.6 million at December 31, 2024. Increases in the credit line and debt securities funded the Company's growth in our loan portfolio and allowed for additional expenditures developing our systems.

Other accounts payables and accrued expenses increased $6.5 million (33%) at December 31, 2024 compared to the prior year. The increase in the Company’s accounts payable and accrued expenses was primarily due to an increase in trade accounts payable for insurance premiums due to unaffiliated insurance company in 2024 compared to 2023. The increase was partially offset by a decrease in accrued payroll and accrued health insurance claims.

Operating lease liabilities decreased $1.0 million (2%) at December 31, 2024 compared to the prior year. The decrease in the Company's operating lease liabilities was the result of a decrease in the average remaining lease term in 2024 compared to 2023.

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Results of Operations:

Total revenues, which include finance charge income, investment income, insurance income and miscellaneous other revenue, were $377.8 million and $351.4 million for 2024 and 2023, respectively. The aforementioned growth in our loan portfolio resulted in higher revenue across finance charge income, investment income, and insurance income, which was partially offset by a decrease in miscellaneous other revenue.

The provision for credit losses decreased $4.0 million (5%) during 2024 compared to 2023 due to lower net charge-offs.

Higher revenues and lower provision expense were offset by increases in interest expense, personnel expense, loan purchase premium amortization expense, and information technology related expenses which resulted in a increase in net income for the Company during the year just ended. Net income decreased $6.1 million (1157%) to a net loss of $5.6 million during 2024 compared to $0.5 million during 2023.

Net Interest Income:

Net interest income is a principal component of the Company’s operating performance and resulting net income. It represents the difference between income on earning assets and the cost of funds on interest bearing liabilities. Debt securities represent a majority of our interest bearing liabilities. Factors affecting our net interest income include the level of average net receivables and the interest income associated therewith, capitalized loan origination costs and our average outstanding debt, as well as the general interest rate environment. Volatility in interest rates generally has more impact on the income earned on investments and the Company’s borrowing costs than on interest income earned on loans. Management does not normally change the rates charged on loans originated solely as a result of changes in the interest rate environment.

Net interest income represents the difference between income on earning assets (loans and investments) and the cost of funds on interest bearing liabilities. Our net interest income is affected by the size and mix of our loan and investment portfolios as well as the spread between interest and finance charges earned on the respective assets and interest incurred on our debt. Net interest income increased $8.3 million (3%) compared to the same period in 2023. The increase in net interest income was primarily due to growth in our loan portfolio and a decrease in charge-offs in 2024 compared to 2023, partially offset by an increase in interest expense. Our average net loan balance increased $54.6 million (6%) during the twelve months just ended compared to the same period a year ago.

Average Gross Loans Outstanding less unearned finance charges was $995.9 million at December 31, 2024, compared to $941.3 million at December 31, 2023. Net interest income was $252.1 million during 2024, compared to $243.8 million in 2023.

As previously mentioned, higher sales of the Company’s debt securities and an increase in borrowings on the Company’s credit line resulted in an increase in senior debt. The increase resulted in higher interest cost. Average borrowings were $893.5 million during 2024 compared to $828.4 million during 2023. Interest expense increased $12.0 million (28%) during 2024 compared to 2023.

Net Insurance Income:

The Company offers certain optional credit insurance products to loan customers when closing a loan. Net insurance income (insurance revenues less claims and expenses) was $47.6 million during 2024 and $40.4 million during 2023. Net insurance premium revenue increased 18% while claims and expenses decreased 1% during 2024.

Other Revenue:

Other revenue was $7.0 million and $7.8 million during 2024 and 2023, respectively. A significant component of other revenue is earnings from the sale of auto club memberships. The Company, as an agent for a third party, offers auto club memberships to loan customers during the closing of a loan. An increase in sales of auto club memberships partially offset the decrease in service charge revenue for the period just ended.

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Provision for Credit Losses:

The Company’s provision for credit losses is a charge against earnings to maintain the allowance for credit losses at a level that Management estimates is adequate to cover expected losses as of the date of the statement of financial position. See Note 2. “Allowance for Credit Losses,” in the accompanying “Notes to Consolidated Financial Statements” for further discussion of the Company’s provision for credit losses.

The provision for credit losses decreased $4.0 million (5%) during 2024 compared to 2023 due to an improved macroeconomic outlook. Net charge-offs impacting the provision for credit losses were $81.4 million for 2024 and $91.2 million for 2023, respectively.

Determining a proper allowance for credit losses is a critical accounting estimate which involves Management’s judgment with respect to certain relevant factors, such as historical and expected loss trends, unemployment rates in various locales, delinquency levels, bankruptcy trends and overall general and industry specific economic conditions.

During the year ended December 31, 2024, the Company engaged a major rating service provider to assist with estimating the instances of loss ("Probability of Default" or "PD") and the average severity of losses ("Loss Given Default" or "LGD") using the characteristics of our loan portfolio, along with incorporating a reasonable and supportable forecast which is utilized to support the adjustments to historical loss experience of loans with similar credit risk. Key segmentation in the technique is origination vintage, remaining contractual term, risk score and state of origination. The technique produces a variety of alternative economic scenarios. We consider how macroeconomic and/or other factors might impact expected credit losses over the remaining maturity of the portfolio and determine which scenario(s) and specific scenario weights are applied within the estimation. The allowance for credit losses recorded in the statement of financial position reflects Management’s best estimate of expected credit losses. For further information regarding the change in technique, refer to the Critical Accounting Policies section below. In addition, please see Note 2, "Loans" in the accompanying "Notes to Unaudited Condensed Consolidated Financial Statements" for further discussion of estimated credit losses. Management may determine it is appropriate to increase or decrease the allowance for expected credit losses in future period, or actual losses in any period, either of which events could have a material impact on our results of operations in the future.

Operating Expenses:

Other operating expenses of the Company were $223.2 million during 2024 compared to $199.2 million during 2023. Other operating expenses encompass personnel expense, occupancy expense and miscellaneous other expenses.

Personnel expense increased $12.8 million (11%) during 2024 compared to 2023. Higher insurance costs, higher payroll taxes, higher bonus accrual, and salary adjustments for certain team members were the primary factors causing the increase in personnel expenses.

Occupancy expenses increased $1.5 million (7%) during 2024 compared to 2023. Increases in monthly rent expenses, depreciation and amortization expenses, and new branch openings attributed to the increase in occupancy expenses.

Other expenses increased $9.6 million (14%) during 2024 compared to 2023. Higher information technology consulting expenses, conversion expenses, and the amortization of loans purchased at a premium offset by a reduction in advertising expenses were the primary factors driving the increase in miscellaneous other operating expenses during 2024 compared to 2023.

Income Taxes:

The Company has elected to be treated as an S corporation for income tax reporting purposes. The taxable income or loss of an S corporation is treated as income of and is reportable in the individual tax returns of the shareholders of the Company in an appropriate allocation. Accordingly, deferred income tax assets and liabilities have been eliminated and no provisions for current and deferred income taxes were made by the Company except for amounts attributable to state income taxes for certain states, which do not recognize S corporation status for income tax reporting purposes. Deferred income tax assets and liabilities will continue to be recognized and provisions for current and deferred income taxes will be made by the Company's subsidiaries as they are not permitted to be treated as S Corporations.

- 16 -

Effective income tax rates for the years ended December 31, 2024 and 2023 were 6268.6% and 90.1%, respectively. The effective income tax rate differs from the statutory rate due to changes in the proportion of income earned by the Company's insurance subsidiaries.

Quantitative and Qualitative Disclosures About Market Risk:

Volatility in market interest rates can impact the Company’s investment portfolio and the interest rates paid on its bank borrowings and debt securities. Changes in interest rates have more impact on the income earned on investments and the Company’s borrowing costs than on interest income earned on loans, as Management does not normally change the rates charged on loans originated solely as a result of changes in the interest rate environment. These exposures are monitored and managed by the Company as an integral part of its overall cash management program. It is Management’s goal to minimize any adverse effect that movements in interest rates may have on the financial condition and operations of the Company. The information in the table below summarizes the Company’s risk associated with marketable debt securities and debt obligations as of December 31, 2024. Rates associated with the investment securities represent weighted averages based on the tax effected yield to maturity of each individual security. No adjustment has been made to yield, even though many of the investments are tax-exempt and, as a result, actual yield will be higher than that disclosed. For debt obligations, the table presents principal cash flows and related weighted average interest rates by contractual maturity dates. The Company’s subordinated debt securities are sold with various interest adjustment periods, which is the time from sale until the interest rate adjusts, and which allows the holder to redeem that security prior to the contractual maturity without penalty. It is expected that actual maturities on a portion of the Company’s subordinated debentures will occur prior to the contractual maturity as a result of interest rate adjustments. Management estimates the carrying value of senior and subordinated debt approximates their fair values when compared to instruments of similar type, terms and maturity.

Loans originated by the Company are excluded from the table (in millions, except for %) below since interest rates charged on loans are based on rates allowable in compliance with any applicable regulatory guidelines. Management does not believe that changes in market interest rates will significantly impact rates charged on loans. The Company has no exposure to foreign currency risk.

	Expected Year of Maturity
	2025			2026			2027			2028			2029			2030 & Beyond			Total			Fair Value
Assets:
Investment Securities	$	0.2		$	0.3		$	0.5		$	0.9		$	2.9		$	251.2		$	256.0		$	256.0
Average Interest Rate	3.3		%	3.5		%	3.3		%	3.7		%	3.6		%	3.4		%	3.4		%
Liabilities:
Senior Debt
Note Payable to Bank	$	—		$	—		$	151.9		$	—		$	—		$	—		$	151.9		$	151.9
Average Interest Rate	—		%	—		%	8.18		%	—		%	—		%	—		%	8.18		%
Senior Demand Notes	$	91.1		$	—		$	—		$	—		$	—		$	—		$	91.1		$	91.1
Average Interest Rate	1.90		%	—		%	—		%	—		%	—		%	—		%	1.90		%
Commercial Paper	$	715.8		$	—		$	—		$	—		$	—		$	—		$	715.8		$	715.8
Average Interest Rate	5.96		%	—		%	—		%	—		%	—		%	—		%	5.96		%
Subordinated    Debentures	$	19.7		$	9.7		$	0.9		$	0.5		$	—		$	—		$	30.8		$	30.8
Average Interest Rate	4.35		%	5.05		%	5.29		%	5.53		%	—		%	—		%	4.69		%

Liquidity and Capital Resources:

Liquidity is the ability of the Company to meet its ongoing financial obligations, either through the collection of receivables or by generating additional funds through liability management. The Company's liquidity is therefore dependent on the collection of its receivables, the sale of its debt securities and the continued availability of funds under the Company's revolving credit agreement.

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We continue to monitor and review current economic conditions and the related potential implications on us, including with respect to, among other things, changes in credit losses, liquidity, compliance with our debt covenants, and relationships with our customers.

As of December 31, 2024 and December 31, 2023, the Company had $35.9 million and $22.8 million, respectively, invested in cash and short-term investments readily convertible into cash with original maturities of three months or less. The Company uses cash reserves to fund its operations, including providing funds for any increase in redemptions of debt securities by investors which may occur.

The Company's investment securities can be converted into cash, if necessary. As of December 31, 2024 and 2023, 99% and 99%, respectively, of the Company's cash and cash equivalents and investment securities were maintained in Frandisco Property and Casualty Insurance Company and Frandisco Life Insurance Company, the Company's insurance subsidiaries. Georgia state insurance regulations limit the use an insurance company can make of its assets. Ordinary dividend payments to the Company by its wholly owned life insurance subsidiary are subject to annual limitations and are restricted to the lesser of 10% of policyholder's statutory surplus or the net statutory gain from operations before recognizing realized investment gains of the individual insurance subsidiary during the prior year. Dividend payments to a parent company by its wholly owned property and casualty subsidiary are subject to annual limitations and are restricted to the lessor of 10% of policyholder's surplus or the net statutory income before recognizing realized investment gains of the individual insurance subsidiary during the prior two years. Any dividends above these state limitations are termed "extraordinary dividends" and must be approved in advance by the Georgia Insurance Commissioner. The maximum aggregate amount of dividends these subsidiaries could have paid to the Company during 2024, without prior approval of the Georgia Insurance Commissioner, was approximately $49.7 million.

At December 31, 2023, Frandisco Property and Casualty Insurance Company and Frandisco Life Insurance Company had a statutory surplus of $129.9 million and $111.0 million, respectively. The maximum aggregate amount of dividends these subsidiaries can pay to the Company in 2024 without prior approval of the Georgia Insurance Commissioner is approximately $49.7 million. On November 28, 2023, Management submitted a request for approval of two separate transactions involving dividends and/or lines of credit with maximum amounts of $90.0 million from Frandisco Life Insurance Company and $105.0 million from Frandisco Property and Casualty Insurance Company. The Commissioner of the Insurance Department did not deny such requests with the 30 days allotted by law, thereby granting approval for transactions on or before December 31, 2024. Effective February 1, 2024, Frandisco Property and Casualty Insurance Company and Frandisco Life Insurance Company amended previous unsecured revolving line of credits available to the Company extending the terms to December 31, 2027.

At December 31, 2024, Frandisco Property and Casualty Insurance Company and Frandisco Life Insurance Company had a statutory surplus of $142.6 million and $120.7 million, respectively. The maximum aggregate amount of dividends these subsidiaries could pay to the Company during 2024, without prior approval of the Georgia Insurance Commissioner, is approximately $56.2 million. On December 12, 2024, Management submitted a request for approval of two separate transactions involving dividends and/or lines of credit with maximum amounts of $90.0 million from Frandisco Life Insurance Company and $105.0 million from Frandisco Property and Casualty Insurance Company. The Commissioner of the Insurance Department did not deny such requests with the 30 days allotted by law, thereby granting approval for transactions on or before December 31, 2025. The request was approved by the Georgia Insurance Department for transactions on or before December 31, 2025. Effective February 1, 2025, Frandisco Life Insurance Company and Frandisco Property and Casualty Insurance Company amended previous unsecured revolving lines of credit available to the Company by extending the term to December 31, 2028.

Most of the Company's loan portfolio is financed through sales of its various debt securities, which, because of certain redemption features contained therein, have shorter average maturities than the loan portfolio as a whole. The difference in maturities may adversely affect liquidity if the Company is not able to continue to sell debt securities at interest rates and on terms that are responsive to the demands of the marketplace or maintain sufficient borrowing availability under our credit facility.

The Company's continued liquidity is therefore also dependent on the collection of its receivables and the sale of debt securities that meet the investment requirements of the public. In addition to its receivables and securities sales, the Company had an external source of funds available under a revolving credit facility with

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BMO Bank, N.A. The credit agreement with BMO Bank, N.A. executed on December 6, 2024, provides for borrowings or re-borrowings of up to $300.0 million or 75% of the Company's net finance receivables (as defined in the credit agreement), whichever is less, subject to certain limitations, and all borrowings are secured by the finance receivables of the Company. At December 31, 2024 $151.9 million was outstanding under the credit facility. The outstanding includes the payoff and termination of the Wells Fargo Bank, N.A, credit agreement (as amended, the "credit agreement") that provided for borrowings or re-borrowings of up to $230.0 million or 70% of the Company's net finance receivables (as defined in the credit agreement), whichever is less, subject to certain limitations, and all borrowings are secured by the finance receivables of the Company. At December 31, 2023, $122.1 million, was outstanding under the credit line. Management believes the current credit facility, when considered with funds expected to be available from operations, should provide sufficient liquidity for the Company.

Available but unborrowed amounts under the credit agreement are subject to a periodic unused line fee of up to 0.50%, based on the outstanding balance on the credit line. The interest rate under the credit agreement is equivalent to the greater of (a) 0.75% per annum plus the Applicable Margin or (b) the one month secured overnight financing rate (the “SOFR Rate”) plus the term SOFR adjustment (the "Adjusted Term SOFR Rate") plus the Applicable Margin. The Adjusted Term SOFR Rate is adjusted on the first day of each calendar month based upon the SOFR Rate as of the last day of the preceding calendar month. The Applicable Margin is 3.00%. The interest rate on the credit agreement at December 31, 2024 and 2023 was 7.52% and 8.19%, respectively.

The credit agreement requires the Company to comply with certain covenants customary for financing transactions of this nature, including, among others, maintaining a minimum interest coverage ratio, a minimum loss reserve ratio, a minimum ratio of earnings to interest, taxes and depreciation and amortization to interest expense, a minimum asset quality ratio, a minimum consolidated tangible net worth ratio, and a maximum debt to tangible net worth ratio, each as defined. The Company must also comply with certain restrictions on its activities consistent with credit facilities of this type, including limitations on: (a) restricted payments; (b) additional debt obligations (other than specified debt obligations); (c) investments (other than specified investments); (d) mergers, acquisitions, or a liquidation or winding up; (e) modifying its organizational documents or changing lines of business; (f) modifying certain contracts; (g) certain affiliate transactions; (h) sale-leaseback, synthetic lease, or similar transactions; (i) guaranteeing additional indebtedness (other than specified indebtedness); (j) capital expenditures; or (k) speculative transactions. The credit agreement also restricts the Company or any of its subsidiaries from creating or allowing certain liens on their assets, entering into agreements that restrict their ability to grant liens (other than specified agreements), or creating or allowing restrictions on any of their ability to make dividends, distributions, inter-company loans or guaranties, or other inter-company payments, or inter-company asset transfers.

Any increase in the Company's allowance for credit losses would not directly affect the Company's liquidity, as any adjustment to the allowance has no impact on cash; however, an increase in the actual loss rate may have a material adverse effect on the Company's liquidity. The inability to collect loans could materially impact the Company's liquidity in the future.

The Company anticipates that its cash and cash equivalents, cash flows from operations, available lines of credit, and borrowings from time to time under the credit agreement will be sufficient to fund its liquidity needs for the next 12 months and thereafter for the foreseeable future.

Critical Accounting Policies:

The accounting and reporting policies of 1st Franklin are in accordance with accounting principles generally accepted in the United States of America and conform to general practices within the financial services industry. The more critical accounting and reporting policies include the allowance for credit losses, revenue recognition and insurance claims reserves.

Allowance for Credit Losses:

Provisions for credit losses are charged to operations in amounts sufficient to maintain the allowance for credit losses at a level considered adequate to cover expected credit losses in our loan portfolio. The allowance for credit losses is established based on the determination of the amount of expected losses inherent in the loan portfolio as of the reporting date.

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The Company uses a Probability of Default ("PD") / Loss Given Default ("LGD") technique to estimate the allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. Historical net finance receivables are tracked over the term of the loan pools to identify the instances of loss (PDs) and the average severity of losses (LGDs). We engaged a major rating service provider to assist with incorporating a reasonable and supportable forecast which is utilized to support the adjustments to historical loss experience of loans with similar credit risk. Key segmentation in the technique is origination vintage, remaining contractual term, risk score and state of origination. The technique produces a variety of alternative economic scenarios. We consider how macroeconomic or other factors might impact expected credit losses over the remaining maturity of the portfolio and determine which scenario(s) and specific scenario weights to be applied within the estimation. The allowance for credit losses recorded in the balance sheet reflects our best estimate of expected credit losses.

Revenue Recognition:

Accounting principles generally accepted in the United States of America require that an interest yield method be used to calculate the income recognized on accounts which have precomputed charges. An interest yield method is used by the Company on each individual account with precomputed charges to calculate income for those on-going accounts; however, state regulations often allow interest refunds to be made according to the "Rule of 78's" method for payoffs and renewals. Since the majority of the Company's accounts which have precomputed charges are paid off or renewed prior to maturity, the result is that most of the accounts effectively yield on a Rule of 78's basis.

Precomputed finance charges are included in the gross amount of certain direct cash loans, sales finance contracts and certain real estate loans. These precomputed charges are deferred and recognized as income on an accrual basis using the effective interest method. Some other cash loans and real estate loans, which do not have precomputed charges, have income recognized on a simple interest accrual basis. Income is not accrued on a loan that is more than 60 days past due.

Loan fees and origination costs are deferred and recognized as an adjustment to the loan yield over the contractual life of the related loan.

The property and casualty credit insurance policies written by the Company, as agent for a non-affiliated insurance company, are reinsured by the Company's property and casualty insurance subsidiary. The premiums are deferred and earned over the period of insurance coverage using the pro-rata method or the effective yield method, depending on whether the amount of insurance coverage generally remains level or declines.

The credit life and accident and health insurance policies written by the Company, as agent for a non-affiliated insurance company, are reinsured by the Company’s life insurance subsidiary. The premiums are deferred and earned using the pro-rata method for level-term life insurance policies and the effective yield method for decreasing-term life policies. Premiums on accident and health insurance policies are earned based on an average of the pro-rata method and the effective yield method.

Insurance Claims Reserves:

Included in unearned insurance premiums and commissions on the consolidated statements of financial position are reserves for incurred but unpaid credit insurance claims for policies written by the Company and reinsured by the Company's wholly owned insurance subsidiaries. These reserves are established based on accepted actuarial methods. In the event that the Company's actual reported losses for any given period are materially in excess of the previously estimated amounts, such losses could have a material adverse effect on the Company's results of operations.

Different assumptions in the application of these policies could result in material changes in the Company's consolidated financial position or consolidated results of operations.

New Accounting Pronouncements:

See Note 1, "Summary of Significant Accounting Policies - Recent Accounting Pronouncements," in the accompanying "Notes to Consolidated Financial Statements" for a discussion of new accounting standards and

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the expected impact of accounting standards recently issued but not yet required to be adopted. For pronouncements already adopted, any material impacts on the Company's consolidated financial statements are discussed in the applicable section(s) of this Management's Discussion and Analysis of Financial Condition and Results of Operations and Notes to the Company's Consolidated Financial Statements included elsewhere in this Annual Report.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of 1st Franklin Financial Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of 1st Franklin Financial Corporation and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis of Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses – Refer to Note 2 to the consolidated financial statements

Critical Audit Matter Description

The allowance for credit losses is based on Management's evaluation of the inherent risks and changes in the composition of the Company's loan portfolio. For the year ended December 31, 2024, the Company selected a Probability of Default ("PD") / Loss Given Default ("LGD") technique to estimate the allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. The Company engaged a major rating service provider to assist with estimating the instances of loss (PDs) and the average severity of losses (LGDs) using the characteristics of the Company’s loan portfolio, along with incorporating a reasonable and supportable

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forecast which is utilized to support the adjustments to historical loss experience of loans with similar credit risk. Key segmentation in the technique is origination vintage, remaining contractual term, risk score and state of origination. The technique produces a variety of alternative economic scenarios. The Company considers how macroeconomic and other factors might impact expected credit losses over the remaining maturity of the portfolio and determines which scenario(s) and specific scenario weights are applied within the estimation.

We identified the allowance for credit losses estimate as a critical audit matter because of the significant amount of complexity and judgment required by management to select and weight the macroeconomic forecast scenarios that are applied to the estimate. Performing audit procedures to evaluate the appropriateness of this model and whether adjustments are necessary required a high degree of auditor judgment, the use of specialists, and an increased extent of effort, specifically due to the effect of uncertainty in consumer payment patterns and general economic conditions on the estimate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the allowance for credit losses included the following, among others:

•We used credit specialists to assist us in (i) evaluating the reasonableness of the PD/LGD model and relevant assumptions, and (ii) evaluating the reasonableness of design, theory, and logic of the model for estimating expected credit losses.

•We tested the completeness and accuracy of data utilized as inputs within the PD/LGD model and the reasonableness of the technique’s calculation of probability of default and loss given default.

•We evaluated the reasonableness of management’s judgments related to the selection and weighting of macroeconomic forecast scenarios by comparing the forecast data to other independent sources.

•We compared the output of the estimated allowance for credit losses to the consolidated financial statements and assessed the reasonableness of the related disclosures.

/s/ Deloitte & Touche LLP

Atlanta, Georgia

April 29, 2025

We have served as the Company’s auditor since 2002.

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1st FRANKLIN FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

DECEMBER 31, 2024 AND 2023

ASSETS

	2024		2023
CASH AND CASH EQUIVALENTS (Note 1)	$	35,930,768	$	22,775,852
RESTRICTED CASH (Note 1)	8,784,328		12,059,022
LOANS (Note 2):
Direct Cash Loans	1,080,370,655		972,567,737
Real Estate Loans	23,364,743		29,812,798
Sales Finance Contracts	154,677,310		175,548,110
	1,258,412,708		1,177,928,645
Less: Unearned Finance Charges	199,844,507		174,043,203
Unearned Insurance Premiums	73,503,536		69,748,304
Allowance for Credit Losses	73,365,842		71,361,745
	911,698,823		862,775,393
INVESTMENT SECURITIES (Note 3):
Available for Sale, at fair value	255,966,759		250,085,804
OTHER ASSETS:
Land, Buildings, Equipment and Leasehold Improvements, less accumulated depreciation and amortization of $60,361,530 and $55,304,631 in 2024 and 2023, respectively	15,515,210		17,215,898
Operating Lease Right-of-Use Assets (Note 8)	40,737,215		41,938,371
Deferred Acquisition Costs	4,464,900		4,149,171
Due from Non-affiliated Insurance Company	3,596,769		2,365,339
Other Miscellaneous	34,968,298		26,931,910
	99,282,392		92,600,689
TOTAL ASSETS	$	1,311,663,070	$	1,240,296,760

See Notes to Consolidated Financial Statements

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1st FRANKLIN FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

DECEMBER 31, 2024 AND 2023

LIABILITIES AND STOCKHOLDERS' EQUITY

	2024		2023
SENIOR DEBT (Note 6):
Bank Borrowings	$	151,868,570	$	122,050,000
Senior Demand Notes, including accrued interest	91,100,482		100,568,430
Commercial Paper	718,724,910		661,573,356
	961,693,962		884,191,786
ACCOUNTS PAYABLE AND ACCRUED EXPENSES:
Operating Lease Liabilities (Note 8)	42,026,593		43,034,942
Other Accounts Payable and Accrued Expenses	26,462,022		19,952,978
	68,488,615		62,987,920
SUBORDINATED DEBT (Note 7)	30,769,476		28,533,940
Total Liabilities	1,060,952,053		975,713,646
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS' EQUITY:
Preferred Stock; $100 par value 6,000 shares authorized; no shares outstanding	—		—
Common Stock:
Voting Shares; $100 par value; 2,000 shares authorized; 1,700 shares outstanding as of December 31, 2024 and 2023	170,000		170,000
Non-Voting Shares; no par value; 198,000 shares authorized; 168,300 shares outstanding as of December 31, 2024 and 2023			—
Accumulated Other Comprehensive Loss	(27,222,450)		(18,955,725)
Retained Earnings	277,763,467		283,368,839
Total Stockholders' Equity	250,711,017		264,583,114
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,311,663,070	$	1,240,296,760

See Notes to Consolidated Financial Statements

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1st FRANKLIN FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

	2024		2023		2022
INTEREST INCOME:
Finance Charges	$	296,507,429	$	276,974,396	$	266,963,826
Net Investment Income	10,735,461		10,038,606		8,177,846
	307,242,890		287,013,002		275,141,672
INTEREST EXPENSE:
Senior Debt	53,668,197		42,093,613		26,875,546
Subordinated Debt	1,481,765		1,099,749		971,958
	55,149,962		43,193,362		27,847,504
NET INTEREST INCOME	252,092,928		243,819,640		247,294,168
PROVISION FOR CREDIT LOSSES (Note 2)	83,387,023		87,387,765		84,287,916
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	168,705,905		156,431,875		163,006,252
NET INSURANCE INCOME:
Premiums	63,570,924		56,570,776		56,984,335
Insurance Claims and Expense	(16,003,370)		(16,203,800)		(17,164,735)
	47,567,554		40,366,976		39,819,600
OTHER REVENUE	6,985,345		7,774,862		6,831,179
OPERATING EXPENSES:
Personnel Expense	124,597,000		111,763,367		113,732,789
Occupancy Expense	22,241,147		20,705,383		18,173,248
Other Expense	76,329,787		66,754,481		57,173,463
	223,167,934		199,223,231		189,079,500
INCOME BEFORE INCOME TAXES	90,870		5,350,482		20,577,531
PROVISION FOR INCOME TAXES (Note 12)	5,696,242		4,820,393		4,417,904
NET (LOSS) / INCOME	$	(5,605,372)	$	530,089	$	16,159,627
BASIC EARNINGS PER SHARE:
170,000 Shares Outstanding for All Periods (1,700 voting, 168,300 non-voting)	$	(32.97)	$	3.12	$	95.06

See Notes to Consolidated Financial Statements

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1st FRANKLIN FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

	2024		2023		2022
Net (Loss) / Income	$	(5,605,372)	$	530,089	$	16,159,627
Other Comprehensive (Loss) / Income:
Net changes related to available-for-sale Securities:
Unrealized (losses) gains	(10,175,433)		9,743,321		(45,165,474)
Income tax benefit (provision)	2,183,398		(2,026,463)		9,479,082
Net unrealized (losses) gains	(7,992,035)		7,716,858		(35,686,392)
Less reclassification of gains to net income	274,690		270,767		452,074
Total Other Comprehensive (Loss) / Income	(8,266,725)		7,446,091		(36,138,467)
Total Comprehensive (Loss) / Income	$	(13,872,097)	$	7,976,180	$	(19,978,840)

See Notes to Consolidated Financial Statements

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1st FRANKLIN FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023, AND 2022

	Common Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
	Shares	Amount
Balance at December 31, 2021	170,000	170,000		286,851,102		9,736,651		296,757,753
Comprehensive Income:
Net Income for 2022	—	—		16,159,627		—
Other Comprehensive Loss	—	—		—		(36,138,467)
Total Comprehensive Loss	—	—		—		—		(19,978,840)
Cash Distributions Paid	—	—		(17,485,889)		—		(17,485,889)
Balance at December 31, 2022	170,000	170,000		285,524,840		(26,401,816)		259,293,024
Comprehensive Income:
Net Income for 2023	—	—		530,089		—
Other Comprehensive Income	—	—		—		7,446,091
Total Comprehensive Income	—	—		—		—		7,976,180
Cash Distributions Paid	—	—		(2,686,090)		—		(2,686,090)
Balance at December 31, 2023	170,000	$	170,000	$	283,368,839	$	(18,955,725)	$	264,583,114
Comprehensive Income:
Net Loss for 2024	—	—		(5,605,372)		—
Other Comprehensive Loss	—	—		—		(8,266,725)
Total Comprehensive Loss	—	—		—		—		(13,872,097)
Cash Distributions Paid	—	—		—		—		—
Balance at December 31, 2024	170,000	$	170,000	$	277,763,467	$	(27,222,450)	$	250,711,017

See Notes to Consolidated Financial Statements

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1st FRANKLIN FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

	2024		2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) / Income	$	(5,605,372)	$	530,089	$	16,159,627
Adjustments to reconcile net (loss) / income to net cash provided by operating activities:
Provision for credit losses	83,387,023		87,387,765		84,287,916
Depreciation and amortization	9,479,026		6,606,132		4,425,985
Deferred tax expense (benefit)	516,947		392,024		(151,474)
Net (gains) due to called redemptions of marketable securities, gain on sales of equipment and amortization on securities	(715,950)		(661,315)		(830,011)
Increase in other assets	(9,419,269)		(8,882,938)		(7,430,995)
(Decrease) Increase in other liabilities	6,509,044		(11,210,993)		1,125,774
Net Cash Provided	84,151,449		74,160,764		97,586,822
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans originated or purchased	(619,849,662)		(642,891,708)		(602,792,430)
Loan payments	487,539,209		493,004,266		469,077,122
Purchases of securities, available for sale	(22,410,290)		(38,010,713)		(30,156,252)
Sales / Redemptions of securities, available for sale	6,781,079		18,040,000		26,815,000
Capital expenditures	(6,061,948)		(11,493,546)		(5,219,242)
Proceeds from Sale of Fixed Assets	13,122		—		22,929
Net Cash Used	(153,988,490)		(181,351,701)		(142,252,873)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) / increase in Senior Demand Notes	(9,488,397)		(11,757,244)		8,282,195
Advances on credit line	424,542,649		239,172,362		213,677,200
Payments on credit line	(394,724,079)		(184,653,362)		(206,446,200)
Commercial paper issued	243,815,087		146,377,614		135,878,572
Commercial paper redeemed	(186,663,533)		(109,389,811)		(63,485,901)
Subordinated debt securities issued	9,725,581		6,795,654		5,759,655
Subordinated debt securities redeemed	(7,490,045)		(7,267,540)		(6,446,173)
Dividends / distributions paid	—		(2,686,090)		(17,485,889)
Net Cash Provided	79,717,263		76,591,583		69,733,459
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	9,880,222		(30,599,354)		25,067,408
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning	34,834,874		65,434,228		40,366,820
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ending	$	44,715,096	$	34,834,874	$	65,434,228
Cash paid during the year for -
Interest Paid	$	54,881,513	$	41,752,170	$	27,264,793
Income Taxes Paid	$	5,215,000	$	4,763,842	4,156,000
Non-Cash Transactions for -
ROU assets and associated liabilities	9,241,050		10,311,099		9,553,566

See Notes to Consolidated Financial Statements

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1st FRANKLIN FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business:

1st Franklin Financial Corporation (the "Company") is a consumer finance company which originates and services direct cash loans, real estate loans and sales finance contracts through 369 branch offices located throughout the southern United States. In addition to this business, the Company writes credit insurance when requested by its loan customers as an agent for a non-affiliated insurance company specializing in such insurance. Two of the Company's wholly owned subsidiaries, Frandisco Life Insurance Company and Frandisco Property and Casualty Insurance Company, reinsure the credit life, the credit accident and health, the credit unemployment and the credit property insurance so written.

Basis of Consolidation:

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Inter-company accounts and transactions have been eliminated.

Fair Values of Financial Instruments:

The following methods and assumptions are used by the Company in estimating fair values for financial instruments.

Cash and Cash Equivalents. Cash includes cash on hand and with banks. Cash equivalents are short-term highly liquid investments with original maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value due to the relatively short period of time between the origination of the instruments and their expected realization. Cash and cash equivalents are classified as a Level 1 financial asset.

Loans. The fair value of the Company's direct cash loans and sales finance contracts approximate the carrying value since the estimated life, assuming prepayments, is short-term in nature. The fair value of the Company's real estate loans approximate the carrying value as the interest rate charged by the Company is at statutory maximums, which approximates market rates as there have been no material changes to statutory maximums since origination. Loans are classified as a Level 3 financial asset.

Investment Securities. The fair value of investment securities is based on quoted market prices. If a quoted market price is not available, fair value is estimated using market prices for similar securities. See additional information below regarding fair value under Accounting Standards Codification ("ASC") No. 820, Fair Value Measurements. See Note 4 for fair value measurement of available-for-sale investment securities and for information related to how these securities are valued.

Senior Debt. The carrying value of the Company's senior debt securities approximates fair value due to the relatively short period of time between the origination of the instruments and their expected payment. Senior debt securities are classified as a Level 2 financial liability.

Subordinated Debt. The carrying value of the Company's subordinated debt securities approximates fair value due to the re-pricing frequency of the securities. Subordinated debt securities are classified as a Level 2 financial liability.

Use of Estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the

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financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could vary materially from these estimates.

Income Recognition:

The Company categorizes it primary sources of revenue into three categories: (1) interest related revenues, (2) insurance related revenue, and (3) revenue from contracts with customers.

(1)Interest related revenues are specifically excluded from the scope of ASC 606 and accounted for under ASC Topic 310, "Receivables".

(2)Insurance related revenues are subject to industry-specific guidance within the scope of ASC Topic 944, "Financial Services - Insurance".

(3)Other revenues primarily relate to commissions earned by the Company on sales of auto club memberships. Auto club commissions are revenue from contracts with customers and are accounted for in accordance with the guidance set forth in ASC 606.

Accounting principles generally accepted in the United States of America require that an interest yield method be used to calculate the income recognized on accounts which have precomputed charges. An interest yield method is used by the Company on each individual account with precomputed charges to calculate income for those on-going accounts; however, state regulations often allow interest refunds to be made according to the "Rule of 78's" method for payoffs and renewals. Since the majority of the Company's accounts which have precomputed charges are paid off or renewed prior to maturity, the result is that most of the accounts effectively yield on a Rule of 78's basis.

Precomputed finance charges are included in the gross amount of certain direct cash loans, sales finance contracts and certain real estate loans. These precomputed charges are deferred and recognized as income on an accrual basis using the effective interest method. Some other cash loans and real estate loans, which do not have precomputed charges, have income recognized on a simple interest accrual basis. Income is not accrued on a loan that is more than 60 days past due.

Loan fees and origination costs are deferred and recognized as an adjustment to the loan yield over the contractual life of the related loan.

The property and casualty credit insurance policies written by the Company, as agent for an unrelated insurance company, are reinsured by the Company's property and casualty insurance subsidiary. The premiums are deferred and earned over the period of insurance coverage using the pro-rata method or the effective yield method, depending on whether the amount of insurance coverage generally remains level or declines.

The credit life and accident and health policies written by the Company, as agent for an unrelated insurance company, are reinsured by the Company's life insurance subsidiary. The premiums are deferred and earned using the pro-rata method for level-term life policies and the effective yield method for decreasing-term life policies. Premiums on accident and health policies are earned based on an average of the pro-rata method and the effective yield method.

Claims of the insurance subsidiaries are expensed as incurred and reserves are established for incurred but not reported claims. Reserves for claims totaled $7.2 million and $7.0 million at December 31, 2024 and 2023, respectively, and are included in unearned insurance premiums on the consolidated statements of financial position.

Policy acquisition costs of the insurance subsidiaries are deferred and amortized to expense over the life of the policies on the same methods used to recognize premium income.

The primary revenue category included in other revenue relates to commissions earned by the Company on sales of auto club memberships. Commissions received from the sale of auto club memberships are earned at the time the membership is sold. The Company sells the memberships as an agent for a third

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party. The Company has no further obligations after the date of sale as all claims for benefits are paid and administered by the third party.

Depreciation and Amortization:

Office machines, equipment, internal use software, and Company automobiles are recorded at cost and depreciated on a straight-line basis over a period of three to ten years. Leasehold improvements are amortized on a straight-line basis over five years or less depending on the term of the applicable lease. Depreciation and amortization expense for each of the three years ended December 31, 2024, 2023, and 2022 was $9.5 million, $6.6 million and $4.4 million, respectively.

Restricted Cash:

Restricted cash consists of funds maintained in restricted accounts in order to comply with certain requirements imposed on insurance companies by the State of Georgia and to meet the reserve requirements of its reinsurance agreements. Restricted cash also includes escrow deposits held by the Company on behalf of certain real estate mortgage customers.

	Year Ended December 31, (In thousands)
	2024		2023		2022
Cash and cash equivalents	$	35,931	$	22,776	$	49,653
Restricted cash	8,784		12,059		15,781
Total cash, cash equivalents and restricted cash	$	44,715	$	34,835	$	65,434

Impairment of Long-Lived Assets:

The Company annually evaluates whether events and circumstances have occurred or triggering events have occurred that indicate the carrying amount of property and equipment may warrant revision or may not be recoverable. When factors indicate that these long-lived assets should be evaluated for possible impairment, the Company assesses the recoverability by determining whether the carrying value of such long-lived assets will be recovered through the future undiscounted cash flows expected from use of the asset and its eventual disposition. Based on Management’s evaluation, there was no impairment of the carrying value of the long-lived assets, including property and equipment at December 31, 2024 or 2023.

Income Taxes:

The Financial Accounting Standards Board (“FASB”) issued ASC 740-10. FASB ASC 740-10 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized. FASB ASC 740-10 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At December 31, 2024 and 2023, the Company had no uncertain tax positions.

The Company’s insurance subsidiaries are treated as taxable entities and income taxes are provided for where applicable (Note 12). No provision for income taxes has been made by the Company since it has elected to be treated as an S Corporation for income tax reporting purposes. However, certain states do not recognize S Corporation status, and the Company has accrued amounts necessary to pay the required income taxes in such states.

Collateral Held for Resale:

When the Company takes possession of collateral which secures a loan, the collateral is recorded at the lower of its estimated resale value or the loan balance. Any losses incurred at that time are charged against the Allowance for Credit Losses.

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Marketable Debt Securities:

Management has designated the Company’s investment securities held in the Company's investment portfolio at December 31, 2024 and 2023 as being available for sale. This portion of the investment portfolio is reported at fair value with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss) included in the consolidated statements of comprehensive income (loss). Gains and losses on sales of securities designated as available for sale are determined based on the specific identification method.

Earnings per Share Information:

The Company has no contingently issuable common shares, thus basic and diluted earnings per share amounts are the same.

Recent Accounting Pronouncements:

In November 2023, the FASB issued ASU 2023-07, improving the disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. These enhanced disclosures require reporting of incremental segment information on an annual and interim basis for all public entities, including public entities with only one reportable segment, to enable investors to develop more decision-useful financial analyses. The amendments in this update are effective for annual periods beginning after December 15, 2023 and interim periods within annual periods beginning after December 15, 2024, and early adoption is permitted. The segment reporting guidance should be applied retrospectively to all prior periods presented in the financial statements, and upon transition, the expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company adopted and applied on a retrospective basis for all prior periods presented in the financial statements, and upon transition, the expense categories and amounts disclosed in the prior periods are based on the significant segment expense categories identified and disclosed in the period of adoption. Implementation of the update did not have a material effect on the Company’s consolidated financial statements. See Note 13, "Segment Reporting," for the Company's enhanced disclosures to reflect the adoption of this update.

In December 2023, the FASB issued ASU 2023-09, enhancing the transparency and decision usefulness of income tax disclosures. The amendment, among other things, improves transparency of income tax disclosures by requiring more consistent categories and greater disaggregation of information in rate reconciliations, and disaggregation of income taxes paid by jurisdiction. The amendments in this update are effective for annual periods beginning after December 15, 2024, and early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The income tax guidance should be applied on a prospective basis, however, retrospective application is permitted. The Company is currently evaluating the potential impact of this update on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, enhancing the disclosures about a company’s expenses. The amendment, among other things, improves these disclosures by requiring disaggregated expense information about a company’s expense types. The amendments in this update are effective for annual periods beginning after December 15, 2026, and early adoption is permitted. The enhanced expense guidance can be applied on either a prospective (for financial statements issued during reporting periods after the effective date of this ASU) or retrospective (to any or all prior periods presented) basis. The Company is currently evaluating the impact of this update on its consolidated financial statements.

2.    LOANS

The Company’s consumer loans are made to individuals in relatively small amounts for relatively short periods of time. First and second mortgage loans on real estate are made in larger amounts and for longer periods of time. The Company also purchases sales finance contracts from various dealers. All loans and sales contracts are held for investment.

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Loan Renewals:

Loan renewals are accounted for in accordance with the applicable guidance in ASC Topic 310-20 Nonrefundable Fees and Other Costs. Loan renewals are a product the Company offers to existing customers that allows them to borrow additional funds from the Company. In evaluating a loan for renewal, in addition to our standard underwriting requirements, we may take into consideration the customer’s prior payment performance with us, which we believe to be an indicator of the customer’s future credit performance. If the terms of the new loan resulting from a loan renewal are at least as favorable to us as the terms for comparable loans to other customers with similar collection risks who are not renewing a loan, the renewal is accounted for as a new loan. The criteria is met if the new loan's effective yield is at least equal to the effective yield for such comparable loans and the modification of the original loan is more than minor. A modification of a loan is more than minor if the present value of the cash flows under the terms of the renewal is at least 10 percent different from the present value of the remaining cash flows under the terms of the original loan. Accordingly, when a renewal is generated, the original loan(s) are extinguished along with the associated unearned finance charges and a new loan is originated. Substantially all renewals include a non-cash component that represents the exchange of the original principal balance for the new principal balance and a cash component for the net proceeds distributed to the customer for the additional amount borrowed. The cash component is presented as outflows from investing activities and the non-cash component is presented as a non-cash investing activity.

Cash, unearned finance charges, origination fees, discounts, premiums, deferred fees, and, in the instance of a loan renewal, the net payoff of the of the renewed loan are included in the loan origination amount. The cash component of the loan origination is included in the Statement of Cash Flows in the Cash Flows from Investing Activities as Loans Originated or Purchased.

Reconciliation of Gross Loans Originated / Acquired to Loans Originated or Purchased in Consolidated Statements of Cash Flows (in millions):

	2024		2023		2022
Loans Originated/Acquired per Business Section	$	1,337	$	1,228	$	1,158
Non-Cash Reconciling items:
Other Consumer (Live Check and Premier) Renewed Loans Payoff	326		319		314
Other non-cash activity: unearned finance charges, origination fees, discounts, premiums, and deferred fees	391		266		241
Loans originated or purchased per Consolidated Statements of Cash Flows	$	620	$	643	$	603

Description of Loans

Loans outstanding on the Consolidated Statements of Financial Position (“Financial Gross Outstanding(s)”) include principal, origination fees, premiums, discounts, and in the case of interest-bearing loans, deferred fees, other fees receivable, and accrued interest receivable.

Loan performance reporting is generally based on a loan’s gross outstanding balance (“Gross Outstanding(s)”), (“Gross Balance”), ("Gross Amount"), or ("Gross Loan") that includes principal plus origination fees for interest-bearing loans and the total of payments for loans with pre-computed interest.

The allowance for credit losses is based on the underlying financial instrument’s amortized cost basis ("Amortized Cost Basis"), with the allowance representing the portion of Amortized Cost Basis the Company does not expect to recover due to credit losses. The following are included in the Company’s Amortized Cost Basis:

•For pre-computed loans: Principal Balance, net of unearned finance charges and unearned insurance1.

•For interest-bearing loans: Principal Balance, net of unearned insurance1.

1 The state of Louisiana classifies certain insurance products as non-refundable. Non-refundable products are not netted against the principal balance for calculation of the amortized cost basis.

- 34 -

Gross Balance (in thousands) by Origination Year as of December 31, 2024:

Loan Class	2024		2023		2022		2021		2020		Prior		Total
Direct Cash Loans: Live Check Loans	$	176,859	$	18,932	$	3,081	$	425	$	55	$	20	$	199,372
Direct Cash Loans: Premier Loans	3,398		3,786		9,563		3,320		492		161		20,720
Direct Cash Loans: Other Consumer Loans	645,179		150,608		40,634		14,853		2,623		1,312		855,209
Real Estate Loans	2,249		4		1,035		8,486		3,607		7,364		22,745
Sales Finance Contracts	63,232		53,598		24,938		9,232		2,361		278		153,639
Total	$	890,917	$	226,928	$	79,251	$	36,316	$	9,138	$	9,135	$	1,251,685

Gross Balance (in thousands) by Origination year as of December 31, 2023:

Loan Class	2023		2022		2021		2020		2019		Prior		Total
Direct Cash Loans: Live Check Loans	$	136,419	$	16,682	$	2,661	$	376	$	36	$	17	$	156,191
Direct Cash Loans: Premier Loans	11,890		27,961		10,878		2,160		505		170		53,564
Direct Cash Loans: Other Consumer Loans	582,489		123,277		41,431		8,044		2,536		854		758,631
Real Estate Loans	2,075		1,365		10,877		4,649		4,118		6,220		29,304
Sales Finance Contracts	98,384		47,852		18,935		8,279		1,142		112		174,704
Total	$	831,257	$	217,137	$	84,782	$	23,508	$	8,337	$	7,373	$	1,172,394

Contractual Maturities of Loans:

An estimate of contractual maturities stated as a percentage of the loan balances based upon an analysis of the Company's portfolio as of December 31, 2024 is as follows:

Due In Calendar Year	Direct Cash Loans		Real Estate Loans		Sales Finance Contracts
2025	13	%	12	%	4	%
2026	43		4		16
2027	25		7		23
2028	13		9		31
2029	6		7		26
2030 & beyond	—		61		—
	100	%	100	%	100	%

Historically, a majority of the Company's loans have been renewed many months prior to their final contractual maturity dates, and the Company expects this trend to continue in the future. Accordingly, the above contractual maturities should not be regarded as a forecast of future cash collections.

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The Company’s principal balances on non-accrual loans by loan class at December 31, 2024 and 2023 are as follows (in thousands):

Loan Class	December 31, 2024		December 31, 2023
Direct Cash Loans: Live Check Consumer Loans	$	7,815	$	10,888
Direct Cash Loans: Premier Consumer Loans	1,170		2,526
Direct Cash Loans: Other Consumer Loans	38,895		33,194
Real Estate Loans	1,464		1,383
Sales Finance Contracts	6,741		6,655
Total	$	56,085	$	54,647

An age analysis of principal balances past due, segregated by loan class, as of December 31, 2024 and 2023 is as follows (in thousands):

December 31, 2024	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due Loans
Direct Cash Loans: Live Check Loans	$	4,812	$	3,794	$	5,180	$	13,786
Direct Cash Loans: Premier Loans	768		416		759		1,943
Direct Cash Loans: Other Consumer Loans	31,154		17,363		25,229		73,746
Real Estate Loans	1,213		299		1,308		2,820
Sales Finance Contracts	6,140		3,298		3,801		13,239
Total	$	44,087	$	25,170	$	36,277	$	105,534

December 31, 2023	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due Loans
Direct Cash Loans: Live Check Loans	$	4,555	$	4,228	$	6,548	$	15,331
Direct Cash Loans: Premier Loans	1,142		789		1,713		3,644
Direct Cash Loans: Other Consumer Loans	19,975		11,240		24,433		55,648
Real Estate Loans	776		334		1,403		2,513
Sales Finance Contracts	4,228		2,226		4,142		10,596
Total	$	30,676	$	18,817	$	38,239	$	87,732

While delinquency rating analysis is a primary credit quality indicator, we also consider the ratio of bankrupt accounts to the total loan portfolio in evaluating whether any qualitative adjustments were necessary to the allowance for credit losses. The ratio of bankrupt accounts to total principal loan balances outstanding at December 31, 2024 and December 31, 2023 was 1.38% and 1.43% respectively.

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For each segment in the portfolio, the Company also evaluates credit quality based on the aging status of the loan and by payment activity.

- 36 -

The following table presents the gross balance (in thousands) in each segment in the portfolio as of December 31, 2024 based on year of origination.

	Payment Performance – Principal Balance by Origination Year
	2024		2023		2022		2021		2020		Prior		Total Net Balance
Direct Cash Loans: Live Checks
Performing	$	171,371	$	16,923	$	2,843	$	359	$	46	$	15	$	191,557
Nonperforming	5,488		2,009		238		66		9		5		7,815
	$	176,859	$	18,932	$	3,081	$	425	$	55	$	20	$	199,372
Direct Cash Loans: Premier Loans
Performing	$	3,273	$	3,616	$	8,968	$	3,087	$	452	$	154	$	19,550
Nonperforming	125		170		595		233		40		7		1,170
	$	3,398	$	3,786	$	9,563	$	3,320	$	492	$	161	$	20,720
Direct Cash Loans: Other Consumer Loans
Performing	$	625,542	$	137,705	$	36,576	$	13,122	$	2,278	$	1,090	$	816,313
Nonperforming	19,637		12,903		4,058		1,731		345		222		38,896
	$	645,179	$	150,608	$	40,634	$	14,853	$	2,623	$	1,312	$	855,209
Real Estate Loans:
Performing	$	2,249	$	4	$	953	$	7,893	$	3,256	$	6,927	$	21,282
Nonperforming	—		—		82		593		351		437		1,463
	$	2,249	$	4	$	1,035	$	8,486	$	3,607	$	7,364	$	22,745
Sales Finance Contracts:
Performing	$	61,721	$	50,929	$	23,370	$	8,530	$	2,124	$	224	$	146,898
Nonperforming	1,511		2,669		1,568		702		237		54		6,741
	$	63,232	$	53,598	$	24,938	$	9,232	$	2,361	$	278	$	153,639

Modifications to Borrowers Experiencing Financial Difficulty

The Company allows refinancing of delinquent loans on a case-by-case basis for those who satisfy certain eligibility requirements. The eligible customers can include those experiencing temporary hardships, lawsuits, or customers who have declared bankruptcy. In most cases, the loans that are eligible for restructuring are between 90 and 180 days past due. We do not allow the amount of the new loan to exceed the original amount of the existing loan and we believe that refinancing the delinquent loans for certain customers provides the Company with an opportunity to increase its average loans outstanding and its interest, fees, and other income without experiencing a significant increase in loan losses. These refinancings also provide a resolution to temporary financial setbacks for these borrowers and sustain their credit rating.

Legal fees and other direct costs incurred by the Company during a restructuring are expensed when incurred. The effective interest rate for restructured loans is based on the original contractual rate, not the rate specified in the restructuring agreement. The modified loans are adjusted to be recorded at the value of expected cash flows to be received in the future. Modifications that lower the principal balance experience a direct charge-off for the difference of the original and modified principal amount. Substantially all of the restructurings relate to fee and interest rate concessions. The Company only lowers the principal balance in the event of a court order.

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The information relating to modifications made to borrowers experiencing financial difficulty (in thousands, except for %) for the period indicated are as follows:

	Year ended December 31, 2024
Loan Class	Interest Rate Reduction				Term Extension				Principal Forgiveness				Combination - Term Extension and Principal Forgiveness				Combination - Term Extension and Interest Rate Reduction
Direct Cash Loans: Live Check Loans	$	3,217	40.2	%	$	1,205	15.1	%	$	1,283	16.0	%	$	1,319	16.5	%	$	968	12.1	%
Direct Cash Loans: Premier Loans	381		14.7	%	602		23.2	%	311		12.0	%	759		29.3	%	539		20.8	%
Direct Cash Loans: Other Consumer Loans	12,202		17.7	%	13,529		19.6	%	6,452		9.4	%	21,679		31.5	%	15,007		21.8	%
Real Estate Loans	91		65.8	%	37		26.8	%	3		2.4	%	—		—	%	7		5.0	%
Sales Finance Contracts	774		10.2	%	826		10.9	%	1,134		14.9	%	4,325		57.0	%	533		7.0	%
Total	$	16,665	19.1	%	$	16,199	18.5	%	$	9,183	10.5	%	$	28,082	32.2	%	$	17,054	19.6	%

	Year ended December 31, 2023
Loan Class	Interest Rate Reduction				Term Extension				Principal Forgiveness				Combination - Term Extension and Principal Forgiveness				Combination - Term Extension and Interest Rate Reduction
Direct Cash Loans: Live Check Loans	$	5,244	36.9	%	$	2,350	16.5	%	$	2,557	18.0	%	$	2,784	19.6	%	$	1,277	9.0	%
Direct Cash Loans: Premier Loans	1,218		18.0	%	1,735		25.6	%	748		11.0	%	1,784		26.3	%	1,289		19.0	%
Direct Cash Loans: Other Consumer Loans	15,617		17.1	%	16,482		18.1	%	10,009		11.0	%	30,706		33.6	%	18,453		20.2	%
Real Estate Loans	281		75.6	%	48		12.9	%	25		6.8	%	—		—	%	17		4.7	%
Sales Finance Contracts	696		6.2	%	977		8.7	%	1,865		16.7	%	7,008		62.6	%	643		5.8	%
Total	$	23,056	18.6	%	$	21,591	17.4	%	$	15,206	12.3	%	$	42,282	34.1	%	$	21,679	17.5	%

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The financial effects of the modifications made to borrowers experiencing financial difficulty in the year ended December 31, 2024 are as follows:

Loan Modification	Loan Class	Financial Effect
Interest Rate Reduction	Live Check Loans	Reduced the weighted-average contractual interest rate from 27.5% to 16.7%
	Premier Loans	Reduced the weighted-average contractual interest rate from 20.2% to 15.2%
	Other Consumer Loans	Reduced the weighted-average contractual interest rate from 29.1% to 19.1%
	Real Estate Loans	Reduced the weighted-average contractual interest rate from 19.3% to 8.5%
	Sales Finance Contracts	Reduced the weighted-average contractual interest rate from 22.2% to 15.7%
Term Extension	Live Check Loans	Added a weighted-average 12 months to the term
	Premier Loans	Added a weighted-average 22 months to the term
	Other Consumer Loans	Added a weighted-average 16 months to the term
	Real Estate Loans	No Financial Effect
	Sales Finance Contracts	Added a weighted-average 19 months to the term
Principal Forgiveness	Live Check Loans	Reduced the gross balance of the loans $1.3 million
	Premier Loans	Reduced the gross balance of the loans $0.3 million
	Other Consumer Loans	Reduced the gross balance of the loans $6.5 million
	Real Estate Loans	No Financial Effect
	Sales Finance Contracts	Reduced the gross balance of the loans $1.1 million

The financial effects of the modifications made to borrowers experiencing financial difficulty in the year ended December 31, 2023 are as follows:

Loan Modification	Loan Class	Financial Effect
Interest Rate Reduction	Live Check Loans	Reduced the weighted-average contractual interest rate from 27.0% to 16.5%
	Premier Loans	Reduced the weighted-average contractual interest rate from 20.2% to 15.5%
	Other Consumer Loans	Reduced the weighted-average contractual interest rate from 29.2% to 19.4%
	Real Estate Loans	Reduced the weighted-average contractual interest rate from 18.3% to 6.6%
	Sales Finance Contracts	Reduced the weighted-average contractual interest rate from 21.9% to 15.7%
Term Extension	Live Check Loans	Added a weighted-average 13 months to the term
	Premier Loans	Added a weighted-average 23 months to the term
	Other Consumer Loans	Added a weighted-average 16 months to the term
	Real Estate Loans	Added a weighted-average 28 months to the term
	Sales Finance Contracts	Added a weighted-average 17 months to the term
Principal Forgiveness	Live Check Loans	Reduced the gross balance of the loans $2.6 million
	Premier Loans	Reduced the gross balance of the loans $0.7 million
	Other Consumer Loans	Reduced the gross balance of the loans $10.0 million
	Real Estate Loans	No Financial Effect
	Sales Finance Contracts	Reduced the gross balance of the loans $1.9 million

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The aging for loans that were modified to borrowers experiencing financial difficulty in the past 12 months (in thousands):

	December 31, 2024
Loan Class	Current		30 - 89 Past Due		90+ Past Due		Total
Direct Cash Loans: Live Check Loans	$	3,670	$	903	$	3,419	$	7,992
Direct Cash Loans: Premier Loans	1,545		390		657		2,592
Direct Cash Loans: Other Consumer Loans	40,693		11,702		16,474		68,869
Real Estate Loans	36		19		84		139
Sales Finance Contracts	4,709		1,309		1,573		7,591
Total	$	50,653	$	14,323	$	22,207	$	87,183

	December 31, 2023
Loan Class	Current		30 - 89 Past Due		90+ Past Due		Total
Direct Cash Loans: Live Check Loans	$	4,023	$	1,096	$	1,629	$	6,747
Direct Cash Loans: Premier Loans	3,212		597		686		4,495
Direct Cash Loans: Other Consumer Loans	46,154		7,640		8,900		62,694
Real Estate Loans	183		—		198		380
Sales Finance Contracts	6,361		1,202		1,107		8,670
Total	$	59,933	$	10,534	$	12,519	$	82,986

Loans modified for borrowers experiencing financial difficulty during the prior 12 months that subsequently charged off (in thousands):

	Twelve months ended December 31, 2024
Loan Class	Interest Rate Reduction		Term Extension		Principal Forgiveness		Combination- Term Extension and Principal Forgiveness		Combination - Term Extension and Interest Rate Reduction
Direct Cash Loans: Live Check Loans	$	799	$	1,925	$	492	$	185	$	167
Direct Cash Loans: Premier Loans	128		155		62		68		94
Direct Cash Loans: Other Consumer Loans	2,528		4,237		1,625		999		1,953
Real Estate Loans	—		—		—		—		—
Sales Finance Contracts	204		317		145		70		355
Total	$	3,659	$	6,634	$	2,324	$	1,322	$	2,569

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	Twelve months ended December 31, 2023
Loan Class	Interest Rate Reduction		Term Extension		Principal Forgiveness		Combination- Term Extension and Principal Forgiveness		Combination - Term Extension and Interest Rate Reduction
Direct Cash Loans: Live Check Loans	$	2,679	$	272	$	1,206	$	258	$	286
Direct Cash Loans: Premier Loans	458		139		359		181		221
Direct Cash Loans: Other Consumer Loans	4,880		1,004		3,207		2,264		1,994
Real Estate Loans	—		—		5		—		—
Sales Finance Contracts	222		66		420		398		82
Total	$	8,239	$	1,481	$	5,197	$	3,101	$	2,583

Prior to January 1, 2023, the Company classified a receivable as a TDR when the Company modified a loan's contractual terms for economic or other reasons related to the borrower's financial difficulties and granted a concession that would not have otherwise been considered.

The following table presents a summary of loans that were restructured during the year ended December 31, 2022 (in thousands, except number of loans):

Loan Class	Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment
Direct Cash Loans: Live Check Consumer Loans	6,238	$	11,026	$	10,869
Direct Cash Loans: Premier Consumer Loans	999	6,521		6,367
Direct Cash Loans: Other Consumer Loans	21,599	85,663		83,162
Real Estate Loans	26	238		236
Sales Finance Contracts	1,165	8,922		8,664
Total	30,027	$	112,370	$	109,298

TDRs that subsequently defaulted during the year ended December 31, 2022 are listed below (in thousands, except number of loans):

Loan Class	Number of Loans	Pre-Modification Recorded Investment
Direct Cash Loans: Live Check Consumer Loans	2,252	$	3,883
Direct Cash Loans: Premier Consumer Loans	182	1,066
Direct Cash Loans: Other Consumer Loans	5,196	13,212
Real Estate Loans	2	5
Sales Finance Contracts	183	1,061
Total	7,815	$	19,227

Allowance for Credit Losses:

The Company uses a Probability of Default (“PD”) / Loss Given Default (“LGD”) technique to estimate the allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. We utilized this same technique for the current and prior reporting periods. We engaged a major rating service provider to assist with estimating the instances of loss (PDs) and the average severity of losses (LGDs) using the characteristics of our loan portfolio, along with incorporating a reasonable and supportable forecast which is utilized to support the adjustments to historical loss experience of loans with similar credit risk. Key segmentation in the technique is origination vintage, remaining contractual term, risk score and state of origination. The technique produces a variety of alternative economic scenarios. We consider how macroeconomic and/or other factors might impact expected credit losses over the remaining maturity of the

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portfolio and determine which scenario(s) and specific scenario weights are applied within the estimation. The allowance for credit losses recorded in the balance sheet reflects Management’s best estimate of expected credit losses.

The Company classifies delinquent accounts at the end of each month according to the Company’s graded delinquency rules which includes the number of installments past due at that time, based on the then-existing terms of the contract. Accounts are classified in delinquency categories of 30-59 days past due, 60-89 days past due, or 90 or more days past due based on the Company’s graded delinquency policy. When a loan meets the Company’s charge-off policy, the loan is charged off, unless Management directs that it be retained as an active loan. In making this charge-off evaluation, Management considers factors such as pending insurance, bankruptcy status and other indicators of collectability. The amount charged off is the unpaid balance less the unearned finance charges and the unearned insurance premiums, if applicable.

Management ceases accruing finance charges on loans that meet the Company’s non-accrual policy based on grade delinquency rules, generally when two payments remain unpaid on precomputed loans or when the interest paid-to-date on an interest-bearing loan is 60 days or more past due. Finance charges are then only recognized to the extent there is a loan payment received or when the account qualifies for return to accrual status. Accounts qualify for return to accrual status when the graded delinquency on a precomputed loan is less than two payments and when the interest paid-to-date on an interest-bearing loan is less than 60 days past due. There were no loans that met the non-accrual policy still accruing interest at December 31, 2024 or December 31, 2023.

The allowance for credit losses increased by $2.0 million (3%) to $73.4 million as of December 31, 2024, compared to $71.4 million at December 31, 2023.

Management believes that the allowance for credit losses, as calculated in accordance with the Company’s current expected credit loss (“CECL”) methodology, is appropriate to cover expected credit losses on loans at December 31, 2024; however, because the allowance for credit losses is based on estimates, there can be no assurance that the ultimate charge-off amount will match such estimates. Management may determine it is appropriate to increase or decrease the allowance for expected credit losses in future periods, or actual losses in any period, either of which events could have a material impact on our results of operations in the future.

Gross charge-offs (in thousands) by origination year are as follows:

	Twelve months ended December 31, 2024
	2024		2023		2022		2021		2020		Prior		Total
Direct Cash Loans: Live Check Loans	$	4,802	$	18,473	$	2,856	$	387	$	64	$	54	26,636
Direct Cash Loans: Premier Loans	25		394		2,464		844		140		57		3,924
Direct Cash Loans: Other Consumer Loans	18,444		35,693		12,832		4,422		893		715		72,999
Real Estate Loans	—		—		—		(4)		—		10		6
Sales Finance Contracts	544		4,857		3,543		1,673		800		160		11,577
Total	$	23,815	$	59,417	$	21,695	$	7,322	$	1,897	$	996	$	115,142

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	Twelve months ended December 31, 2023
	2023		2022		2021		2020		2019		Prior		Total
Direct Cash Loans: Live Check Loans	$	8,385	$	20,548	$	2,185	$	182	$	44	$	53	31,397
Direct Cash Loans: Premier Loans	219		4,512		2,285		447		176		46		7,685
Direct Cash Loans: Other Consumer Loans	10,461		38,971		14,762		2,234		948		635		68,011
Real Estate Loans	—		—		1		12		1		8		22
Sales Finance Contracts	1,196		4,600		2,674		1,536		283		65		10,354
Total	$	20,261	$	68,631	$	21,907	$	4,411	$	1,452	$	807	$	117,469

Segmentation of the portfolio began with the adoption of ASC 326 on January 1, 2020. The following table provides additional information on our allowance for credit losses based on a collective evaluation in thousands).

	2024
	Direct Cash: Live Checks		Direct Cash: Premier Loans		Direct Cash: Other Consumer Loans		Real Estate Loans		Sales Finance Contracts		Total
Allowance for Credit Losses:
Balance at January 1, 2024	$	9,832	$	2,510	$	47,282	$	2,488	$	9,250	$	71,362
Provision for Credit Losses	21,565		354		54,118		(872)		8,222		83,387
Charge-offs	(26,636)		(3,924)		(72,999)		(6)		(11,577)		(115,142)
Recoveries	6,810		1,917		22,542		6		2,484		33,759
Ending Balance	$	11,571	$	857	$	50,943	$	1,616	$	8,379	$	73,366

	2023
	Direct Cash: Live Checks		Direct Cash: Premier Loans		Direct Cash: Other Consumer Loans		Real Estate Loans		Sales Finance Contracts		Total
Allowance for Credit Losses:
Balance at January 1, 2023	$	14,896	$	6,108	$	46,412	$	143	$	7,651	$	75,210
Provision for Credit Losses	20,807		2,592		51,726		2,360		9,903		87,388
Charge-offs	(31,397)		(7,685)		(68,011)		(22)		(10,354)		(117,469)
Recoveries	5,526		1,495		17,155		7		2,050		26,233
Ending Balance	$	9,832	$	2,510	$	47,282	$	2,488	$	9,250	$	71,362

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3.    INVESTMENT SECURITIES

Investment securities available for sale are carried at estimated fair market value. The amortized cost and estimated fair values of these investment securities are as follows (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2024:
Obligations of states and political subdivisions	$	290,425	$	683	$	(35,141)	$	255,967
Total	$	290,425	$	683	$	(35,141)	$	255,967
December 31, 2023:
Obligations of states and political subdivisions	$	273,595	$	2,443	$	(26,437)	$	249,601
Corporate securities	485		—		—		485
Total	$	274,080	$	2,443	$	(26,437)	$	250,086

The amortized cost and estimated fair values of investment securities at December 31, 2024, by contractual maturity, are shown below (in thousands):

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	250	$	250
Due after one year through five years	4,600		4,537
Due after five years through ten years	34,185		33,528
Due after ten years	251,390		217,652
Total	$	290,425	$	255,967

The following table provides an analysis of available-for-sale investment securities in an unrealized loss position (in thousands).

	Less than 12 Months				12 Months or Longer				Total
December 31, 2024	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of states and political subdivisions	$	97,056	$	(2,934)	$	125,068	$	(32,208)	$	222,124	$	(35,142)

	Less than 12 Months				12 Months or Longer				Total
December 31, 2023	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of states and political subdivisions	$	33,724	$	(421)	$	112,931	$	(26,017)	$	146,655	$	(26,438)

The previous two tables represent 244 investments and 158 investment held by the Company at December 31, 2024 and 2023, respectively, the majority of which were rated "A" or higher. The unrealized losses on the Company's investments were the result of interest rate and market fluctuations. Based on the credit ratings of these investments, along with the consideration of whether the Company has the intent to sell or will be more likely than not required to sell the applicable investment before recovery of amortized cost basis, the Management concluded that an allowance for credit losses was not required at December 31, 2024 or at December 31, 2023.

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On December 2, 2024, the Company engaged in the sale of our corporate securities, classified as available for sale. The total gross proceeds from the sale were $707 thousand. The sale resulted in realized gains of $222 thousand in 2024, which is reflected in investment income in the consolidated statement of income. Total proceeds from the redemption of investments due to the exercise of call provisions by the issuers thereof and regularly scheduled maturities during 2024 were $6.1 million. Gross and net gains of $0.1 million were realized on these redemptions.

There were no sales of securities during 2023. Proceeds from redemption of investments due to the exercise of call provisions by the issuers thereof and regularly scheduled maturities during 2023 were $18.0 million Gross and net gains of $0.2 million were realized on these redemptions.

4.    FAIR VALUE

FASB ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date The following fair value hierarchy is used in selecting inputs used to determine the fair value of an asset or liability, with the highest priority given to Level 1, as these are the most transparent or reliable. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Level 1 - Quoted prices for identical instruments in active markets.

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

The Company is responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. The Company performs due diligence to understand the inputs or how the data was calculated or derived. The Company employs a market approach in the valuation of its obligations of states, political subdivisions and municipal revenue bonds that are available for sale. These investments are valued on the basis of current market quotations provided by independent pricing services selected by Management based on the advice of an investment manager. To determine the value of a particular investment, these independent pricing services may use certain information with respect to market transactions in such investment or comparable investments, various relationships observed in the market between investments, quotations from dealers, and pricing metrics and calculated yield measures based on valuation methodologies commonly employed in the market for such investments. Quoted prices are subject to our internal price verification procedures. The fair values of common stocks and mutual funds are based on unadjusted quoted market prices in active markets. We validate prices received using a variety of methods, including, but not limited to comparison to other pricing services or corroboration of pricing by reference to independent market data such as a secondary broker. There was no change in this methodology during any period reported.

Assets measured at fair value as of December 31, 2024 and 2023 are available-for-sale investment securities which are summarized below (in thousands):

			Fair Value Measurements at Reporting Date Using
Description	December 31, 2024		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Obligations of states and political subdivisions	255,967		—		255,967		—
Available-for-sale investment securities	$	255,967	$	—	$	255,967	$	—

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			Fair Value Measurements at Reporting Date Using
Description	December 31, 2023		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Corporate securities	$	485	$	485	$	—	$	—
Obligations of states and political subdivisions	249,601		—		249,601		—
Available-for-sale investment securities	$	250,086	$	485	$	249,601	$	—

5.    INSURANCE SUBSIDIARY RESTRICTIONS

As of December 31, 2024 and 2023, 99% and 99%, respectively, of the Company's cash and cash equivalents and investment securities were maintained in the Company’s insurance subsidiaries. State insurance regulations limit the types of investments an insurance company may hold in its portfolio. These limitations specify types of eligible investments, quality of investments and the percentage a particular investment may constitute of an insurance company’s portfolio.

Dividend payments to the Company by its wholly owned life insurance subsidiary are subject to annual limitations and are restricted to the lesser of 10% of policyholders’ surplus or the net statutory gain from operations before recognizing realized investment gains of the individual insurance subsidiary during the prior year. Dividend payments to the Company by its wholly owned property and casualty insurance subsidiary are also subject to annual limitations and are restricted to the greater of 10% of policyholders’ surplus or the net statutory income before recognizing realized investment gains of the individual insurance subsidiary during the prior three years.

At December 31, 2024, Frandisco Property and Casualty Insurance Company and Frandisco Life Insurance Company had a statutory surplus of $142.6 million and $120.7 million, respectively. The maximum aggregate amount of dividends these subsidiaries could pay to the Company during 2024, without prior approval of the Georgia Insurance Commissioner, is approximately $56.2 million. On December 12, 2024, Management submitted a request for approval of two separate transactions involving dividends and/or lines of credit with maximum amounts of $90.0 million from Frandisco Life Insurance Company and $105.0 million from Frandisco Property and Casualty Insurance Company. The Commissioner of the Insurance Department did not deny such requests with the 30 days allotted by law, thereby granting approval for transactions on or before December 31, 2025. The request was approved by the Georgia Insurance Department for transactions on or before December 31, 2025. Effective February 1, 2025, Frandisco Life Insurance Company and Frandisco Property and Casualty Insurance Company amended previous unsecured revolving lines of credit available to the Company by extending the term to December 31, 2028.

At December 31, 2023, Frandisco Property and Casualty Insurance Company and Frandisco Life Insurance Company had a statutory surplus of $129.9 million and $111.0 million, respectively. The maximum aggregate amount of dividends these subsidiaries could pay to the Company in 2024 without prior approval of the Georgia Insurance Commissioner is approximately $49.7 million. On November 28, 2023, Management submitted a request for approval of two separate transactions involving dividends and/or lines of credit with maximum amounts of $90.0 million from Frandisco Life Insurance Company and $105.0 million from Frandisco Property and Casualty Insurance Company. The Commissioner of the Insurance Department did not deny such requests with the 30 days allotted by law, thereby granting approval for transactions on or before December 31, 2024. Effective February 1, 2024, Frandisco Property and Casualty Insurance Company and Frandisco Life Insurance Company amended previous unsecured revolving line of credits available to the Company extending the terms to December 31, 2027.

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6.    SENIOR DEBT

Effective December 6, 2024, the Company entered into a credit facility with BMO Bank, N.A. to replace the Wells Fargo N.A. credit agreement. The credit facility provides for borrowings or re-borrowings of up to $300.0 million or 75% of the Company's net finance receivables (as defined in the credit agreement), whichever is less, subject to certain limitations, and all borrowings are secured by the finance receivables of the Company. At December 31, 2024 $151.9 million was outstanding under the credit facility. At December 31, 2023, $122.1 million, was outstanding under the credit line with Wells Fargo Bank, N.A. Management believes the current credit facility, when considered with funds expected to be available from operations, should provide sufficient liquidity for the Company.

Available but unborrowed amounts under the credit agreement are subject to a periodic unused line fee of up to 0.50%, based on the outstanding balance on the credit line. The interest rate under the credit agreement is equivalent to the greater of (a) 0.75% per annum plus the Applicable Margin or (b) the one month secured overnight financing rate (the “SOFR Rate”) plus the term SOFR adjustment (the "Adjusted Term SOFR Rate") plus the Applicable Margin. The Adjusted Term SOFR Rate is adjusted on the first day of each calendar month based upon the SOFR Rate as of the last day of the preceding calendar month. The Applicable Margin is 3.00%. The interest rate on the credit agreements at December 31, 2024 and 2023 was 7.52% and 8.19%, respectively.

The credit agreement requires the Company to comply with certain covenants customary for financing transactions of this nature, including, among others, maintaining a minimum interest coverage ratio, a minimum loss reserve ratio, a minimum ratio of earnings to interest, taxes and depreciation and amortization to interest expense, a minimum asset quality ratio, a minimum consolidated tangible net worth ratio, and a maximum debt to tangible net worth ratio, each as defined. The Company must also comply with certain restrictions on its activities consistent with credit facilities of this type, including limitations on: (a) restricted payments; (b) additional debt obligations (other than specified debt obligations); (c) investments (other than specified investments); (d) mergers, acquisitions, or a liquidation or winding up; (e) modifying its organizational documents or changing lines of business; (f) modifying certain contracts; (g) certain affiliate transactions; (h) sale-leaseback, synthetic lease, or similar transactions; (i) guaranteeing additional indebtedness (other than specified indebtedness); (j) capital expenditures; or (k) speculative transactions. The credit agreement also restricts the Company or any of its subsidiaries from creating or allowing certain liens on their assets, entering into agreements that restrict their ability to grant liens (other than specified agreements), or creating or allowing restrictions on any of their ability to make dividends, distributions, inter-company loans or guaranties, or other inter-company payments, or inter-company asset transfers.

The Company’s Senior Demand Notes are unsecured obligations which are payable on demand. The interest rate payable on any Senior Demand Note is a variable rate, compounded daily, established from time to time by the Company.

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Commercial paper is issued by the Company only to qualified investors, in amounts in excess of $50,000, with maturities of less than 260 days and at interest rates that the Company believes are competitive in its market. Additional data related to the Company's senior debt is as follows (in thousands, except % data):

Year Ended December 31	Weighted Average Interest Rate at End of Year		Maximum Amount Outstanding During Year		Average Amount Outstanding During Year		Weighted Average Interest Rate During Year (1)
2024
Bank Borrowings	7.52	%	$	154,850	$	111,916	8.03	%
Senior Demand Notes	1.90		104,826		95,809		1.90
Commercial Paper	5.96		715,795		685,772		5.95
2023
Bank Borrowings	8.19	%	$	125,250	$	92,381	8.05	%
Senior Demand Notes	1.91		115,527		102,967		1.90
Commercial Paper	5.93		658,942		633,086		5.02
2022
Bank Borrowings	6.97	%	$	81,942	$	47,083	7.07	%
Senior Demand Notes	1.92		122,860		113,151		1.92
Commercial Paper	3.94		633,534		604,980		3.54

(1)Includes unused line fee and administrative fee.

7.    SUBORDINATED DEBT

The payment of the principal and interest on the Company’s subordinated debt is subordinate and junior in right of payment to all unsubordinated indebtedness of the Company.

Subordinated debt consists of Variable Rate Subordinated Debentures issued from time to time by the Company, and which mature four years after their date of issue The maturity date is automatically extended for an additional four year term unless the holder or the Company redeems the debenture on its original maturity date or within any applicable grace period thereafter The debentures are offered and sold in various minimum purchase amounts with varying interest rates as established from time to time by the Company and interest adjustment periods for each respective minimum purchase amount. Interest rates on the debentures automatically adjust at the end of each adjustment period. The debentures may also be redeemed by the holder at the applicable interest adjustment date or within any applicable grace period thereafter without penalty. Redemptions at any other time are at the discretion of the Company and are subject to a penalty. The Company may redeem the debentures for a price equal to 100% of the principal plus accrued but unpaid interest upon 30 days’ notice to the holder.

Interest rate information on the Company’s subordinated debt at December 31 is as follows:

Weighted Average Interest Rate as of End of Year			Weighted Average Interest Rate During Year
2024	2023	2022	2024	2023	2022
5.04%	4.30%	3.29%	4.69%	3.68%	3.16%

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Maturity and redemption information relating to the Company's subordinated debt at December 31, 2024 in (thousands) is as follows:

	Amount Maturing or Redeemable at Option of Holder
	Based on Maturity Date		Based on Interest Adjustment Period
2024	$	5,643	$	19,698
2025	4,900		9,656
2026	7,456		924
2027	12,770		491
Total	$	30,769	$	30,769

8.    LEASES

The Company's operations are carried on in locations which are occupied under operating lease agreements. These lease agreements are recorded as operating lease right-of-use (“ROU”) assets and operating lease liabilities. Total operating lease expense was $11.0 million, $10.1 million, and $9.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company’s minimum aggregate future lease commitments at December 31, 2024 and 2023 are presented in the tables that follow.

ROU assets represent the Company’s right to use an underlying asset during the lease term and the operating lease liabilities represent the Company’s obligations for lease payments in accordance with the lease. Recognition of ROU assets and liabilities are recognized at the lease commitment based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commitment date or adoption. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is recorded in occupancy expense in the consolidated statement of income.

Remaining lease terms range from 1 to 10 years and typically include extension options. The Company’s leases are not complex and do not contain residual value guarantees, variable lease payments, or significant assumptions or judgments made in applying the requirements of Topic 842. Operating leases with a term of 12 months or less are not recorded on the statement of financial condition and the related lease expense is recognized on a straight-line basis over the lease term.

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The tables below summarize our lease expense and other information related to the Company’s operating leases (dollars in thousands):

	Twelve Months Ended Dec 31, 2024
Operating lease expense	$	9,241
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	9,124
Weighted-average remaining lease term – operating leases (in years)	6.64
Weighted-average discount rate – operating leases	5.84		%
Lease Maturity Schedule as of December 31, 2024:	Amount
2024	9,201
2025	8,530
2026	7,641
2027	6,721
2028	5,306
2028 and beyond	13,463
Total	50,862
Less: Discount	(8,835)
Present Value of Lease Liability	$	42,027
Present Value of Lease Asset	$	40,737

	Twelve Months Ended Dec 31, 2023
Operating lease expense	$	8,038
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	7,890
Weighted-average remaining lease term – operating leases (in years)	7.01
Weighted-average discount rate – operating leases	5.45		%
Lease Maturity Schedule as of December 31, 2023:	Amount
2023	8,612
2024	8,227
2025	7,677
2026	6,801
2027	5,849
2027 and beyond	14,768
Total	51,933
Less: Discount	(8,898)
Present Value of Lease Liability	$	43,035
Present Value of Lease Asset	$	41,938

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9.    COMMITMENTS AND CONTINGENCIES

We conduct our lending operations under the provisions of various federal and state laws, implementing regulations, and insurance regulations. Changes in the current regulatory environment, or the interpretation or application of current regulations, could impact our business.

The Company is subject to various legal proceedings, claims and administrative proceedings arising in the ordinary course of its business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable, the peril or claim is uninsured or under insured, and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the uninsured or under insured loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the uninsured or under insured loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated uninsured or under insured loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss (whether on the merits or by virtue of the existence of collectible insurance) would not be material.

Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company.

10.    EMPLOYEE BENEFIT PLANS

The Company maintains a 401(k) plan, which is qualified under Section 401(a) and Section 401(k) of the Internal Revenue Code of 1986 (the “Code”), as amended, to cover employees of the Company.

Any employee who is 18 years of age or older is eligible to participate in the 401(k) plan on the first day of the month following the completion of one complete calendar month of continuous employment and the Company begins matching employee contributions of up to 6% of their salary, using the following formula: 100% of the first 1% and 70% of the next 5% of salary deferred. From August 1, 2023 to December 31, 2023 the Company paused their matches on employee contributions. The Company resumed matches on January 1, 2024 utilizing our previous methodology. During 2024, 2023 and 2022, the Company contributed $2.9 million, $1.9 million and $2.9 million, respectively, in matching funds for employee 401(k) deferred accounts.

The Company also maintains a non-qualified deferred compensation plan for employees who receive compensation in excess of the amount provided in Section 401(a)(17) of the Code, as such amount may be adjusted from time to time in accordance with the Code.

11.    RELATED PARTY TRANSACTIONS

The Company leased a portion of its properties (see Note 8) for an aggregate of $0.5 million per year from certain officers or stockholders.

The Company has an outstanding loan to a real estate development partnership of which David Cheek (son of Ben F. Cheek, III) who beneficially owns 24.24% of the Company’s voting stock, is a partner. The balance on this commercial loan (including principal and accrued interest) was $2.3 million at December 31, 2024. The loan is a variable-rate loan with the interest based on the prime rate plus 1%. The interest rate adjusts whenever the prime rate changes.

Certain directors, officers and stockholders have funds personally invested in the Company’s debt securities. The rates on these debt securities are the same rates provided to other customers.

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Effective September 23, 1995, the Company entered into a Split-Dollar Life Insurance Agreement with the Trustee of a member of the board of directors and a retired executive officer’s irrevocable life insurance trust. The life insurance policy insures a member of the Company’s board of directors and a retired executive officer. As a result of certain changes in tax regulations relating to split-dollar life insurance policies, the agreement was amended effectively making the premium payments a loan to the Trust. The interest on the loan is a variable rate adjusting monthly based on the federal mid-term Applicable Federal Rate. A payment of $20.0 thousand for interest accrued during 2024 was applied to the loan on December 31, 2024. No principal payments on this loan were made in 2024. The balance on this loan at December 31, 2024 was $485.4 thousand. This was the maximum loan amount outstanding during the year.

12.    INCOME TAXES

The Company has elected to be treated as an S corporation for income tax reporting purposes. The taxable income or loss of an S corporation is treated as income of and is reportable in the individual tax returns of the shareholders of the Company in an appropriate allocation. Accordingly, deferred income tax assets and liabilities have been eliminated and no provisions for current and deferred income taxes were made by the Company except for amounts attributable to state income taxes for certain states, which do not recognize S corporation status for income tax reporting purposes. Deferred income tax assets and liabilities will continue to be recognized and provisions for current and deferred income taxes will be made by the Company’s subsidiaries as they are not permitted to be treated as S Corporations.

We account for income taxes under the asset and liability method, which requires the recognition of Deferred Tax Assets, “DTAs”, and Deferred Tax Liabilities, “DTLs”, for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine DTAs and DTLs on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on DTAs and DTLs is recognized in income in the period that includes the enactment date.

We recognize DTAs to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If we determine that we would be able to realize our DTAs in the future in excess of their net recorded amount, we would make an adjustment to the DTA valuation allowance, which would reduce the provision for income taxes.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

We recognize interest and penalties related to unrecognized tax benefits, “UTBs”, on the interest expense line and other expense line, respectively, in the accompanying consolidated statement of operations. Accrued interest and penalties are included on the related liability lines in the consolidated balance sheet.

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The provision for income taxes for the years ended December 31, 2024, 2023 and 2022 is made up of the following components:

	2024		2023		2022
Current – Federal	$	5,174,295	$	4,389,030	$	4,280,033
Current – State	5,000		39,339		289,345
Total Current	5,179,295		4,428,369		4,569,378
Deferred tax expense (benefit)	516,947		392,024		(151,474)
Total Provision	$	5,696,242	$	4,820,393	$	4,417,904

Temporary differences create deferred federal tax assets and liabilities, which are detailed below as of December 31, 2024 and 2023. These amounts are included in accounts payable and accrued expenses in the accompanying consolidated statements of financial position.

	As Of December 31,
	2024		2023
Deferred Tax Assets:
Unearned Premium Reserves	$	2,229,173	$	2,132,375
Unrealized Loss (Gain) on
Marketable Debt Securities	7,236,347		5,038,864
SPAE Capitalization	39,204		33,195
STAT & Tax Reserve	743,174		690,797
Total Deferred Tax Assets	$	10,247,898	$	7,895,231
Deferred Tax Liabilities:
Insurance Commissions	(5,863,515)		(5,270,518)
Deferred Acquisition Cost Amortization	(1,648,246)		(1,589,701)
GAAP/STAT Premium Tax	(249,723)		(229,493)
Unrealized Loss (Gain) on
Other	(33,897)		(37,155)
Total Deferred Tax Liabilities	(7,795,381)		(7,126,867)
Net Deferred Tax Asset (Liability)	$	2,452,517	$	768,364

The Company's effective tax rate for the years ended December 31, 2024, 2023 and 2022 is analyzed as follows.

	2024		2023		2022
Statutory Federal income tax rate	21.0	%	21.0	%	21.0	%
Tax effect of S corporation status	7836.8		92.5		5.0
Tax exempt income	(1594.8)		(24.1)		(5.9)
State income taxes	5.5		0.7		1.4
Effective Tax Rate	6268.6	%	90.1	%	21.5	%

13.    SEGMENT FINANCIAL INFORMATION:

The Company discloses segment information in accordance with FASB ASC 280. FASB ASC 280 requires companies to determine segments based on how management makes decisions about allocating resources to segments and measuring their performance. The Company adopted ASU 2023-07 and applied the

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guidance retrospectively effective for the fiscal year beginning January 1, 2024. See Note 1 under "Recent Accounting Pronouncements" for additional information.

Following a series of entrances into new states of operation, the Company reorganized into two new reportable segments: North and South. The impact of change of the segments is presented on a retrospective basis for all periods presented below. Each segment is managed by a Senior Vice President who directly reports to the Company's Chief Operating Officer. The Company allocates resources and assesses operational and financial performance to each segment. The products offered require similar marketing strategies, technology, and training. The Company's Chief Operating Officer ("CODM") is responsible for allocating resources and assessing financial performance.

The Company's net income is the measure used by the CODM in evaluating the segments' profit and loss of the each segment. The CODM uses the net income results and impacts along with the strategy of the organization to assess performance and enable decision making when allocating resources. The Company's financial results include the following measures' amounts for the periods indicated that are either reviewed by the CODM or are otherwise regularly provided to the CODM:

As part of the CODM's review and evaluation process for allocating resources, the CODM is provided segment income and expenses.

Below is a performance report of each of the Company's segments for the year ended December 31, 2024 followed by a reconciliation to consolidated Company data.

Year 2024	North		South		Total
	(In Millions)
Revenues:
Finance Charges Earned	$	114	$	182	$	296
Insurance Income	19		38		57
Other	3		5		8
	136		225		361
Expenses:
Interest Cost	21		36		57
Provision for Loan Losses	35		47		82
Depreciation and Amortization	1		2		3
Other Expense	49		79		128
	106		164		270
Segment Profit	$	30	$	61	$	91
Segment Assets:
Net Receivables	$	378	$	636	1,014
Cash	33		23		56
Net Fixed Assets	3		6		9
Other Assets	18		27		45
Total Segment Assets	$	432	$	692	$	1,124

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RECONCILIATION:	2024
	(In Millions)
Revenues:
Total revenues from reportable segments	$	361
Corporate finance charges earned not allocated to segments	—
Corporate investment income earned not allocated to segments	11
Timing difference of insurance income allocation to segments	7
Other revenues not allocated to segments	$	(1)
Consolidated Revenues (1)	$	378
Net Income:
Total profit or loss for reportable segments	$	91
Corporate earnings not allocated	17
Corporate expenses not allocated	(107)
Consolidated Income Before Income Taxes	$	—
Assets:
Total assets for reportable segments	$	1,124
Loans held at corporate level	2
Unearned insurance at corporate level	(31)
Allowance for loan losses at corporate level	(73)
Cash and cash equivalents held at corporate level	(11)
Investment securities at corporate level	256
Fixed assets at corporate level	6
Other assets at corporate level	39
Consolidated Assets	$	1,312

Note 1: Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.

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Below is a performance report of each of the Company's segments for the year ended December 31, 2023 followed by a reconciliation to consolidated Company data.

Year 2023	North		South		Total
	(In Millions)
Revenues:
Finance Charges Earned	$	104	$	173	$	277
Insurance Income	$	17	$	33	50
Other	3		4		7
	124		210		334
Expenses:
Interest Cost	$	16	$	28	44
Provision for Loan Losses	$	35	$	56	91
Depreciation and Amortization	$	1	$	2	3
Other Expenses	49		77		126
	101		163		264
Segment Profit	$	23	$	47	$	70
Segment Assets:
Net Receivables	$	355	$	613	968
Cash	$	—	$	—	—
Net Fixed Assets	$	3	$	7	10
Other Assets	17		25		42
Total Segment Assets	$	375	$	645	$	1,020

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RECONCILIATION:	2023
	(In Millions)
Revenues:
Total revenues from reportable segments	$	334
Corporate finance charges earned not allocated to segments	—
Corporate investment income earned not allocated to segments	10
Timing difference of insurance income allocation to segments	7
Other revenues not allocated to segments	$	—
Consolidated Revenues (1)	$	351
Net Income:
Total profit or loss for reportable segments	$	70
Corporate earnings not allocated	17
Corporate expenses not allocated	(82)
Consolidated Income Before Income Taxes	$	5
Assets:
Total assets for reportable segments	$	1,021
Loans held at corporate level	2
Unearned insurance at corporate level	(40)
Allowance for loan losses at corporate level	(71)
Cash and cash equivalents held at corporate level	38
Investment securities at corporate level	250
Fixed assets at corporate level	7
Other assets at corporate level	33
Consolidated Assets	$	1,240

Note 1: Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.

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Below is a performance report of each of the Company's segments for the year ended December 31, 2022 followed by a reconciliation to consolidated Company data.

Year 2022	North		South		Total
	(In Millions)
Revenues:
Finance Charges Earned	$	98	$	169	$	267
Insurance Income	$	16	$	32	48
Other	$	2	$	4	6
	116		205		321
Expenses:
Interest Cost	$	10	$	18	28
Provision for Loan Losses	$	29	$	47	76
Depreciation and Amortization	$	—	$	2	2
Other Expenses	$	40	$	69	109
	79		136		215
Segment Profit	$	37	$	69	$	106
Segment Assets:
Net Receivables	$	328	$	583	911
Cash	$	3	$	5	8
Net Fixed Assets	$	3	$	6	9
Other Assets	6		25		31
Total Segment Assets	$	340	$	619	$	959

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RECONCILIATION:	2022
	(In Millions)
Revenues:
Total revenues from reportable segments	$	321
Corporate finance charges earned not allocated to segments	—
Corporate investment income earned not allocated to segments	8
Timing difference of insurance income allocation to segments	10
Other revenues not allocated to segments	0
Consolidated Revenues (1)	$	339
Net Income:
Total profit or loss for reportable segments	$	106
Corporate earnings not allocated	18
Corporate expenses not allocated	(103)
Consolidated Income Before Income Taxes	$	21
Assets:
Total assets for reportable segments	$	959
Loans held at corporate level	2
Unearned insurance at corporate level	(37)
Allowance for loan losses at corporate level	(75)
Cash and cash equivalents held at corporate level	58
Investment securities at corporate level	220
Fixed assets at corporate level	4
Other assets at corporate level	32
Consolidated Assets	$	1,163

Note 1:Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.

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DIRECTORS AND EXECUTIVE OFFICERS

Directors
Name	Principal Occupation, Title and Company	Director Since
Ben F. Cheek, IV	Chairman of Board, 1st Franklin Financial Corporation	2001
Ben F. Cheek, III	Chairman Emeritus, 1st Franklin Financial Corporation	1967
David W. Cheek	Shareholder	2024
Virginia C. Herring	President and Chief Executive Officer 1st Franklin Financial Corporation	2020
A. Roger Guimond	Retired Executive Vice President and Chief Financial Officer, 1st Franklin Financial Corporation	2004
Jerry J. Harrison, Jr.	Executive Vice President and    Chief Strategy Officer    1st Franklin Financial Corporation	2020
Donata Ison	Vice President of Finance    Armhr	2023
John G. Sample, Jr.	CPA	2004
Sheryl Smith	Retired Chief Operating, Risk and Compliance Officer     Omni Financial	2024
Keith D. Watson	Chairman Bowen & Watson, Inc.	2004
Executive Officers
Name	Position with Company	Position Since
Ben F. Cheek, IV	Chairman of Board	2015
Virginia C. Herring	President and Chief Executive Officer	2015
Kelly E. Abernathy	Executive Vice President and Chief Compliance Officer	2025
Daniel E. Clevenger, II	Executive Vice President and Chief Administrative Officer	2015
Kristin M. Dunn	Executive Vice President and Chief Marketing Officer	2025
Brian J. Gyomory	Executive Vice President and Chief Financial Officer	2021
Jerry J. Harrison, Jr.	Executive Vice President and Chief Strategy Officer	2023
Gary L. McQuain	Executive Vice President and Chief Operations Officer	2020
John D. Niemiec	Executive Vice President and Chief Credit Officer	2025
Mark J. Scarpitti	Executive Vice President and General Counsel	2021
Joseph A. Shaw	Executive Vice President and Chief Information Officer	2018
Mary S. Zimmerman	Executive Vice President and Chief Human Resources Officer	2025

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CORPORATE INFORMATION

Corporate Offices	Legal Counsel	Independent Registered Public Accounting Firm
P.O. Box 880	Jones Day
135 East Tugalo Street	Atlanta, Georgia	Deloitte & Touche LLP
Toccoa, Georgia 30577		Atlanta, Georgia
(706) 886-7571

Requests for Additional Information

Informational inquiries, including requests for a copy of the Company’s most recent annual report on Form 10-K, and any subsequent quarterly reports on Form 10-Q, as filed with the Securities and Exchange Commission, should be addressed to the Company's Secretary at the corporate offices listed above.

BRANCH OPERATIONS
SOUTH CAROLINA		MIDDLE GEORGIA
M. Summer Clevenger	Vice President	Jennifer C. Purser	Vice President
Regional Operations Directors		Regional Operations Directors
Nicholas D. Blevins	Gerald D. Rhoden	Janet R. Brownlee	James A. Mahaffey
Lonnie N. Boston III	Gregory A. Shealy	Ronald E. Byerly	Deloris L. O’Neal
Jenna L. Henderson	Louise S. Stokes	Kathryn D. Landry	Harriet H. Welch
Tammy T. Lee
SOUTH GEORGIA		NORTH GEORGIA
Michael E. Shankles	Vice President	Becki B. Lawhon	Vice President
Regional Operations Directors		Regional Operations Directors
Stacy M. Courson	Wanda Parham	James D. Blalock	Christian J. Murray
Jeffrey C. Lee	David B. Surrett	Kevin M. Gray	April E. Pelphrey
Sylvia J. McClung	Robert D. Whitlock	Nokie N. Moore	F. Cliff Snyder
ALABAMA		MISSISSIPPI
Jerry W. Hughes	Vice President	Marty B. Miskelly	Vice President
Regional Operations Directors		Regional Operations Directors
M. Peyton Givens	William J. Pridmore	Maurice J. Bize, Jr.	Teresa A. Grantham
Eric S. Hayes	Tanya M. Slaten	Carla A. Eldridge	Rebecca H. Rockette
Tomerria S. Iser	Michael L. Spriggs	Jimmy R. Fairbanks, Jr.
Jonathan M. Kendrick
TENNESSEE		LOUISIANA
Josh C. Nickerson	Vice President	John B. Gray	Vice President
Regional Operations Directors		Regional Operations Directors
Jerry D. Cline	J. Steven Knotts	Sonya L. Acosta	Tabatha A. Green
Brian M. Hill	Angelia M. Stafford	Bryan W. Cook	Anthony B. Seney
Tammy R. Hood	Melissa D. Storck	L. Christopher Deakle

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KENTUCKY			VIRGINIA
Chad H. Frederick		Vice President	Richard F. Corirossi		Assistant Vice President
Regional Operations Directors			Regional Operations Directors
Zackary S. Coker		Gary A. Zortman
Daniel C. Powell
TEXAS
Lori A. Sanchez		Vice President
Lauren M. Munoz		Assistant Vice President
Regional Operations Directors
Chadd D. Stewart		Brittany L. Rubio
Rene N. Villescas
HOME OFFICE ADMINISTRATION
Billy Fuller	Senior Vice President – Branch Operations		James P. Smith	Senior Vice President – Branch Operations
Virginia K Palmer	Senior Vice President – Operations Administration		Richard J. Brandt	Senior Vice President – Internal Audit
John E. Copeland	Senior Vice President – Finance		Pat S. Kenny	Senior Vice President – Branch Operations Support
Joshua M. Dilbeck	Vice President – Product Management		Brian D. Lingle	Vice President – Controller
Angela C. Brock	Vice President – Payroll and Compensation		Timothy E. Ott	Vice President – Information Technology Applications
Richard C. Chapman	Vice President – Financial Planning and Analysis		Yogi Shah	Vice President - Information Technology Infrastructure
Valerie Younts	Vice President – Regulatory Counsel		Joe Schuebert	Vice President – Governmental and Regulatory Affairs
Stacey K. Estes	Vice President – Real Estate and Property Management		Kevin M. Morris	Vice President – Regulatory Counsel
Shelby Gober	Vice President - Employee Development		Justin Wiles	Vice President - Project Management
John-Mark Jones	Vice President - Chief Information Security Officer		April G. Whiten	Vice President - Regulatory Strategy Development
C. Huffman Lewis	Vice President - Legislative and Regulatory Affairs

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___________________

2024 BEN F. CHEEK, JR. "OFFICE OF THE YEAR"

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** PICTURE OF EMPLOYEES **

*********************

This award is presented annually in recognition of the office that represents the highest overall performance within the Company. Congratulations to the entire Sylvania, Georgia staff for this significant achievement. The Friendly Franklin Folks salute you!

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(Graphic showing state maps of Alabama, Georgia, Kentucky, Louisiana, Mississippi, South Carolina, Tennessee, Texas, and Virginia which is regional operating territory of Company and listing of branch offices)

1st FRANKLIN FINANCIAL CORPORATION BRANCH OFFICES
ALABAMA
Adamsville	Brewton	Fort Payne	Moody	Pell City	Talladega
Albertville	Clanton	Gadsden	Moulton	Prattville	Tallassee
Alexander City	Cullman	Hamilton	Muscle Shoals	Robertsdale	Troy
Andalusia	Decatur	Huntsville (2)	Oneonta	Russellville (2)	Trussville
Arab	Dothan	Jackson	Opelika	Saraland	Tuscaloosa
Athens	Enterprise	Jasper	Oxford	Scottsboro	Wetumpka
Bay Minette	Fayette	Mobile	Ozark	Selma
Bessemer	Florence	Montgomery	Pelham	Sylacauga
GEORGIA
Adel	Cartersville	Douglasville	Hawkinsville	Monroe	Thomaston
Albany (2)	Cedartown	Dublin	Hazlehurst	Montezuma	Thomasville
Alma	Chatsworth	East Ellijay	Helena	Monticello	Thomson
Americus	Clarkesville	Eastman	Hinesville (2)	Moultrie	Tifton
Athens (2)	Claxton	Eatonton	Hiram	Nashville	Toccoa
Augusta	Clayton	Elberton	Hogansville	Newnan	Tucker
Bainbridge	Cleveland	Fayetteville	Jackson	Perry	Valdosta
Barnesville	Cochran	Fitzgerald	Jasper	Pooler	Vidalia
Baxley	Columbus (2)	Flowery Branch	Jefferson	Richmond Hill	Villa Rica
Blairsville	Commerce	Forest Park	Jesup	Rome	Warner Robins (2)
Blakely	Conyers	Forsyth	Kennesaw	Royston	Washington
Blue Ridge	Cordele	Fort Valley	LaGrange	Sandersville	Waycross
Bremen	Cornelia	Fort Oglethorpe	Lavonia	Savannah	Waynesboro
Brunswick	Covington	Gainesville	Lawrenceville	Statesboro	Winder
Butler	Cumming	Garden City	Macon (2)	Stockbridge
Cairo	Dahlonega	Georgetown	Madison	Swainsboro
Calhoun	Dalton	Greensboro	Manchester	Sylvania
Canton	Dawson	Griffin	McDonough	Sylvester
Carrollton	Douglas (2)	Hartwell	Milledgeville
KENTUCKY
Burkesville	Harlan	Lexington	Middlesboro	Paducah	Shepherdsville
Cadiz	Hopkinsville	Louisville	Morehead	Richmond	Somerset
Elizabethtown	Jackson	Madisonville	Owensboro	Shelbyville
LOUISIANA
Abbeville	Crowley	Jena	Marksville	New Iberia	Shreveport
Alexandria	Denham Springs	Kenner	Marrero	Opelousas	Sulphur
Baker	DeRidder	Lafayette	Minden	Pineville	Thibodaux
Bastrop	Eunice	Lake Charles	Monroe	Prairieville	West Monroe
Baton Rouge	Franklin	LaPlace	Morgan City	Ruston	Winnsboro
Bossier City	Hammond	Leesville	Natchitoches	Slidell
Covington	Houma

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1st FRANKLIN FINANCIAL CORPORATION BRANCH OFFICES (Continued)
MISSISSIPPI
Amory	Columbia	Gulfport	Laurel	Olive Branch	Ridgeland
Batesville	Columbus	Hattiesburg	Louisville	Oxford	Ripley
Bay St. Louis	Corinth	Hazlehurst	Magee	Pearl	Senatobia
Booneville	D’Iberville	Hernando	McComb	Philadelphia	Starkville
Brookhaven	Forest	Houston	Meridian	Picayune	Tupelo
Carthage	Greenwood	Iuka	New Albany	Pontotoc	Winona
Clinton	Grenada	Kosciusko	Newton
SOUTH CAROLINA
Aiken	Cheraw	Georgetown	Laurens	North Charleston	Summerville
Anderson	Chester	Greenwood	Lexington	North Greenville	Sumter
Batesburg-Leesville	Columbia	Greer	Manning	Orangeburg	Union
Beaufort	Conway	Hartsville	Marion	Rock Hill	Walterboro
Boiling Springs	Dillon	Irmo	Moncks Corner	Seneca	Winnsboro
Camden	Easley	Lake City	Myrtle Beach	Simpsonville	York
Cayce	Florence	Lancaster	Newberry	Spartanburg
Charleston	Gaffney
TENNESSEE
Athens	Crossville	Greeneville	Lebanon	Morristown	Sevierville
Bristol	Dayton	Hixson	Lenoir City	Murfreesboro	Springfield
Clarksville	Dickson	Jacksboro	Lexington	Newport	Smyrna
Cleveland	Dyersburg	Jackson	Madisonville	Powell	Tazewell
Columbia	Elizabethton	Johnson City	Maryville	Pulaski	Tullahoma
Cookeville	Fayetteville	Kingsport	Millington	Savannah	Winchester
Cordova	Gallatin	Lafayette
TEXAS
Austin (2)	Houston	Lufkin	Pasadena	San Antonio (3)	Texarkana
Bastrop	Hunstville	Missouri City	Pearland	San Marcos	Victoria
Conroe	Katy	Mount Pleasant	Rosenburg	Temple
Corpus Christi	Longview	New Braunfels
VIRGINIA
Abingdon	Chesapeake (2)	Colonial Heights	Danville	Mechanicsville	Yorktown

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1st FRANKLIN FINANCIAL CORPORATION

MISSION STATEMENT:

"Serving communities by offering opportunities to individuals and families through financial services.”

CORE VALUES:

Ø    Team: Be Trustworthy

Ø    Impact: Be Intentional

Ø    People: Be Exceptional

Ø    Service: Be Humble

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