UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 ------------------------------
 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 _________
 ------------------------------
 Commission File Number 2-27985
 (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)

 Page

 Item 1. Business

 Item 1A. Risk Factors

 Item 1B. Unresolved Staff Comments

 Item 1C. Cybersecurity

 Item 2. Properties

 Item 3. Legal Proceedings

 Item 4. Mine Safety Disclosures

 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6. [Reserved]

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A. Quantitative and Qualitative Disclosures About Market Risk

 Item 8. Financial Statements and Supplementary Data

 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure:

 Item 9A. Controls and Procedures

 Item 9B. Other Information

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10. Directors, Executive Officers and Corporate Governance

 Item 11. Executive Compensation

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13. Certain Relationships and Related Transactions, and Director Independence

 Item 14. Principal Accountant Fees and Services

 Item 15. Exhibits and Financial Statement Schedules

 Item 16. Form 10-K Summary

 Signatures

 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.

 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.
 ------------------------------------------
 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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 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)
 1967
 Chairman Emeritus

 Ben F. Cheek, IV (3)(4)(5)
 2001
 Chairman of the Board

 David W. Cheek (4)(5)

 2024

 None

 Virginia C. Herring (3)(4)(5)
 2020

 A. Roger Guimond (2)(5)
 2004
 None

 Jerry J. Harrison, Jr. (3)(2)(5)

 2020
 Executive Vice President and Chief Strategy Officer

 Donata Ison (1)(2)(5)

 2023
 None

 John G. Sample, Jr. (1)(2)(5)
 2004
 None

 Sheryl Smith (1)(2)(5)

 2024

 None

 Keith D. Watson (1)(2)(5)
 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:
 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.

 Summary of Qualifications

 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.

 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.

 Executive officer of the Company. Highly knowledgeable of the banking and consumer finance industry. Has been with the Company for 36 years.

 Over 20 years of experience and an extensive background in Commercial Real Estate development. Partner of CFL Properties, LLC.

 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.

 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.

 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.

 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.

 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.

 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
 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
 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
Daughter of Ben F. Cheek, III, Sister of
 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
 Chief Compliance Officer

 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
 Chief Administrative Officer

 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

 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

 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
 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
 Chief Operating Officer

 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
 Chief Credit Risk Officer

 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
 General Counsel and Secretary / Treasurer

 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
 Chief Information Officer

 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
 Chief Human Resources Officer

 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:  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
 - 20 -

 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:

 Jerry L. Harrison, Jr.

 Ben F. Cheek. IV

 Summary Compensation Table

 Name and
Principal
Position
 Year
 Salary
 Bonus
 Non-Equity
Incentive
Plan
Compensation
 All
Other
Compensation
 Total

 (1)
 (2)
 (3)

 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

 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

 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

 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

 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:
 - 23 -

 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

 $
 16,154
 $
 11,665
 $
 $
 —
 $
 62,819

 $
 46,281
 $
 9,192
 $
 $
 2,194
 $
 92,667

 $
 —
 $
 $
 12,000
 $
 —
 $
 12,820

 $
 —
 $
 $
 —
 $
 5,850
 $
 6,672

 $
 —
 $
 13,907
 $
 $
 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
$

 $
 —
 $
 44,625
 $
 89,250

 $
 —
 $
 124,031
 $
 248,063

 $
 —
 $
 104,723
 $
 209,445

 $
 —
 $
 149,625
 $
 299,250

 $
 —
 $
 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
 - 24 -

 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

 $
 —
 $
 —
 $
 22,143
 $
 —
 $
 798,044

 $
 —
 $
 2,194
 $
 4,327
 $
 —
 $
 199,354

 $
 12,000
 $
 —
 $
 $
 —
 $
 23,728

 $
 —
 $
 5,850
 $
 $
 —
 $
 47,600

 $
 —
 $
 6,975
 $
 $
 —
 $
 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

 $
 —
 $
 —
 $
 —

 $
 $
 —
 $

 $
 $
 —
 $

 $
 $
 —
 $

 $
 $
 —
 $

 $
 $
 —
 $

 $
 $
 —
 $

 $
 40,000
 $
 —
 $
 40,000

 Dean Scarborough (1)

 $
 17,500
 $
 —
 $
 17,500

 $
 $
 —
 $

 $
 $
 —
 $

 (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).
 - 25 -

 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

 644 Shares - Direct
 37.88%

 135 East Tugalo Street

 Toccoa, Georgia 30577

 644 Shares - Direct
 37.88%

 135 East Tugalo Street

 Toccoa, Georgia 30577

 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
 - 26 -

 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

 None
 None

 None
 None

 644 Shares - Direct
 37.88%

 7,405 Shares - Direct
 4.40%

 38,089 Shares – Indirect (1)

 644 Shares - Direct
 37.88%

 7,911 Shares - Direct
 4.70%

 38,088 Shares – Indirect (1)

 412 Shares - Direct

 24.24%

 8,111 Shares - Direct

 4.82%

 38,089 Shares – Indirect (1)

 None
 None

 None
 None

 None
 None

 None
 None

 None
 None

 None
 None

 None
 None

 None
 None

 None
 None

 None
 None

 None
 None

 None
 None

 None
 None

 None
 None

 All directors and executive officers as a group (11 persons)

 1,700 Shares - Direct

 100.00%

 23,427 Shares - Direct
 13.92%

 114,266 Shares- Indirect (1)

 67.89%

 - 27 -

 (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
 38,089

 David W. Cheek and Ben F. Cheek, IV
 38,088

 Ben F. Cheek, IV and Virginia C. Herring
 38,089

 (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.
 - 28 -

 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.
 - 29 -

 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).

 - 30 -

 (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).

 - 31 -

 (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). *

 - 32 -

 (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

 - 33 -

 101.SCH

 101.CAL

 101.LAB

 101.PRE

 101.DEF

 *
 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.
 - 34 -

 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:

 By: /s/ Virginia C. Herring

 Date

 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

 /s/ Ben F. Cheek, III

 (Ben F. Cheek, III)
 Chairman Emeritus

 /s/ Virginia C. Herring

 (Virginia C. Herring)
 Director, President and Chief Executive Officer

 /s/ David W. Cheek

 (David W. Cheek)

 /s/ Brian J. Gyomory

 (Brian J. Gyomory)
 Executive Vice President and Chief Financial Officer

 /s/ A. Roger Guimond

 (A. Roger Guimond)

 /s/ Jerry J. Harrison, Jr.

 (Jerry J. Harrison, Jr.)
 Director, Executive Vice President and Chief Strategy Officer

 /s/ Donata Ison

 (Donata Ison)

 /s/ John G. Sample, Jr.

 (John G. Sample, Jr.)

 /s/ Sheryl Smith

 (Sheryl Smith)

 /s/ Keith D. Watson

 (Keith D. Watson)

 - 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
 - 37 -

 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:

 1,080,370,655
 972,567,737

 23,364,743
 29,812,798

 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 -

 STATEMENTS OF FINANCIAL POSITION
 DECEMBER 31, 2024 AND 2023
 LIABILITIES AND STOCKHOLDERS' EQUITY

 2024
 2023

 SENIOR DEBT:

 $
 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

 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

 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 -

 STATEMENTS OF INCOME

 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

 $
 $
 $

 - 40 -

 STATEMENTS OF COMPREHENSIVE INCOME

 2024
 2023
 2022

 Net (Loss) / Income

 $
 $
 $

 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 -

 STATEMENTS OF STOCKHOLDERS' EQUITY

 Common Stock
 Retained
Earnings
 Accumulated
 Other
 Comprehensive
 (Loss) Income

 Total

 Shares

 Balance at December 31, 2021
 286,851,102
 9,736,651
 296,757,753

 Comprehensive Loss:

 Net Income for 2022
 —
 —
 —

 Other Comprehensive Loss
 —
 —
 —
 ( 36,138,467)

 Total Comprehensive Loss
 —
 —
 —
 —
 ( 19,978,840)

 —
 —
 —

 Balance at December 31, 2022
 $
 $
 285,524,840
 $
 ( 26,401,816)
 $
 259,293,024

 Comprehensive Loss:

 Net Income for 2023
 —
 —
 —

 Other Comprehensive Income
 —
 —
 —
 7,446,091

 Total Comprehensive Income
 —
 —
 —
 —
 7,976,180

 —
 —
 —

 Balance at December 31, 2023
 $
 $
 283,368,839
 $
 ( 18,955,725)
 $
 264,583,114

 Comprehensive Loss:

 Net Loss for 2024

 —
 —
 —

 Other Comprehensive Loss
 —
 —
 —
 ( 8,266,725)

 Total Comprehensive Loss
 —
 —
 —
 —
 ( 13,872,097)

 —
 —
 —
 —
 —

 Balance at December 31, 2024
 $
 $
 277,763,467
 $
 ( 27,222,450)
 $
 250,711,017

 - 42 -

 STATEMENTS OF CASH FLOWS
 2024
 2023
 2022

 CASH FLOWS FROM OPERATING ACTIVITIES:

 Net (Loss) / Income

 $
 $
 $

 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
 —

 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

 - 43 -

 NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
 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
 ANNUAL REPORT
 DECEMBER 31, 2024

 - 1 -

 The Company

 Chairman's Letter

 Business

 Sources of Funds and Common Stock Matters

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)

 Consolidated Financial Statements

 Directors and Executive Officers

 Corporate Information

 Ben F. Cheek, Jr. Office of the Year

 - 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

 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):

 2024
 2023
 2022
 2021
 2020

 $
 267,810
 $
 247,829
 $
 240,542
 $
 213,527
 $
 192,976

 4,423
 5,769
 7,285
 7,245
 6,555

 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:

 2024
 2023
 2022
 2021
 2020

 30.82
 %
 31.51
 %
 31.12
 %
 31.22
 %
 31.45
 %

 16.59
 17.53
 17.48
 17.33
 17.16

 18.17
 19.16
 19.36
 19.66
 19.13

 The following table contains certain information about our operations:

 2024
 2023
 2022
 2021
 2020

 Number of Branch Offices

 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

 - 6 -

 DESCRIPTION OF LOANS

 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
 %
 %
 %
 %
 %

 REAL ESTATE LOANS:

 Number of Loans Made

 Volume of Loans Made (in thousands)
 $
 —
 $
 $
 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
 %
 %
 %
 %
 %

 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
 %
 %
 %
 %
 %

 - 7 -

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

 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

 —
 —
 2,106
 17,345
 11,846

 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

 6,448
 (7,510)
 10,694
 11,407
 9,166

 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

 $
 1,080,371
 $
 972,568
 $
 911,822
 $
 873,433
 $
 777,569

 23,365
 29,813
 37,323
 45,972
 39,960

 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

 $
 167,047
 $
 133,663
 $
 119,804
 $
 122,455
 $
 107,850

 —
 —
 —
 —

 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.

 - 8 -

 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):

 2024
 2023
 2022
 2021
 2020

 DIRECT CASH LOANS:

 60-89 Days Past Due
 $
 21,574
 $
 16,257
 $
 20,199
 $
 12,272
 $
 10,779

 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

 2.90
 %
 3.38
 %
 4.12
 %
 2.69
 %
 2.33
 %

 REAL ESTATE LOANS:

 60-89 Days Past Due
 $
 $
 $
 $
 $

 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

 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

 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

 2.47
 %
 2.37
 %
 2.28
 %
 2.02
 %
 2.21
 %

 - 9 -

 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):

 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
 $
 —
 $
 $
 $
 $

 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
 - 10 -

 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
 - 11 -

 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:

 2024
 2023
 2022
 2021
 2020

 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
 %
 %
 %
 %
 %

 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:

 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:

 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.
 - 12 -

 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.
 - 13 -

 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.

 - 14 -

 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.
 - 15 -

 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

 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

 —
 %
 —
 %
 8.18
 %
 —
 %
 —
 %
 —
 %
 8.18
 %

 Senior Demand Notes
 $
 91.1
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 91.1
 $
 91.1

 1.90
 %
 —
 %
 —
 %
 —
 %
 —
 %
 —
 %
 1.90
 %

 $
 715.8
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 715.8
 $
 715.8

 5.96
 %
 —
 %
 —
 %
 —
 %
 —
 %
 —
 %
 5.96
 %

 Subordinated
 Debentures
 $
 19.7
 $
 9.7
 $
 0.9
 $
 0.5
 $
 —
 $
 —
 $
 30.8
 $
 30.8

 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.
 - 17 -

 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
 - 18 -

 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.
 - 19 -

 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
 - 20 -

 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.
 - 21 -

 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
 - 22 -

 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
 We have served as the Company's auditor since 2002.
 - 23 -

 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):

 1,080,370,655
 972,567,737

 23,364,743
 29,812,798

 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

 - 24 -

 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 DECEMBER 31, 2024 AND 2023
 LIABILITIES AND STOCKHOLDERS' EQUITY

 2024
 2023

 SENIOR DEBT (Note 6):

 $
 151,868,570
 $
 122,050,000

 Senior Demand Notes, including accrued interest
 91,100,482
 100,568,430

 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

 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

 - 25 -

 CONSOLIDATED STATEMENTS OF INCOME

 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

 $
 $
 $

 BASIC EARNINGS PER SHARE:

 170,000 Shares Outstanding for All Periods ( 1,700 voting, 168,300 non-voting)

 $
 ( 32.97)
 $
 3.12
 $
 95.06

 - 26 -

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 2024
 2023
 2022

 Net (Loss) / Income

 $
 $
 $

 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)

 - 27 -

 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

 Balance at December 31, 2021

 286,851,102
 9,736,651
 296,757,753

 Comprehensive Income:

 Net Income for 2022
 —
 —
 —

 Other Comprehensive Loss
 —
 —
 —
 ( 36,138,467)

 Total Comprehensive Loss
 —
 —
 —
 —
 ( 19,978,840)

 —
 —
 —

 Balance at December 31, 2022

 285,524,840
 ( 26,401,816)
 259,293,024

 Comprehensive Income:

 Net Income for 2023
 —
 —
 —

 Other Comprehensive Income
 —
 —
 —
 7,446,091

 Total Comprehensive Income
 —
 —
 —
 —
 7,976,180

 —
 —
 —

 Balance at December 31, 2023

 $
 $
 283,368,839
 $
 ( 18,955,725)
 $
 264,583,114

 Comprehensive Income:

 Net Loss for 2024

 —
 —
 —

 Other Comprehensive Loss
 —
 —
 —
 ( 8,266,725)

 Total Comprehensive Loss
 —
 —
 —
 —
 ( 13,872,097)

 —
 —
 —
 —
 —

 Balance at December 31, 2024

 $
 $
 277,763,467
 $
 ( 27,222,450)
 $
 250,711,017

 - 28 -

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2024
 2023
 2022

 CASH FLOWS FROM OPERATING ACTIVITIES:

 Net (Loss) / Income

 $
 $
 $

 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
 —

 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

 - 29 -

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 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
 - 30 -

 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
 - 31 -

 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.
 - 32 -

 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.

 - 33 -

 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

 Other non-cash activity: unearned finance charges, origination fees, discounts, premiums, and deferred fees

 Loans originated or purchased per Consolidated Statements of Cash Flows
 $
 $
 $

 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:

 2024
 2023
 2022
 2021
 2020
 Prior
 Total

 $
 176,859
 $
 18,932
 $
 3,081
 $
 $
 $
 $
 199,372

 3,398
 3,786
 9,563
 3,320
 20,720

 645,179
 150,608
 40,634
 14,853
 2,623
 1,312
 855,209

 2,249
 1,035
 8,486
 3,607
 7,364
 22,745

 63,232
 53,598
 24,938
 9,232
 2,361
 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:

 2023
 2022
 2021
 2020
 2019
 Prior
 Total

 $
 136,419
 $
 16,682
 $
 2,661
 $
 $
 $
 $
 156,191

 11,890
 27,961
 10,878
 2,160
 53,564

 582,489
 123,277
 41,431
 8,044
 2,536
 758,631

 2,075
 1,365
 10,877
 4,649
 4,118
 6,220
 29,304

 98,384
 47,852
 18,935
 8,279
 1,142
 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
 %
 %
 %

 2026

 2027

 2028

 2029

 2030 & beyond
 —
 —

 %
 %
 %

 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.
 - 35 -

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

 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

 38,895
 33,194

 1,464
 1,383

 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
 60-89 Days
 90 Days or
More
 Total
Loans

 $
 4,812
 $
 3,794
 $
 5,180
 $
 13,786

 1,943

 31,154
 17,363
 25,229
 73,746

 1,213
 1,308
 2,820

 6,140
 3,298
 3,801
 13,239

 Total
 $
 44,087
 $
 25,170
 $
 36,277
 $
 105,534

 December 31, 2023
 30-59 Days
 60-89 Days
 90 Days or
More
 Total
Loans

 $
 4,555
 $
 4,228
 $
 6,548
 $
 15,331

 1,142
 1,713
 3,644

 19,975
 11,240
 24,433
 55,648

 1,403
 2,513

 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

 $
 171,371
 $
 16,923
 $
 2,843
 $
 $
 $
 $
 191,557

 5,488
 2,009
 7,815

 $
 176,859
 $
 18,932
 $
 3,081
 $
 $
 $
 $
 199,372

 $
 3,273
 $
 3,616
 $
 8,968
 $
 3,087
 $
 $
 $
 19,550

 1,170

 $
 3,398
 $
 3,786
 $
 9,563
 $
 3,320
 $
 $
 $
 20,720

 $
 625,542
 $
 137,705
 $
 36,576
 $
 13,122
 $
 2,278
 $
 1,090
 $
 816,313

 19,637
 12,903
 4,058
 1,731
 38,896

 $
 645,179
 $
 150,608
 $
 40,634
 $
 14,853
 $
 2,623
 $
 1,312
 $
 855,209

 Real Estate Loans:

 $
 2,249
 $
 $
 $
 7,893
 $
 3,256
 $
 6,927
 $
 21,282

 —
 —
 1,463

 $
 2,249
 $
 $
 1,035
 $
 8,486
 $
 3,607
 $
 7,364
 $
 22,745

 Sales Finance Contracts:

 $
 61,721
 $
 50,929
 $
 23,370
 $
 8,530
 $
 2,124
 $
 $
 146,898

 1,511
 2,669
 1,568
 6,741

 $
 63,232
 $
 53,598
 $
 24,938
 $
 9,232
 $
 2,361
 $
 $
 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.

 - 37 -

 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

 Combination - Term Extension and Principal Forgiveness
 Combination - Term Extension and Interest Rate Reduction

 $
 3,217
 40.2
 %
 $
 1,205
 15.1
 %
 $
 1,283
 16.0
 %
 $
 1,319
 16.5
 %
 $
 12.1
 %

 14.7
 %
 23.2
 %
 12.0
 %
 29.3
 %
 20.8
 %

 12,202
 17.7
 %
 13,529
 19.6
 %
 6,452
 9.4
 %
 21,679
 31.5
 %
 15,007
 21.8
 %

 65.8
 %
 26.8
 %
 2.4
 %
 —
 —
 %
 5.0
 %

 10.2
 %
 10.9
 %
 1,134
 14.9
 %
 4,325
 57.0
 %
 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

 Combination - Term Extension and Principal Forgiveness
 Combination - Term Extension and Interest Rate Reduction

 $
 5,244
 36.9
 %
 $
 2,350
 16.5
 %
 $
 2,557
 18.0
 %
 $
 2,784
 19.6
 %
 $
 1,277
 9.0
 %

 1,218
 18.0
 %
 1,735
 25.6
 %
 11.0
 %
 1,784
 26.3
 %
 1,289
 19.0
 %

 15,617
 17.1
 %
 16,482
 18.1
 %
 10,009
 11.0
 %
 30,706
 33.6
 %
 18,453
 20.2
 %

 75.6
 %
 12.9
 %
 6.8
 %
 —
 —
 %
 4.7
 %

 6.2
 %
 8.7
 %
 1,865
 16.7
 %
 7,008
 62.6
 %
 5.8
 %

 Total
 $
 23,056
 18.6
 %
 $
 21,591
 17.4
 %
 $
 15,206
 12.3
 %
 $
 42,282
 34.1
 %
 $
 21,679
 17.5
 %

 - 38 -

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

 Loan Modification
 Financial Effect

 Reduced the weighted-average contractual interest rate from 27.5 % to 16.7 %

 Reduced the weighted-average contractual interest rate from 20.2 % to 15.2 %

 Reduced the weighted-average contractual interest rate from 29.1 % to 19.1 %

 Reduced the weighted-average contractual interest rate from 19.3 % to 8.5 %

 Reduced the weighted-average contractual interest rate from 22.2 % to 15.7 %

 Added a weighted-average 12 months to the term

 Added a weighted-average 22 months to the term

 Added a weighted-average 16 months to the term

 No Financial Effect

 Added a weighted-average 19 months to the term

 Reduced the gross balance of the loans $ 1.3 million

 Reduced the gross balance of the loans $ 0.3 million

 Reduced the gross balance of the loans $ 6.5 million

 No Financial Effect

 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
 Financial Effect

 Reduced the weighted-average contractual interest rate from 27.0 % to 16.5 %

 Reduced the weighted-average contractual interest rate from 20.2 % to 15.5 %

 Reduced the weighted-average contractual interest rate from 29.2 % to 19.4 %

 Reduced the weighted-average contractual interest rate from 18.3 % to 6.6 %

 Reduced the weighted-average contractual interest rate from 21.9 % to 15.7 %

 Added a weighted-average 13 months to the term

 Added a weighted-average 23 months to the term

 Added a weighted-average 16 months to the term

 Added a weighted-average 28 months to the term

 Added a weighted-average 17 months to the term

 Reduced the gross balance of the loans $ 2.6 million

 Reduced the gross balance of the loans $ 0.7 million

 Reduced the gross balance of the loans $ 10.0 million

 No Financial Effect

 Reduced the gross balance of the loans $ 1.9 million

 - 39 -

 The aging for loans that were modified to borrowers experiencing financial difficulty in the past 12 months (in thousands):
 December 31, 2024

 Current
 30 - 89 Past Due
 90+ Past Due
 Total

 $
 3,670
 $
 $
 3,419
 $
 7,992

 1,545
 2,592

 40,693
 11,702
 16,474
 68,869

 4,709
 1,309
 1,573
 7,591

 Total
 $
 50,653
 $
 14,323
 $
 22,207
 $
 87,183

 December 31, 2023

 Current
 30 - 89 Past Due
 90+ Past Due
 Total

 $
 4,023
 $
 1,096
 $
 1,629
 $
 6,747

 3,212
 4,495

 46,154
 7,640
 8,900
 62,694

 —

 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

 Combination- Term Extension and Principal Forgiveness
 Combination - Term Extension and Interest Rate Reduction

 $
 $
 1,925
 $
 $
 $

 2,528
 4,237
 1,625
 1,953

 —
 —
 —
 —
 —

 Total
 $
 3,659
 $
 6,634
 $
 2,324
 $
 1,322
 $
 2,569

 - 40 -

 Twelve months ended December 31, 2023

 Combination- Term Extension and Principal Forgiveness
 Combination - Term Extension and Interest Rate Reduction

 $
 2,679
 $
 $
 1,206
 $
 $

 4,880
 1,004
 3,207
 2,264
 1,994

 —
 —
 —
 —

 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):

 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
 6,521
 6,367

 21,599
 85,663
 83,162

 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):

 Number
of
Loans
 Pre-Modification
Recorded
Investment

 Direct Cash Loans: Live Check Consumer Loans
 2,252
 $
 3,883

 Direct Cash Loans: Premier Consumer Loans
 1,066

 5,196
 13,212

 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
 - 41 -

 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

 $
 4,802
 $
 18,473
 $
 2,856
 $
 $
 $
 26,636

 2,464
 3,924

 18,444
 35,693
 12,832
 4,422
 72,999

 —
 —
 —
 ( 4)
 —

 4,857
 3,543
 1,673
 11,577

 Total
 $
 23,815
 $
 59,417
 $
 21,695
 $
 7,322
 $
 1,897
 $
 $
 115,142

 - 42 -

 Twelve months ended December 31, 2023

 2023
 2022
 2021
 2020
 2019
 Prior
 Total

 $
 8,385
 $
 20,548
 $
 2,185
 $
 $
 $
 31,397

 4,512
 2,285
 7,685

 10,461
 38,971
 14,762
 2,234
 68,011

 —
 —

 1,196
 4,600
 2,674
 1,536
 10,354

 Total
 $
 20,261
 $
 68,631
 $
 21,907
 $
 4,411
 $
 1,452
 $
 $
 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
 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
 2,484
 33,759

 Ending Balance
 $
 11,571
 $
 $
 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
 $
 $
 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
 2,050
 26,233

 Ending Balance
 $
 9,832
 $
 2,510
 $
 47,282
 $
 2,488
 $
 9,250
 $
 71,362

 - 43 -

 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
Gains
 Gross
 Estimated
Fair
Value

 December 31, 2024:

 $
 290,425
 $
 $
 ( 35,141)
 $

 Total
 $
 290,425
 $
 $
 ( 35,141)
 $

 December 31, 2023:

 $
 273,595
 $
 2,443
 $
 ( 26,437)
 $
 249,601

 Corporate securities
 —
 —

 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
 $
 $

 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
 $

 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
 Fair
Value
 Fair
Value

 $
 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
 Fair
Value
 Fair
Value

 $
 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.
 - 44 -

 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)

 —
 —

 Available-for-sale investment securities
 $
 $
 —
 $
 $
 —

 - 45 -

 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
 $
 $
 $
 —
 $
 —

 249,601
 —
 249,601
 —

 Available-for-sale investment securities
 $
 250,086
 $
 $
 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.

 - 46 -

 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.
 - 47 -

 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
Outstanding
During Year
 Average
Outstanding
During Year
 Weighted
Average
Interest Rate
During Year (1)

 2024

 7.52
 %
 $
 154,850
 $
 111,916
 8.03
 %

 Senior Demand Notes
 1.90
 104,826
 95,809
 1.90

 5.96
 715,795
 685,772
 5.95

 2023

 8.19
 %
 $
 125,250
 $
 92,381
 8.05
 %

 Senior Demand Notes
 1.91
 115,527
 102,967
 1.90

 5.93
 658,942
 633,086
 5.02

 2022

 6.97
 %
 $
 81,942
 $
 47,083
 7.07
 %

 Senior Demand Notes
 1.92
 122,860
 113,151
 1.92

 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 %

 - 48 -

 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

 2027
 12,770

 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.
 - 49 -

 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:

 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:

 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

 - 50 -

 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.
 - 51 -

 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.
 - 52 -

 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
 - 53 -

 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

 Finance Charges Earned
 $
 $
 $

 Insurance Income

 Other

 Expenses:

 Interest Cost

 Provision for Loan Losses

 Depreciation and Amortization

 Other Expense

 Segment Profit

 $
 $
 $

 Segment Assets:

 Net Receivables
 $
 $
 1,014

 Cash

 Net Fixed Assets

 Other Assets

 Total Segment Assets

 $
 $
 $
 1,124

 - 54 -

 RECONCILIATION:
 2024

 Total revenues from reportable segments

 $

 Corporate finance charges earned not allocated to segments

 —

 Corporate investment income earned not allocated to segments

 Timing difference of insurance income allocation to segments

 Other revenues not allocated to segments

 $
 ( 1)

 Consolidated Revenues (1)
 $

 Net Income:

 Total profit or loss for reportable segments

 $

 Corporate earnings not allocated

 Corporate expenses not allocated
 ( 107)

 Consolidated Income Before Income Taxes

 $
 —

 Assets:

 Total assets for reportable segments

 $
 1,124

 Loans held at corporate level

 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

 Fixed assets at corporate level

 Other assets at corporate level

 Consolidated Assets
 $
 1,312

 Note 1: Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.
 - 55 -

 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

 Finance Charges Earned
 $
 $
 $

 Insurance Income
 $
 $

 Other

 Expenses:

 Interest Cost
 $
 $

 Provision for Loan Losses
 $
 $

 Depreciation and Amortization

 $
 $

 Other Expenses

 Segment Profit

 $
 $
 $

 Segment Assets:

 Net Receivables
 $
 $

 Cash
 $
 —
 $
 —
 —

 Net Fixed Assets
 $
 $

 Other Assets

 Total Segment Assets

 $
 $
 $
 1,020

 - 56 -

 RECONCILIATION:
 2023

 Total revenues from reportable segments

 $

 Corporate finance charges earned not allocated to segments

 —

 Corporate investment income earned not allocated to segments

 Timing difference of insurance income allocation to segments

 Other revenues not allocated to segments

 $
 —

 Consolidated Revenues (1)
 $

 Net Income:

 Total profit or loss for reportable segments

 $

 Corporate earnings not allocated

 Corporate expenses not allocated
 ( 82)

 Consolidated Income Before Income Taxes
 $

 Assets:

 Total assets for reportable segments

 $
 1,021

 Loans held at corporate level

 Unearned insurance at corporate level
 ( 40)

 Allowance for loan losses at corporate level
 ( 71)

 Cash and cash equivalents held at corporate level

 Investment securities at corporate level

 Fixed assets at corporate level

 Other assets at corporate level

 Consolidated Assets
 $
 1,240

 Note 1: Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.
 - 57 -

 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

 Finance Charges Earned
 $
 $
 $

 Insurance Income
 $
 $

 Other
 $
 $

 Expenses:

 Interest Cost
 $
 $

 Provision for Loan Losses
 $
 $

 Depreciation and Amortization

 $
 —
 $

 Other Expenses

 $
 $

 Segment Profit

 $
 $
 $

 Segment Assets:

 Net Receivables
 $
 $

 Cash
 $
 $

 Net Fixed Assets
 $
 $

 Other Assets

 Total Segment Assets

 $
 $
 $

 - 58 -

 RECONCILIATION:
 2022

 Total revenues from reportable segments

 $

 Corporate finance charges earned not allocated to segments

 —

 Corporate investment income earned not allocated to segments

 Timing difference of insurance income allocation to segments

 Other revenues not allocated to segments

 Consolidated Revenues (1)
 $

 Net Income:

 Total profit or loss for reportable segments

 $

 Corporate earnings not allocated

 Corporate expenses not allocated
 ( 103)

 Consolidated Income Before Income Taxes
 $

 Assets:

 Total assets for reportable segments

 $

 Loans held at corporate level

 Unearned insurance at corporate level
 ( 37)

 Allowance for loan losses at corporate level
 ( 75)

 Cash and cash equivalents held at corporate level

 Investment securities at corporate level

 Fixed assets at corporate level

 Other assets at corporate level

 Consolidated Assets
 $
 1,163

 Note 1:Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.
 - 59 -

 DIRECTORS AND EXECUTIVE OFFICERS

 Directors

 Name
 Principal Occupation,
Title and Company
 Director Since

 Chairman of Board,

 2001

 Chairman Emeritus,

 1967

 Shareholder

 2024

 2020

 Retired Executive Vice President and
 Chief Financial Officer,

 2004

 Chief Strategy Officer
 2020

 Vice President of Finance
 Armhr

 2023

 CPA

 2004

 Retired Chief Operating, Risk and Compliance Officer
 Omni Financial

 2024

 Chairman
 Bowen & Watson, Inc.

 2004

 Executive Officers

 Name
 Position with Company
 Position Since

 Chairman of Board
 2015

 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

 Executive Vice President and Chief Financial Officer

 2021

 Executive Vice President and Chief Strategy Officer

 2023

 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

 - 60 -

 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
 Jennifer C. Purser

 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
 Becki B. Lawhon

 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
 Marty B. Miskelly

 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

 John B. Gray

 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

 - 61 -

 KENTUCKY
 VIRGINIA

 Chad H. Frederick
 Richard F. Corirossi

 Assistant Vice President

 Zackary S. Coker
 Gary A. Zortman

 Daniel C. Powell

 TEXAS

 Lori A. Sanchez

 Lauren M. Munoz

 Assistant Vice President

 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

 - 62 -

 ___________________
 2024 BEN F. CHEEK, JR. "OFFICE OF THE YEAR"
 *********************
 ** 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!
 - 63 -

 (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

 - 64 -

 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

 - 65 -

 MISSION STATEMENT:
 "Serving communities by offering opportunities to individuals and families through financial services."
 CORE VALUES:
 Team: Be Trustworthy
 Impact: Be Intentional
 People: Be Exceptional
 Service: Be Humble
 - 66 -