1st FRANKLIN FINANCIAL CORP - Form 10-Q SEC filing 0000038723 --12-31 false 2022 Q1 0000038723 2022-01-01 2022-03-31 0000038723 2022-03-31 0000038723  2022-03-31 2022-03-31 0000038723  2022-04-30 0000038723  2022-04-30 0000038723 2021-12-31 0000038723  2022-03-31 0000038723  2021-12-31 0000038723  2022-03-31 0000038723  2021-12-31 0000038723 2021-01-01 2021-03-31 0000038723  2021-12-31 0000038723  2022-03-31 0000038723  2022-01-01 2022-03-31 0000038723  2022-01-01 2022-03-31 0000038723  2022-01-01 2022-03-31 0000038723  2021-12-31 0000038723  2021-12-31 0000038723  2022-03-31 0000038723  2022-03-31 0000038723 2020-12-31 0000038723  2020-12-31 0000038723  2020-12-31 0000038723  2020-12-31 0000038723  2021-01-01 2021-03-31 0000038723  2021-01-01 2021-03-31 0000038723  2021-01-01 2021-03-31 0000038723 2021-03-31 0000038723  2021-03-31 0000038723  2021-03-31 0000038723  2021-03-31 0000038723  2022-03-31 0000038723  2021-12-31 0000038723  2022-03-31 0000038723  2021-12-31 0000038723  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0000038723  2021-12-31 0000038723  2021-12-31 0000038723  2021-12-31 0000038723  2021-12-31 0000038723  2021-12-31 0000038723  2021-12-31 0000038723  2021-12-31 0000038723  2021-12-31      SECURITIES AND EXCHANGE COMMISSION Washington, D.C.  20549 ------------------------------ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2022 OR ☐ 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 ------------------------------ 1st FRANKLIN FINANCIAL CORP A Georgia Corporation I.R.S. Employer Identification No. 58-0521233 135 East Tugalo Street Post Office Box 880 Toccoa , Georgia 30577 ( 706 ) 886-7571 ------------------------------ Securities registered pursuant to Section 12(b) of the Ac None Indicate by check mark whether the registran  (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 [  ] Indicate by check mark whether the 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 [  ] 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 the definitions 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 __ Accelerated Filer ___ Non-Accelerated Filer X _  Smaller Reporting Company ☐ Emerging Growth Company ☐ 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.  ___ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No [ X ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding April 30, 2022 Voting Common Stock, par value $ 100 per share 1,700 Shares Non-Voting Common Stock, no par value 168,300 Shares PART I.  FINANCIAL INFORMATION ITEM 1. Financial Statements: The information contained under the following captions in the Company's Quarterly Report to Investors as of and for the three months ended March 31, 2022 is incorporated by reference herein.  See Exhibit 13. Condensed Consolidated Statements of Financial Position (Unaudited): March 31, 2022 and December 31, 2021 Condensed Consolidated Statements of Income and Retained Earnings (Unaudited): Three Months Ended March 31, 2022 and March 31, 2021 Condensed Consolidated Statements of Comprehensive Income (Unaudited): Three Months Ended March 31, 2022 and March 31, 2021 Condensed Consolidated Statements of Stockholders’ Equity (Unaudited): Three Months Ended March 31, 2022 and March 31, 2021 Condensed Consolidated Statements of Cash Flows (Unaudited): Three Months Ended March 31, 2022 and March 31, 2021 Notes to Unaudited Condensed Consolidated Financial Statements ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operatio The information contained under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the Company's Quarterly Report to Investors as of and for the three months ended March 31, 2022 is incorporated by reference herein.  See Exhibit 13. ITEM 3. Quantitative and Qualitative Disclosures About Market Ris The information contained under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operations -- Quantitative and Qualitative Disclosures About Market Risk" in the Company's Quarterly Report to Investors as of and for the three months ended March 31, 2022 is incorporated by reference herein.  See Exhibit 13. ITEM 4. Controls and Procedu We maintain a set of disclosure controls and procedures, as such term is defined in Rule 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), designed to ensure that information required to be disclosed by the Company in reports that it files or submits under 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.  An evaluation was carried out as of the end of the period covered by this report, under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of our disclosure controls and procedures.  Based on that evaluation, the CEO and CFO have concluded that, as of March 31, 2022, the Company’s disclosure controls and procedures were effective.  No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. <PAGE> 1 There were no changes in the Company's internal control over financial reporting that occurred during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. PART II.  OTHER INFORMATION ITEM 1. Legal Proceedi The Company is, and expects to be, involved in various legal proceedings incidental to its business from time to time.  In the opinion of Management, the ultimate resolution of any such known claims or proceedings is not expected to have a material adverse effect on the Company’s financial position, liquidity or results of operations. ITEM 6. Exhibits: (a) Exhibits: 13 31.1 31.2 32.1 32.2 101.INS 101.SCH 101.CAL 101.LAB 101.PRE 101.DEF 104 Quarterly Report to Investors as of and for the Three Months Ended March 31, 2022 . Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934. Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934. 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. 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. Inline XBRL Instance Document. Inline XBRL Taxonomy Extension Schema Document. Inline XBRL Taxonomy Extension Calculation Linkbase Document. Inline XBRL Taxonomy Extension Label Linkbase Document. Inline XBRL Taxonomy Extension Presentation Linkbase Document. Inline XBRL Taxonomy Extension Definition Linkbase Document. Cover Page Interactive Data File (embedded within the Inline XBRL document). PAGE <2> SIGNATURES Pursuant to the requirements 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. 1 st FRANKLIN FINANCIAL CORPORATION Registrant /s/ Virginia C. Herring President and Chief Executive Officer (Principal Executive Officer) /s/ Brian J. Gyomory Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Date: May 16, 2022 <PAGE> 3