SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
FORM 10-K/A |
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(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE |
ACT OF 1934 |
For the fiscal year ended December 31, 2004 |
OR |
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
EXCHANGE ACT OF 1934 |
For the transition period from __________to _________ |
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Commission File Number 2-27985 |
1st FRANKLIN FINANCIAL CORPORATION |
(Exact name of registrant as specified in its charter) |
Georgia | 58-0521233 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
213 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 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 __ | |
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X |
Information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X |
(Cover page 1 of 2 pages) |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes _ No X |
State the aggregate market value of the voting and non voting common equity held by non-affiliates of the registrant: Not Applicable. | ||
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: | |
Outstanding at February 28, 2005 | |
Class | Outstanding at February 28, 2005 |
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, 2004 are incorporated by reference into Parts I, II and IV of this Form 10-K. |
(Cover page 2 of 2 pages) |
EXPLANATORY NOTE |
1ST Franklin Financial Corporation (the “Company”) is filing this Amendment No. 2 to its Annual Report on Form 10-K for the year ended December 31, 2004, originally filed with the Securities and Exchange Commission on March 30, 2005 and amended on March 31, 2005 (as so amended, the “Annual Report”) solely to include the financial statement schedule that was previously omitted from Item 15 of the Annual Report. In accordance with, and pursuant to, Rule 12b-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the complete text of Item 15, as so amended, is set forth below. In addition, and pursuant to Rule 12b-15 of the Exchange Act, the Company is filing herewith certain currently dated certifications. |
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES: | |||||
(a) (1) Financial Statements: | |||||
Incorporated by reference from the Annual Report: Report of Independent Registered Public Accounting Firm Consolidated Statements of Financial Position at December 31, 2004 and 2003 Consolidated Statements of Income for the three years ended December 31, 2004 Consolidated Statements of Stockholders’ Equity for the three years ended December 31, 2004 Consolidated Statements of Cash Flows for the three years ended December 31, 2004 Notes to Consolidated Financial Statements | |||||
(2) Financial Statement Schedules: | |||||
Report of Independent Registered Public Accounting Firm Schedule I – Condensed Financial Information of Registrant | |||||
(3) Exhibits: | |||||
2. (a) | Articles of Merger of 1st Franklin Financial Corporation with and into 1st Franklin Financial Corporation dated December 31, 1994 (incorporated herein by reference to Exhibit 3(2)(a) from Form 10-K for the fiscal year ended December 31 1994). | ||||
3. (a) | Restated Articles of Incorporation as amended January 26, 1996 (incorporated herein by reference to Exhibit 3(3)(a) from Form 10-K for the fiscal year ended December 31, 1995). | ||||
(b ) | Bylaws (incorporated herein by reference to Exhibit 3(3)(b) from Form 10-K for the fiscal year ended December 31, 1995). | ||||
4. (a) | Indenture dated October 31, 1984, covering the Variable Rate Subordinated Debentures – Series 1 (incorporated herein by reference to Exhibit 4(a) from Registration Statement No. 2-94191). | ||||
(b) | Modification of Indenture dated March 29, 1995 (incorporated herein by reference to Exhibit 3(4)(b) from Form 10-K for the fiscal year ended December 31, 1994). | ||||
(c) | Second Modification of Indenture, dated December 2, 2004, by and among Synovus Trust Company, N.A., as trustee, and 1st Franklin Financial Corporation (incorporated herein by reference to Exhibit 4(e) to the Registration Statement on Form S-2 (Reg. No. 333-126589). | ||||
9. | Not applicable | ||||
10. (a) | Credit Agreement dated May 1993, between the Company and SouthTrust Bank of Georgia, N.A. (incorporated herein by reference to Exhibit 10(a) from the Form 10-K for the fiscal year ended December 31, 1993). | ||||
(b) | Credit Agreement dated September 25, 2001, between the Company and SouthTrust Bank of Georgia, N.A. (incorporated herein by reference to Exhibit 10 from Form 10-Q for the quarter ended September 30, 2001). | ||||
(c) | First Amendment to Loan Agreement and Line of Credit Promissory Note dated September 25, 2002, between the Company and SouthTrust Bank of Georgia, N.A. (incorporated herein by reference to Exhibit 10.1 from Form 10-Q for the quarter ended September 30, 2002). | ||||
(d) | Loan Documents Modification Agreement dated September 25, 2003, between the Company and SouthTrust Bank of Georgia, N.A. (incorporated herein by reference to Exhibit 10.1 from Form 10-Q for the quarter ended September 30, 2003). | ||||
(e) | Loan Documents Modification Agreement dated September 24, 2004, between the Company and SouthTrust Bank of Georgia, N.A. (incorporated herein by reference to Exhibit 10.1 from Form 10-Q for the quarter ended September 30, 2004). | ||||
(f) | Amended and Restated Line of Credit Promissory Note dated September 24, 2004, between the Company and SouthTrust Bank of Georgia, N.A. (incorporated herein by reference to Exhibit 10.2 from Form 10-Q for the quarter ended September 30, 2004). | ||||
11. | Computation of Earnings per Share is self-evident from the Consolidated Statement of Income and Retained Earnings in the Annual Report, incorporated by reference herein. | ||||
12. | Ratio of Earnings to Fixed Charges. | ||||
13. | The Annual Report. | ||||
18. | Not applicable | ||||
19. | Not applicable | ||||
21. | Subsidiaries of Registrant. | ||||
22. | Not applicable | ||||
* 23. | Consent of Independent Registered Public Accounting Firm. | ||||
24. | Not applicable | ||||
27. | Not applicable | ||||
28. | Not applicable | ||||
* 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 Executive 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 Executive Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||
(b) | Reports on Form 8-K: | ||||
No reports on Form 8-K were filed by the Registrant during the quarter ended December 31, 2004. | |||||
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* Filed herewith |
SIGNATURES |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amended report to be signed on its behalf by the undersigned, thereunto duly authorized: |
1st FRANKLIN FINANCIAL CORPORATION | |
October 5, 2005 | By: /s/ Ben F. Cheek, III |
Date | Ben F. Cheek, III |
Chairman of Board |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
To: The Board of Directors |
1st Franklin Financial Corporation |
We have audited the consolidated financial statements of 1st Franklin Financial Corporation and subsidiaries (the “Company”) as of December 31, 2004 and 2003, and for each of the three years in the period ended December 31, 2004, and have issued our report thereon dated March 18, 2005; such report has previously been filed as part of the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. Our audits also included the financial statement schedule of the Company listed in the accompanying index at Item 15. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information s et forth therein. |
/s/ Deloitte & Touche LLP |
Atlanta, Georgia |
March 18, 2005 |
SCHEDULE I | ||||
Page 1 of 4 | ||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | ||||
1st FRANKLIN FINANCIAL CORPORATION | ||||
(Parent Company Only) | ||||
DECEMBER 31, 2004 AND 2003 | ||||
ASSETS | ||||
2004 | 2003 |
CASH AND CASH EQUIVALENTS: | |||
Cash and Due From Banks | $ 2,649,818 | $ 916,446 | |
Short-term Investments | 734,903 | 3,798,698 | |
3,384,721 | 4,715,144 | ||
LOANS: | |||
Direct Cash Loans | 229,043,613 | 211,202,608 | |
Real Estate Loans | 26,989,611 | 31,520,134 | |
Sales Finance Contracts | 30,510,881 | 26,678,509 | |
286,544,105 |
269,401,251 | ||
Less: | Unearned Finance Charges | 34,343,193 | 31,519,343 |
Unearned Insurance Premiums | 9,194,384 | 9,354,774 | |
Allowance for Loan Losses | 15,285,085 | 13,515,085 | |
Net Loans | 227,721,443 | 215,012,049 | |
INVESTMENT IN SUBSIDIARIES | 68,529,016 | 60,867,909 | |
MARKETABLE DEBT SECURITIES: | |||
Available for Sale, at fair market value | 506,999 | 614,203 | |
Held to Maturity, at amortized cost | -- | -- | |
506,999 | 614,203 | ||
OTHER ASSETS: | |||
Land, Buildings, Equipment and Leasehold Improvements, | |||
less accumulated depreciation and amortization | |||
of $13,185,739 and $12,077,943 in 2004 and 2003, respectively | 7,185,341 | 5,686,724 | |
Miscellaneous | 2,217,973 | 2,628,019 | |
9,403,314 | 8,314,743 | ||
TOTAL ASSETS | $ 309,545,493 | $ 289,524,048 |
SCHEDULE I | ||
Page 2 of 4 | ||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | ||
1st FRANKLIN FINANCIAL CORPORATION | ||
(Parent Company Only) | ||
DECEMBER 31, 2004 AND 2003 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
2004 | 2003 |
SENIOR DEBT: | ||
Notes Payable to Banks | $ 10,387,000 | $ -- |
Senior Demand Notes, including accrued interest | 66,331,059 | 67,905,065 |
Commercial Paper | 91,949,693 | 80,298,949 |
168,667,752 | 148,204,014 | |
| ||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12,915,235 | 14,223,924 |
SUBORDINATED DEBT | 41,310,529 | 44,075,934 |
Total Liabilities | 222,893,516 | 206,503,872 |
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 | 170,000 | 170,000 |
Non-Voting Shares; no par value; | ||
198,000 shares authorized; 168,300 shares | ||
outstanding as of December 31, 2004 and 2003 | -- | -- |
Accumulated Other Comprehensive Income | 376,683 | 227,222 |
Retained Earnings | 86,105,294 | 82,622,954 |
Total Stockholders' Equity | 86,651,977 | 83,020,176 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 309,545,493
| $ 289,524,048
|
SCHEDULE I | |||
Page 3 of 4 | |||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | |||
1st FRANKLIN FINANCIAL CORPORATION | |||
(Parent Company Only) | |||
STATEMENTS OF INCOME | |||
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002 | |||
2004 | 2003 | 2002 | |
INTEREST INCOME: | |||
Finance Charges | $ 66,068,779 | $ 60,773,100 | $ 60,302,706 |
Investment Income | 35,621 | 186,703 | 606,701 |
66,104,400 | 60,959,803 | 60,909,407 | |
INTEREST EXPENSE: | |||
Senior Debt | 5,073,818 | 4,564,880 | 4,717,991 |
Subordinated Debt | 2,063,150 | 2,247,738 | 3,233,578 |
7,136,968 | 6,812,618 | 7,951,569 | |
NET INTEREST INCOME | 58,967,432 | 54,147,185 | 52,957,838 |
PROVISION FOR LOAN LOSSES | 18,096,969 | 15,244,755 | 14,159,392 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 40,870,463 | 38,902,430 | 38,798,446 |
NET INSURANCE INCOME | 14,169,770 | 13,515,517 | 12,921,183 |
OTHER REVENUE | 903,917 | 868,184 | 850,427 |
OPERATING EXPENSES: | |||
Personnel Expense | 34,312,589 | 31,588,132 | 32,528,422 |
Occupancy Expense | 8,287,737 | 7,239,664 | 6,701,904 |
Other Expense | 15,998,782 | 13,190,031 | 12,140,886 |
58,599,108 | 52,017,827 | 51,371,212 | |
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES | (2,654,958) | 1,268,304 | 1,198,844 |
PROVISION FOR INCOME TAXES | 39,428 | 74,109 | 9,094 |
EQUITY IN EARNINGS OF SUBSIDIARIES, Net of Tax | 7,675,608 | 7,459,404 | 7,225,190 |
NET INCOME | 4,981,222 | 8,653,599 | 8,414,940 |
RETAINED EARNINGS, Beginning of Period | 82,622,954 | 78,657,682 | 70,271,242 |
Distributions on Common Stock | 1,498,882 | 4,688,327 | 28,500 |
RETAINED EARNINGS, End of Period | $ 86,105,294 | $ 82,622,954 | $ 78,657,682 |
SCHEDULE I | |||
Page 4 of 4 | |||
1st FRANKLIN FINANCIAL CORPORATION | |||
(Parent Company Only) | |||
STATEMENTS OF CASH FLOWS | |||
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002 | |||
2004 | 2003 | 2002 |
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income | $ 4,981,222 | $ 8,653,599 | $ 8,414,940 |
Adjustments to reconcile net income to net | |||
cash provided by operating activities: | |||
Provision for Loan Losses | 18,096,969 | 15,244,755 | 14,159,392 |
Depreciation and Amortization | 1,754,700 | 1,396,117 | 1,332,527 |
Equity in undistributed earnings of subsidiaries | (7,661,108) | (7,445,404) | (7,210,190) |
Loss on sale of marketable securities and | |||
equipment and premium amortization on securities | 43,347 | (34,396) | 79,612 |
(Increase) Decrease in Miscellaneous Assets | 410,047 | (491,249) | 1,555,717 |
Increase (Decrease) in Other Liabilities | (1,308,689) | 1,024,789 | 1,900,811 |
Net Cash Provided | 16,316,488 | 18,348,211 | 20,232,809 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Loans originated or purchased | (196,761,835) | (180,569,120) | (163,039,959) |
Loan payments | 165,955,472 | 146,558,514 | 129,998,463 |
Purchases of securities, available for sale | -- | -- | (799,240) |
Sales of securities, available for sale | -- | 2,893,910 | -- |
Redemptions of securities, available for sale | -- | 2,165,000 | 4,257,400 |
Principal payments on securities, available for sale | 248,854 | 174,149 | 202,850 |
Capital expenditures | (3,499,585) | (2,575,128) | (1,578,615) |
Proceeds from sale of equipment | 210,732 | 120,610 | 148,684 |
Net Cash Used | (33,846,362) | (31,232,065) | (30,810,417) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net increase in Notes Payable to | |||
Banks and Senior Demand Notes | 8,812,994 | 813,460 | 207,620 |
Commercial Paper issued | 28,626,116 | 29,199,674 | 31,533,262 |
Commercial Paper redeemed | (16,975,372) | (17,238,336) | (21,156,420) |
Subordinated Debt issued | 5,754,767 | 6,053,896 | 5,838,148 |
Subordinated Debt redeemed | (8,520,172) | (8,755,799) | (11,829,571) |
Dividends / Distributions Paid | (1,498,882) | (4,688,327) | (28,500) |
Net Cash Provided | 16,199,451 | 5,384,568 | 4,564,539 |
NET DECREASE IN | |||
CASH AND CASH EQUIVALENTS | (1,330,423) | (7,499,286) | (6,013,069) |
CASH AND CASH EQUIVALENTS, beginning | 4,715,144 | 12,214,430 | 18,227,499 |
CASH AND CASH EQUIVALENTS, ending | $ 3,384,721 | $ 4,715,144 | $ 12,214,430 |
Cash paid during the year for: | Interest | $ 7,101,750 | $ 6,823,904 | $ 8,000,426 |
Income Taxes | 39,856 | 93,940 | 30,000 |
1st FRANKLIN FINANCIAL CORPORATION INDEX TO EXHIBITS | |||
Exhibit No. | Description | Page No. | |
23 | Consent of Independent Registered Public Accounting Firm | 12 | |
31.1 | Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934 | 13 | |
31.2 | Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934 | 14 | |
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 | 15 | |
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 | 16 |