SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1999
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 Corporation
A Georgia Corporation I.R.S. Employer No. 58-0521233
213 East Tugalo Street
Post Office Box 880
Toccoa, Georgia 30577
(706) 886-7571
-------------------------------
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 31, 1999
- --------------------------------------------- ----------------------------
Voting Common Stock, par value $100 per share 1,700 Shares
Non-Voting Common Stock, no par value 168,300 Shares
ITEM 1. Financial Statements:
--------------------
The following financial statements required hereunder are
incorporated by reference from the Company's Quarterly Report to
Investors for the Six Months Ended June 30, 1999. See Exhibit 19
Consolidated Statements of Financial Position:
June 30, 1999 and December 31, 1998
Consolidated Statements of Income and Retained Earnings:
Quarters and Six Months Ended June 30, 1999 and June 30,
1998
Consolidated Statements of Cash Flows:
Six Months Ended June 30, 1999 and June 30, 1998
Notes to Consolidated Financial Statements
ITEM 2. Managements' Discussion and Analysis of Financial Condition and
Results of Operations.
---------------------------------------------------------------
The information required hereunder is set forth under "Management's
Letter" of the Company's Quarterly Report to Investors for the Six
Months Ended June 30, 1999. See Exhibit 19
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
19 Quarterly Report to Investors for the Six Months
Ended June 30, 1999.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter
ended June 30,1999.
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.
1st FRANKLIN FINANCIAL CORPORATION
-----------------------------------
Registrant
s/ Ben F. Cheek, III
--------------------
Chairman of Board
s/ A. Roger Guimond
----------------------------------------
Vice President, Chief Financial
Officer and Principal Accounting Officer
Date: August 13, 1999
1st FRANKLIN FINANCIAL CORPORATION
INDEX TO EXHIBITS
Exhibit No. Page No.
- ---------- -------
19 Quarterly Report to Investors for the Six
Months Ended June 30, 1999 ...................... 4
27 Financial Data Schedule.......................... 13
Exhibit 19
1st
FRANKLIN
FINANCIAL
CORPORATION
QUARTERLY
REPORT TO INVESTORS
FOR THE
SIX MONTHS ENDED
JUNE 30, 1999
MANAGEMENT'S LETTER
Financial Condition:
- -------------------
The strong loan demand experienced during the first quarter of 1999
continued through the second quarter. Net receivables (gross receivables
less unearned finance charges) grew $3.9 million (2%) during the six months
ended June 30, 1999. Extensive marketing and consumers' willingness to
borrow are primarily responsible for the increase in demand for the Company's
loans.
Current operations and the sale of its debt securities continue to
outpace the Company's working capital requirements, thereby creating a
surplus of funds. Investment securities increased $8.5 million (18%) during
the six months just ended due to Management's aggressive effort to invest
these surplus funds into higher yielding investment instruments. The
Company's investment portfolio consists mainly of U.S. Treasury bonds,
Government Agency bonds and various municipal bonds. Declining bond market
values during the current year has resulted in a $.9 million loss in market
values in investment securites which Management has designated as available
for sale.
Cash and cash equivalents decreased $3.3 million (16%) during the first
half of 1999 due to the funding of the aforementioned loan demand and the
investment of surplus funds into higher yielding investment securities.
The previously mentioned increase in sales of the Company's debt
securities caused senior debt to increase $10.7 million (10%) during the
current period.
Disbursement of the prior year's accrued incentive bonus in February,
1999 and the annual contribution to the Company's employee profit sharing
plan were the primary causes of the $1.4 million (12%) decrease in other
liabilities during the six months just ended as compared to the prior
year-end.
Results of Operations:
- ---------------------
Results of operations for the quarter ended June 30, 1999 closely
paralleled the performance for the six months just ended; therefore, the
discussion which follows will cover the six month period as a whole. The
discussion will not encompass a separate analysis of the quarterly
performance unless otherwise noted.
The Company's core earnings are its net interest income, which is the
difference between interest income on earning assets (loans and investment
securities) and interest expense on its interest bearing debt. Net interest
income rose $1.7 million (10%) during the six months just ended as compared
to the same six month period a year ago. Increased earnings on higher levels
of average net receivables outstanding is primarily responsible for the
increase in net interest margin. Current year increases in demand for the
Company's loans have resulted in average net receivables increasing $10.6
million (7%) to $156.1 million during the six months ended June 30, 1999 as
compared to $145.7 million during the same six month period in 1998.
Declining market interest rates paid on the Company's senior and
subordinated debt securities enabled Management to continue to reduce overall
borrowing cost. Although average outstanding indebtedness rose during the
current year, the lower borrowing cost enabled Management to keep the
increase in interest expense to a minimal amount. In July, subsequent to the
second quarter, market rates began moving upward as the Federal Reserve
raised the prime rate. If market rates continue to rise, Management may
have to raise rates paid on its debt securities in order to stay competitive.
In doing so, there could be a negative impact on the net interest margin
Net insurance income increased $.9 million (12%) during the six months
just ended as compared to the same period a year ago. Changes in insurance
earnings generally correspond to changes in the level of average net
receivables outstanding. As net receivables increase, the Company typically
sees an increase in customers requesting credit insurance, thereby leading to
higher levels of insurance in-force.
Rising loan losses, particularly during the second quarter, caused the
Company's loan loss provison to increase $.5 million (20%) during the six
months just ended as compared the same period a year ago. The provison also
increased during the current period as a result of the increase in net
receivables and the increase in the loss reserve associated thereon. In
addition, Management raised the loan loss reserve during the later part of
1998 in order to provide adequate protection against probable losses.
Delinquent accounts 60 days or more past due declined to 5.7% of net
receivables at June 30, 1999 as compared to 6.1% at prior year-end.
Management continually reviews its delinquency position with respect to the
total loan portfolio and believes it uses the best information available in
setting the loan loss reserve. Future adjustments will be made when deemed
necessary.
<PAGE>
Other operating expenses increased $1.8 million (10%) during the first
half of 1999 as compared to the first half of 1998. The increase in overhead
cost is primarily due to (i) higher wages due to merit salary increases,
(ii) increased incentive award accruals, (iii) higher benefit costs,
(iv) increased supervisory expenses, (v) increases in computer expenses and
(vi) higher marketing and advertising costs.
Effective income tax rates were 15.7% and 13.2% for the quarters ended
June 30, 1999 and 1998 and 15.1% and 14.9% for the six months ended June 30,
1999 and 1998, respectively. Income taxes during the periods reflect only
the taxes of the Company's insurance subsidiaries which are not S
corporations for income tax reporting purposes. Federal and state income
taxes generated by the S corporation are paid by the shareholders, except in
states which don't recognize S corporation status. Certain tax benefits
provided by law to life insurance companies substanially reduce the life
insurance subsidiary's effective tax rate and thus decreases the Company's
general tax rate below statutory rates. Investments in tax exempt securities
by the property and casualty insurance subsidiary also decreases the
effective tax rate.
Market Risk:
- -----------
There has been no change in the Company's market risk since December 31,
1998.
Liquidity:
- ---------
Liquidity requirements of the Company are financed through the collection
of receivables and through the issuance of public debt securities. Continued
liquidity of the Company is therefore dependent on the collection of its
receivables and the sale of debt securities that meet the investment
requirements of the public. In addition to the securities program, the
Company has two external sources of funds through the use of two Credit
Agreements. One agreement provides for available borrowing of $21 million.
Available borrowings were $21 million at June 30, 1999 and December 31, 1998,
relating to this agreement. Another agreement provides for an additional
$2 million for general operating purposes. Available borrowings under this
agreement were $2 million at June 30, 1999 and December 31, 1998.
Year 2000 Readiness Disclosure:
- ------------------------------
Management continues to focus on Year 2000 readiness. Although the
Company is not a banking institution, the Company is adhering to the
Interagency Guidelines Establishing Year 2000 Standards for Safety and
Soundness which set forth safety and soundness standards pursuant to the
Federal Financial Institutions Examination Council ("FFIEC").
As of June 30, the Company has completed testing all information
technology ("IT") systems and non-IT systems. Also completed was a
remediation contingency plan in the unlikely event a system does fail,
particularly a system the committee deemed as "mission critical". The
Company's Year 2000 Committee will continue to monitor and evaluate the
Company's readiness as we progress toward January 1, 2000. In addition,
contingency plans will continued to be refined as needed.
Compliance has not had a material affect on the Company's operating
results, nor does Management expect it to during the current year. Expenses
of $20,000 have been budgeted in 1999 for costs the Company expects to
incurr in regards to Year 2000 readiness. Current year expenditures have
been $6,392.
Management does not foresee any problems associated with Year 2000
compliance. However, disruptions in service with respect to the computer
systems of vendors and/or suppliers, which are outside the control of the
Company, could impair the ability of the Company to obtain necessary services.
Refer to the Company's 1998 Annual Report for a more detailed discussion
regarding Year 2000 issues.
New Accounting Standards:
- ------------------------
In July 1999, the FASB issued SFAS No. 137, providing a one year delay
in the effective date of SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities". SFAS 133 requires companies to record derivatives
on the balance sheet as assets and liabilities at fair value. The Statement
also requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. The
Company will be required to adopt SFAS No. 133 in 2001. Management does not
expect the adoption of this statement to have a material impact on the
financial statements or results of operations of the Company.
1st FRANKLIN FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
June 30, December 31,
1999 1998
------------ ------------
(Unaudited) (Audited)
ASSETS
CASH AND CASH EQUIVALENTS . . . . . . . . . . . . $ 16,819,711 $ 20,111,678
------------ ------------
LOANS, net. . . . . . . . . . . . . . . . . . . . 142,252,927 138,548,161
------------ ------------
INVESTMENT SECURITIES:
Available for Sale, at fair market value. . . . 48,662,919 39,938,412
Held to Maturity, at amortized cost . . . . . . 6,990,932 7,205,113
------------ ------------
55,653,851 47,143,525
------------ ------------
OTHER ASSETS. . . . . . . . . . . . . . . . . . . 11,164,641 10,871,546
------------ ------------
TOTAL ASSETS . . . . . . . . . . . . . . $225,891,130 $216,674,910
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
SENIOR DEBT . . . . . . . . . . . . . . . . . . . $115,148,855 $104,446,030
OTHER LIABILITIES . . . . . . . . . . . . . . . . 10,495,871 11,904,342
SUBORDINATED DEBT . . . . . . . . . . . . . . . . 37,287,434 38,960,747
------------ ------------
Total Liabilities . . . . . . . . . . . . . . . 162,932,160 155,311,119
------------ ------------
STOCKHOLDERS' EQUITY:
Common Stock. . . . . . . . . . . . . . . . . . 170,000 170,000
Accumulated Other Comprehensive (Loss) Income . (381,674) 556,423
Retained Earnings . . . . . . . . . . . . . . . 63,170,644 60,637,368
Total Stockholders' Equity. . . . . . . . . . . 62,958,970 61,363,791
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY. . . . . . . . . $225,891,130 $216,674,910
============ ============
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
1st FRANKLIN FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30 June 30
------------------------- -------------------------
(Unaudited) (Unaudited)
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME. . . . . . . . . $12,298,857 $11,339,419 $24,305,147 $22,462,428
INTEREST EXPENSE . . . . . . . . 2,231,021 2,144,587 4,417,617 4,322,442
----------- ----------- ----------- -----------
NET INTEREST INCOME. . . . . . . 10,067,836 9,194,832 19,887,530 18,139,986
Provision for Loan Losses. . . 1,912,668 1,681,654 2,886,478 2,409,634
----------- ----------- ----------- -----------
NET INTEREST INCOME
AFTER PROVISION
FOR LOAN LOSSES. . . . . . . . 8,155,168 7,513,178 17,001,052 15,730,352
----------- ----------- ----------- -----------
NET INSURANCE INCOME . . . . . . 4,106,082 3,603,305 8,117,354 7,223,685
----------- ----------- ----------- -----------
OTHER REVENUE. . . . . . . . . . 128,735 118,056 262,529 236,570
----------- ----------- ----------- -----------
OTHER OPERATING EXPENSES:
Personnel Expense. . . . . . . 5,912,703 5,156,112 12,081,668 10,757,449
Occupancy. . . . . . . . . . . 1,379,205 1,320,175 2,747,374 2,660,156
Other. . . . . . . . . . . . . 2,442,220 2,272,782 4,931,953 4,592,540
----------- ----------- ----------- -----------
Total. . . . . . . . . . . . 9,734,128 8,749,069 19,760,995 18,010,145
----------- ----------- ----------- -----------
INCOME BEFORE
INCOME TAXES . . . . . . . . . 2,655,857 2,485,470 5,619,940 5,180,462
Provision for Income Taxes . . 416,488 352,208 847,870 721,208
----------- ----------- ----------- -----------
NET INCOME . . . . . . . . . . . 2,239,369 2,133,262 4,772,070 4,459,254
RETAINED EARNINGS,
beginning of period. . . . . . 63,170,069 56,547,331 60,637,368 54,221,339
Dividends / Distributions
on Common Stock. . . . . . . . 2,238,794 361,411 2,238,794 361,411
----------- ----------- ----------- -----------
RETAINED EARNINGS,
end of period. . . . . . . . . $63,170,644 $58,319,182 $63,170,644 $58,319,182
=========== =========== =========== ===========
BASIC EARNINGS PER SHARE:
Voting Common Stock;
1,700 Shares outstanding
all periods. . . . . . . . . $13.17 $12.55 $28.07 $26.23
====== ====== ====== ======
Non-Voting Common Stock;
168,300 Shares outstanding
all periods. . . . . . . . . $13.17 $12.55 $28.07 $26.23
====== ====== ====== ======
</TABLE>
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
1st FRANKLIN FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
Six Months Ended
June 30
--------------------------
(Unaudited)
1999 1998
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income. . . . . . . . . . . . . . . . . . $ 4,772,070 $ 4,459,254
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for Loan Losses . . . . . . . . 2,886,478 2,409,634
Depreciation and Amortization . . . . . . 610,612 623,021
Deferred Income Taxes . . . . . . . . . . 75,905 27,329
Other, net. . . . . . . . . . . . . . . . 87,429 4,196
Increase in Miscellaneous assets. . . . . (477,596) (847,946)
Decrease in Accounts Payable and
Accrued Expenses. . . . . . . . . . . . (1,266,700) (587,625)
----------- -----------
Net Cash Provided. . . . . . . . . 6,688,198 6,087,863
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans Originated or purchased . . . . . . . . (61,719,130) (55,314,479)
Loan Payments . . . . . . . . . . . . . . . . 55,127,886 53,340,333
Purchases of marketable debt securities . . . (14,554,183) (11,426,110)
Principal payments on securities . . . . . . 285,551 299,213
Sales of marketable securities. . . . . . . . -- 66,658
Redemptions of securities . . . . . . . . . . 4,530,000 10,985,000
Other, net. . . . . . . . . . . . . . . . . . (441,007) (475,543)
----------- -----------
Net Cash Used. . . . . . . . . . . (16,770,883) (2,524,928)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Senior Debt . . . . . . . . . . . 10,702,825 1,116,212
Subordinated Debt Issued. . . . . . . . . . . 3,373,178 2,952,816
Subordinated Debt redeemed. . . . . . . . . . (5,046,491) (3,134,460)
Distributions Paid. . . . . . . . . . . . . . (2,238,794) (361,411)
----------- -----------
Net Cash Provided. . . . . . . . . 6,790,718 573,157
----------- -----------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS. . . . . . . . . . . . . (3,291,967) 4,136,092
CASH AND CASH EQUIVALENTS, beginning. . . . . . 20,111,678 25,122,077
----------- -----------
CASH AND CASH EQUIVALENTS, ending . . . . . . . $16,819,711 $29,258,169
=========== ===========
Cash Paid during the period for: Interest . . . $ 4,320,174 $ 4,344,548
Income Taxes . 914,743 721,440
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
<PAGE>
-NOTES-
1. The accompanying interim financial information of 1st Franklin Financial
Corporation and subsidiaries (the Company) should be read in conjunction
with the annual financial statements and notes thereto as of December 31,
1998 and for the years then ended included in the Company's December 31,
1998 Annual Report.
2. In the opinion of Management of the Company, the accompanying consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the Company's financial
position as of June 30, 1999 and December 31, 1998 and the results of its
operations and its cash flows for the six months ended June 1999 and 1998.
While certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission, the
Company believes that the disclosures herein are adequate to make the
information presented not misleading.
3. The results of operations for the six months ended June 30, 1999 are not
necessarily indicative of the results to be expected for the full fiscal
year.
4. The computation of Earnings per Share is self-evident from the
Consolidated Statement of Income and Retained Earnings.
5. In 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income". The Company had comprehensive income, which is comprised of
net income and unrealized gains or losses on securities held as available
for sale, of $1,523,119 and $2,130,009 for the quarters ended June 30,
1999 and 1998 and $3,833,973 and $4,407,337 for the six month comparable
periods, respectively.
6. The following tables summarize assets, revenues and profit by business
segment. A reconcilement to consolidated net income is also provided.
All segment revenues result from transactions with third parties. There
has been no differences from the 1998 Annual Report from the basis of
segmentation or the basis of measurement of segment profit.
Division Division Division
I II III Total
-------- -------- -------- --------
(In Thousands)
Segment Revenues:
Three Months ended 6/30/99. $ 4,886 $ 5,305 $ 5,515 $ 15,706
Three Months ended 6/30/98. 4,422 4,964 5,057 14,443
Six Months ended 6/30/99. . 9,684 10,703 10,975 31,362
Six Months ended 6/30/98. . 8,960 9,864 9,951 28,775
Segment Profit:
Three Months ended 6/30/99. $ 1,771 $ 2,129 $ 1,701 $ 5,601
Three Months ended 6/30/98. 1,536 1,961 1,692 5,189
Six Months ended 6/30/99. . 3,489 4,410 3,462 11,361
Six Months ended 6/30/98. . 2,960 4,077 3,166 10,203
Segment Assets:
6/30/99 . . . . . . . . . . $85,541 $96,385 $39,474 $221,400
6/30/98 . . . . . . . . . . 80,932 90,384 35,893 207,209
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
6/30/99 6/30/98 6/30/99 6/30/98
Reconcilement (In Thousands)
Profit:
Profit per segments . . . $ 5,601 $ 5,189 $11,361 $ 10,203
Corporate earnings
not allocated . . . . . 827 617 1,323 1,147
Corporate expenses
not allocated . . . . . (3,773) (3,321) (7,064) (6,170)
Income taxes not
allocated . . . . . . . (416) (352) (848) (721)
------- ------- ------- --------
$ 2,239 $ 2,133 $ 4,772 $ 4,459
======= ======= ======= ========
<PAGE>
BRANCH OPERATIONS
Isabel Vickery Youngblood . . . . . . Senior Vice President
A. Jarrell Coffee . . . . . . . . . . Vice President
Jack R. Coker . . . . . . . . . . . . Vice President
Robert J. Canfield. . . . . . . . . . Area Vice President
J. Michael Culpepper. . . . . . . . . Area Vice President
Ronald F. Morrow. . . . . . . . . . . Area Vice President
<TABLE>
<CAPTION>
SUPERVISORS
<S> <C> <C> <C>
Regina Bond Bruce Hooper Johnny McEntyre Darryl Parker
Ronald Byerly Janice Hyde Brian McSwain Henrietta Reathford
Susie Cantrell Judy Landon Dianne Moore Tami Settlemyer
Donald Carter Jeff Lee Harriet Moss Timothy Schmotz
Donald Floyd Tommy Lennon Mike Olive Gaines Snow
Renee Hebert Mike Lyles Melvin Osley Marc Thomas
Jack Hobgood Tim Love Dale Palmer
OFFICES
<S> <C> <C> <C>
Alabama Offices: Georgia Offices: Georgia Offices: Louisiana Offices:
- --------------- --------------- --------------- -----------------
Alexander City Bremem Jefferson New Iberia
Andalusia Brunswick Jesup Pineville
Arab Buford LaGrange
Athens Butler Lavonia Mississippi Offices:
Bessemer Cairo Lawrenceville -------------------
Birmingham Calhoun Madison Bay St. Louis
Clanton Canton Manchester Carthage
Cullman Carrollton McDonough Columbia
Decatur Cartersville McRae Grenada
Dothan Cedartown Milledgeville Gulfport
Enterprise Chatsworth Monroe Hattiesburg
Fayette Clarkesville Montezuma Jackson
Florence Claxton Monticello Kosciusko
Gadsden Clayton Moultrie Magee
Geneva Cleveland Nashville McComb
Hamilton Cochran Newnan Pearl
Huntsville Commerce Perry Picayune
Jasper Conyers Richmond Hill
Madison Cordele Rome North Carolina Offices:
Moulton Cornelia Royston ----------------------
Muscle Shoals Covington Sandersville Monroe
Opp Cumming Savannah Pineville
Ozark Dallas Statesboro
Pelham Dalton Swainsboro South Carolina Offices:
Prattville Dawson Sylvania ----------------------
Russellville (2) Douglas Sylvester Aiken
Scottsboro Douglasville (2) Thomaston Anderson
Selma Eastman Thomson Cayce
Sylacauga Elberton Tifton Clemson
Troy Ellijay Toccoa Columbia
Tuscaloosa Forsyth Valdosta Conway
Fort Valley Vidalia Easley
Georgia Offices: Gainesville Warner Robins Florence
- --------------- Garden City Washington Gaffney
Adel Georgetown Waycross Greenville
Albany Greensboro Winder Greenwood
Alma Griffin Greer
Americus Hartwell Louisiana Offices: Lancaster
Arlington Hawkinsville ----------------- Laurens
Athens (2) Hazlehurst Alexandria Marion
Bainbridge Hinesville DeRidder Newberry
Barnesville Hogansville Jena Orangeburg
Baxley Jackson Leesville Rock Hill
Blakely Jasper Marksville Seneca
Blue Ridge Natchitoches Spartanburg
Union
York
</TABLE>
DIRECTORS
Ben F. Cheek, III
Chairman and Chief Executive Officer
1st Franklin Financial Corporation
Lorene M. Cheek
Homemaker
Jack D. Stovall
President, Stovall Building Supplies, Inc.
Dr. Robert E. Thompson
Physician, Toccoa Clinic
EXECUTIVE OFFICERS
Ben F. Cheek, III
Chairman and Chief Executive Officer
T. Bruce Childs
President and Chief Operating Officer
A. Roger Guimond
Vice President and Chief Financial Officer
Lynn E. Cox
Secretary
Linda L. Sessa
Treasurer
COUNSEL
Jones, Day, Reavis & Pogue
3500 One Peachtree Center
303 Peachtree Street, N.E.
Atlanta, Georgia 30308-3242
AUDITORS
Arthur Andersen LLP
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 16,819,711
<SECURITIES> 55,653,851
<RECEIVABLES> 180,635,790
<ALLOWANCES> 6,818,112
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 13,389,708
<DEPRECIATION> 8,867,990
<TOTAL-ASSETS> 225,891,130
<CURRENT-LIABILITIES> 125,644,726
<BONDS> 152,436,289
<COMMON> 170,000
0
0
<OTHER-SE> 62,788,970
<TOTAL-LIABILITY-AND-EQUITY> 225,891,130
<SALES> 0
<TOTAL-REVENUES> 34,537,811
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 21,613,776
<LOSS-PROVISION> 2,886,478
<INTEREST-EXPENSE> 4,417,617
<INCOME-PRETAX> 5,619,940
<INCOME-TAX> 847,870
<INCOME-CONTINUING> 4,772,070
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,772,070
<EPS-BASIC> 28.07
<EPS-DILUTED> 28.07
</TABLE>
