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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=right>Registration No. <U>333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=center>Washington, D.C. &nbsp;20549</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>Form S-1</B></P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=center>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>1<SUP>st</SUP> FRANKLIN FINANCIAL CORPORATION</B></P>
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<TR><TD style="margin-top:0px" valign=top width=145.2><P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial; font-size:8pt">A Georgia Corporation</P>
</TD><TD style="margin-top:0px" valign=top width=288 colspan=2><P style="margin:0px; font-family:Arial; font-size:8pt" align=center>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6141</P>
<P style="margin:0px; font-family:Arial; font-size:8pt">(Primary Standard Industrial Classification Code Number)</P>
</TD><TD style="margin-top:0px" valign=top width=192><P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial; font-size:8pt">I.R.S. Employer No. 58-0521233</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=center>135 East Tugalo Street</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=center>Post Office Box 880</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=center>Toccoa, Georgia &nbsp;30577</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=center>(706) 886-7571</P>
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<TR><TD style="margin-top:0px" valign=top width=307.2 colspan=2><P style="margin:0px; font-family:Arial" align=center>Agent for Service:</P>
</TD><TD style="margin-top:0px" valign=top width=318 colspan=2><P style="margin:0px; font-family:Arial" align=center>Copy To:</P>
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<TR><TD style="margin-top:0px" valign=top width=307.2 colspan=2><P style="margin:0px; font-family:Arial" align=center>A. Roger Guimond</P>
<P style="margin:0px; font-family:Arial" align=center>135 East Tugalo Street</P>
<P style="margin:0px; padding-left:24px; font-family:Arial" align=center>Post Office Box 880 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin:0px; padding-left:24px; font-family:Arial" align=center>Toccoa, Georgia &nbsp;30577 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin:0px; padding-left:24px; font-family:Arial" align=center>(706) 886-7571 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="margin-top:0px" valign=top width=318 colspan=2><P style="margin:0px; font-family:Arial" align=center>Mark L. Hanson, Esq.</P>
<P style="margin:0px; font-family:Arial" align=center>Jones Day</P>
<P style="margin:0px; font-family:Arial" align=center>1420 Peachtree Street, N.E.</P>
<P style="margin:0px; font-family:Arial" align=center>Suite 800</P>
<P style="margin:0px; font-family:Arial" align=center>Atlanta, Georgia &nbsp;30309</P>
<P style="margin:0px; font-family:Arial" align=center>(404) 521-3939</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=center>Approximate date of commencement of proposed sale to the public: &nbsp;From time to time</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial" align=center>commencing as soon as possible after the registration statement becomes effective.</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial">If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. &nbsp;(X)</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial">If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. &nbsp;( &nbsp;)</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial">If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. &nbsp;&nbsp;&nbsp;( &nbsp;)</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial">If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. &nbsp;&nbsp;&nbsp;( &nbsp;)</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin:0px; font-family:Arial">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated or a smaller reporting company. &nbsp;See the definitions of &#147;large accelerated filer&#148;, &#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule 12b-2 of the Exchange Act. &nbsp;(Check one):</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin-top:0px; margin-bottom:-2px; text-indent:96px; width:336px; font-family:Arial; float:left">Large Accelerated Filer &nbsp;___</P>
<P style="margin:0px; text-indent:-2px; font-family:Arial">Accelerated Filer &nbsp;___</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin-top:0px; margin-bottom:-2px; text-indent:96px; width:288px; font-family:Arial; float:left">Non Accelerated Filer &nbsp;<U>&nbsp;X</U></P>
<P style="margin:0px; text-indent:-2px; font-family:Arial">Smaller Reporting Company ___</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial">The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.</P>
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<TR><TD style="margin-top:0px" valign=top width=625.2 colspan=4><P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=center><B>AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 2011</B></P>
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<TR><TD style="margin-top:0px; border:1px solid #000000" valign=top width=122.867 colspan=2><P style="margin:0px" align=center><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center>Title of each class of securities to be registered</P>
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<P style="margin:0px; font-family:Arial,Times New Roman" align=center>Amount to be registered</P>
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<P style="margin:0px; font-family:Arial,Times New Roman" align=center>Proposed maximum offering price per unit</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=122.933><P style="margin:0px; font-family:Arial,Times New Roman" align=center>Proposed maximum aggregate offering price</P>
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<P style="margin:0px; font-family:Arial,Times New Roman" align=center>Amount of registration fee (1)</P>
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<TR><TD style="margin-top:0px; border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=122.867 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=center>Senior Demand Notes</P>
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<P style="margin:0px; font-family:Arial,Times New Roman" align=center>$800,000,000</P>
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<P style="margin:0px; font-family:Arial,Times New Roman" align=center>(2)</P>
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<P style="margin:0px; font-family:Arial,Times New Roman" align=center>$800,000,000</P>
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<P style="margin:0px; font-family:Arial,Times New Roman" align=center>$92,880</P>
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<TR><TD style="margin-top:0px" valign=top width=31.2><P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial,Times New Roman"><BR>
(1)</P>
</TD><TD style="margin-top:0px" valign=top width=583.267 colspan=5><P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial,Times New Roman"><BR>
Calculated in accordance with rule 457(c) by multiplying the maximum aggregate offering price by .00011610.</P>
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<TR><TD style="margin-top:0px" valign=top width=31.2><P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial,Times New Roman">(2)</P>
</TD><TD style="margin-top:0px" valign=top width=583.267 colspan=5><P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial,Times New Roman">The Senior Demand Notes will be issued in denominations selected by the purchasers thereof, subject to minimum denominations established by the Company.</P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial,Times New Roman">The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.</P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>1</B><B><SUP>st</SUP></B><B> FRANKLIN FINANCIAL CORPORATION</B></P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>$800,000,000 SENIOR DEMAND NOTES</B></P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;_________________________________________________</P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman">1<SUP>st</SUP> Franklin Financial Corporation is offering to sell Senior Demand Notes on a continuous basis. &nbsp;Each Senior Demand Note is payable on demand and is issued and sold in an initial denomination of $25.00 or more, and in any amounts thereafter. &nbsp;The principal amount of each Senior Demand Note at any time is equal to all amounts invested in such Senior Demand Note, together with accrued and unpaid interest, less redemptions. &nbsp;The Senior Demand Notes have no stated maturity. &nbsp;They are payable in whole or in part at any time upon the request of a holder, and are callable by us upon written notice at any time without premium.</P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman">The Senior Demand Notes are unsecured obligations of the Company and will be issued under an Indenture between us and U.S. Bank National Association, as Trustee.</P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman">The interest rate payable on Senior Demand Notes is a variable rate, compounded daily, and will depend upon a holder's then-current daily balance of Senior Demand Notes. &nbsp;We may establish, in our discretion, separate interest rates for Senior Demand Notes with daily balances from $1.00 to $2,499.99; $2,500.00 to $9,999.99; $10,000.00 to $49,999.99; $50,000.00 to $99,999.99; and $100,000.00 and over. &nbsp;When an interest rate is established for each range of balances, it becomes effective for and applied to all Senior Demand Notes with a current daily balance within that range, whether existing or newly issued. &nbsp;These interest rates may be the same or different for each range of balances, and we may increase or decrease the interest rate for any range independently of the others without notice to you after the date of investment.</P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman">We will publish the most recently determined interest rate for each balance range in a newspaper of general circulation in Toccoa, Georgia, the location of the Company&#146;s principal place of business, and on our web site at http://www.1ffc.com. &nbsp;The information on our website is not a part of, or incorporated by reference into, this prospectus. &nbsp;You can also obtain a list of the most recently determined interest rates by calling or visiting our executive offices in Toccoa, Georgia. &nbsp;A prospectus supplement setting forth the most recently determined interest rates will be filed with the SEC, as appropriate. </P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman">We are offering the Senior Demand Notes without an underwriter. &nbsp;We do not have to sell any minimum amount of Senior Demand Notes to accept and use the proceeds of this offering. &nbsp;We cannot assure you that all or any portion of the Senior Demand Notes we are offering will be sold. &nbsp;We have not made any arrangement to place any of the proceeds from this offering in an escrow, trust or similar account. &nbsp;Therefore, you cannot be guaranteed of the return of your investment. &nbsp;The Senior Demand Notes are not listed on any securities exchange and there is no public trading market for the Senior Demand Notes. &nbsp;We have the right to reject any subscription for Senior Demand Notes, in whole or in part, for any reason.</P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman">You should read this prospectus and any applicable prospectus supplement carefully before you decide whether to invest in Senior Demand Notes.</P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; padding-right:24.067px; font-family:Arial,Times New Roman" align=justify><B>Investing in Senior Demand Notes involves risks. &nbsp;See &quot;Risk Factors&quot; beginning on page 8 for a description of these risks.</B></P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman"><B>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the Senior Demand Notes, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</B></P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin-top:0px; margin-bottom:6.667px; font-family:Arial,Times New Roman">1<SUP>st</SUP> FRANKLIN FINANCIAL CORPORATION IS NOT A BANK. &nbsp;THE SENIOR DEMAND NOTES ARE NOT BANK DEPOSITS OR SIMILAR OBLIGATIONS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR THE SECURITIES INVESTOR PROTECTION CORPORATION OR ANY OTHER FEDERAL OR STATE AGENCY.</P>
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<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman">The Trustee has not provided or approved any information in this prospectus, takes no responsibility for any information contained in this prospectus and makes no representations as to the contents of this prospectus.</P>
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<BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=153.6 /><TD width=153.6 /><TD width=153.6 /><TD width=153.6 /></TR>
<TR><TD style="margin-top:0px; border-top:1px solid #000000" valign=top width=153.6><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px; border-top:1px solid #000000" valign=top width=153.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>Price to</P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center>Public</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000" valign=top width=153.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>Underwriting</P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center>Discounts and Commissions (1)</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000" valign=top width=153.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>Proceeds to</P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center>Company (2)</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-top:1px solid #000000" valign=top width=153.6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-family:Arial,Times New Roman; float:left">Per Senior Demand<BR>
Note</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000" valign=top width=153.6><P style="margin:0px; font-family:Arial,Times New Roman" align=right><BR>
100%&nbsp;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000" valign=top width=153.6><P style="margin:0px; font-family:Arial,Times New Roman" align=right><BR>
None&nbsp;</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000" valign=top width=153.6><P style="margin:0px; font-family:Arial,Times New Roman" align=right><BR>
100%&nbsp;</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=153.6><P style="margin:0px; text-indent:24px; font-family:Arial,Times New Roman">Total </P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=153.6><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$800,000,000&nbsp;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=153.6><P style="margin:0px; font-family:Arial,Times New Roman" align=right>None&nbsp;</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=153.6><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$800,000,000</P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=37.2 /><TD width=577.267 /></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; font-family:Arial,Times New Roman">(1)</P>
</TD><TD style="margin-top:0px" valign=top width=577.267><P style="margin:0px; font-family:Arial,Times New Roman">The Senior Demand Notes are not being offered or sold pursuant to any underwriting or similar agreement, and no commissions or other remuneration will be paid in connection with their sale. &nbsp;The Senior Demand Notes will be sold at face value.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; font-family:Arial,Times New Roman">(2)</P>
</TD><TD style="margin-top:0px" valign=top width=577.267><P style="margin:0px; font-family:Arial,Times New Roman">Before deduction of our expenses, estimated at $148,480.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=577.267><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=577.267><P style="margin:0px; font-family:Arial,Times New Roman" align=center>Subject to completion. &nbsp;The date of this prospectus is _______ __, 2011<B>.</B></P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px" align=center><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">2</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-bottom:9.6px; padding-top:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=614.467 /></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman">You should rely only on the information contained or incorporated by reference in this prospectus. &nbsp;We have not authorized anyone to provide you with any different information. You should not assume that the information contained or incorporated by reference in this prospectus is accurate as of any date other than as of the date of this prospectus or the date the documents incorporated by reference were filed with the SEC. &nbsp;We are offering to sell, and seeking offers to buy, the securities registered by this prospectus only in jurisdictions where these offers and sales are permitted. </P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=614.467 /></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>TABLE OF CONTENTS</B></P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=49.2 /><TD width=468 /><TD width=97.2 /></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Prospectus Summary </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>4</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Risk Factors </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>8</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Ratios of Earnings to Fixed Charges </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>10</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Use of Proceeds </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>10</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Plan of Distribution </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>10</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Forward-Looking Information </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>11</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Description of the Senior Demand Notes </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>11</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Legal Matters </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>17</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Experts </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>17</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Where You Can Find More Information </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>17</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Incorporation of Certain Information by Reference </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>17</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=468><P style="margin:0px; font-family:Arial,Times New Roman">Reports to Security Holders </P>
</TD><TD style="margin-top:0px" valign=top width=97.2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>18</P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">3</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-bottom:9.6px; padding-top:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=187.2 /><TD width=84 /><TD width=102 /><TD width=90 /><TD width=144 /></TR>
<TR><TD style="margin-top:0px" valign=top width=607.2 colspan=5><P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>PROSPECTUS SUMMARY</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=607.2 colspan=5><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=607.2 colspan=5><P style="margin:0px; font-family:Arial,Times New Roman"><I>The following summary highlights some of the information from this prospectus and may not contain all of the information that may be important to you. &nbsp;Before deciding whether to invest in Senior Demand Notes, you should read the entire prospectus, and the information that is incorporated by reference into the prospectus, carefully.</I></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=607.2 colspan=5><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=607.2 colspan=5><P style="margin:0px; font-family:Arial,Times New Roman" align=center>1<SUP>st</SUP> FRANKLIN FINANCIAL CORPORATION</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=607.2 colspan=5><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=607.2 colspan=5><P style="margin:0px; font-family:Arial,Times New Roman">1<SUP>st</SUP> Franklin Financial Corporation has been engaged in the consumer finance business since 1941, particularly in making consumer loans to individuals in relatively small amounts for short periods of time. Other lending activities include the purchase of sales finance contracts from dealers and the making of first and second mortgage loans on real estate to homeowners. &nbsp;As of December 31, 2010, our business was operated through a network of 252 branch offices located in Alabama, Georgia, Louisiana, Mississippi, South Carolina and Tennessee. </P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">We fund our loans through a combination of the issuance of short and longer-term debt securities, including Senior Demand Notes and our variable rate subordinated debentures, as well as with borrowings from time to time under our revolving credit facility. &nbsp;Our credit facility provides for unsecured borrowings of up to $100.0 million, or a lesser amount as determined based on our then-applicable borrowing base (as defined in our credit agreement). &nbsp;As of December 31, 2010, we had $99.1 million in availability under our credit facility. &nbsp;This credit facility expires on September 11, 2013.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">We also offer optional credit insurance coverage to our customers when making a loan. &nbsp;This coverage may include credit life insurance, credit accident and health 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 credit accident and health coverage to help continue loan payments if the customer becomes sick or disabled for an extended period of time. &nbsp;Customers may also choose credit property coverage to protect the value of loan collateral against damage, theft or destruction. &nbsp;We write these various insurance products as an agent for a non-affiliated insurance company. &nbsp;Under various agreements, our wholly-owned insurance subsidiaries reinsure the insurance coverage on our customers written on behalf of this non-affiliated insurance company.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">1<SUP>st</SUP> FRANKLIN FINANCIAL CORPORATION IS NOT A BANK. &nbsp;THE SENIOR DEMAND NOTES ARE NOT BANK DEPOSITS OR SIMILAR OBLIGATIONS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR THE SECURITIES INVESTOR PROTECTION CORPORATION OR ANY OTHER FEDERAL OR STATE AGENCY.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Our principal executive office is located at 135 East Tugalo Street, Toccoa, Georgia 30577, and our phone number at that address is (706) 886-7571 or (800) 282-0709 (within Georgia) or (800) 700-7943 (outside of Georgia).</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=607.2 colspan=5><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=607.2 colspan=5><P style="margin-top:0px; margin-bottom:6.667px; font-family:Arial,Times New Roman" align=center>SUMMARY DESCRIPTION OF THE SENIOR DEMAND NOTES</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Securities Offered</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">We are offering to sell up to $800,000,000 in aggregate principal amount of our Senior Demand Notes.</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Denominations</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">Senior Demand Notes will be sold in an initial amount of not less than $25.00 and in any amount thereafter.</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Principal Amount</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">The principal amount of each Senior Demand Note at any time is equal to all amounts invested in such Senior Demand Note, together with accrued interest, less redemptions.</P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">4</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-bottom:9.6px; padding-top:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR>
<BR>
<BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=187.2 /><TD width=84 /><TD width=102 /><TD width=90 /><TD width=144 /></TR>
<TR><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Maturity</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">Senior Demand Notes have no stated maturity. &nbsp;They are payable upon demand of the holder.</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Interest Rate</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">The interest rate is variable, compounded daily and set from time to time by us. &nbsp;The interest rate may be, but is not required to be, different for each range of balances of Senior Demand Notes. &nbsp;The interest rate may vary based on the holder&#146;s daily balance of his/her Senior Demand Notes within the following ranges: $1.00 to $2,499.99; $2,500.00 to $9,999.99; $10,000.00 to $49,999.99; $50,000.00 to $99,999.99; and $100,000.00 and over.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Compound Interest</P>
</TD><TD style="margin-top:0px" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">Interest is compounded daily. &nbsp;Examples of annualized effective yields for daily compounded rates are set forth below: </P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=271.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=102><P style="margin:0px; font-family:Arial,Times New Roman" align=center>Example</P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center>Nominal</P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>Rates</U></P>
</TD><TD style="margin-top:0px" valign=top width=90><P style="margin:0px; font-family:Arial,Times New Roman" align=center>Effective</P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center>Annual</P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>Rates</U></P>
</TD><TD style="margin-top:0px" valign=top width=144><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=271.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=102><P style="margin:0px; padding-left:28.8px; font-family:Arial,Times New Roman">2.50%</P>
</TD><TD style="margin-top:0px" valign=top width=90><P style="margin:0px; padding-left:20.933px; font-family:Arial,Times New Roman">2.53% &nbsp;</P>
</TD><TD style="margin-top:0px" valign=top width=144><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=271.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=102><P style="margin:0px; padding-left:28.8px; font-family:Arial,Times New Roman">2.75</P>
</TD><TD style="margin-top:0px" valign=top width=90><P style="margin:0px; padding-left:20.933px; font-family:Arial,Times New Roman">2.79</P>
</TD><TD style="margin-top:0px" valign=top width=144><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=271.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=102><P style="margin:0px; padding-left:28.8px; font-family:Arial,Times New Roman">3.00</P>
</TD><TD style="margin-top:0px" valign=top width=90><P style="margin:0px; padding-left:20.933px; font-family:Arial,Times New Roman">3.05</P>
</TD><TD style="margin-top:0px" valign=top width=144><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=271.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=102><P style="margin:0px; padding-left:28.8px; font-family:Arial,Times New Roman">3.25</P>
</TD><TD style="margin-top:0px" valign=top width=90><P style="margin:0px; padding-left:20.933px; font-family:Arial,Times New Roman">3.30</P>
</TD><TD style="margin-top:0px" valign=top width=144><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=271.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=102><P style="margin:0px; padding-left:28.8px; font-family:Arial,Times New Roman">3.50</P>
</TD><TD style="margin-top:0px" valign=top width=90><P style="margin:0px; padding-left:20.933px; font-family:Arial,Times New Roman">3.56</P>
</TD><TD style="margin-top:0px" valign=top width=144><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=271.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=102><P style="margin:0px; padding-left:28.8px; font-family:Arial,Times New Roman">3.75</P>
</TD><TD style="margin-top:0px" valign=top width=90><P style="margin:0px; padding-left:20.933px; font-family:Arial,Times New Roman">3.82</P>
</TD><TD style="margin-top:0px" valign=top width=144><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=271.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=102><P style="margin:0px; padding-left:28.8px; font-family:Arial,Times New Roman">4.00</P>
</TD><TD style="margin-top:0px" valign=top width=90><P style="margin:0px; padding-left:20.933px; font-family:Arial,Times New Roman">4.08</P>
</TD><TD style="margin-top:0px" valign=top width=144><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=271.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=102><P style="margin:0px; padding-left:28.8px; font-family:Arial,Times New Roman">4.50</P>
</TD><TD style="margin-top:0px" valign=top width=90><P style="margin:0px; padding-left:20.933px; font-family:Arial,Times New Roman">4.60</P>
</TD><TD style="margin-top:0px" valign=top width=144><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=271.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=102><P style="margin:0px; padding-left:28.8px; font-family:Arial,Times New Roman">5.00</P>
</TD><TD style="margin-top:0px" valign=top width=90><P style="margin:0px; padding-left:20.933px; font-family:Arial,Times New Roman">5.13</P>
</TD><TD style="margin-top:0px" valign=top width=144><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=607.2 colspan=5><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=187.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">These are only examples of interest rates. &nbsp;The actual rate of interest earned on a Senior Demand Note may differ, and may be higher or lower, depending on the balance thereof and the rates determined by us, in our discretion, from time to time.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=607.2 colspan=5><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Interest Rate Adjustment</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">The interest rate may be, but is not required to be, different for each range of balances of Senior Demand Notes. &nbsp;When we periodically establish an interest rate for a range of balances, it becomes effective for all Senior Demand Notes in that range of balances, whether existing or newly issued. &nbsp;The interest rate on a Senior Demand Note may also change if the daily current balance of Senior Demand Notes owned by a holder changes to a different range of balances.</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Notification of Interest Rate Adjustment</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">A holder of Senior Demand Notes will not be expressly notified of changes in any applicable interest rate; then-current interest rates will be available by calling or visiting our executive offices, or on our website. &nbsp;We will also file a notice of any interest rate change with the SEC in a prospectus supplement, as appropriate.</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Redemption by Holder</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">Senior Demand Notes are payable or redeemable at any time upon request. &nbsp;We will honor partial redemption requests so long as the remaining outstanding balance is at least $1.00. &nbsp;Redemptions can be requested in person or by mail at our executive office, by electronic means or by use of the check redemption option described below.</P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">5</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-bottom:9.6px; padding-top:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR>
<BR>
<BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=187.2 /><TD width=84 /><TD width=102 /><TD width=90 /><TD width=144 /></TR>
<TR><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Check Redemption Option</P>
</TD><TD style="margin-top:0px; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">In certain instances, a holder of Senior Demand Notes can redeem all or a part of his or her Senior Demand Notes by writing checks against such balance.</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Minimum Balance Requirement to Utilize Check Redemption Option</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">The check redemption option is only available to holders of Senior Demand Notes who maintain a minimum balance invested with us (in Senior Demand Notes or other of our securities) of $500.00. &nbsp;If and when a holder's aggregate balance falls below $500.00, we may suspend his or her check writing privileges.</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Check Writing and Senior Demand Note Redemptions</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">Checks may be written in any amount and made payable to anyone, subject to the minimum balance limitation. &nbsp;Each honored check is considered to be a Senior Demand Note redemption in an amount equal to that paid by the check.</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Checks that Exceed the Senior Demand Note Balance or Would Reduce the Aggregate Invested Balance Below $500.00</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">If a check is presented to us for payment and it either exceeds the balance of a holder's Senior Demand Notes or would reduce the holder&#146;s aggregate invested balance with us below $500.00, it may be returned unpaid. &nbsp;If this occurs, the holder will be assessed a return charge.</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Redemption by 1<SUP>st</SUP> Franklin</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">1<SUP>st</SUP> Franklin may redeem the Senior Demand Notes at any time upon at least 30, but not more than 60, days' written notice to the holder for a price equal to the principal amount of the Senior Demand Notes plus accrued and unpaid interest up to the date of redemption.</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Form of Investment</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">Senior Demand Notes may be purchased by cash, check or electronic transfer.</P>
</TD></TR>
<TR><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=187.2><P style="margin:0px; font-family:Arial,Times New Roman">Trustee</P>
</TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=420 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">Senior Demand Notes will be issued under an indenture between us and U.S. Bank National Association, as Trustee.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=607.2 colspan=5><P style="margin:0px" align=center><BR></P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">6</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-bottom:9.6px; padding-top:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=211.2 /><TD width=79.667 /><TD width=79.667 /><TD width=79.667 /><TD width=79.667 /><TD width=77.333 /><TD width=2.333 /></TR>
<TR><TD style="margin-top:0px" valign=top width=609.533 colspan=7><P style="margin:0px; font-family:Arial,Times New Roman" align=center>SUMMARY SELECTED FINANCIAL INFORMATION</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=609.533 colspan=7><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=609.533 colspan=7><P style="margin:0px; font-family:Arial,Times New Roman">The tables below set forth certain summary selected consolidated financial data of 1<SUP>st</SUP> Franklin. &nbsp;This information is only a summary and you should read it together with 1<SUP>st</SUP> Franklin&#146;s consolidated historical financial statements and the related notes contained in our annual report on Form 10-K incorporated by reference in this prospectus. &nbsp;These historical results are not necessarily indicative of our results or financial condition to be expected in the future.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=609.533 colspan=7><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=398.333 colspan=6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>Year Ended December 31</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2010</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2009</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2008</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2007</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2006</U></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=398.333 colspan=6><P style="margin:0px; font-family:Arial,Times New Roman; font-size:8pt" align=center>(In thousands)</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=609.533 colspan=7><P style="margin:0px; font-family:Arial,Times New Roman"><B>Selected Income Statement Data:</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Revenues </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$145,461</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$139,846</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$138,610</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$130,297</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$115,042</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Net Interest Income </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>90,711</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>85,655</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>83,484</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>75,669</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>69,632</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Interest Expense </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>12,439</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>13,682</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>14,728</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>15,746</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>11,994</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Provision for Loan Losses </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>20,907</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>29,302</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>25,725</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>21,434</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>19,109</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Income Before Income Taxes</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>23,423</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>11,050</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>13,761</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>15,754</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>11,023</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Net Income </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>20,683</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>8,373</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>10,665</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>12,205</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>7,672</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=398.333 colspan=6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>As of December 31</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2010</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2009</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2008</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2007</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2006</U></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=398.333 colspan=6><P style="margin:0px; font-family:Arial,Times New Roman; font-size:8pt" align=center>(In thousands)</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=290.867 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman"><B>Selected Balance Sheet Data:</B></P>
</TD><TD style="margin-top:0px" valign=top width=239 colspan=3><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Net Loans </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$294,974</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$279,093</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$285,580</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$276,655</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>$249,862</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Total Assets </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>422,064</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>396,425</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>389,422</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>402,454</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>362,567</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Senior Debt </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>208,492</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>186,849</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>169,672</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>182,373</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>181,474</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Subordinated Debt </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>59,780</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>74,884</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>86,605</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>91,966</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>67,190</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Stockholders&#146; Equity </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>132,710</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>117,115</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>116,236</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=right>109,841</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=right>98,365</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=159.333 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=159.333 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px; border-bottom:1px solid #000000" valign=top width=398.333 colspan=6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>As of December 31</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2010</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2009</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2008</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2007</U></P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2006</U></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; font-family:Arial,Times New Roman"><B>Other Data:</B></P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Ratio of Earnings to </P>
<P style="margin:0px; text-indent:30px; font-family:Arial,Times New Roman">Fixed Charges </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px" align=right><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=right>&nbsp;&nbsp;2.67</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px" align=right><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=right>&nbsp;&nbsp;1.72</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px" align=right><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=right>&nbsp;&nbsp;1.86</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px" align=right><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=right>&nbsp;&nbsp;1.92</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px" align=right><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=right>&nbsp;&nbsp;1.83</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; text-indent:12px; font-family:Arial,Times New Roman">Ratio of Total Liabilities </P>
<P style="margin:0px; text-indent:30px; font-family:Arial,Times New Roman">To Stockholders&#146; Equity </P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px" align=right><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=right>&nbsp;&nbsp;2.18</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px" align=right><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=right>&nbsp;&nbsp;2.38</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px" align=right><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=right>&nbsp;&nbsp;2.35</P>
</TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px" align=right><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=right>&nbsp;&nbsp;2.66</P>
</TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px" align=right><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=right>&nbsp;&nbsp;2.69</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=211.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=79.667 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px" align=right><BR></P>
<P style="margin:0px" align=right><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=right><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">7</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
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<P style="margin:0px; page-break-before:always" align=right><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>RISK FACTORS</B></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><I>The risks described below set forth known material risks of investing in Senior Demand Notes. &nbsp;You should carefully consider the risks described below, as well as the other information in this prospectus or incorporated by reference into this prospectus, in particular the risk factors relating to the Company included in our annual report on Form 10-K for the year ended December 31, 2010 before deciding whether to invest in Senior Demand Notes. &nbsp;If any of the situations described in any of these risks actually occur, or if any risks or uncertainties not presently known to us occurs, our business, financial condition or results of operations could be materially adversely affected. In any of these events, you may lose part or all of your investment.</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center>RISK FACTORS RELATING TO THE SENIOR DEMAND NOTES</P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>The Senior Demand Notes may not be a suitable investment for you. &nbsp;</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The Senior Demand Notes may not be a suitable investment for you, and we advise you to consult your investment, tax and other professional financial advisors prior to deciding whether to invest in Senior Demand Notes. &nbsp;The characteristics of the Senior Demand Notes, including the features and variable interest rate, may not satisfy your investment objectives. &nbsp;The Senior Demand Notes may not be a suitable investment for you based on your ability to withstand a loss of interest or principal or other aspects of your financial situation, including your income, net worth, financial needs, investment risk profile, return objectives, investment experience and other factors. &nbsp;Before deciding whether to invest in Senior Demand Notes, you should consider your investment allocation with respect to the amount of your contemplated investment in the Senior Demand Notes in relation to your other investment holdings and the diversity of those holdings.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; font-family:Arial,Times New Roman"><B>Because the Senior Demand Notes will have no sinking fund, security, insurance or guarantee, you may lose all or part of your investment in the Senior Demand Notes if we do not have enough cash to pay the Senior Demand Notes.</B></P>
<P style="margin:0px; font-family:Arial,Times New Roman">There is no sinking fund, security, insurance or guarantee of our obligation to make payments on the Senior Demand Notes. &nbsp;The Senior Demand Notes are not secured by any of our assets. &nbsp;We will not contribute funds to a separate account, commonly known as a sinking fund, to make any interest or principal payments on the Senior Demand Notes. &nbsp;The Senior Demand Notes are not certificates of deposit or similar obligations of, and are not guaranteed or insured by, any depository institution, the Federal Deposit Insurance Corporation (&#147;FDIC&#148;), the Securities Investor Protection Corporation (&#147;SIPC&#148;), or any other federal or state agency. &nbsp;Therefore, if you invest in the Senior Demand Notes, you will have to rely only on our cash flow from operations and other sources of funds for repayment of principal at maturity or redemption and for payment of interest when due. If our cash flow from operations and other sources of funds are not sufficient to pay the Senior Demand Notes, then you may lose all or part of your investment.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>The Senior Demand Notes will be effectively subordinated to any secured indebtedness.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The Senior Demand Notes are unsecured, and therefore are effectively subordinated to any secured debt we may issue in the future to the extent of the value of the assets securing such indebtedness. &nbsp;While we do not presently have any secured indebtedness outstanding, the Senior Demand Notes do not place any restrictions on our ability to incur any such indebtedness. &nbsp;In the event we become subject to a bankruptcy, liquidation, dissolution, reorganization or similar preceding, the holders of any secured indebtedness would be entitled to proceed against the collateral that secures the secured indebtedness, and that collateral, to the extent not sufficient to provide for the repayment of all such secured indebtedness may not be available for satisfaction of any amounts owed under the Senior Demand Notes.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">8</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-bottom:9.6px; padding-top:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>If we incur indebtedness that is secured or substantially more indebtedness that is equal in priority with respect to the right of repayment to the Senior Demand Notes, our ability to repay the Senior Demand Notes may be impaired.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">As of December 31, 2010 we had $0.9 million of indebtedness outstanding on a secured basis with a higher priority with respect to right of repayment to the Senior Demand Notes. &nbsp;Also at December 31, 2010 we had $167.2 million in indebtedness outstanding that was equal in priority with respect to the right of repayment to the Senior Demand Notes. &nbsp;Subject to any limitations that may be contained in any credit agreements that we may be party to from time to time, we may also incur substantial additional indebtedness, some or all of which may be secured by our assets. &nbsp;This indebtedness may be secured or be equal in payment preference to the Senior Demand Notes. If we incur additional indebtedness, it may become more difficult to meet our repayment obligations, and the risks to holders of Senior Demand Notes could increase.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>Our management has broad discretion over the use of proceeds from this offering.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">We expect to use the proceeds from this offering for general corporate purposes, which may include the repayment of indebtedness under any credit facility to which we are, or become, a party, or our variable rate senior and subordinated debt incurred from time to time, as any of it becomes due. &nbsp;Because no specific allocation of the proceeds can be or has been made, our management will have broad discretion in determining how the proceeds of the offering will be used.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>Because there are only limited restrictions on our activities under the Senior Demand Notes, you will have only limited protections.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">In comparison to the restrictive covenants that are imposed on us by our existing credit agreement and that we expect would be imposed on us by any credit facility we may enter into in the future, the indenture that governs the Senior Demand Notes contains only relatively minimal restrictions on our activities. &nbsp;Because there are only very limited restrictions and limited events of default under the indenture, we will not be restricted thereunder from, among other activities, issuing additional debt that may be secured or share ratably in right of repayment to the Senior Demand Notes. &nbsp;In either event, you may have more difficulty recovering part or all of your investment. &nbsp;Further, if we default on any payment on the Senior Demand Notes or otherwise under the indenture, you will likely have to rely on the Trustee to exercise remedies on your behalf under the terms of the indenture. &nbsp;You may not be able to seek remedies against us directly.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>Because we may redeem the Senior Demand Notes at any time, you may be subject to reinvestment risk.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">We have the right to redeem any Senior Demand Note at any time upon at least 30 days' written notice to you. &nbsp;The Senior Demand Notes would be redeemed at 100% of the principal amount plus accrued but unpaid interest up to the redemption date. &nbsp;Any such redemption may have the effect of reducing the income or return on investment that you would otherwise expect to receive on an investment in the Senior Demand Notes. &nbsp;If this occurs, you may not be able to reinvest the proceeds at an interest rate comparable to the rate paid on the Senior Demand Notes.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>No public market exists in which to transfer Senior Demand Notes.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">An investor may redeem any or all of his or her Senior Demand Notes as described in this prospectus. &nbsp;However, no public trading or secondary market for the Senior Demand Notes currently exists, or ever will exist, and, consequently, there is no public market to provide liquidity for any sale or transfer of, or to provide any valuation to help investors evaluate the appropriateness of the interest rates offered in light of the risks to be assumed in connection with an investment in the Senior Demand Notes.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">9</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-bottom:9.6px; padding-top:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=25.2 /><TD width=18 /><TD width=60 /><TD width=50.4 /><TD width=45.6 /><TD width=31.2 /><TD width=76.8 /><TD width=76.8 /><TD width=76.8 /><TD width=76.8 /><TD width=76.8 /></TR>
<TR><TD style="margin-top:0px" valign=top width=614.4 colspan=11><P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>RATIOS OF EARNINGS TO FIXED CHARGES</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.4 colspan=11><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.4 colspan=11><P style="margin:0px; font-family:Arial,Times New Roman">For purposes of calculating the ratios of earnings to fixed charges below, we calculated earnings by adding fixed charges to income before income taxes. &nbsp;Fixed charges consist of the interest on our indebtedness and the amount which we believe is representative of the interest factor component of our rent expense.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=25.2><P style="margin:0px; padding:0px; font-size:6pt">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=78 colspan=2><P style="margin:0px; padding:0px; font-size:6pt">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=96 colspan=2><P style="margin:0px; padding:0px; font-size:6pt">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=415.2 colspan=6><P style="margin:0px; padding:0px; font-size:6pt">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=43.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=110.4 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=384 colspan=6><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>
</TD><TD style="margin-top:0px" valign=top width=76.8><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=43.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=110.4 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=76.8 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2010</U></P>
</TD><TD style="margin-top:0px" valign=top width=76.8><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2009</U></P>
</TD><TD style="margin-top:0px" valign=top width=76.8><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2008</U></P>
</TD><TD style="margin-top:0px" valign=top width=76.8><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2007</U></P>
</TD><TD style="margin-top:0px" valign=top width=76.8><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>2006</U></P>
</TD><TD style="margin-top:0px" valign=top width=76.8><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=43.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=110.4 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=76.8 colspan=2><P style="margin:0px; font-family:Arial,Times New Roman" align=center>2.67</P>
</TD><TD style="margin-top:0px" valign=top width=76.8><P style="margin:0px; font-family:Arial,Times New Roman" align=center>1.72</P>
</TD><TD style="margin-top:0px" valign=top width=76.8><P style="margin:0px; font-family:Arial,Times New Roman" align=center>1.86</P>
</TD><TD style="margin-top:0px" valign=top width=76.8><P style="margin:0px; font-family:Arial,Times New Roman" align=center>1.92</P>
</TD><TD style="margin-top:0px" valign=top width=76.8><P style="margin:0px; font-family:Arial,Times New Roman" align=center>1.83</P>
</TD><TD style="margin-top:0px" valign=top width=76.8><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>USE OF PROCEEDS</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Net proceeds from sales of the Senior Demand Notes, after payment of applicable expenses, will be placed in our general treasury. &nbsp;No segregation of proceeds will be made, but we expect to use the net proceeds for general corporate purposes, which may include the repayment or redemption, from time to time, of outstanding senior or subordinated securities as those securities mature or as such debtholders otherwise request redemption. &nbsp;Our subordinated securities are variable rate subordinated debentures, which are offered and sold from time to time in varying principal amounts and at various interest rates. &nbsp;We cannot presently estimate the amount of proceeds that will be used to make mandatory redemption payments, as this will vary depending upon, among other things, the amount of securities outstanding, the maturity dates and applicable interest rates, which vary from time to time, and related investor decisions outside of our control. &nbsp;Any proceeds not used for redemptions or repayments as described above may be used to make consumer finance loans in the ordinary course of our business, to repay interest or principal on bank borrowings outstanding at any time, to repay other debts outstanding as those amounts come due, and for other general operating purposes.</P>
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<P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>PLAN OF DISTRIBUTION</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The Senior Demand Notes will be offered directly to the public by us. &nbsp;No selling commissions or other remuneration will be paid directly or indirectly to any of our officers, directors or employees in connection with the sale of the Senior Demand Notes. &nbsp;All proceeds from sales of Senior Demand Notes will be placed in our general treasury as sales are made, as described in the &quot;Use of Proceeds&quot; section of this prospectus. &nbsp;All offering expenses, including registration fees, printing, advertising, postage and professional fees, will be paid by us.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">There is no assurance that any or all of the Senior Demand Notes offered by this prospectus will be sold. &nbsp;This offering, however, is not made contingent upon any minimum amount of Senior Demand Notes being sold.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The Senior Demand Notes will be sold and redeemed at our executive office located at 135 East Tugalo Street, Post Office Box 880, Toccoa, Georgia 30577. &nbsp;The telephone number is (706) 886-7571 or (800) 282-0709 (within Georgia) or (800) 700-7943 (outside of Georgia).</P>
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<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">10</P>
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<P style="margin:0px; font-family:Arial,Times New Roman; page-break-before:always" align=center><B>FORWARD-LOOKING INFORMATION</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">This prospectus, and the information incorporated by reference in it, contains &quot;forward-looking statements&quot; within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Such forward-looking statements may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by those forward-looking statements. Such factors include, but are not limited to, the known risks we face that are described in the &#147;Risk Factors&#148; section of this prospectus and in our annual report on Form 10-K for the year ended December 31, 2010 which is incorporated by reference in this prospectus, and as otherwise may be described in our periodic reports that we file with the SEC from time to time. If any of the events described in the &#147;Risk Factors&#148; section or included elsewhere or incorporated by reference into this prospectus occur, they could impact our ability to pay the interest and principal on the Senior Demand Notes, as well as have an adverse effect on our business, financial condition and results of operations. &nbsp;We undertake no obligation to update any forward-looking statements.</P>
<P style="margin:0px; font-family:Arial,Times New Roman">`</P>
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<P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>DESCRIPTION OF THE SENIOR DEMAND NOTES</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>General</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The Senior Demand Notes we are offering will represent senior, unsecured debt obligations of 1<SUP>st</SUP> Franklin. &nbsp;The Senior Demand Notes will be issued under an Indenture, dated April 13, 2008, between us and U.S. Bank National Association, as Trustee. &nbsp;The terms and conditions of the Senior Demand Notes include those set out in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939. &nbsp;The following is a summary of the material provisions of the Senior Demand Notes and the Indenture. &nbsp;For a complete understanding of the Senior Demand Notes, you should review the definitive terms and conditions contained in the Indenture, which include definitions of certain terms used below. &nbsp;A copy of the form of Indenture has been filed with the SEC as an exhibit to the registration statement of which this prospectus is a part and is available from us at no charge upon request.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The Senior Demand Notes are direct obligations of 1<SUP>st</SUP> Franklin, but are not secured by any collateral or lien. &nbsp;The Senior Demand Notes will be identical except for the issue date and interest rate. &nbsp;The Senior Demand Notes have no stated maturity, will not be subject to any sinking fund and will be payable or redeemable at the option of the holder thereof at any time as described below. &nbsp;The Senior Demand Notes will rank equally and ratably with all of our other senior, unsecured indebtedness.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">In addition, the Senior Demand Notes are not bank certificates of deposit and are not insured by the Federal Deposit Insurance Corporation (the &#147;FDIC&#148;), the Securities Investor Protection Corporation (the &#147;SPIC&#148;) or any other federal or state agency or company. Investors must rely solely on our ability to repay the obligations under the Senior Demand Notes. </P>
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<P style="margin:0px; font-family:Arial,Times New Roman"><B>Sale and Issuance</B></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; font-family:Arial,Times New Roman">All funds you invest in Senior Demand Notes, together with all accrued interest, and any redemptions, will be recorded on a register maintained by us or the Trustee. &nbsp;We will act as registrar and paying agent unless otherwise designated.</P>
<P style="margin:0px; font-family:Arial,Times New Roman">Senior Demand Notes will be issued and sold in an initial amount of not less than $25.00 and in any amount thereafter, and will be dated the date of purchase. &nbsp;We may, at our discretion, limit the maximum amount any investor or related investors may maintain in outstanding Senior Demand Notes at any one time. &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>Principal Amount</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The principal amount of each Senior Demand Note at any time is equal to all amounts invested in such Senior Demand Note, together with accrued interest, less redemptions.</P>
<P style="margin:0px"><BR></P>
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<P style="margin:0px; font-family:Arial,Times New Roman">11</P>
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<P style="margin:0px; font-family:Arial,Times New Roman; page-break-before:always"><B>Interest</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The interest rate payable on any Senior Demand Note is a variable rate, compounded daily. &nbsp;We may establish, from time to time, separate interest rates for the following ranges: from $1.00 to $2,499.99; $2,500.00 to $9,999.99; $10,000.00 to $49,999.99; $50,000.00 to $99,999.99; and $100,000.00 and over. &nbsp;Interest rate determinations are made by management after evaluation of market conditions for investments with similar characteristics, such as investment amount, redemption rights and risk profile. &nbsp;When an interest rate is established for each range of balances, it becomes effective for and applied to all Senior Demand Notes within that range, whether existing or newly issued. &nbsp;These interest rates may, but are not required to be, different for each range of balances, and we may increase or decrease the interest rate for any range independently of the others without express notice to holders after the date of investment. &nbsp;The interest rate on any Senior Demand Note may also change if the daily balance of that Senior Demand Note changes to a different range of balances. &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">A holder of Senior Demand Notes will not be expressly notified of changes from time to time in the interest rates. &nbsp;The interest rates being paid on the Senior Demand Notes at any time may be obtained by calling or visiting our executive offices or by logging onto our website at <U>http://www.1ffc.com</U>. &nbsp;The information on our website is not a part of, or incorporated by reference into, this prospectus. &nbsp;We will also publish the most recently determined interest rate for each balance range weekly in a newspaper of general circulation in Toccoa, Georgia, the location of the Company&#146;s principal place of business. &nbsp;We will also file a notice of any interest rate change with the SEC in a supplement to this prospectus, as appropriate.</P>
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<P style="margin:0px; font-family:Arial,Times New Roman"><B>How to Invest</B></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial,Times New Roman"><I>General</I>. &nbsp;You may invest in Senior Demand Notes during normal business hours at our executive offices in Toccoa, Georgia, by cash, check or electronic transfer. &nbsp;Each investment in Senior Demand Notes must be accompanied by properly completed investment documentation. &nbsp;The minimum initial amount which you may invest is $25.00. &nbsp;There is no required minimum amount for subsequent investments. &nbsp;All investments must be made in U.S. dollars. &nbsp;Investments in Senior Demand Notes may be made individually, jointly or as custodial or trust investments and may be made by individuals, corporations, partnerships, firms or associations, provided that in each case the investor meets certain requirements.</P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial,Times New Roman"><I>Investments by Cash</I>. &nbsp;You may invest in Senior Demand Notes by delivering cash to us at our executive offices located at 135 East Tugalo Street, Toccoa, Georgia 30577. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial,Times New Roman"><I>Investments by Check. &nbsp;</I>You may invest in Senior Demand Notes by check delivered to our executive offices located at 135 East Tugalo Street, Toccoa, Georgia 30577. &nbsp;Checks must be drawn in U.S. dollars on a U.S. bank. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial,Times New Roman"><I>Investments by Electronic Transfer</I>. &nbsp;You may invest in Senior Demand Notes by wire transfer or automated clearing house transfer of funds to 1<SUP>st</SUP> Franklin Financial Corporation's account at Community Bank and Trust. &nbsp;For all investments through these electronic transfers, the transfer instructions must include the name &quot;1<SUP>st</SUP> Franklin Financial Corporation, Senior Demand Notes&quot; and your name, address, and investment number. &nbsp;</P>
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<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial,Times New Roman; page-break-before:always">Investments in Senior Demand Notes made with cash begin to accrue interest as of the date the investment is made at our executive offices. &nbsp;Investments made by check begin to accrue interest the first business day after the date of receipt at our executive offices. &nbsp;Investments made by electronic transfer will be invested in Senior Demand Notes, and will begin accruing interest, on the day credited to the account of 1<SUP>st</SUP> Franklin Financial Corporation. &nbsp;Transferring funds electronically by means other than wire transfer or automated clearing house transfer may result in a delay in crediting the investment to your Senior Demand Note investment account. &nbsp;Neither we nor Community Bank &amp; Trust, a division of South Carolina Bank &amp; Trust NA (&#147;Community Bank &amp; Trust&#148;) will be responsible for delays in funds transfer systems.</P>
<P style="margin:0px; font-family:Arial,Times New Roman">We reserve the right to reject any investment application and return the funds to a potential investor for any reason, including if any of the foregoing investments are not preceded or accompanied by documentation satisfactory to us to establish that the potential investor meets any applicable eligibility criteria. &nbsp;Copies of this documentation are available at our executive offices, or you can request that it be sent to you by calling us at (706) 886-7571 or (800) 282-0709 (within Georgia) or (800) 700-7943 (outside of Georgia). &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>Redemption by the Holder</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Subject to any limitations described in &quot;Subordination&quot; below, we will redeem any Senior Demand Notes upon request of a holder in an amount up to the outstanding principal balance plus any unpaid interest at the time of redemption. &nbsp;We will also make partial redemptions as long as the balance remaining on any Senior Demand Notes is at least $1.00. &nbsp;All redemption requests must be made either in person, by mail, or by electronic means to, our executive offices or by the check redemption option as described below. &nbsp;Redemption requests made in person or by mail must be accompanied by properly completed documentation. &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>Check and Electronic Redemption Options</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">At the option of a holder of Senior Demand Notes, the holder may redeem Senior Demand Notes by writing checks, or by electronic means, drawn against the holder's Senior Demand Note balance and payable through Community Bank &amp; Trust. &nbsp;The check and electronic redemption options are available only to those persons who maintain a minimum investment balance with us of $500.00 or more. &nbsp;This investment may be maintained in Senior Demand Notes and/or any other of our debt securities. &nbsp;If at any time this minimum required balance declines to less than $500.00, all check writing and electronic redemption privileges and other services related to these redemption options may be immediately suspended by us until the balance equals or exceeds $500.00.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">A Senior Demand Note holder who elects the check redemption option will receive an initial supply of blank checks from us at no charge. &nbsp;Permanent checks must be purchased by the holder at his expense from a check supplier of the holder's choice. &nbsp;Checks may be used at any time and made payable to anyone for any amount, subject to the $500.00 minimum balance requirement. &nbsp;Each check is considered to be a Senior Demand Note redemption in an amount equal to the amount of the check paid. &nbsp;Subject to a service charge, a holder may stop payment of a check by timely notifying us in writing, but we are not liable for failure to stop any payment.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Checks which are presented to us for payment and which exceed the holder's Senior Demand Note balance or which would reduce that holder's minimum balance below $500.00 may be returned unpaid by us, and the holder will be assessed a returned check service fee.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">A Senior Demand Note holder who elects the check redemption option also has the option to enter into a separate Overdraft Protection Agreement, Security Agreement and Assignment. &nbsp;Under this agreement, a holder of Senior Demand Notes assigns debt securities to us as collateral for overdraft payments. &nbsp;We will then pay any overdrafts to the extent of the protection amount set out in this agreement. &nbsp;This agreement contains customary fees for this service. &nbsp;Amounts paid by us under this agreement are loans and are subject to repayment with interest, as well as other finance charges described in such agreement.</P>
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<P style="margin:0px; font-family:Arial,Times New Roman; page-break-before:always">To use the check redemption option, a holder must enter into a Senior Demand Note Check Redemption Agreement with us. &nbsp;This agreement sets forth the provisions and charges associated with the check redemption option. &nbsp;A copy of this agreement is available from us at no charge upon request. &nbsp;Either the Senior Demand Note holder or the Company may terminate this agreement at any time. &nbsp;Additionally, any of the terms of this agreement may be amended by us upon 30 days' prior written notice. &nbsp;Upon termination of this agreement, a Senior Demand Note holder may continue to redeem Senior Demand Notes in person or by mail as provided above without penalty. &nbsp;The Senior Demand Note holder, however, will remain liable for any unpaid checks or other charges in connection with this agreement.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">If Senior Demand Notes are held jointly by more than one owner, only one holder whose name appears on the investment register must sign a redemption check unless otherwise specified on the investment application or subsequent written request and so indicated on the checks. &nbsp;The amount of the Senior Demand Notes to be redeemed by check will continue accruing interest until the redemption check is presented for payment.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The check and electronic redemption options are optional redemption methods for redeeming the Senior Demand Notes. &nbsp;See &quot;Redemption by the Holder.&quot; &nbsp;These options are strictly at the request of the holder and do not change any of the terms or provisions of the Senior Demand Notes as described herein. &nbsp;The Senior Demand Notes, including those redeemed under these options, are not bank deposits or bank obligations and are not insured by the FDIC, the SIPC, or any other federal or state agency. &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>Redemption by the Company</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">We can call the Senior Demand Notes as a whole, or individually, for redemption at any time at a price equal to the principal amount plus any unpaid interest thereon at the time of redemption. &nbsp;Notice of such redemption will be given by mail to the holder not less than 30 nor more than 60 days prior to the date fixed for redemption.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>Account Fees and Charges</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Any fees and expenses associated with the Senior Demand Notes, and the check redemption option, will be deducted from a Senior Demand Note holder's balance and will be treated as a redemption of the corresponding amount of Senior Demand Notes. &nbsp;Any fees and charges will appear on the appropriate account statement. &nbsp;See &#147;Statements to Holders&#148;.</P>
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<P style="margin:0px; font-family:Arial,Times New Roman"><B>Statements to Holders</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Either we or the Trustee will maintain a register of each holder&#146;s investments in Senior Demand Notes. &nbsp;We will maintain the register unless otherwise designated. &nbsp;The principal amount of each Senior Demand Note at any time is equal to all amounts invested in such Senior Demand Note, together with accrued interest, less redemptions. &nbsp;We will send to each holder, at least quarterly, a statement showing the holder's Senior Demand Note balance as it appears on our books. &nbsp;Such statement will contain a summary of all transactions relating to that holder's Senior Demand Notes during the applicable period, including beginning and ending aggregate principal amounts, accrued interest and redemptions. &nbsp;Holders who have elected to use the Check Redemption Option will receive a monthly statement listing all checks paid during the month and setting forth check numbers, amounts, dates of payments and any other transactions, such as additional investments, interest earned and service charges which were posted in the investor's account during the month. &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Canceled checks are not returned to the holder. &nbsp;Investors may request laser image copies of canceled checks to be included with their monthly statements for a nominal fee. &nbsp;Microfilm copies and/or laser stored images of canceled checks will be retained by us and, upon payment of any applicable copy charge, a holder may obtain a copy of any individual check at any time. &nbsp;</P>
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<P style="margin:0px; font-family:Arial,Times New Roman">14</P>
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<P style="margin:0px; font-family:Arial,Times New Roman; page-break-before:always"><B>Subordination</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Payment of the principal and interest on the Senior Demand Notes is subordinate in right of payment to all of our secured debt to the extent of the value of the assets securing such indebtedness. &nbsp;The term &quot;secured debt&quot; means all of our indebtedness outstanding at any time that by its terms is secured by various assets. &nbsp;At December 31, 2010, we had $0.9 million in secured debt outstanding, and the Indenture does not restrict our right to increase our secured debt in the future. &nbsp;No sinking fund will be established to provide for payments on the Senior Demand Notes.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">In the event that the Senior Demand Notes are declared due and payable because of a default under the Indenture, a holder of a Senior Demand Note will be entitled to payment only after all principal and interest on all secured debt has been paid, to the extent of the value of the assets securing such indebtedness. &nbsp;Likewise, in the event of our insolvency, bankruptcy or liquidation, or other similar proceeding relating to 1<SUP>st</SUP> Franklin or to its creditors, as such, or to our property, or in the event of any dissolution or other winding up, whether or not involving insolvency or bankruptcy, then the holders of any secured debt would be entitled to receive payment in full of all principal and interest due to them, to the extent of the value of the assets securing such indebtedness, before the holders of the Senior Demand Notes would be entitled to receive any payments. &nbsp;</P>
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<P style="margin:0px; font-family:Arial,Times New Roman"><B>Indenture and Trustee</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The Senior Demand Notes will be issued under an Indenture, dated April 3, 2008, between us and U.S. Bank National Association, as Trustee. &nbsp;A copy of the form of this Indenture has been filed with the SEC as an exhibit to the registration statement of which this prospectus is a part and statements in this prospectus relating to the Senior Demand Notes are subject to the detailed provisions of the Indenture. &nbsp;Whenever any particular section of the Indenture or any term used in it is referred to, the statement in connection with which such reference is made is qualified in its entirety by such reference.</P>
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<P style="margin:0px; font-family:Arial,Times New Roman"><B>Restrictions on Additional Debt</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">There are no restrictions in the Indenture against the issuance of additional securities or the incurrence of additional debt, including other senior debt or secured obligations. </P>
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<P style="margin:0px; font-family:Arial,Times New Roman"><B>Successors</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The Indenture generally permits a consolidation or merger between us and another entity. &nbsp;It also permits the transfer or lease by us of all or substantially all of our assets. &nbsp;These transactions are permitted if:</P>
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<P style="margin-top:0px; margin-bottom:-2px; text-indent:48px; width:72px; font-family:Arial,Times New Roman; font-size:12pt; float:left"><font style='font-family:Arial Unicode MS,Times New Roman'>&#8226;</font></P>
<P style="margin:0px; padding-left:72px; text-indent:-2px; font-family:Arial,Times New Roman">the resulting or acquiring entity, if other than us, is a corporation and assumes all of our responsibilities and liabilities under the Senior Demand Notes and the Indenture; and</P>
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<P style="margin:0px; padding-left:72px; text-indent:-2px; font-family:Arial,Times New Roman">immediately after the transaction, and giving effect to the transaction, no event of default under the Indenture exists.</P>
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<P style="margin-top:0px; margin-bottom:6.667px; font-family:Arial,Times New Roman"><B>Modification of the Indenture</B></P>
<P style="margin-top:0px; margin-bottom:6.667px; font-family:Arial,Times New Roman">The Indenture contains provisions permitting 1<SUP>st</SUP> Franklin and the Trustee, with the consent of the holders of not less than two-thirds of the outstanding principal amount of Senior Demand Notes, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental Indenture or modifying in any manner the rights of the holders of such Senior Demand Notes; provided, however, that no such supplemental Indenture can do any of the following:</P>
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<P style="margin:0px; font-family:Arial,Times New Roman">15</P>
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<P style="margin:0px; padding-left:72px; text-indent:-2px; font-family:Arial,Times New Roman">reduce the principal amount of any Senior Demand Note;</P>
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<P style="margin:0px; padding-left:72px; text-indent:-2px; font-family:Arial,Times New Roman">reduce the amount of Senior Demand Notes whose holders must consent to an amendment; or</P>
<P style="margin-top:0px; margin-bottom:-2px; text-indent:48px; width:72px; font-family:Arial,Times New Roman; font-size:12pt; clear:left; float:left"><font style='font-family:Arial Unicode MS,Times New Roman'>&#8226;</font></P>
<P style="margin:0px; padding-left:72px; text-indent:-2px; font-family:Arial,Times New Roman">make any changes regarding the Indenture that relate to a waiver of default, the rights of holders to receive payments, and the requirements of consent of the holders of Senior Demand Notes, in each case without the consent of the holder of each Senior Demand Note so affected.</P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; font-family:Arial,Times New Roman">We, along with the Trustee, may amend the Indenture to allow for the issuance of additional Senior Demand Notes without the consent of the holders of Senior Demand Notes. &nbsp;There are no limitations as to the maximum amount of any increase or to the number of increases which may be made.</P>
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<P style="margin:0px; font-family:Arial,Times New Roman"><B>Events of Default and Notice Thereof</B></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; font-family:Arial,Times New Roman">An event of default is generally defined by the Indenture to mean any of the following:</P>
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<P style="margin:0px; padding-left:72px; text-indent:-2px; font-family:Arial,Times New Roman">failure to pay principal or interest on any Senior Demand Note upon a request for redemption therefor, which failure continues for 30 days;</P>
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<P style="margin:0px; padding-left:72px; text-indent:-2px; font-family:Arial,Times New Roman">failure, after notice from the Trustee or from the holders of at least 25% in principal amount of the Senior Demand Notes, to observe or perform within 30 days any of the covenants contained in the Indenture or Senior Demand Notes; or</P>
<P style="margin-top:0px; margin-bottom:-2px; text-indent:48px; width:72px; font-family:Arial,Times New Roman; font-size:12pt; clear:left; float:left"><font style='font-family:Arial Unicode MS,Times New Roman'>&#8226;</font></P>
<P style="margin:0px; padding-left:72px; text-indent:-2px; font-family:Arial,Times New Roman">the occurrence of certain events of bankruptcy, insolvency or reorganization.</P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The Indenture provides that the Trustee will, within 90 days after the occurrence of any event of default, give the registered holders of Senior Demand Notes notice of any existing default known to the Trustee, but, except in case of a default in the payment of principal or interest, the Trustee may withhold such notice if and for so long as the Trustee in good faith determines that the withholding of such notice is in the interest of those holders.</P>
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<P style="margin:0px; font-family:Arial,Times New Roman"><B>Rights on Default</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The Trustee, by notice to the Company, or the holders of at least 25% in principal amount of Senior Demand Notes, may declare the principal of and accrued but unpaid interest on all Senior Demand Notes due upon the happening of any of the events of default specified in the Indenture, but the holders of a majority of the outstanding principal amount of those Senior Demand Notes may waive any default and rescind such declaration if the default is cured within the 30 day period thereafter, except a default in the payment of the principal of or interest on any Senior Demand Note or a default on any other senior debt. &nbsp;The holders of a majority of the outstanding principal amount of the Senior Demand Notes may direct the time, method and place of conducting any proceeding for any remedy available to, or exercising any power or trust conferred upon, the Trustee, but the Trustee may decline to follow any direction that conflicts with law or any provision of the Indenture, or is unduly prejudicial to the rights of the other holders of Senior Demand Notes or would involve the Trustee in personal liability. &nbsp;Holders may not institute any proceeding to enforce the Indenture unless the Trustee refuses to act for 60 days after request from the holders of at least 25% in principal amount of the Senior Demand Notes and during that 60 day period the holders of a majority in principal amount do not give the Trustee a direction inconsistent with the request, and tender to the Trustee of satisfactory indemnity. &nbsp;Nevertheless, any holder may enforce the payment of the principal of and interest on that holder's Senior Demand Notes upon a request therefor.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman"><B>Concerning the Trustee</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">In addition to its agreement to serve as Trustee under the indenture, U.S. Bank National Association issues to us, and services, certain credit cards, on customary commercial terms and for which it receives customary fees. &nbsp;The Trustee maintains its principal corporate trust office at 1349 West Peachtree Street, N.W., Suite 1050, Atlanta, Georgia 30309. </P>
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<P style="margin:0px; font-family:Arial,Times New Roman">16</P>
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<P style="margin:0px; font-family:Arial,Times New Roman; page-break-before:always"><B>Evidence to be Furnished to the Trustee</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The Indenture provides that, upon any application or request by us to the Trustee to act, we will provide the Trustee an officer's certificate and an opinion of counsel stating that any necessary conditions precedent have been met and satisfactory indemnification as required has been provided. &nbsp;Within 120 days after the end of each fiscal year, we are required to file with the Trustee an officer&#146;s certificate stating whether or not, to the best knowledge of the signer, we are in default in the performance of any covenant, agreement or condition in the Indenture and, if so, specifying each such default and, with respect to each, the action taken or proposed to be taken by us to remedy such default.</P>
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<P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>LEGAL MATTERS</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The validity of the issuance of the Senior Demand Notes being offered by this prospectus is being passed upon for us by Jones Day, Atlanta, Georgia.</P>
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<P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>EXPERTS</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The consolidated financial statements, and the related financial statement schedule, incorporated in this prospectus by reference from the Company&#146;s Annual Report on Form 10-K have been audited by Deloitte &amp; Touche LLP, an independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference. &nbsp;&nbsp;Such consolidated financial statements and financial statement schedule have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>WHERE YOU CAN FIND MORE INFORMATION</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">We file annual, quarterly and special reports, and other information, with the SEC. &nbsp;You may read and copy any document we file with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. &nbsp;Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. &nbsp;Our SEC filings are also available to the public at the SEC's web site at http://www.sec.gov.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">The SEC allows us to &quot;incorporate by reference&quot; the information we file with it, which means that we can disclose important information to you by referring you to those documents. &nbsp;The information incorporated by reference into this prospectus is an important part of this prospectus. &nbsp;Specifically, we are incorporating by reference the following: &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; text-indent:48px; width:96px; font-family:Arial,Times New Roman; float:left">(a)</P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:96px; text-indent:-2px; font-family:Arial,Times New Roman" align=justify>The Annual Report of the Company on Form 10-K for the year ended December 31, 2010, filed on March 29, 2011;</P>
<P style="margin-top:0px; margin-bottom:-2px; text-indent:48px; width:96px; font-family:Arial,Times New Roman; clear:left; float:left">(b)</P>
<P style="margin:0px; padding-left:96px; text-indent:-2px; font-family:Arial,Times New Roman" align=justify>All other reports filed with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, since December 31, 2010.</P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Any statement contained in this prospectus or in a document incorporated by reference in this prospectus is deemed to be modified or superseded for purposes of this prospectus to the extent that any of the following modifies or supersedes such statement:</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; text-indent:48px; width:72px; font-family:Arial,Times New Roman; font-size:12pt; float:left"><font style='font-family:Arial Unicode MS,Times New Roman'>&#8226;</font></P>
<P style="margin:0px; padding-left:72px; text-indent:-2px; font-family:Arial,Times New Roman">in the case of a statement in a previously filed document incorporated by reference in this prospectus, a statement contained in this prospectus; or</P>
<P style="margin-top:0px; margin-bottom:-2px; text-indent:48px; width:72px; font-family:Arial,Times New Roman; font-size:12pt; clear:left; float:left"><font style='font-family:Arial Unicode MS,Times New Roman'>&#8226;</font></P>
<P style="margin:0px; padding-left:72px; text-indent:-2px; font-family:Arial,Times New Roman">a statement contained in any prospectus supplement relating to the offering of Senior Demand Notes.</P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Any modified or superseded statement will not be deemed to constitute a part of this prospectus or any prospectus supplement, except as modified or superseded. &nbsp;Except as provided by the above-mentioned exceptions, all information appearing in this prospectus and each prospectus supplement is qualified in its entirety by the information appearing in the documents incorporated by reference.</P>
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<P style="margin:0px; font-family:Arial,Times New Roman">17</P>
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<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Copies of documents incorporated by reference will be provided without charge upon request to our Corporate Secretary at 135 East Tugalo Street, Post Office Box 880, Toccoa, Georgia 30577, telephone number (706) 886-7571 or (800)-282-0709 (within Georgia) or (800) 700-7943 (outside of Georgia). &nbsp;You can also access any or all of these filings free of charge at our website http://www.1ffc.com. &nbsp;Information contained on our website does not constitute part of this prospectus, and you should rely only on the information contained, or specifically incorporated by reference, in this prospectus in deciding whether to invest in Senior Demand Notes.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>REPORTS TO SECURITY HOLDERS</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">A copy of the above-mentioned annual report filed with the SEC is being delivered with this prospectus. &nbsp;Additionally, we provide each security holder with our most recent annual report containing financial information that has been examined and reported upon, with an opinion expressed, by an independent registered public accounting firm. &nbsp;We also provide each security holder with a copy of our most recent quarterly report, once filed with the SEC, containing certain unaudited financial and other information of the Company. &nbsp;Each of these reports for the current year are also available on our web site at http://www.1ffc.com. &nbsp;Information contained on our website does not constitute part of, and is not incorporated by reference into, this prospectus, and you should rely only on the information contained, or specifically incorporated by reference, in this prospectus in deciding whether to invest in Senior Demand Notes.</P>
<P style="margin:0px"><BR></P>
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<P style="margin:0px; font-family:Arial,Times New Roman">18</P>
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</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=614.467 /></TR>
<TR><TD style="margin-top:0px" valign=top width=614.467><P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>PART II. &nbsp;INFORMATION NOT REQUIRED IN PROSPECTUS</B></P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=49.2 /><TD width=48 /><TD width=56.4 /><TD width=153.6 /><TD width=153.6 /><TD width=153.6 /></TR>
<TR><TD style="margin-top:0px" valign=top width=614.4 colspan=6><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-family:Arial,Times New Roman; float:left"><U>Item 13.</U></P>
<P style="margin:0px; text-indent:-2px; font-family:Arial,Times New Roman"><U>Other Expenses of Issuance and Distribution</U></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=153.6 colspan=3><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=153.6><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=153.6><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=153.6><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=49.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=565.2 colspan=5><P style="margin:0px; font-family:Arial,Times New Roman">The expenses to be incurred in the issuance and distribution of the securities being registered hereby are estimated as follows:</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=97.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=363.6 colspan=3><P style="margin:0px; padding-right:-9.6px; font-family:Arial,Times New Roman">Filing Fee - Securities and Exchange Commission </P>
<P style="margin:0px; padding-right:-9.6px; font-family:Arial,Times New Roman">State Registration Fees</P>
<P style="margin:0px; padding-right:-9.6px; font-family:Arial,Times New Roman">Legal Fees and Expenses </P>
<P style="margin:0px; padding-right:-9.6px; font-family:Arial,Times New Roman">Accounting Fees </P>
<P style="margin:0px; padding-right:-9.6px; font-family:Arial,Times New Roman">Printing Costs </P>
<P style="margin:0px; padding-right:-9.6px; font-family:Arial,Times New Roman">Advertising </P>
<P style="margin:0px; padding-right:-9.6px; font-family:Arial,Times New Roman">Trustee's Fees </P>
<P style="margin:0px; padding-right:-9.6px; font-family:Arial,Times New Roman">Postage and Miscellaneous </P>
<P style="margin:0px; padding-right:-9.6px; text-indent:64.8px; font-family:Arial,Times New Roman">Total </P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-right:-9.6px; font-family:Arial,Times New Roman">* Previously paid.</P>
</TD><TD style="margin-top:0px" valign=top width=153.6><P style="margin-top:0px; margin-right:-60px; margin-bottom:-2px; text-indent:37.2px; width:97.2px; font-family:Arial,Times New Roman; float:left">$</P>
<P style="margin-top:0px; margin-bottom:-2px; width:60px; font-family:Arial,Times New Roman; float:left" align=right>92,880</P>
<P style="margin-top:0px; margin-bottom:-2px; width:97.2px; font-family:Arial,Times New Roman; float:left" align=right>1,000</P>
<P style="margin-top:0px; margin-bottom:-2px; width:97.2px; font-family:Arial,Times New Roman; float:left" align=right>6,000</P>
<P style="margin-top:0px; margin-bottom:-2px; width:97.2px; font-family:Arial,Times New Roman; float:left" align=right>3,000</P>
<P style="margin-top:0px; margin-bottom:-2px; width:97.2px; font-family:Arial,Times New Roman; float:left" align=right>10,400</P>
<P style="margin-top:0px; margin-bottom:-2px; width:97.2px; font-family:Arial,Times New Roman; float:left" align=right>6,000</P>
<P style="margin-top:0px; margin-bottom:-2px; width:97.2px; font-family:Arial,Times New Roman; float:left" align=right>13,200</P>
<P style="margin-top:0px; margin-bottom:-2px; width:97.2px; font-family:Arial,Times New Roman; float:left" align=right><U>16,000</U></P>
<P style="margin-top:0px; margin-right:-60px; margin-bottom:-2px; text-indent:37.2px; width:97.2px; font-family:Arial,Times New Roman; clear:left; float:left"><U>$</U></P>
<P style="margin-top:0px; margin-bottom:-2px; width:60px; font-family:Arial,Times New Roman; float:left" align=right><U>148,480</U></P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; width:48px; font-family:Arial,Times New Roman; float:left"><U>Item 14.</U></P>
<P style="margin:0px; text-indent:-2px; font-family:Arial,Times New Roman"><U>Indemnification of Directors and Officers</U></P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin-top:0px; margin-bottom:8.867px; padding-left:48px; font-family:Arial,Times New Roman">The bylaws of the registrant (the &quot;Bylaws&quot;) provide that the registrant will indemnify any officer, director, employee or agent of the registrant who was or is a party or is threatened to be made a party to any threatened, pending or completed action (other than an action by or in the right of the registrant) by reason of the fact that such person is or was a director, officer, employee or agent of the registrant, or is or was serving at the request of the registrant as a director, officer, employee or agent of another entity against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action if such person acted in a manner he reasonably believed to be in or not opposed to the best interests of the registrant, and, with respect to any criminal action or proceeding, and had no reasonable cause to believe his conduct was unlawful. &nbsp;The termination of any action by judgment, order, settlement or conviction, or upon a plea of nolo contendre or its equivalent, shall not, of itself, create a presumption that a person did not act in a manner which he reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.</P>
<P style="margin-top:0px; margin-bottom:8.867px; padding-left:48px; font-family:Arial,Times New Roman">The Bylaws further provide that the registrant will indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action by or in the right of the registrant to procure a judgment in its favor by reason of the fact such person was a director, officer, employee or agent of the registrant, or is or was serving at the request of the registrant as a director, officer, employee or agent of another entity against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant. &nbsp;However, no indemnification will be made in respect of any claim, issue or matter as to which such person has been adjudged to be liable for negligence or misconduct in the performance of his duty to the registrant unless and only to the extent that the court in which such action or suit was brought determines that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.</P>
<P style="margin-top:0px; margin-bottom:8.867px"><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">19</P>
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<P style="margin:0px; padding-left:48px; font-family:Arial,Times New Roman; page-break-before:always">Any of the foregoing indemnification shall be made by the registrant only as authorized in the specific case upon a determination that indemnification of the person is proper in the circumstances because such person has met the applicable standard of conduct set forth in the Bylaws, unless otherwise ordered by a court. &nbsp;Such determination will be made (i) by the board of directors of the registrant by a majority vote of a quorum consisting of directors who were not parties to such action, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the affirmative vote of a majority of the shares of stock of the registrant entitled to vote thereon.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px; font-family:Arial,Times New Roman">To the extent that any of the foregoing persons is successful on the merits or otherwise in the defense of an action, such person will be indemnified against expenses incurred by such person in connection therewith.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px; font-family:Arial,Times New Roman">The registrant reserves the right to advance sums for the defense of any action in advance of the final disposition of such action provided that the registrant receives from the person requesting the advance an undertaking to repay any sums unless it is determined that such person is entitled to be indemnified as provided in the Bylaws.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px; font-family:Arial,Times New Roman">The indemnification provided by the Bylaws is not exclusive of any other rights, in respect of indemnification or otherwise, to which those seeking indemnification may be entitled under any Bylaw or resolution approved by the affirmative vote of the holders of a majority of the shares of the registrant entitled to vote thereon taken at a meeting the notice of which specified that such Bylaw or resolution would be placed before the shareholders of the registrant.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px; font-family:Arial,Times New Roman">The registrant has the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the registrant, or is or was serving at the request of the registrant as a director, officer, employee or agent of another entity against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the registrant would have the power to indemnify him against such liability under the provisions of the Bylaws.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px; font-family:Arial,Times New Roman">If any expenses or other amounts are paid by way of indemnification, otherwise than by court order or action by the shareholders of the registrant or by an insurance carrier pursuant to insurance maintained by the registrant, the registrant will, not later than the next annual meeting of shareholders (unless such meeting is held within three months from the date of such payment) and, in any event, within 15 months from the date of such payment, send by first class mail to its shareholders of record at the time entitled to vote for the election of directors a statement specifying the persons paid, the amounts paid, and the nature and status at the time of such payment of the litigation or threatened litigation.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; width:48px; font-family:Arial,Times New Roman; float:left"><U>Item 15.</U></P>
<P style="margin:0px; text-indent:-2px; font-family:Arial,Times New Roman"><U>Recent Sales of Unregistered Securities</U></P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin:0px; padding-left:48px; font-family:Arial,Times New Roman">In the ordinary course of its business and to assist in the funding of its day-to-day operations involving, primarily, the making of consumer loans and first and second mortgage loans, the registrant makes periodic sales of certain of its securities which are exempt from the registration provisions of the Securities Act of 1933 (the &quot;Act&quot;). &nbsp;None of such sales in the past three years have involved, or have been made through, any underwriters, and all such sales were made by executive officers of the registrant. &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px; font-family:Arial,Times New Roman">Within the past three years, the registrant has offered and sold certain of its securities considered by the registrant to be commercial paper to investors meeting certain minimum investment qualifications pursuant to the exemption from the federal securities regulation requirements provided by Section 3(a)(3) of the Act. &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px; font-family:Arial,Times New Roman">During the previous three years, the registrant sold approximately $697.6 million of such securities.</P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">20</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
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<P style="margin:0px; page-break-before:always"><BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=37.2 /><TD width=54 /><TD width=54 /><TD width=469.2 /></TR>
<TR><TD style="margin-top:0px" valign=top width=614.4 colspan=4><P style="margin-top:0px; margin-bottom:-2px; width:48px; font-family:Arial,Times New Roman; float:left"><U>Item 16.</U></P>
<P style="margin:0px; text-indent:-2px; font-family:Arial,Times New Roman"><U>Exhibits and Financial Statement Schedules</U></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.4 colspan=4><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman">3.</P>
</TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(a)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">Restated Articles of Incorporation of the registrant, as amended January 26, 1996 (incorporated herein by reference to Exhibit 3(a) to the registrant's annual report on Form 10-K for the year ended December 31, 1995).</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(b)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">Bylaws of the registrant (incorporated herein by reference to Exhibit 3(b) to the registrant's annual report on Form 10-K for the year ended December 31, 1995).</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman">4.</P>
</TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(a)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">Form of Indenture by and between the Company and U.S. Bank National Association (incorporated by reference to Exhibit 4(a) to the Company&#146;s registration statement on Form S-1 dated December 27, 2007) *</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(b)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">Form of Senior Demand Note (incorporated by reference to Exhibit 4(b) to the Company&#146;s registration statement on Form S-1 dated December 27, 2007) *</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman">5. &nbsp;</P>
</TD><TD style="margin-top:0px" valign=top width=523.2 colspan=2><P style="margin:0px; padding-left:10.8px; font-family:Arial,Times New Roman">Opinion of Counsel Regarding Legality.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman">10.</P>
</TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(a)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">Loan and Security Agreement, dated September 11, 2009, by and among the Company and Wells Fargo Preferred Capital, Inc., as agent for lenders and a lender, and the other financial institutions from time to time party thereto (incorporated herein by reference to Exhibit 10.1 to Form 8-K dated September 17, 2009).</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(b)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">First Amendment, dated November 3, 2009, to that certain Loan and Security Agreement dated as of September 11, 2009, by and among the Company, Wells Fargo Preferred Capital, Inc., as agent for lenders, and the other financial institutions from time to time party thereto (incorporated herein by reference to Exhibit 10.1 to Form 8-K dated November 5, 2009).</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(c)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">Second Amendment, dated August 11, 2010, to that certain Loan and Security Agreement dated as of September 11, 2009, by and among the Company, Wells Fargo Preferred Capital, Inc., as agent for lenders, and the financial institutions a party thereto as lenders (incorporated herein by reference to Exhibit 10.1 to the Company&#146;s Form 10-Q for the quarterly period ended June 30, 2010).</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(d</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">Director Compensation Summary Term Sheet ** (incorporated by reference to Exhibit 10(d) to the Company&#146;s annual report on Form 10-K for the year ended December 31, 2009).</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(e)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">Form of the Company&#146;s 2011 Executive Bonus Plan ** (incorporated by reference to Exhibit 10(e) to the registrant&#146;s annual report on Form 10-K for the year ended December 31, 2010).</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman">11.</P>
</TD><TD style="margin-top:0px" valign=top width=523.2 colspan=2><P style="margin:0px; padding-left:10.8px; font-family:Arial,Times New Roman">Computation of Per Share Earnings (can be determined from the consolidated statements of income contained in the registrant's annual report on Form 10-K for the fiscal year ended December 31, 2010, incorporated herein by reference).</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman">12. </P>
</TD><TD style="margin-top:0px" valign=top width=523.2 colspan=2><P style="margin:0px; padding-left:10.8px; font-family:Arial,Times New Roman">Calculation of Ratio of Earnings to Fixed Charges.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman">21.</P>
</TD><TD style="margin-top:0px" valign=top width=523.2 colspan=2><P style="margin:0px; padding-left:10.8px; font-family:Arial,Times New Roman">Subsidiaries of the registrant (incorporated by reference to Exhibit 21 to the registrant's annual report on Form 10-K for the year ended December 31, 2010).</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman">23.</P>
</TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(a)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">Consent of Independent Registered Public Accounting Firm.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(b)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">Consent of Counsel (included in Exhibit 5). </P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman">24. </P>
</TD><TD style="margin-top:0px" valign=top width=523.2 colspan=2><P style="margin:0px; padding-left:10.8px; font-family:Arial,Times New Roman">Power of attorney (included on signature page hereto).</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">21</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
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<P style="margin:0px; page-break-before:always"><BR>
<BR>
<BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=37.2 /><TD width=54 /><TD width=54 /><TD width=469.2 /></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman">25.</P>
</TD><TD style="margin-top:0px" valign=top width=523.2 colspan=2><P style="margin:0px; padding-left:10.8px; font-family:Arial,Times New Roman">Form T-1 as to the eligibility and qualification of U.S. Bank National Association, Trustee, under the Indenture between the registrant and U.S. Bank National Association. </P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.4 colspan=4><P style="margin-top:0px; margin-bottom:-2px; width:18px; font-family:Arial,Times New Roman; float:left">*</P>
<P style="margin:0px; text-indent:-2px; font-family:Arial,Times New Roman">Previously filed.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.4 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman">** &nbsp;Management contract or compensatory plan or arrangement.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.4 colspan=4><P style="margin:0px; font-family:Arial,Times New Roman"><U>Item 17. &nbsp;&nbsp;&nbsp;Undertakings</U></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.4 colspan=4><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=577.2 colspan=3><P style="margin:0px; font-family:Arial,Times New Roman">The undersigned registrant hereby undertakes:</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(1)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: &nbsp;(i) &nbsp;to include any prospectus required by section 10(a)(3) of the Securities Act of 1933; &nbsp;(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. &nbsp;Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the <FONT style="font-family:(normal text),Times New Roman">&quot;</FONT><FONT style="font-family:Arial">Calculation of Registration Fee&quot; table in the effective registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;</FONT></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial" align=center>(2)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial">That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial" align=center>(3)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial">To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial" align=center>(4)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial">If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. &nbsp;Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, <I>provided</I> that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. &nbsp;Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.</P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">22</P>
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</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=37.2 /><TD width=54 /><TD width=54 /><TD width=469.2 /></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(5)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; width:22.8px; font-family:Arial,Times New Roman; float:left">i.</P>
<P style="margin:0px; text-indent:-2px; font-family:Arial,Times New Roman">If the registrant is relying on Rule 430B (&#167; 230.430B of this chapter):</P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; text-indent:22.8px; width:58.8px; font-family:Arial,Times New Roman; float:left">A.</P>
<P style="margin:0px; padding-left:58.8px; text-indent:-2px; font-family:Arial,Times New Roman">Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and</P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; text-indent:22.8px; width:58.8px; font-family:Arial,Times New Roman; float:left">B.</P>
<P style="margin:0px; padding-left:58.8px; text-indent:-2px; font-family:Arial,Times New Roman">Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. &nbsp;As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. &nbsp;Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or</P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; width:22.8px; font-family:Arial,Times New Roman; float:left">ii.</P>
<P style="margin:0px; padding-left:22.8px; text-indent:-2px; font-family:Arial,Times New Roman">If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. &nbsp;Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=37.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=54><P style="margin:0px; font-family:Arial,Times New Roman" align=center>(6)</P>
</TD><TD style="margin-top:0px" valign=top width=469.2><P style="margin:0px; font-family:Arial,Times New Roman">That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: &nbsp;The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; width:22.8px; font-family:Arial,Times New Roman; float:left">i.</P>
<P style="margin:0px; padding-left:22.8px; text-indent:-2px; font-family:Arial,Times New Roman">Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;</P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; width:22.8px; font-family:Arial,Times New Roman; float:left">ii.</P>
<P style="margin:0px; padding-left:22.8px; text-indent:-2px; font-family:Arial,Times New Roman">Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;</P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; width:22.8px; font-family:Arial,Times New Roman; float:left">iii.</P>
<P style="margin:0px; padding-left:22.8px; text-indent:-2px; font-family:Arial,Times New Roman">The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and</P>
<P style="margin:0px; clear:left"><BR></P>
<P style="margin-top:0px; margin-bottom:-2px; width:22.8px; font-family:Arial,Times New Roman; float:left">iv.</P>
<P style="margin:0px; padding-left:22.8px; text-indent:-2px; font-family:Arial,Times New Roman">Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.</P>
</TD></TR>
</TABLE>
<DIV style="width:600.067px"><P style="margin:0px"><BR></P>
</DIV><DIV style="width:600px"><P style="margin:0px; font-family:Arial,Times New Roman">The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. &nbsp;In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.</P>
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</DIV><DIV style="width:600.067px"><P style="margin:0px; font-family:Arial,Times New Roman">23</P>
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</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=614.933 /></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; font-family:Arial,Times New Roman" align=center><B>SIGNATURES</B></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; font-family:Arial,Times New Roman">Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Toccoa, State of Georgia, on the 21<SUP>st</SUP> day of April, 2011.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin-top:0px; margin-bottom:-2px; width:600.533px; font-family:Arial,Times New Roman; float:left" align=right>1<SUP>st</SUP> FRANKLIN FINANCIAL CORPORATION</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; font-family:Arial,Times New Roman" align=right><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ Ben F. Cheek, III&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; font-family:Arial,Times New Roman" align=right>Ben F. Cheek, III</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; font-family:Arial,Times New Roman" align=right>Chairman of the Board</P>
</TD></TR>
</TABLE>
<DIV style="width:600px"><P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=614.933 /></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; font-family:Arial,Times New Roman">KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ben F. Cheek, III and A. Roger Guimond, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and their substitutes, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and their substitutes, may lawfully do or cause to be done by virtue hereof.</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=614.933><P style="margin:0px; font-family:Arial,Times New Roman">Pursuant to the requirements of the Securities Act of 1933, this registration statement or amendment thereto has been signed by the following persons in the capacities and on the dates indicated:</P>
</TD></TR>
</TABLE>
<DIV style="width:600px"><P style="margin:0px"><BR></P>
</DIV><TABLE style="margin-top:0px; font-size:10pt" cellpadding=0 cellspacing=0><TR height=0 style="font-size:0"><TD width=169.2 /><TD width=288 /><TD width=157.6 /></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>Signature</U></P>
</TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>Title</U></P>
</TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center><U>Date</U></P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; font-family:Arial,Times New Roman"><U>&nbsp;/s/ Ben F. Cheek, III </U></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Ben F. Cheek, III</P>
</TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; font-family:Arial,Times New Roman">Chairman of the Board and Chief Executive Officer (Principal Executive Officer)</P>
</TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>April 21, 2011</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin-top:0px; margin-bottom:-2px; width:144px; font-family:Arial,Times New Roman; float:left"><U>&nbsp;/s/ Ben F. Cheek, IV</U></P>
<P style="margin:0px; text-indent:-2px; font-family:Arial,Times New Roman"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>
<P style="margin:0px; font-family:Arial,Times New Roman; clear:left">Ben F. Cheek. IV</P>
</TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; font-family:Arial,Times New Roman">Vice Chairman</P>
</TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>April 21, 2011</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin-top:0px; margin-bottom:-2px; width:144px; font-family:Arial,Times New Roman; float:left"><U>&nbsp;/s/ Virginia C. Herring</U></P>
<P style="margin:0px; text-indent:-2px; font-family:Arial,Times New Roman"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>
<P style="margin:0px; font-family:Arial,Times New Roman; clear:left">Virginia C. Herring</P>
</TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; font-family:Arial,Times New Roman">President</P>
</TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>April 21, 2011</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; font-family:Arial,Times New Roman"><U>&nbsp;/s/ A. Roger Guimond</U></P>
<P style="margin:0px; font-family:Arial,Times New Roman">A. Roger Guimond</P>
</TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; font-family:Arial,Times New Roman">Executive Vice President and Chief Financial Officer &nbsp;(Principal Financial Officer and Principal Accounting Officer); Director</P>
</TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>April 21, 2011</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; font-family:Arial,Times New Roman"><U>/s/ John G. Sample, Jr.</U></P>
<P style="margin:0px; font-family:Arial,Times New Roman">John G. Sample, Jr.</P>
</TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; font-family:Arial,Times New Roman">Director</P>
</TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>April 21, 2011</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; font-family:Arial,Times New Roman"><U>/s/ Dean Scarborough</U></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Dean Scarborough</P>
</TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; font-family:Arial,Times New Roman">Director</P>
</TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>April 21, 2011</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; font-family:Arial,Times New Roman"><U>/s/ Robert E. Thompson</U></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Robert E. Thompson</P>
</TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; font-family:Arial,Times New Roman">Director</P>
</TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>April 21, 2011</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; font-family:Arial,Times New Roman"><U>/s/ Keith Watson</U></P>
<P style="margin:0px; font-family:Arial,Times New Roman">Keith Watson</P>
</TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; font-family:Arial,Times New Roman">Director</P>
</TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; font-family:Arial,Times New Roman" align=center>April 21, 2011</P>
</TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=169.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=288><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=457.2 colspan=2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=157.6><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
</TABLE>
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<TR><TD style="margin-top:0px" valign=top width=614.4 colspan=2><P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial,Times New Roman" align=center><B>EXHIBIT INDEX</B></P>
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<TR><TD style="margin-top:0px" valign=top width=181.2><P style="margin:0px; font-family:Arial,Times New Roman"><U>Exhibit No.</U></P>
</TD><TD style="margin-top:0px" valign=top width=433.2><P style="margin:0px; font-family:Arial,Times New Roman"><U>Description</U></P>
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<TR><TD style="margin-top:0px" valign=top width=181.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=433.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=181.2><P style="margin:0px; font-family:Arial,Times New Roman">&nbsp;&nbsp;5.</P>
</TD><TD style="margin-top:0px" valign=top width=433.2><P style="margin:0px; font-family:Arial,Times New Roman">Opinion of counsel regarding validity</P>
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<TR><TD style="margin-top:0px" valign=top width=181.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=433.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=181.2><P style="margin:0px; font-family:Arial,Times New Roman">12.</P>
</TD><TD style="margin-top:0px" valign=top width=433.2><P style="margin:0px; font-family:Arial,Times New Roman">Calculation of Ratio of Earnings to Fixed Charges</P>
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<TR><TD style="margin-top:0px" valign=top width=181.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=433.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=181.2><P style="margin:0px; font-family:Arial,Times New Roman">23.</P>
</TD><TD style="margin-top:0px" valign=top width=433.2><P style="margin:0px; font-family:Arial,Times New Roman">Consent of Independent Registered Public Accounting Firm</P>
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<TR><TD style="margin-top:0px" valign=top width=181.2><P style="margin:0px; padding:0px">&nbsp;</P></TD><TD style="margin-top:0px" valign=top width=433.2><P style="margin:0px; padding:0px">&nbsp;</P></TD></TR>
<TR><TD style="margin-top:0px" valign=top width=181.2><P style="margin:0px; font-family:Arial,Times New Roman">25.</P>
</TD><TD style="margin-top:0px" valign=top width=433.2><P style="margin:0px; font-family:Arial,Times New Roman" align=justify>Form T-1 as to the eligibility and qualification of U.S. Bank National Association, Trustee, under the Indenture between the registrant and U.S. Bank National Association. </P>
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[{"type": "S-1", "sequence": "1", "filename": "registrationstatementsdnedga.htm", "description": "FORM S-1 REGISTRATION STATEMENT", "secsgml_size_bytes": 201704}]
{"company-data": {"conformed-name": "1st FRANKLIN FINANCIAL CORP", "cik": "0000038723", "assigned-sic": "6141", "irs-number": "580521233", "state-of-incorporation": "GA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-173685", "film-number": "11775877"}, "business-address": {"street1": "135 E TUGALO ST", "street2": "P O BOX 880", "city": "TOCCOA", "state": "GA", "zip": "30577", "phone": "4048867571"}, "mail-address": {"street1": "135 EAST TUGALO STREET", "street2": "PO  BOX  880", "city": "TOCCOA", "state": "GA", "zip": "30577"}, "former-company": [{"former-conformed-name": "FIRST FRANKLIN FINANCIAL CORP", "date-changed": "19920703"}, {"former-conformed-name": "FRANKLIN DISCOUNT CO", "date-changed": "19840115"}]}
_
Registration No.
333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
-----------------------
Form S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------
1
st
FRANKLIN FINANCIAL CORPORATION
A Georgia Corporation
6141
(Primary Standard Industrial Classification Code Number)
I.R.S. Employer No. 58-0521233
135 East Tugalo Street
Post Office Box 880
Toccoa, Georgia  30577
(706) 886-7571
-----------------------
Agent for Service:
Copy To:
A. Roger Guimond
135 East Tugalo Street
Post Office Box 880
Toccoa, Georgia  30577
(706) 886-7571
Mark L. Hanson, Esq.
Jones Day
1420 Peachtree Street, N.E.
Suite 800
Atlanta, Georgia  30309
(404) 521-3939
-----------------------
Approximate date of commencement of proposed sale to the public:  From time to time
commencing as soon as possible after the registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  (X)
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  (  )
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    (  )
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    (  )
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated or a smaller reporting company.  See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.  (Check one):
Large Accelerated Filer  ___
Accelerated Filer  ___
Non Accelerated Filer
X
Smaller Reporting Company ___
-----------------------
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 2011
Title of each class of securities to be registered
Amount to be registered
Proposed maximum offering price per unit
Proposed maximum aggregate offering price
Amount of registration fee (1)
Senior Demand Notes
$800,000,000
(2)
$800,000,000
$92,880
(1)
Calculated in accordance with rule 457(c) by multiplying the maximum aggregate offering price by .00011610.
(2)
The Senior Demand Notes will be issued in denominations selected by the purchasers thereof, subject to minimum denominations established by the Company.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
1
st
FRANKLIN FINANCIAL CORPORATION
$800,000,000 SENIOR DEMAND NOTES
_________________________________________________
1
st
Franklin Financial Corporation is offering to sell Senior Demand Notes on a continuous basis.  Each Senior Demand Note is payable on demand and is issued and sold in an initial denomination of $25.00 or more, and in any amounts thereafter.  The principal amount of each Senior Demand Note at any time is equal to all amounts invested in such Senior Demand Note, together with accrued and unpaid interest, less redemptions.  The Senior Demand Notes have no stated maturity.  They are payable in whole or in part at any time upon the request of a holder, and are callable by us upon written notice at any time without premium.
The Senior Demand Notes are unsecured obligations of the Company and will be issued under an Indenture between us and U.S. Bank National Association, as Trustee.
The interest rate payable on Senior Demand Notes is a variable rate, compounded daily, and will depend upon a holder's then-current daily balance of Senior Demand Notes.  We may establish, in our discretion, separate interest rates for Senior Demand Notes with daily balances from $1.00 to $2,499.99; $2,500.00 to $9,999.99; $10,000.00 to $49,999.99; $50,000.00 to $99,999.99; and $100,000.00 and over.  When an interest rate is established for each range of balances, it becomes effective for and applied to all Senior Demand Notes with a current daily balance within that range, whether existing or newly issued.  These interest rates may be the same or different for each range of balances, and we may increase or decrease the interest rate for any range independently of the others without notice to you after the date of investment.
We will publish the most recently determined interest rate for each balance range in a newspaper of general circulation in Toccoa, Georgia, the location of the Company's principal place of business, and on our web site at http://www.1ffc.com.  The information on our website is not a part of, or incorporated by reference into, this prospectus.  You can also obtain a list of the most recently determined interest rates by calling or visiting our executive offices in Toccoa, Georgia.  A prospectus supplement setting forth the most recently determined interest rates will be filed with the SEC, as appropriate.
We are offering the Senior Demand Notes without an underwriter.  We do not have to sell any minimum amount of Senior Demand Notes to accept and use the proceeds of this offering.  We cannot assure you that all or any portion of the Senior Demand Notes we are offering will be sold.  We have not made any arrangement to place any of the proceeds from this offering in an escrow, trust or similar account.  Therefore, you cannot be guaranteed of the return of your investment.  The Senior Demand Notes are not listed on any securities exchange and there is no public trading market for the Senior Demand Notes.  We have the right to reject any subscription for Senior Demand Notes, in whole or in part, for any reason.
You should read this prospectus and any applicable prospectus supplement carefully before you decide whether to invest in Senior Demand Notes.
Investing in Senior Demand Notes involves risks.  See "Risk Factors" beginning on page 8 for a description of these risks.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the Senior Demand Notes, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
1
st
FRANKLIN FINANCIAL CORPORATION IS NOT A BANK.  THE SENIOR DEMAND NOTES ARE NOT BANK DEPOSITS OR SIMILAR OBLIGATIONS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR THE SECURITIES INVESTOR PROTECTION CORPORATION OR ANY OTHER FEDERAL OR STATE AGENCY.
The Trustee has not provided or approved any information in this prospectus, takes no responsibility for any information contained in this prospectus and makes no representations as to the contents of this prospectus.
Price to
Public
Underwriting
Discounts and Commissions (1)
Proceeds to
Company (2)
Per Senior Demand
Note
100%
None
100%
Total
$800,000,000
None
$800,000,000
(1)
The Senior Demand Notes are not being offered or sold pursuant to any underwriting or similar agreement, and no commissions or other remuneration will be paid in connection with their sale.  The Senior Demand Notes will be sold at face value.
(2)
Before deduction of our expenses, estimated at $148,480.
Subject to completion.  The date of this prospectus is _______ __, 2011
.
2
You should rely only on the information contained or incorporated by reference in this prospectus.  We have not authorized anyone to provide you with any different information. You should not assume that the information contained or incorporated by reference in this prospectus is accurate as of any date other than as of the date of this prospectus or the date the documents incorporated by reference were filed with the SEC.  We are offering to sell, and seeking offers to buy, the securities registered by this prospectus only in jurisdictions where these offers and sales are permitted.
TABLE OF CONTENTS
Prospectus Summary
4
Risk Factors
8
Ratios of Earnings to Fixed Charges
10
Use of Proceeds
10
Plan of Distribution
10
Forward-Looking Information
11
Description of the Senior Demand Notes
11
Legal Matters
17
Experts
17
Where You Can Find More Information
17
Incorporation of Certain Information by Reference
17
Reports to Security Holders
18
3
PROSPECTUS SUMMARY
The following summary highlights some of the information from this prospectus and may not contain all of the information that may be important to you.  Before deciding whether to invest in Senior Demand Notes, you should read the entire prospectus, and the information that is incorporated by reference into the prospectus, carefully.
1
st
FRANKLIN FINANCIAL CORPORATION
1
st
Franklin Financial Corporation has been engaged in the consumer finance business since 1941, particularly in making consumer loans to individuals in relatively small amounts for short periods of time. Other lending activities include the purchase of sales finance contracts from dealers and the making of first and second mortgage loans on real estate to homeowners.  As of December 31, 2010, our business was operated through a network of 252 branch offices located in Alabama, Georgia, Louisiana, Mississippi, South Carolina and Tennessee.
We fund our loans through a combination of the issuance of short and longer-term debt securities, including Senior Demand Notes and our variable rate subordinated debentures, as well as with borrowings from time to time under our revolving credit facility.  Our credit facility provides for unsecured borrowings of up to $100.0 million, or a lesser amount as determined based on our then-applicable borrowing base (as defined in our credit agreement).  As of December 31, 2010, we had $99.1 million in availability under our credit facility.  This credit facility expires on September 11, 2013.
We also offer optional credit insurance coverage to our customers when making a loan.  This coverage may include credit life insurance, credit accident and health 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 credit accident and health coverage to help continue loan payments if the customer becomes sick or disabled for an extended period of time.  Customers may also choose credit property 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 reinsure the insurance coverage on our customers written on behalf of this non-affiliated insurance company.
1
st
FRANKLIN FINANCIAL CORPORATION IS NOT A BANK.  THE SENIOR DEMAND NOTES ARE NOT BANK DEPOSITS OR SIMILAR OBLIGATIONS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR THE SECURITIES INVESTOR PROTECTION CORPORATION OR ANY OTHER FEDERAL OR STATE AGENCY.
Our principal executive office is located at 135 East Tugalo Street, Toccoa, Georgia 30577, and our phone number at that address is (706) 886-7571 or (800) 282-0709 (within Georgia) or (800) 700-7943 (outside of Georgia).
SUMMARY DESCRIPTION OF THE SENIOR DEMAND NOTES
Securities Offered
We are offering to sell up to $800,000,000 in aggregate principal amount of our Senior Demand Notes.
Denominations
Senior Demand Notes will be sold in an initial amount of not less than $25.00 and in any amount thereafter.
Principal Amount
The principal amount of each Senior Demand Note at any time is equal to all amounts invested in such Senior Demand Note, together with accrued interest, less redemptions.
4
Maturity
Senior Demand Notes have no stated maturity.  They are payable upon demand of the holder.
Interest Rate
The interest rate is variable, compounded daily and set from time to time by us.  The interest rate may be, but is not required to be, different for each range of balances of Senior Demand Notes.  The interest rate may vary based on the holder's daily balance of his/her Senior Demand Notes within the following ranges: $1.00 to $2,499.99; $2,500.00 to $9,999.99; $10,000.00 to $49,999.99; $50,000.00 to $99,999.99; and $100,000.00 and over.
Compound Interest
Interest is compounded daily.  Examples of annualized effective yields for daily compounded rates are set forth below:
Example
Nominal
Rates
Effective
Annual
Rates
2.50%
2.53%
2.75
2.79
3.00
3.05
3.25
3.30
3.50
3.56
3.75
3.82
4.00
4.08
4.50
4.60
5.00
5.13
These are only examples of interest rates.  The actual rate of interest earned on a Senior Demand Note may differ, and may be higher or lower, depending on the balance thereof and the rates determined by us, in our discretion, from time to time.
Interest Rate Adjustment
The interest rate may be, but is not required to be, different for each range of balances of Senior Demand Notes.  When we periodically establish an interest rate for a range of balances, it becomes effective for all Senior Demand Notes in that range of balances, whether existing or newly issued.  The interest rate on a Senior Demand Note may also change if the daily current balance of Senior Demand Notes owned by a holder changes to a different range of balances.
Notification of Interest Rate Adjustment
A holder of Senior Demand Notes will not be expressly notified of changes in any applicable interest rate; then-current interest rates will be available by calling or visiting our executive offices, or on our website.  We will also file a notice of any interest rate change with the SEC in a prospectus supplement, as appropriate.
Redemption by Holder
Senior Demand Notes are payable or redeemable at any time upon request.  We will honor partial redemption requests so long as the remaining outstanding balance is at least $1.00.  Redemptions can be requested in person or by mail at our executive office, by electronic means or by use of the check redemption option described below.
5
Check Redemption Option
In certain instances, a holder of Senior Demand Notes can redeem all or a part of his or her Senior Demand Notes by writing checks against such balance.
Minimum Balance Requirement to Utilize Check Redemption Option
The check redemption option is only available to holders of Senior Demand Notes who maintain a minimum balance invested with us (in Senior Demand Notes or other of our securities) of $500.00.  If and when a holder's aggregate balance falls below $500.00, we may suspend his or her check writing privileges.
Check Writing and Senior Demand Note Redemptions
Checks may be written in any amount and made payable to anyone, subject to the minimum balance limitation.  Each honored check is considered to be a Senior Demand Note redemption in an amount equal to that paid by the check.
Checks that Exceed the Senior Demand Note Balance or Would Reduce the Aggregate Invested Balance Below $500.00
If a check is presented to us for payment and it either exceeds the balance of a holder's Senior Demand Notes or would reduce the holder's aggregate invested balance with us below $500.00, it may be returned unpaid.  If this occurs, the holder will be assessed a return charge.
Redemption by 1
st
Franklin
1
st
Franklin may redeem the Senior Demand Notes at any time upon at least 30, but not more than 60, days' written notice to the holder for a price equal to the principal amount of the Senior Demand Notes plus accrued and unpaid interest up to the date of redemption.
Form of Investment
Senior Demand Notes may be purchased by cash, check or electronic transfer.
Trustee
Senior Demand Notes will be issued under an indenture between us and U.S. Bank National Association, as Trustee.
6
SUMMARY SELECTED FINANCIAL INFORMATION
The tables below set forth certain summary selected consolidated financial data of 1
st
Franklin.  This information is only a summary and you should read it together with 1
st
Franklin's consolidated historical financial statements and the related notes contained in our annual report on Form 10-K incorporated by reference in this prospectus.  These historical results are not necessarily indicative of our results or financial condition to be expected in the future.
Year Ended December 31
2010
2009
2008
2007
2006
(In thousands)
Selected Income Statement Data:
Revenues
$145,461
$139,846
$138,610
$130,297
$115,042
Net Interest Income
90,711
85,655
83,484
75,669
69,632
Interest Expense
12,439
13,682
14,728
15,746
11,994
Provision for Loan Losses
20,907
29,302
25,725
21,434
19,109
Income Before Income Taxes
23,423
11,050
13,761
15,754
11,023
Net Income
20,683
8,373
10,665
12,205
7,672
As of December 31
2010
2009
2008
2007
2006
(In thousands)
Selected Balance Sheet Data:
Net Loans
$294,974
$279,093
$285,580
$276,655
$249,862
Total Assets
422,064
396,425
389,422
402,454
362,567
Senior Debt
208,492
186,849
169,672
182,373
181,474
Subordinated Debt
59,780
74,884
86,605
91,966
67,190
Stockholders' Equity
132,710
117,115
116,236
109,841
98,365
As of December 31
2010
2009
2008
2007
2006
Other Data:
Ratio of Earnings to
Fixed Charges
2.67
1.72
1.86
1.92
1.83
Ratio of Total Liabilities
To Stockholders' Equity
2.18
2.38
2.35
2.66
2.69
7
RISK FACTORS
The risks described below set forth known material risks of investing in Senior Demand Notes.  You should carefully consider the risks described below, as well as the other information in this prospectus or incorporated by reference into this prospectus, in particular the risk factors relating to the Company included in our annual report on Form 10-K for the year ended December 31, 2010 before deciding whether to invest in Senior Demand Notes.  If any of the situations described in any of these risks actually occur, or if any risks or uncertainties not presently known to us occurs, our business, financial condition or results of operations could be materially adversely affected. In any of these events, you may lose part or all of your investment.
RISK FACTORS RELATING TO THE SENIOR DEMAND NOTES
The Senior Demand Notes may not be a suitable investment for you.
The Senior Demand Notes may not be a suitable investment for you, and we advise you to consult your investment, tax and other professional financial advisors prior to deciding whether to invest in Senior Demand Notes.  The characteristics of the Senior Demand Notes, including the features and variable interest rate, may not satisfy your investment objectives.  The Senior Demand Notes may not be a suitable investment for you based on your ability to withstand a loss of interest or principal or other aspects of your financial situation, including your income, net worth, financial needs, investment risk profile, return objectives, investment experience and other factors.  Before deciding whether to invest in Senior Demand Notes, you should consider your investment allocation with respect to the amount of your contemplated investment in the Senior Demand Notes in relation to your other investment holdings and the diversity of those holdings.
Because the Senior Demand Notes will have no sinking fund, security, insurance or guarantee, you may lose all or part of your investment in the Senior Demand Notes if we do not have enough cash to pay the Senior Demand Notes.
There is no sinking fund, security, insurance or guarantee of our obligation to make payments on the Senior Demand Notes.  The Senior Demand Notes are not secured by any of our assets.  We will not contribute funds to a separate account, commonly known as a sinking fund, to make any interest or principal payments on the Senior Demand Notes.  The Senior Demand Notes are not certificates of deposit or similar obligations of, and are not guaranteed or insured by, any depository institution, the Federal Deposit Insurance Corporation ("FDIC"), the Securities Investor Protection Corporation ("SIPC"), or any other federal or state agency.  Therefore, if you invest in the Senior Demand Notes, you will have to rely only on our cash flow from operations and other sources of funds for repayment of principal at maturity or redemption and for payment of interest when due. If our cash flow from operations and other sources of funds are not sufficient to pay the Senior Demand Notes, then you may lose all or part of your investment.
The Senior Demand Notes will be effectively subordinated to any secured indebtedness.
The Senior Demand Notes are unsecured, and therefore are effectively subordinated to any secured debt we may issue in the future to the extent of the value of the assets securing such indebtedness.  While we do not presently have any secured indebtedness outstanding, the Senior Demand Notes do not place any restrictions on our ability to incur any such indebtedness.  In the event we become subject to a bankruptcy, liquidation, dissolution, reorganization or similar preceding, the holders of any secured indebtedness would be entitled to proceed against the collateral that secures the secured indebtedness, and that collateral, to the extent not sufficient to provide for the repayment of all such secured indebtedness may not be available for satisfaction of any amounts owed under the Senior Demand Notes.
8
If we incur indebtedness that is secured or substantially more indebtedness that is equal in priority with respect to the right of repayment to the Senior Demand Notes, our ability to repay the Senior Demand Notes may be impaired.
As of December 31, 2010 we had $0.9 million of indebtedness outstanding on a secured basis with a higher priority with respect to right of repayment to the Senior Demand Notes.  Also at December 31, 2010 we had $167.2 million in indebtedness outstanding that was equal in priority with respect to the right of repayment to the Senior Demand Notes.  Subject to any limitations that may be contained in any credit agreements that we may be party to from time to time, we may also incur substantial additional indebtedness, some or all of which may be secured by our assets.  This indebtedness may be secured or be equal in payment preference to the Senior Demand Notes. If we incur additional indebtedness, it may become more difficult to meet our repayment obligations, and the risks to holders of Senior Demand Notes could increase.
Our management has broad discretion over the use of proceeds from this offering.
We expect to use the proceeds from this offering for general corporate purposes, which may include the repayment of indebtedness under any credit facility to which we are, or become, a party, or our variable rate senior and subordinated debt incurred from time to time, as any of it becomes due.  Because no specific allocation of the proceeds can be or has been made, our management will have broad discretion in determining how the proceeds of the offering will be used.
Because there are only limited restrictions on our activities under the Senior Demand Notes, you will have only limited protections.
In comparison to the restrictive covenants that are imposed on us by our existing credit agreement and that we expect would be imposed on us by any credit facility we may enter into in the future, the indenture that governs the Senior Demand Notes contains only relatively minimal restrictions on our activities.  Because there are only very limited restrictions and limited events of default under the indenture, we will not be restricted thereunder from, among other activities, issuing additional debt that may be secured or share ratably in right of repayment to the Senior Demand Notes.  In either event, you may have more difficulty recovering part or all of your investment.  Further, if we default on any payment on the Senior Demand Notes or otherwise under the indenture, you will likely have to rely on the Trustee to exercise remedies on your behalf under the terms of the indenture.  You may not be able to seek remedies against us directly.
Because we may redeem the Senior Demand Notes at any time, you may be subject to reinvestment risk.
We have the right to redeem any Senior Demand Note at any time upon at least 30 days' written notice to you.  The Senior Demand Notes would be redeemed at 100% of the principal amount plus accrued but unpaid interest up to the redemption date.  Any such redemption may have the effect of reducing the income or return on investment that you would otherwise expect to receive on an investment in the Senior Demand Notes.  If this occurs, you may not be able to reinvest the proceeds at an interest rate comparable to the rate paid on the Senior Demand Notes.
No public market exists in which to transfer Senior Demand Notes.
An investor may redeem any or all of his or her Senior Demand Notes as described in this prospectus.  However, no public trading or secondary market for the Senior Demand Notes currently exists, or ever will exist, and, consequently, there is no public market to provide liquidity for any sale or transfer of, or to provide any valuation to help investors evaluate the appropriateness of the interest rates offered in light of the risks to be assumed in connection with an investment in the Senior Demand Notes.
9
RATIOS OF EARNINGS TO FIXED CHARGES
For purposes of calculating the ratios of earnings to fixed charges below, we calculated earnings by adding fixed charges to income before income taxes.  Fixed charges consist of the interest on our indebtedness and the amount which we believe is representative of the interest factor component of our rent expense.
December 31
2010
2009
2008
2007
2006
2.67
1.72
1.86
1.92
1.83
USE OF PROCEEDS
Net proceeds from sales of the Senior Demand Notes, after payment of applicable expenses, will be placed in our general treasury.  No segregation of proceeds will be made, but we expect to use the net proceeds for general corporate purposes, which may include the repayment or redemption, from time to time, of outstanding senior or subordinated securities as those securities mature or as such debtholders otherwise request redemption.  Our subordinated securities are variable rate subordinated debentures, which are offered and sold from time to time in varying principal amounts and at various interest rates.  We cannot presently estimate the amount of proceeds that will be used to make mandatory redemption payments, as this will vary depending upon, among other things, the amount of securities outstanding, the maturity dates and applicable interest rates, which vary from time to time, and related investor decisions outside of our control.  Any proceeds not used for redemptions or repayments as described above may be used to make consumer finance loans in the ordinary course of our business, to repay interest or principal on bank borrowings outstanding at any time, to repay other debts outstanding as those amounts come due, and for other general operating purposes.
PLAN OF DISTRIBUTION
The Senior Demand Notes will be offered directly to the public by us.  No selling commissions or other remuneration will be paid directly or indirectly to any of our officers, directors or employees in connection with the sale of the Senior Demand Notes.  All proceeds from sales of Senior Demand Notes will be placed in our general treasury as sales are made, as described in the "Use of Proceeds" section of this prospectus.  All offering expenses, including registration fees, printing, advertising, postage and professional fees, will be paid by us.
There is no assurance that any or all of the Senior Demand Notes offered by this prospectus will be sold.  This offering, however, is not made contingent upon any minimum amount of Senior Demand Notes being sold.
The Senior Demand Notes will be sold and redeemed at our executive office located at 135 East Tugalo Street, Post Office Box 880, Toccoa, Georgia 30577.  The telephone number is (706) 886-7571 or (800) 282-0709 (within Georgia) or (800) 700-7943 (outside of Georgia).
10
FORWARD-LOOKING INFORMATION
This prospectus, and the information incorporated by reference in it, contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Such forward-looking statements may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by those forward-looking statements. Such factors include, but are not limited to, the known risks we face that are described in the "Risk Factors" section of this prospectus and in our annual report on Form 10-K for the year ended December 31, 2010 which is incorporated by reference in this prospectus, and as otherwise may be described in our periodic reports that we file with the SEC from time to time. If any of the events described in the "Risk Factors" section or included elsewhere or incorporated by reference into this prospectus occur, they could impact our ability to pay the interest and principal on the Senior Demand Notes, as well as have an adverse effect on our business, financial condition and results of operations.  We undertake no obligation to update any forward-looking statements.
`
DESCRIPTION OF THE SENIOR DEMAND NOTES
General
The Senior Demand Notes we are offering will represent senior, unsecured debt obligations of 1
st
Franklin.  The Senior Demand Notes will be issued under an Indenture, dated April 13, 2008, between us and U.S. Bank National Association, as Trustee.  The terms and conditions of the Senior Demand Notes include those set out in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939.  The following is a summary of the material provisions of the Senior Demand Notes and the Indenture.  For a complete understanding of the Senior Demand Notes, you should review the definitive terms and conditions contained in the Indenture, which include definitions of certain terms used below.  A copy of the form of Indenture has been filed with the SEC as an exhibit to the registration statement of which this prospectus is a part and is available from us at no charge upon request.
The Senior Demand Notes are direct obligations of 1
st
Franklin, but are not secured by any collateral or lien.  The Senior Demand Notes will be identical except for the issue date and interest rate.  The Senior Demand Notes have no stated maturity, will not be subject to any sinking fund and will be payable or redeemable at the option of the holder thereof at any time as described below.  The Senior Demand Notes will rank equally and ratably with all of our other senior, unsecured indebtedness.
In addition, the Senior Demand Notes are not bank certificates of deposit and are not insured by the Federal Deposit Insurance Corporation (the "FDIC"), the Securities Investor Protection Corporation (the "SPIC") or any other federal or state agency or company. Investors must rely solely on our ability to repay the obligations under the Senior Demand Notes.
Sale and Issuance
All funds you invest in Senior Demand Notes, together with all accrued interest, and any redemptions, will be recorded on a register maintained by us or the Trustee.  We will act as registrar and paying agent unless otherwise designated.
Senior Demand Notes will be issued and sold in an initial amount of not less than $25.00 and in any amount thereafter, and will be dated the date of purchase.  We may, at our discretion, limit the maximum amount any investor or related investors may maintain in outstanding Senior Demand Notes at any one time.
Principal Amount
The principal amount of each Senior Demand Note at any time is equal to all amounts invested in such Senior Demand Note, together with accrued interest, less redemptions.
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Interest
The interest rate payable on any Senior Demand Note is a variable rate, compounded daily.  We may establish, from time to time, separate interest rates for the following ranges: from $1.00 to $2,499.99; $2,500.00 to $9,999.99; $10,000.00 to $49,999.99; $50,000.00 to $99,999.99; and $100,000.00 and over.  Interest rate determinations are made by management after evaluation of market conditions for investments with similar characteristics, such as investment amount, redemption rights and risk profile.  When an interest rate is established for each range of balances, it becomes effective for and applied to all Senior Demand Notes within that range, whether existing or newly issued.  These interest rates may, but are not required to be, different for each range of balances, and we may increase or decrease the interest rate for any range independently of the others without express notice to holders after the date of investment.  The interest rate on any Senior Demand Note may also change if the daily balance of that Senior Demand Note changes to a different range of balances.
A holder of Senior Demand Notes will not be expressly notified of changes from time to time in the interest rates.  The interest rates being paid on the Senior Demand Notes at any time may be obtained by calling or visiting our executive offices or by logging onto our website at
http://www.1ffc.com
.  The information on our website is not a part of, or incorporated by reference into, this prospectus.  We will also publish the most recently determined interest rate for each balance range weekly in a newspaper of general circulation in Toccoa, Georgia, the location of the Company's principal place of business.  We will also file a notice of any interest rate change with the SEC in a supplement to this prospectus, as appropriate.
How to Invest
General
.  You may invest in Senior Demand Notes during normal business hours at our executive offices in Toccoa, Georgia, by cash, check or electronic transfer.  Each investment in Senior Demand Notes must be accompanied by properly completed investment documentation.  The minimum initial amount which you may invest is $25.00.  There is no required minimum amount for subsequent investments.  All investments must be made in U.S. dollars.  Investments in Senior Demand Notes may be made individually, jointly or as custodial or trust investments and may be made by individuals, corporations, partnerships, firms or associations, provided that in each case the investor meets certain requirements.
Investments by Cash
.  You may invest in Senior Demand Notes by delivering cash to us at our executive offices located at 135 East Tugalo Street, Toccoa, Georgia 30577.
Investments by Check.
You may invest in Senior Demand Notes by check delivered to our executive offices located at 135 East Tugalo Street, Toccoa, Georgia 30577.  Checks must be drawn in U.S. dollars on a U.S. bank.
Investments by Electronic Transfer
.  You may invest in Senior Demand Notes by wire transfer or automated clearing house transfer of funds to 1
st
Franklin Financial Corporation's account at Community Bank and Trust.  For all investments through these electronic transfers, the transfer instructions must include the name "1
st
Franklin Financial Corporation, Senior Demand Notes" and your name, address, and investment number.
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Investments in Senior Demand Notes made with cash begin to accrue interest as of the date the investment is made at our executive offices.  Investments made by check begin to accrue interest the first business day after the date of receipt at our executive offices.  Investments made by electronic transfer will be invested in Senior Demand Notes, and will begin accruing interest, on the day credited to the account of 1
st
Franklin Financial Corporation.  Transferring funds electronically by means other than wire transfer or automated clearing house transfer may result in a delay in crediting the investment to your Senior Demand Note investment account.  Neither we nor Community Bank & Trust, a division of South Carolina Bank & Trust NA ("Community Bank & Trust") will be responsible for delays in funds transfer systems.
We reserve the right to reject any investment application and return the funds to a potential investor for any reason, including if any of the foregoing investments are not preceded or accompanied by documentation satisfactory to us to establish that the potential investor meets any applicable eligibility criteria.  Copies of this documentation are available at our executive offices, or you can request that it be sent to you by calling us at (706) 886-7571 or (800) 282-0709 (within Georgia) or (800) 700-7943 (outside of Georgia).
Redemption by the Holder
Subject to any limitations described in "Subordination" below, we will redeem any Senior Demand Notes upon request of a holder in an amount up to the outstanding principal balance plus any unpaid interest at the time of redemption.  We will also make partial redemptions as long as the balance remaining on any Senior Demand Notes is at least $1.00.  All redemption requests must be made either in person, by mail, or by electronic means to, our executive offices or by the check redemption option as described below.  Redemption requests made in person or by mail must be accompanied by properly completed documentation.
Check and Electronic Redemption Options
At the option of a holder of Senior Demand Notes, the holder may redeem Senior Demand Notes by writing checks, or by electronic means, drawn against the holder's Senior Demand Note balance and payable through Community Bank & Trust.  The check and electronic redemption options are available only to those persons who maintain a minimum investment balance with us of $500.00 or more.  This investment may be maintained in Senior Demand Notes and/or any other of our debt securities.  If at any time this minimum required balance declines to less than $500.00, all check writing and electronic redemption privileges and other services related to these redemption options may be immediately suspended by us until the balance equals or exceeds $500.00.
A Senior Demand Note holder who elects the check redemption option will receive an initial supply of blank checks from us at no charge.  Permanent checks must be purchased by the holder at his expense from a check supplier of the holder's choice.  Checks may be used at any time and made payable to anyone for any amount, subject to the $500.00 minimum balance requirement.  Each check is considered to be a Senior Demand Note redemption in an amount equal to the amount of the check paid.  Subject to a service charge, a holder may stop payment of a check by timely notifying us in writing, but we are not liable for failure to stop any payment.
Checks which are presented to us for payment and which exceed the holder's Senior Demand Note balance or which would reduce that holder's minimum balance below $500.00 may be returned unpaid by us, and the holder will be assessed a returned check service fee.
A Senior Demand Note holder who elects the check redemption option also has the option to enter into a separate Overdraft Protection Agreement, Security Agreement and Assignment.  Under this agreement, a holder of Senior Demand Notes assigns debt securities to us as collateral for overdraft payments.  We will then pay any overdrafts to the extent of the protection amount set out in this agreement.  This agreement contains customary fees for this service.  Amounts paid by us under this agreement are loans and are subject to repayment with interest, as well as other finance charges described in such agreement.
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To use the check redemption option, a holder must enter into a Senior Demand Note Check Redemption Agreement with us.  This agreement sets forth the provisions and charges associated with the check redemption option.  A copy of this agreement is available from us at no charge upon request.  Either the Senior Demand Note holder or the Company may terminate this agreement at any time.  Additionally, any of the terms of this agreement may be amended by us upon 30 days' prior written notice.  Upon termination of this agreement, a Senior Demand Note holder may continue to redeem Senior Demand Notes in person or by mail as provided above without penalty.  The Senior Demand Note holder, however, will remain liable for any unpaid checks or other charges in connection with this agreement.
If Senior Demand Notes are held jointly by more than one owner, only one holder whose name appears on the investment register must sign a redemption check unless otherwise specified on the investment application or subsequent written request and so indicated on the checks.  The amount of the Senior Demand Notes to be redeemed by check will continue accruing interest until the redemption check is presented for payment.
The check and electronic redemption options are optional redemption methods for redeeming the Senior Demand Notes.  See "Redemption by the Holder."  These options are strictly at the request of the holder and do not change any of the terms or provisions of the Senior Demand Notes as described herein.  The Senior Demand Notes, including those redeemed under these options, are not bank deposits or bank obligations and are not insured by the FDIC, the SIPC, or any other federal or state agency.
Redemption by the Company
We can call the Senior Demand Notes as a whole, or individually, for redemption at any time at a price equal to the principal amount plus any unpaid interest thereon at the time of redemption.  Notice of such redemption will be given by mail to the holder not less than 30 nor more than 60 days prior to the date fixed for redemption.
Account Fees and Charges
Any fees and expenses associated with the Senior Demand Notes, and the check redemption option, will be deducted from a Senior Demand Note holder's balance and will be treated as a redemption of the corresponding amount of Senior Demand Notes.  Any fees and charges will appear on the appropriate account statement.  See "Statements to Holders".
Statements to Holders
Either we or the Trustee will maintain a register of each holder's investments in Senior Demand Notes.  We will maintain the register unless otherwise designated.  The principal amount of each Senior Demand Note at any time is equal to all amounts invested in such Senior Demand Note, together with accrued interest, less redemptions.  We will send to each holder, at least quarterly, a statement showing the holder's Senior Demand Note balance as it appears on our books.  Such statement will contain a summary of all transactions relating to that holder's Senior Demand Notes during the applicable period, including beginning and ending aggregate principal amounts, accrued interest and redemptions.  Holders who have elected to use the Check Redemption Option will receive a monthly statement listing all checks paid during the month and setting forth check numbers, amounts, dates of payments and any other transactions, such as additional investments, interest earned and service charges which were posted in the investor's account during the month.
Canceled checks are not returned to the holder.  Investors may request laser image copies of canceled checks to be included with their monthly statements for a nominal fee.  Microfilm copies and/or laser stored images of canceled checks will be retained by us and, upon payment of any applicable copy charge, a holder may obtain a copy of any individual check at any time.
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Subordination
Payment of the principal and interest on the Senior Demand Notes is subordinate in right of payment to all of our secured debt to the extent of the value of the assets securing such indebtedness.  The term "secured debt" means all of our indebtedness outstanding at any time that by its terms is secured by various assets.  At December 31, 2010, we had $0.9 million in secured debt outstanding, and the Indenture does not restrict our right to increase our secured debt in the future.  No sinking fund will be established to provide for payments on the Senior Demand Notes.
In the event that the Senior Demand Notes are declared due and payable because of a default under the Indenture, a holder of a Senior Demand Note will be entitled to payment only after all principal and interest on all secured debt has been paid, to the extent of the value of the assets securing such indebtedness.  Likewise, in the event of our insolvency, bankruptcy or liquidation, or other similar proceeding relating to 1
st
Franklin or to its creditors, as such, or to our property, or in the event of any dissolution or other winding up, whether or not involving insolvency or bankruptcy, then the holders of any secured debt would be entitled to receive payment in full of all principal and interest due to them, to the extent of the value of the assets securing such indebtedness, before the holders of the Senior Demand Notes would be entitled to receive any payments.
Indenture and Trustee
The Senior Demand Notes will be issued under an Indenture, dated April 3, 2008, between us and U.S. Bank National Association, as Trustee.  A copy of the form of this Indenture has been filed with the SEC as an exhibit to the registration statement of which this prospectus is a part and statements in this prospectus relating to the Senior Demand Notes are subject to the detailed provisions of the Indenture.  Whenever any particular section of the Indenture or any term used in it is referred to, the statement in connection with which such reference is made is qualified in its entirety by such reference.
Restrictions on Additional Debt
There are no restrictions in the Indenture against the issuance of additional securities or the incurrence of additional debt, including other senior debt or secured obligations.
Successors
The Indenture generally permits a consolidation or merger between us and another entity.  It also permits the transfer or lease by us of all or substantially all of our assets.  These transactions are permitted if:
•
the resulting or acquiring entity, if other than us, is a corporation and assumes all of our responsibilities and liabilities under the Senior Demand Notes and the Indenture; and
•
immediately after the transaction, and giving effect to the transaction, no event of default under the Indenture exists.
Modification of the Indenture
The Indenture contains provisions permitting 1
st
Franklin and the Trustee, with the consent of the holders of not less than two-thirds of the outstanding principal amount of Senior Demand Notes, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental Indenture or modifying in any manner the rights of the holders of such Senior Demand Notes; provided, however, that no such supplemental Indenture can do any of the following:
15
•
reduce the principal amount of any Senior Demand Note;
•
reduce the amount of Senior Demand Notes whose holders must consent to an amendment; or
•
make any changes regarding the Indenture that relate to a waiver of default, the rights of holders to receive payments, and the requirements of consent of the holders of Senior Demand Notes, in each case without the consent of the holder of each Senior Demand Note so affected.
We, along with the Trustee, may amend the Indenture to allow for the issuance of additional Senior Demand Notes without the consent of the holders of Senior Demand Notes.  There are no limitations as to the maximum amount of any increase or to the number of increases which may be made.
Events of Default and Notice Thereof
An event of default is generally defined by the Indenture to mean any of the following:
•
failure to pay principal or interest on any Senior Demand Note upon a request for redemption therefor, which failure continues for 30 days;
•
failure, after notice from the Trustee or from the holders of at least 25% in principal amount of the Senior Demand Notes, to observe or perform within 30 days any of the covenants contained in the Indenture or Senior Demand Notes; or
•
the occurrence of certain events of bankruptcy, insolvency or reorganization.
The Indenture provides that the Trustee will, within 90 days after the occurrence of any event of default, give the registered holders of Senior Demand Notes notice of any existing default known to the Trustee, but, except in case of a default in the payment of principal or interest, the Trustee may withhold such notice if and for so long as the Trustee in good faith determines that the withholding of such notice is in the interest of those holders.
Rights on Default
The Trustee, by notice to the Company, or the holders of at least 25% in principal amount of Senior Demand Notes, may declare the principal of and accrued but unpaid interest on all Senior Demand Notes due upon the happening of any of the events of default specified in the Indenture, but the holders of a majority of the outstanding principal amount of those Senior Demand Notes may waive any default and rescind such declaration if the default is cured within the 30 day period thereafter, except a default in the payment of the principal of or interest on any Senior Demand Note or a default on any other senior debt.  The holders of a majority of the outstanding principal amount of the Senior Demand Notes may direct the time, method and place of conducting any proceeding for any remedy available to, or exercising any power or trust conferred upon, the Trustee, but the Trustee may decline to follow any direction that conflicts with law or any provision of the Indenture, or is unduly prejudicial to the rights of the other holders of Senior Demand Notes or would involve the Trustee in personal liability.  Holders may not institute any proceeding to enforce the Indenture unless the Trustee refuses to act for 60 days after request from the holders of at least 25% in principal amount of the Senior Demand Notes and during that 60 day period the holders of a majority in principal amount do not give the Trustee a direction inconsistent with the request, and tender to the Trustee of satisfactory indemnity.  Nevertheless, any holder may enforce the payment of the principal of and interest on that holder's Senior Demand Notes upon a request therefor.
Concerning the Trustee
In addition to its agreement to serve as Trustee under the indenture, U.S. Bank National Association issues to us, and services, certain credit cards, on customary commercial terms and for which it receives customary fees.  The Trustee maintains its principal corporate trust office at 1349 West Peachtree Street, N.W., Suite 1050, Atlanta, Georgia 30309.
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Evidence to be Furnished to the Trustee
The Indenture provides that, upon any application or request by us to the Trustee to act, we will provide the Trustee an officer's certificate and an opinion of counsel stating that any necessary conditions precedent have been met and satisfactory indemnification as required has been provided.  Within 120 days after the end of each fiscal year, we are required to file with the Trustee an officer's certificate stating whether or not, to the best knowledge of the signer, we are in default in the performance of any covenant, agreement or condition in the Indenture and, if so, specifying each such default and, with respect to each, the action taken or proposed to be taken by us to remedy such default.
LEGAL MATTERS
The validity of the issuance of the Senior Demand Notes being offered by this prospectus is being passed upon for us by Jones Day, Atlanta, Georgia.
EXPERTS
The consolidated financial statements, and the related financial statement schedule, incorporated in this prospectus by reference from the Company's Annual Report on Form 10-K have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference.   Such consolidated financial statements and financial statement schedule have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, and other information, with the SEC.  You may read and copy any document we file with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.  Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room.  Our SEC filings are also available to the public at the SEC's web site at http://www.sec.gov.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents.  The information incorporated by reference into this prospectus is an important part of this prospectus.  Specifically, we are incorporating by reference the following:
(a)
The Annual Report of the Company on Form 10-K for the year ended December 31, 2010, filed on March 29, 2011;
(b)
All other reports filed with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, since December 31, 2010.
Any statement contained in this prospectus or in a document incorporated by reference in this prospectus is deemed to be modified or superseded for purposes of this prospectus to the extent that any of the following modifies or supersedes such statement:
•
in the case of a statement in a previously filed document incorporated by reference in this prospectus, a statement contained in this prospectus; or
•
a statement contained in any prospectus supplement relating to the offering of Senior Demand Notes.
Any modified or superseded statement will not be deemed to constitute a part of this prospectus or any prospectus supplement, except as modified or superseded.  Except as provided by the above-mentioned exceptions, all information appearing in this prospectus and each prospectus supplement is qualified in its entirety by the information appearing in the documents incorporated by reference.
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Copies of documents incorporated by reference will be provided without charge upon request to our Corporate Secretary at 135 East Tugalo Street, Post Office Box 880, Toccoa, Georgia 30577, telephone number (706) 886-7571 or (800)-282-0709 (within Georgia) or (800) 700-7943 (outside of Georgia).  You can also access any or all of these filings free of charge at our website http://www.1ffc.com.  Information contained on our website does not constitute part of this prospectus, and you should rely only on the information contained, or specifically incorporated by reference, in this prospectus in deciding whether to invest in Senior Demand Notes.
REPORTS TO SECURITY HOLDERS
A copy of the above-mentioned annual report filed with the SEC is being delivered with this prospectus.  Additionally, we provide each security holder with our most recent annual report containing financial information that has been examined and reported upon, with an opinion expressed, by an independent registered public accounting firm.  We also provide each security holder with a copy of our most recent quarterly report, once filed with the SEC, containing certain unaudited financial and other information of the Company.  Each of these reports for the current year are also available on our web site at http://www.1ffc.com.  Information contained on our website does not constitute part of, and is not incorporated by reference into, this prospectus, and you should rely only on the information contained, or specifically incorporated by reference, in this prospectus in deciding whether to invest in Senior Demand Notes.
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PART II.  INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.
Other Expenses of Issuance and Distribution
The expenses to be incurred in the issuance and distribution of the securities being registered hereby are estimated as follows:
Filing Fee - Securities and Exchange Commission
State Registration Fees
Legal Fees and Expenses
Accounting Fees
Printing Costs
Advertising
Trustee's Fees
Postage and Miscellaneous
Total
* Previously paid.
$
92,880
1,000
6,000
3,000
10,400
6,000
13,200
16,000
$
148,480
Item 14.
Indemnification of Directors and Officers
The bylaws of the registrant (the "Bylaws") provide that the registrant will indemnify any officer, director, employee or agent of the registrant who was or is a party or is threatened to be made a party to any threatened, pending or completed action (other than an action by or in the right of the registrant) by reason of the fact that such person is or was a director, officer, employee or agent of the registrant, or is or was serving at the request of the registrant as a director, officer, employee or agent of another entity against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action if such person acted in a manner he reasonably believed to be in or not opposed to the best interests of the registrant, and, with respect to any criminal action or proceeding, and had no reasonable cause to believe his conduct was unlawful.  The termination of any action by judgment, order, settlement or conviction, or upon a plea of nolo contendre or its equivalent, shall not, of itself, create a presumption that a person did not act in a manner which he reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
The Bylaws further provide that the registrant will indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action by or in the right of the registrant to procure a judgment in its favor by reason of the fact such person was a director, officer, employee or agent of the registrant, or is or was serving at the request of the registrant as a director, officer, employee or agent of another entity against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant.  However, no indemnification will be made in respect of any claim, issue or matter as to which such person has been adjudged to be liable for negligence or misconduct in the performance of his duty to the registrant unless and only to the extent that the court in which such action or suit was brought determines that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.
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Any of the foregoing indemnification shall be made by the registrant only as authorized in the specific case upon a determination that indemnification of the person is proper in the circumstances because such person has met the applicable standard of conduct set forth in the Bylaws, unless otherwise ordered by a court.  Such determination will be made (i) by the board of directors of the registrant by a majority vote of a quorum consisting of directors who were not parties to such action, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the affirmative vote of a majority of the shares of stock of the registrant entitled to vote thereon.
To the extent that any of the foregoing persons is successful on the merits or otherwise in the defense of an action, such person will be indemnified against expenses incurred by such person in connection therewith.
The registrant reserves the right to advance sums for the defense of any action in advance of the final disposition of such action provided that the registrant receives from the person requesting the advance an undertaking to repay any sums unless it is determined that such person is entitled to be indemnified as provided in the Bylaws.
The indemnification provided by the Bylaws is not exclusive of any other rights, in respect of indemnification or otherwise, to which those seeking indemnification may be entitled under any Bylaw or resolution approved by the affirmative vote of the holders of a majority of the shares of the registrant entitled to vote thereon taken at a meeting the notice of which specified that such Bylaw or resolution would be placed before the shareholders of the registrant.
The registrant has the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the registrant, or is or was serving at the request of the registrant as a director, officer, employee or agent of another entity against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the registrant would have the power to indemnify him against such liability under the provisions of the Bylaws.
If any expenses or other amounts are paid by way of indemnification, otherwise than by court order or action by the shareholders of the registrant or by an insurance carrier pursuant to insurance maintained by the registrant, the registrant will, not later than the next annual meeting of shareholders (unless such meeting is held within three months from the date of such payment) and, in any event, within 15 months from the date of such payment, send by first class mail to its shareholders of record at the time entitled to vote for the election of directors a statement specifying the persons paid, the amounts paid, and the nature and status at the time of such payment of the litigation or threatened litigation.
Item 15.
Recent Sales of Unregistered Securities
In the ordinary course of its business and to assist in the funding of its day-to-day operations involving, primarily, the making of consumer loans and first and second mortgage loans, the registrant makes periodic sales of certain of its securities which are exempt from the registration provisions of the Securities Act of 1933 (the "Act").  None of such sales in the past three years have involved, or have been made through, any underwriters, and all such sales were made by executive officers of the registrant.
Within the past three years, the registrant has offered and sold certain of its securities considered by the registrant to be commercial paper to investors meeting certain minimum investment qualifications pursuant to the exemption from the federal securities regulation requirements provided by Section 3(a)(3) of the Act.
During the previous three years, the registrant sold approximately $697.6 million of such securities.
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Item 16.
Exhibits and Financial Statement Schedules
3.
(a)
Restated Articles of Incorporation of the registrant, as amended January 26, 1996 (incorporated herein by reference to Exhibit 3(a) to the registrant's annual report on Form 10-K for the year ended December 31, 1995).
(b)
Bylaws of the registrant (incorporated herein by reference to Exhibit 3(b) to the registrant's annual report on Form 10-K for the year ended December 31, 1995).
4.
(a)
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) *
(b)
Form of Senior Demand Note (incorporated by reference to Exhibit 4(b) to the Company's registration statement on Form S-1 dated December 27, 2007) *
5.
Opinion of Counsel Regarding Legality.
10.
(a)
Loan and Security Agreement, dated September 11, 2009, by and among the Company and Wells Fargo Preferred Capital, Inc., as agent for lenders and a lender, and the other financial institutions from time to time party thereto (incorporated herein by reference to Exhibit 10.1 to Form 8-K dated September 17, 2009).
(b)
First Amendment, dated November 3, 2009, to that certain Loan and Security Agreement dated as of September 11, 2009, by and among the Company, Wells Fargo Preferred Capital, Inc., as agent for lenders, and the other financial institutions from time to time party thereto (incorporated herein by reference to Exhibit 10.1 to Form 8-K dated November 5, 2009).
(c)
Second Amendment, dated August 11, 2010, to that certain Loan and Security Agreement dated as of September 11, 2009, by and among the Company, Wells Fargo Preferred Capital, Inc., as agent for lenders, and the financial institutions a party thereto as lenders (incorporated herein by reference to Exhibit 10.1 to the Company's Form 10-Q for the quarterly period ended June 30, 2010).
(d
Director Compensation Summary Term Sheet ** (incorporated by reference to Exhibit 10(d) to the Company's annual report on Form 10-K for the year ended December 31, 2009).
(e)
Form of the Company's 2011 Executive Bonus Plan ** (incorporated by reference to Exhibit 10(e) to the registrant's annual report on Form 10-K for the year ended December 31, 2010).
11.
Computation of Per Share Earnings (can be determined from the consolidated statements of income contained in the registrant's annual report on Form 10-K for the fiscal year ended December 31, 2010, incorporated herein by reference).
12.
Calculation of Ratio of Earnings to Fixed Charges.
21.
Subsidiaries of the registrant (incorporated by reference to Exhibit 21 to the registrant's annual report on Form 10-K for the year ended December 31, 2010).
23.
(a)
Consent of Independent Registered Public Accounting Firm.
(b)
Consent of Counsel (included in Exhibit 5).
24.
Power of attorney (included on signature page hereto).
21
25.
Form T-1 as to the eligibility and qualification of U.S. Bank National Association, Trustee, under the Indenture between the registrant and U.S. Bank National Association.
*
Previously filed.
**  Management contract or compensatory plan or arrangement.
Item 17.    Undertakings
The undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:  (i)  to include any prospectus required by section 10(a)(3) of the Securities Act of 1933;  (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.  Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the
"
Calculation of Registration Fee" table in the effective registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)
If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering.  Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished,
provided
that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements.  Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.
22
(5)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
i.
If the registrant is relying on Rule 430B (§ 230.430B of this chapter):
A.
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
B.
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus.  As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.  Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or
ii.
If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.  Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(6)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:  The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
i.
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
ii.
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
iii.
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
iv.
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Toccoa, State of Georgia, on the 21
st
day of April, 2011.
1
st
FRANKLIN FINANCIAL CORPORATION
/s/ Ben F. Cheek, III
Ben F. Cheek, III
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ben F. Cheek, III and A. Roger Guimond, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and their substitutes, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement or amendment thereto has been signed by the following persons in the capacities and on the dates indicated:
Signature
Title
Date
/s/ Ben F. Cheek, III
Ben F. Cheek, III
Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
April 21, 2011
/s/ Ben F. Cheek, IV
Ben F. Cheek. IV
Vice Chairman
April 21, 2011
/s/ Virginia C. Herring
Virginia C. Herring
President
April 21, 2011
/s/ A. Roger Guimond
A. Roger Guimond
Executive Vice President and Chief Financial Officer  (Principal Financial Officer and Principal Accounting Officer); Director
April 21, 2011
/s/ John G. Sample, Jr.
John G. Sample, Jr.
Director
April 21, 2011
/s/ Dean Scarborough
Dean Scarborough
Director
April 21, 2011
/s/ Robert E. Thompson
Robert E. Thompson
Director
April 21, 2011
/s/ Keith Watson
Keith Watson
Director
April 21, 2011
EXHIBIT INDEX
Exhibit No.
Description
5.
Opinion of counsel regarding validity
12.
Calculation of Ratio of Earnings to Fixed Charges
23.
Consent of Independent Registered Public Accounting Firm
25.
Form T-1 as to the eligibility and qualification of U.S. Bank National Association, Trustee, under the Indenture between the registrant and U.S. Bank National Association.