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<TR><TD valign=top width=638.4><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B></P>
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<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:12pt; font-size:12pt" align=center><B>Washington, D.C. 20549</B></P>
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<TR><TD valign=top width=638.4><P style="line-height:16pt; margin-top:0pt; margin-bottom:14pt; font-size:14pt" align=center><B>FORM 8-K</B></P>
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<TR><TD valign=top width=638.4><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center><B>CURRENT REPORT</B></P>
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<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:12pt; font-size:12pt" align=center><B>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</B></P>
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<P style="margin-top:0pt; margin-bottom:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=159.6></TD><TD width=79.8></TD><TD width=22.5></TD><TD width=57.3></TD><TD width=95.7></TD><TD width=63.9></TD></TR>
<TR><TD valign=top width=319.2 colspan=2><P style="line-height:14pt; margin:0pt; font-size:12pt">Date of report (Date of earliest event reported)</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=319.2 colspan=4><P style="line-height:14pt; margin:0pt; font-size:12pt">September 19, 2006 (September 18, 2006)</P>
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<TR><TD valign=top width=319.2 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=319.2 colspan=4><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=top width=638.4 colspan=6><P style="line-height:16pt; margin:0pt; font-size:14pt" align=center>1<SUP>st</SUP> Franklin Financial Corporation</P>
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<TR><TD valign=top width=638.4 colspan=6><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>(Exact name of registrant as specified in its charter)</P>
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<TR><TD valign=top width=319.2 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=319.2 colspan=4><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=top width=212.8><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>Georgia</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=212.8 colspan=3><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>2-27985</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=212.8 colspan=2><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>58-0521233</P>
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<TR><TD valign=top width=212.8><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>(State or other jurisdiction <BR>
of incorporation)</P>
</TD><TD valign=top width=212.8 colspan=3><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>(Commission File Number)</P>
</TD><TD valign=top width=212.8 colspan=2><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>(IRS employer <BR>
Identification No.)</P>
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<TR><TD valign=top width=319.2 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=319.2 colspan=4><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=top width=553.2 colspan=5><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>213 East Tugalo Street, P.O. Box 880, Toccoa, Georgia</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=85.2><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>30577</P>
</TD></TR>
<TR><TD valign=top width=553.2 colspan=5><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>(Address of principal executive offices)</P>
</TD><TD valign=top width=85.2><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>(Zip Code)</P>
</TD></TR>
<TR><TD valign=top width=319.2 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=319.2 colspan=4><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=349.2 colspan=3><P style="line-height:14pt; margin:0pt; font-size:12pt">Registrant's telephone number, including area code</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=289.2 colspan=3><P style="line-height:14pt; margin:0pt; font-size:12pt">(706) 886-7571</P>
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<TR><TD valign=top width=319.2 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=319.2 colspan=4><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=top width=638.4 colspan=6><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>n/a</P>
</TD></TR>
<TR><TD valign=top width=638.4 colspan=6><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>(Former name or former address, if changed since last report)</P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=478.8></TD></TR>
<TR><TD valign=top width=638.4><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=638.4><P style="margin-top:0pt; margin-bottom:10pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: </P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="margin-top:0pt; margin-bottom:10pt">[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="margin-top:0pt; margin-bottom:10pt">[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="margin-top:0pt; margin-bottom:10pt">[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="margin-top:0pt; margin-bottom:10pt">[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:10pt; margin:0pt; font-size:8pt">ATI-2241603v1<BIG> </BIG></P>
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<P style="margin:0pt; page-break-before:always"><BR>
<BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=478.8></TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:12pt; font-size:12pt"><B>Section 1 &#150; Registrant&#146;s Business and Operations</B></P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:12pt; font-size:12pt"><B>Item 1.01 &#150; Entry into a Material Definitive Agreement</B>.</P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:12pt; font-size:12pt">On September 18, 2006, 1<SUP>st</SUP> Franklin Financial Corporation (the &quot;Company&quot;) entered into a Letter Agreement with Wachovia Bank, National Association (&quot;Wachovia&quot;) (the &#147;Letter Agreement&#148;) relating to the Company&#146;s loan agreement with Wachovia. The Letter Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by this reference.</P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:12pt; font-size:12pt">The Letter Agreement extends the commitment termination date under the Company&#146;s loan agreement with Wachovia. &nbsp;The Company&#146;s loan agreement with Wachovia generally has a commitment termination date of September 25 in each year. &nbsp;The Letter Agreement extends this commitment termination date until November 25, 2006 while the Company negotiates an amendment to its loan agreement.</P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:12pt; font-size:12pt"><B>Section 9 &#150; Financial Statements and Exhibits</B></P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:12pt; font-size:12pt"><B>Item 9.01 &#150; Financial Statements and Exhibits</B>.</P>
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<TR><TD valign=top width=67.2><P style="line-height:14pt; margin:0pt; font-size:12pt">10.1</P>
</TD><TD valign=top width=571.2><P style="line-height:14pt; margin:0pt; font-size:12pt">Letter Agreement, dated as of September 18, 2006, between the Company and Wachovia Bank, National Association.</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:12pt"><BR>
<BR></P>
<P style="line-height:10pt; margin:0pt; font-size:8pt">ATI-2241603v1<BIG> </BIG></P>
<P style="margin:0pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:12pt; page-break-before:always"><BR>
<BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=478.8></TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:12pt; font-size:12pt" align=center><B>SIGNATURES</B></P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:12pt; font-size:12pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>
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<TR><TD valign=top width=638.4><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin:0pt; font-size:12pt">1<SUP>ST</SUP> FRANKLIN FINANCIAL CORPORATION</P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=638.4><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin:0pt; font-size:12pt" align=right>By: &nbsp;<U>/s/ A. Roger Guimond</U></P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin:0pt; font-size:12pt" align=right>&nbsp;Name: &nbsp;A. Roger Guimond</P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin:0pt; font-size:12pt" align=right>&nbsp;Title: &nbsp;&nbsp;&nbsp;Executive Vice President and<BR>
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Financial Officer</P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin:0pt; font-size:12pt">Date: &nbsp;September 18, 2006</P>
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<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:10pt; margin:0pt; font-size:8pt">ATI-2241603v1<BIG> </BIG></P>
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<P style="margin:0pt; page-break-before:always"><BR>
<BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=50.4></TD><TD width=428.4></TD></TR>
<TR><TD valign=top width=638.4 colspan=2><P style="line-height:14pt; margin-top:0pt; margin-bottom:12pt; font-size:12pt" align=center><B>EXHIBIT LIST</B></P>
</TD></TR>
<TR><TD valign=top width=67.2><P style="line-height:14pt; margin:0pt; font-size:12pt">10.1</P>
</TD><TD valign=top width=571.2><P style="line-height:14pt; margin:0pt; font-size:12pt">Letter Agreement, dated as of September 18, 2006, between the Company and Wachovia Bank, National Association</P>
</TD></TR>
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<P style="margin-top:0pt; margin-bottom:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:12pt"><BR>
<BR></P>
<P style="line-height:10pt; margin:0pt; font-size:8pt">ATI-2241603v1<BIG> </BIG></P>
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{"company-data": {"conformed-name": "FIRST FRANKLIN FINANCIAL CORP", "cik": "0000038723", "assigned-sic": "6141", "irs-number": "580521233", "state-of-incorporation": "GA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "002-27985", "film-number": "061097762"}, "business-address": {"street1": "213 E TUGALO ST", "street2": "P O BOX 880", "city": "TOCCOA", "state": "GA", "zip": "30577", "phone": "4048867571"}, "former-company": {"former-conformed-name": "FRANKLIN DISCOUNT CO", "date-changed": "19840115"}}
_
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported)
September 19, 2006 (September 18, 2006)
1
st
Franklin Financial Corporation
(Exact name of registrant as specified in its charter)
Georgia
2-27985
58-0521233
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS employer
Identification No.)
213 East Tugalo Street, P.O. Box 880, Toccoa, Georgia
30577
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code
(706) 886-7571
n/a
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ATI-2241603v1
Section 1 – Registrant's Business and Operations
Item 1.01 – Entry into a Material Definitive Agreement
.
On September 18, 2006, 1
st
Franklin Financial Corporation (the "Company") entered into a Letter Agreement with Wachovia Bank, National Association ("Wachovia") (the "Letter Agreement") relating to the Company's loan agreement with Wachovia. The Letter Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by this reference.
The Letter Agreement extends the commitment termination date under the Company's loan agreement with Wachovia.  The Company's loan agreement with Wachovia generally has a commitment termination date of September 25 in each year.  The Letter Agreement extends this commitment termination date until November 25, 2006 while the Company negotiates an amendment to its loan agreement.
Section 9 – Financial Statements and Exhibits
Item 9.01 – Financial Statements and Exhibits
.
10.1
Letter Agreement, dated as of September 18, 2006, between the Company and Wachovia Bank, National Association.
ATI-2241603v1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
1
ST
FRANKLIN FINANCIAL CORPORATION
By:
/s/ A. Roger Guimond
Name:  A. Roger Guimond
Title:    Executive Vice President and
Chief Financial Officer
Date:  September 18, 2006
ATI-2241603v1
EXHIBIT LIST
10.1
Letter Agreement, dated as of September 18, 2006, between the Company and Wachovia Bank, National Association
ATI-2241603v1