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<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=478.8></TD></TR>
<TR><TD valign=top width=638.4>&nbsp;</TD></TR>
<TR><TD valign=top width=638.4>&nbsp;</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center><FONT FACE="Times New Roman" COLOR=#000000>SECURITIES AND EXCHANGE COMMISSION</FONT></P>
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<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>Washington, D.C. &nbsp;20549</P>
</TD></TR>
<TR><TD valign=top width=638.4>&nbsp;</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center><B>FORM 8-K<BR>
</B></P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>Current Report <BR>
Pursuant to Section 13 or 15(d) of the<BR>
Securities Exchange Act of 1934</P>
</TD></TR>
<TR><TD valign=top width=638.4>&nbsp;</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt">Date of Report (Date of Earliest Event Reported): &nbsp;March&nbsp;17, 2006 (February 1, 2006)</P>
</TD></TR>
<TR><TD valign=top width=638.4>&nbsp;</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:normal; margin-top:0pt; margin-bottom:4pt; font-size:12pt" align=center><B>1<SUP>st</SUP> FRANKLIN FINANCIAL CORPORATION<BR>
</B><SMALL>(Exact Name of Registrant as Specified in Its Charter)</SMALL></P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:4pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:4pt" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=159.6></TD><TD width=159.6></TD><TD width=159.6></TD></TR>
<TR><TD valign=top width=212.8><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>Georgia</P>
</TD><TD valign=top width=212.8><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>2-27985</P>
</TD><TD valign=top width=212.8><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>58-0521233</P>
</TD></TR>
<TR><TD valign=top width=212.8><P style="line-height:10pt; margin-top:0pt; margin-bottom:4pt; font-size:8pt" align=center>(State or Other Jurisdiction of Incorporation)</P>
</TD><TD valign=top width=212.8><P style="line-height:10pt; margin-top:0pt; margin-bottom:4pt; font-size:8pt" align=center>(Commission File Numbers)</P>
</TD><TD valign=top width=212.8><P style="line-height:10pt; margin-top:0pt; margin-bottom:4pt; font-size:8pt" align=center>(I.R.S. Employer Identification No.)</P>
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</TABLE>
<P style="margin-top:0pt; margin-bottom:4pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=239.4></TD><TD width=239.4></TD></TR>
<TR><TD valign=top width=319.2><P style="line-height:14pt; margin:0pt; font-size:12pt">213 East Tugalo Street, P.O. Box 880</P>
<P style="line-height:14pt; margin:0pt; font-size:12pt">Toccoa, Georgia</P>
</TD><TD valign=top width=319.2><P style="margin:0pt" align=center><BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>30577</P>
</TD></TR>
<TR><TD valign=top width=319.2><P style="line-height:10pt; margin-top:0pt; margin-bottom:4pt; font-size:8pt">(Address of Principal Executive Offices)</P>
</TD><TD valign=top width=319.2><P style="line-height:10pt; margin-top:0pt; margin-bottom:4pt; font-size:8pt" align=center>(Zip Code)</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:4pt"><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:-14pt; font-size:12pt">Registrant&#146;s Telephone Number, Including Area Code:</P>
<P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; text-indent:288pt; font-size:12pt">(706) 886-7571</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:6pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=478.8></TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=top width=638.4><P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>N/A</P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:10pt; margin-top:0pt; margin-bottom:4pt; font-size:8pt" align=center>(Former Name or former address, if changed since last report)</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:6pt"><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="margin-top:0pt; margin-bottom:5pt">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:-12pt; font-family:Wingdings"><FONT FACE="Wingdings">&#168;</FONT></P>
<P style="margin-top:0pt; margin-bottom:3.35pt; text-indent:18pt"><FONT FACE="Times New Roman">Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</FONT></P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="margin-top:0pt; margin-bottom:-12pt; font-family:Wingdings"><FONT FACE="Wingdings">&#168;</FONT></P>
<P style="margin-top:0pt; margin-bottom:3.35pt; text-indent:18pt"><FONT FACE="Times New Roman">Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT></P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="margin-top:0pt; margin-bottom:-12pt; font-family:Wingdings"><FONT FACE="Wingdings">&#168;</FONT></P>
<P style="margin-top:0pt; margin-bottom:3.35pt; text-indent:18pt"><FONT FACE="Times New Roman">Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</FONT></P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="margin-top:0pt; margin-bottom:-12pt; font-family:Wingdings"><FONT FACE="Wingdings">&#168;</FONT></P>
<P style="margin-top:0pt; margin-bottom:3.35pt; text-indent:18pt"><FONT FACE="Times New Roman">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>1</P>
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<P style="margin:0pt; page-break-before:always"><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:0pt; font-size:12pt"><B>Section 1 &#150; Registrant&#146;s Business and Operations</B></P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=65.4></TD><TD width=413.4></TD></TR>
<TR><TD valign=top width=87.2><P style="line-height:14pt; margin:0pt; padding-right:-3.9pt; font-size:12pt"><B>Item &nbsp;1.01</B></P>
</TD><TD valign=top width=551.2><P style="line-height:14pt; margin:0pt; padding-right:72pt; font-size:12pt"><B>Entry into a Material Definitive Agreement</B></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="line-height:14pt; margin:0pt; padding-right:4.5pt; font-size:12pt">On March&nbsp;13, 2006, the Company&#146;s 2006 Executive Bonus Plan (the &#147;Plan&#148;) was approved by the Executive Management Team (the &#147;EMT&#148;) of the Company. &nbsp;The Company is a family owned business, and Ben&nbsp;F. Cheek, III, Chairman of the Board and CEO, is the majority shareholder. &nbsp;The Company does not have an official compensation committee of the board of directors. &nbsp;The EMT establishes the bases for all executive compensation, which compensation is approved by Mr. Cheek, III. &nbsp;The EMT consists of: &nbsp;Ben&nbsp;F. Cheek, III, Ben&nbsp;F. Cheek, IV, Virginia&nbsp;C. Herring, A.&nbsp;Roger Guimond, A. Jarrell Coffee, J. Michael Culpepper, Kay&nbsp;S. Lovern and C. Michael Haynie.</P>
</TD></TR>
<TR><TD valign=top width=638.4>&nbsp;</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin:0pt; padding-right:4.5pt; font-size:12pt">The EMT also established the criteria for determining bonus awards under the Plan for the 2006 fiscal year. &nbsp;For 2006, the EMT determined that the threshold goal for any payouts under the Plan is the achievement of a minimum amount of pre-tax income by the Company.</P>
</TD></TR>
<TR><TD valign=top width=638.4>&nbsp;</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin:0pt; padding-right:4.5pt; font-size:12pt">If that threshold is met, payouts under the Plan are to be based on the number of strategic goals met by the Company. &nbsp;For 2006, the Company has identified four strategic goals. &nbsp;These are:</P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=446.4></TD></TR>
<TR><TD valign=top width=595.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:-14pt; padding-left:18pt; text-indent:-18pt; font-size:12pt">1.</P>
<P style="line-height:14pt; margin:0pt; padding-left:18pt; font-size:12pt">Corporate net receivables growth;</P>
</TD></TR>
<TR><TD valign=top width=595.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:-14pt; padding-left:18pt; text-indent:-18pt; font-size:12pt">2.</P>
<P style="line-height:14pt; margin:0pt; padding-left:18pt; font-size:12pt">Corporate delinquency control;</P>
</TD></TR>
<TR><TD valign=top width=595.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:-14pt; padding-left:18pt; text-indent:-18pt; font-size:12pt">3.</P>
<P style="line-height:14pt; margin:0pt; padding-left:18pt; font-size:12pt">Corporate expenses/revenue ratio; and</P>
</TD></TR>
<TR><TD valign=top width=595.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:-14pt; padding-left:18pt; text-indent:-18pt; font-size:12pt">4.</P>
<P style="line-height:14pt; margin:0pt; padding-left:18pt; font-size:12pt">Corporate return on assets.</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="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt">Bonus payouts under the Plan will vary depending on the number of strategic goals met as follows:</P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=239.4></TD><TD width=239.4></TD></TR>
<TR><TD valign=top width=319.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center><U>No. of Strategic Goals Met</U></P>
</TD><TD valign=top width=319.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center><U>Bonus Payout (as of % of Salary)</U></P>
</TD></TR>
<TR><TD valign=top width=319.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>1</P>
</TD><TD valign=top width=319.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>5% - 35%</P>
</TD></TR>
<TR><TD valign=top width=319.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>2</P>
</TD><TD valign=top width=319.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>5% - 45%</P>
</TD></TR>
<TR><TD valign=top width=319.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>3</P>
</TD><TD valign=top width=319.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>5% - 60%</P>
</TD></TR>
<TR><TD valign=top width=319.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>4</P>
</TD><TD valign=top width=319.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center>5% - 75%</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:6pt"><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:6pt; font-size:12pt">Amounts to be paid may vary within each range depending on personal performance milestones as determined by the EMT.</P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>2</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; page-break-before:always"><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:6pt; font-size:12pt">On February 3, 2006, the EMT approved and the Company paid the following discretionary cash bonuses to the Company&#146;s named executive officers based on the individual&#146;s, and the Company&#146;s, performance in the 2005 fiscal year:</P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=315.9></TD><TD width=139.5></TD></TR>
<TR><TD valign=top width=421.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt"><U>Name and Principal Position</U></P>
</TD><TD valign=top width=186><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt" align=center><U>Amount</U></P>
</TD></TR>
<TR><TD valign=top width=421.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt">Ben F. Cheek, IV, Vice Chairman</P>
</TD><TD valign=top width=186><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; padding-right:39.6pt; font-size:12pt" align=right>$52,400</P>
</TD></TR>
<TR><TD valign=top width=421.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt">Virginia C. Herring, President</P>
</TD><TD valign=top width=186><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; padding-right:39.6pt; font-size:12pt" align=right>$52,400</P>
</TD></TR>
<TR><TD valign=top width=421.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt">A. Roger Guimond, Executive Vice President and CFO</P>
</TD><TD valign=top width=186><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; padding-right:39.6pt; font-size:12pt" align=right>$150,580</P>
</TD></TR>
<TR><TD valign=top width=421.2><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; font-size:12pt">A. Jarrell Coffee, Executive Vice President and COO</P>
</TD><TD valign=top width=186><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; padding-right:39.6pt; font-size:12pt" align=right>$161,159</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:6pt"><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:6pt; font-size:12pt">Ben F. Cheek, III elected to forego any discretionary bonus for the 2005 fiscal year.</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:6pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt"><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:6pt; font-size:12pt" align=center><B>SIGNATURE</B></P>
</TD></TR>
<TR><TD valign=top width=638.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:6pt; 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>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:6pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=262.8></TD></TR>
<TR><TD valign=top width=350.4><P style="line-height:14pt; margin:0pt; font-size:12pt"><B>1<SUP>st</SUP> FRANKLIN FINANCIAL CORPORATION</B></P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=262.8></TD></TR>
<TR><TD valign=top width=350.4><P style="line-height:14pt; margin:0pt; padding-bottom:3pt; font-size:12pt; border-bottom:1.5pt solid #000000">&nbsp;/s/ A. Roger Guimond</P>
</TD></TR>
<TR><TD valign=top width=350.4><P style="line-height:14pt; margin-top:0pt; margin-bottom:-14pt; font-size:12pt">By:</P>
<P style="line-height:14pt; margin:0pt; text-indent:36pt; font-size:12pt">A. Roger Guimond</P>
</TD></TR>
<TR><TD valign=top width=350.4><P style="line-height:14pt; margin:0pt; font-size:12pt">Executive Vice President and</P>
</TD></TR>
<TR><TD valign=top width=350.4><P style="line-height:14pt; margin:0pt; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;Chief Financial Officer</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:6pt" align=center><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:6pt; font-size:12pt">Date: &nbsp;March 17, 2006</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:6pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align=center>3</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": "06694623"}, "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"}}
_
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):  March 17, 2006 (February 1, 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 Numbers)
(I.R.S. 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))
1
Section 1 – Registrant's Business and Operations
Item  1.01
Entry into a Material Definitive Agreement
On March 13, 2006, the Company's 2006 Executive Bonus Plan (the "Plan") was approved by the Executive Management Team (the "EMT") of the Company.  The Company is a family owned business, and Ben F. Cheek, III, Chairman of the Board and CEO, is the majority shareholder.  The Company does not have an official compensation committee of the board of directors.  The EMT establishes the bases for all executive compensation, which compensation is approved by Mr. Cheek, III.  The EMT consists of:  Ben F. Cheek, III, Ben F. Cheek, IV, Virginia C. Herring, A. Roger Guimond, A. Jarrell Coffee, J. Michael Culpepper, Kay S. Lovern and C. Michael Haynie.
The EMT also established the criteria for determining bonus awards under the Plan for the 2006 fiscal year.  For 2006, the EMT determined that the threshold goal for any payouts under the Plan is the achievement of a minimum amount of pre-tax income by the Company.
If that threshold is met, payouts under the Plan are to be based on the number of strategic goals met by the Company.  For 2006, the Company has identified four strategic goals.  These are:
1.
Corporate net receivables growth;
2.
Corporate delinquency control;
3.
Corporate expenses/revenue ratio; and
4.
Corporate return on assets.
Bonus payouts under the Plan will vary depending on the number of strategic goals met as follows:
No. of Strategic Goals Met
Bonus Payout (as of % of Salary)
1
5% - 35%
2
5% - 45%
3
5% - 60%
4
5% - 75%
Amounts to be paid may vary within each range depending on personal performance milestones as determined by the EMT.
2
On February 3, 2006, the EMT approved and the Company paid the following discretionary cash bonuses to the Company's named executive officers based on the individual's, and the Company's, performance in the 2005 fiscal year:
Name and Principal Position
Amount
Ben F. Cheek, IV, Vice Chairman
$52,400
Virginia C. Herring, President
$52,400
A. Roger Guimond, Executive Vice President and CFO
$150,580
A. Jarrell Coffee, Executive Vice President and COO
$161,159
Ben F. Cheek, III elected to forego any discretionary bonus for the 2005 fiscal year.
SIGNATURE
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
/s/ A. Roger Guimond
By:
A. Roger Guimond
Executive Vice President and
Chief Financial Officer
Date:  March 17, 2006
3