1st FRANKLIN FINANCIAL CORP Watch

from 10-K 2 pages Threshold: The Company Must Achieve Minimum Pre-Tax Income Based on the Average Pre-Tax Income for the Three Years Ended December 31, 2021 Plus the Average Incentive Bonus for the Three Years Ended December 31, 2021 Divided by 2. Pre-Tax Income for 2021 Was Adjusted to Reflect Budgeted, Rather Than Actual Provision for Credit Losses. the Minimum Pre-Tax Income Threshold for 2022 Is $17,500,000

from 424B3 6 pages Third Amendment to Amended and Restated Loan and Security Agreement

from 424B3 6 pages Third Amendment to Amended and Restated Loan and Security Agreement

from 8-K 6 pages Third Amendment to Amended and Restated Loan and Security Agreement

from 10-K 2 pages Plan Overview: The Executive Bonus Plan for 2021 Will Focus First on Meeting a Minimum Corporate Profit Threshold, and Thereafter Meeting Personal Goals and Department Goals. Disclaimers: “The Company Must Be in Compliance With All Credit Line Debt Covenants Prior to the Disbursement of Any Bonus.” Right to Alter Program the Company Reserves the Right, at Any Time, or From Time to Time During the Year, With or Without Notice, to Continue or Discontinue This Program, or to Alter It as Necessary in the Best Interest of the Company. the Income Threshold Goal That Is Set Was Identified and Agreed Upon by the Executive Management Team. Below Is the Minimum Income Requirement for the 2020 Bonus to Be Paid. Threshold: The Company Must Achieve Minimum Pre-Tax Income Based on the Average Pre-Tax Income for the Three Years Ended December 31, 2020 Plus the Average Incentive Bonus for the Three Years Ended December 31, 2020 Divided by 2. the Minimum Pre-Tax Income Threshold for 2021 Is $14,563,081

from 10-K 7 pages Second Amendment to Amended and Restated Loan and Security Agreement

from 424B3 11 pages First Amendment to Amended and Restated Loan and Security Agreement

from 8-K 11 pages First Amendment to Amended and Restated Loan and Security Agreement

from 424B3 11 pages First Amendment to Amended and Restated Loan and Security Agreement

from 10-K 2 pages Plan Overview: The Executive Bonus Plan for 2020 Will Focus First on Meeting a Minimum Corporate Profit Threshold, and Thereafter Meeting Personal Goals and Department Goals. Disclaimers: “The Company Must Be in Compliance With All Credit Line Debt Covenants Prior to the Disbursement of Any Bonus.” Right to Alter Program the Company Reserves the Right, at Any Time, or From Time to Time During the Year, With or Without Notice, to Continue or Discontinue This Program, or to Alter It as Necessary in the Best Interest of the Company. the Income Threshold Goal That Is Set Was Identified and Agreed Upon by the Executive Management Team. Below Is the Minimum Income Requirement for the 2020 Bonus to Be Paid. Threshold: The Company Must Achieve Minimum Pre-Tax Income Based on the Average Pre-Tax Income for the Three Years Ended December 31, 2019 Plus the Projected Accrued Incentive Bonus for December 31, 2020 Divided by 3. the Minimum Pre-Tax Income Threshold for 2020 Is $12,472,925

from 8-K 64 pages Amended and Restated Loan and Security Agreement by and Among 1st FRANKLIN FINANCIAL Corporation as Borrower Wells Fargo Bank, N.A. as Agent First Horizon Bank as Syndication Agent Each of the Financial Institutions Now or Hereafter a Party Hereto as Lenders

from 8-K 6 pages Ninth Amendment to Loan and Security Agreement

from 10-K 2 pages Plan Overview: As We Analyze the Results From 2018, Review the Budget Set for 2019 and Weigh in the Economic Forecast for the Year, We Recognize the Need Today, More Than Ever, to Balance Short-Term Results – Growth and Profit, With Long-Term Positioning – New Product Development and Improved Systems. This Balance Is Expected to Provide the Foundation That Remains Critical for the Future Success of the Company. the Short Term Bonus Goals That Are Set for the Company Each Year, Which Are Reflected in This Executive Bonus Plan, Are the Milestones Which Will Drive the Overall Performance to Achieve the Long Range Goals and Plans. the Executive Bonus Plan for 2019 Will Focus First on Meeting a Minimum Income Requirement Threshold, and Thereafter Meeting Four Strategic Goals. the Combination of These Goals Is Expected to Provide a Balanced Measurement of 1st FRANKLIN’s Performance and Will Also Support the Achievement of Our Long Term Goals. Disclaimers: “The Company Must Be in Compliance With All Credit Line Debt Covenants Prior to the Disbursement of Any Bonus.” Right to Alter Program the Company Reserves the Right, at Any Time, or From Time to Time During the Year, With or Without Notice, to Continue or Discontinue This Program, or to Alter It as Necessary in the Best Interest of the Company. the Goals That Are Set Were Identified and Agreed Upon by the Executive Management Team. Below Are the Four Strategic Goals, as Well as the Minimum Income Requirement for the 2019 Bonus to Be Paid. Threshold: The Company Must Achieve Minimum Pre-Tax Income Based on the Average Pre-Tax Income for the Three Years Ended December 31, 2018 Plus the Projected Accrued Incentive Bonus for December 31, 2019 Divided by 3. the Minimum Pre-Tax Income Threshold for 2019 Is $12,872,760

from 8-K 5 pages Eighth Amendment to Loan and Security Agreement

from 10-K 2 pages Plan Overview: As We Analyze the Results From 2017, and Review the Budget Set for 2018 and Weigh in the Economic Forecast for the Year, We Recognize the Need Today, More Than Ever, to Balance Short-Term Results – Growth and Profit, With Long-Term Positioning – New Product Development and Improved Systems. This Balance Is Expected to Provide the Foundation That Remains Critical for the Future Success of the Company. the Short Term Bonus Goals That Are Set for the Company Each Year, Which Are Reflected in This Executive Bonus Plan, Are the Milestones Which Will Drive the Overall Performance to Achieve the Long Range Goals and Plans. the Executive Bonus Plan for 2018 Will Focus First on Meeting a Minimum Income Requirement Threshold, and Thereafter Meeting Five Strategic Goals. the Combination of These Goals Is Expected to Provide a Balanced Measurement of 1st FRANKLIN’s Performance and Will Also Support the Achievement of Our Long Term Goals. Disclaimers: “The Company Must Be in Compliance With All Credit Line Debt Covenants Prior to the Disbursement of Any Bonus.” Right to Alter Program the Company Reserves the Right, at Any Time, or From Time to Time During the Year, With or Without Notice, to Continue or Discontinue This Program, or to Alter It as Necessary in the Best Interest of the Company. the Goals That Are Set Were Identified and Agreed Upon by the Executive Management Team. Below Are the Five Strategic Goals, as Well as the Minimum Income Requirement for the 2018 Bonus to Be Paid. Threshold: The Company Must Achieve Minimum Pre-Tax Income Based on the Average Pre-Tax Income for the Three Years Ended December 31, 2017 Plus the Projected Accrued Incentive Bonus for December 31, 2018 Divided by 2. the Minimum Pre-Tax Income Threshold for 2018 Is $13,135,550

from 10-K 2 pages Plan Overview: As We Analyze the Results From 2016, and Review the Budget Set for 2017 and Weigh in the Economic Forecast for the Year, We Recognize the Need Today, More Than Ever, to Balance Short-Term Results – Growth and Profit, With Long-Term Positioning – New Product Development and Improved Systems. This Balance Is Expected to Provide the Foundation That Remains Critical for the Future Success of the Company. the Short Term Bonus Goals That Are Set for the Company Each Year, Which Are Reflected in This Executive Bonus Plan, Are the Milestones Which Will Drive the Overall Performance to Achieve the Long Range Goals and Plans. the Executive Bonus Plan for 2017 Will Focus First on Meeting a Minimum Income Requirement Threshold, and Thereafter Meeting Five Strategic Goals. the Combination of These Goals Is Expected to Provide a Balanced Measurement of 1st FRANKLIN’s Performance and Will Also Support the Achievement of Our Long Term Goals. Disclaimers: “The Company Must Be in Compliance With All Credit Line Debt Covenants Prior to the Disbursement of Any Bonus.” Right to Alter Program the Company Reserves the Right, at Any Time, or From Time to Time During the Year, With or Without Notice, to Continue or Discontinue This Program, or to Alter It as Necessary in the Best Interest of the Company. the Goals That Are Set Were Identified and Agreed Upon by the Executive Management Team. Below Are the Five Strategic Goals, as Well as the Minimum Income Requirement for the 2017 Bonus to Be Paid. Threshold: The Company Must Achieve Minimum Pre-Tax Income Based on the Average Pre-Tax Income for the Two Years Ended December 31, 2016 Plus the Projected Accrued Incentive Bonus for December 31, 2017 Divided by 2. the Minimum Pre-Tax Income Threshold for 2017 Is $12,364,799

from 10-K 8 pages Seventh Amendment to Loan and Security Agreement

from 10-K 2 pages Plan Overview: As We Analyze the Results From 2015, and Review the Budget Set for 2016 and Weigh in the Economic Forecast for the Year, We Recognize the Need Today, More Than Ever, to Balance Short-Term Results – Growth and Profit, With Long-Term Positioning – New Product Development and Improved Systems. This Balance Is Expected to Provide the Foundation That Remains Critical for the Future Success of the Company. the Short Term Bonus Goals That Are Set for the Company Each Year, Which Are Reflected in This Executive Bonus Plan, Are the Milestones Which Will Drive the Overall Performance to Achieve the Long Range Goals and Plans. the Executive Bonus Plan for 2016 Will Focus First on Meeting a Minimum Income Requirement Threshold, and Thereafter Meeting Five Strategic Goals. the Combination of These Goals Is Expected to Provide a Balanced Measurement of 1st FRANKLIN’s Performance and Will Also Support the Achievement of Our Long Term Goals. Disclaimers: “The Company Must Be in Compliance With All Credit Line Debt Covenants Prior to the Disbursement of Any Bonus.” Right to Alter Program the Company Reserves the Right, at Any Time, or From Time to Time During the Year, With or Without Notice, to Continue or Discontinue This Program, or to Alter It as Necessary in the Best Interest of the Company. the Goals That Are Set Were Identified and Agreed Upon by the Executive Management Team. Below Are the Five Strategic Goals, as Well as the Minimum Income Requirement for the 2016 Bonus to Be Paid. Threshold: The Company Must Achieve Minimum Pre-Tax Income Based on the Average Pre-Tax Income for the Three Years Ended December 31, 2015 Plus the Projected Accrued Incentive Bonus for December 31, 2016 Divided by 2. the Minimum Pre-Tax Income Threshold for 2016 Is $21,343,589

from 8-K 2 pages Sixth Amendment to Loan and Security Agreement

from 10-K 2 pages Plan Overview: As We Analyze the Results From 2014, and Review the Budget Set for 2015 and Weigh in the Economic Forecast for the Year, We Recognize the Need Today, More Than Ever, to Balance Short-Term Results – Growth and Profit, With Long-Term Positioning – New Product Development and Improved Systems. This Balance Is Expected to Provide the Foundation That Remains Critical for the Future Success of the Company. the Short Term Bonus Goals That Are Set for the Company Each Year, Which Are Reflected in This Executive Bonus Plan, Are the Milestones Which Will Drive the Overall Performance to Achieve the Long Range Goals and Plans. the Executive Bonus Plan for 2015 Will Focus First on Meeting a Minimum Income Requirement Threshold, and Thereafter Meeting Five Strategic Goals. the Combination of These Goals Is Expected to Provide a Balanced Measurement of 1st FRANKLIN’s Performance and Will Also Support the Achievement of Our Long Term Goals. Disclaimers: “The Company Must Be in Compliance With All Credit Line Debt Covenants Prior to the Disbursement of Any Bonus.” Right to Alter Program the Company Reserves the Right, at Any Time, or From Time to Time During the Year, With or Without Notice, to Continue or Discontinue This Program, or to Alter It as Necessary in the Best Interest of the Company. the Goals That Are Set Were Identified and Agreed Upon by the Executive Management Team. Below Are the Five Strategic Goals, as Well as the Minimum Income Requirement for the 2015 Bonus to Be Paid. Threshold: The Company Must Achieve Minimum Pre-Tax Income Based on the Average Pre-Tax Income for Three Years Ended December 31, 2014 Plus the Projected Accrued Incentive Bonus at December 31, 2015 Divided by 2. the Minimum Pre-Tax Income Threshold for 2015 Is $24,315,730