Rule 424 (b) (2)
                      				     SEC File #333-55420


             1st FRANKLIN FINANCIAL CORPORATION
                         INVESTMENTS
          WEEK OF OCTOBER 11, 2001 THRU OCTOBER 17, 2001
            VARIABLE RATE SUBORDINATED DEBENTURES

  Effective        Interest        Interest       Minimum
  Yield (a)        Rate (b)     Adjustment (c)     Amount
     4.08            4.00           1 Month       $500.00
     4.08            4.00           3 Months      $500.00
     4.34            4.25           6 Months      $500.00
     4.60            4.50           1 Year        $500.00
     4.86            4.75           2 Years       $500.00
     4.86            4.75           4 Years       $500.00


     (a)  Compounded daily based on a 365 day year.
     (b)  Interest is earned daily and will be payable at
          anytime
          at the holder's request.
     (c)  At the end of this period, interest rate will be
          adjusted
          to a new rate or the holder may redeem without
          penalty.  Redemptions at any other time subject
          to interest penalty.

For   a   Prospectus,  write  or  call  1st  Franklin   Financial
Corporation, P.O. Box 880, Toccoa, Georgia, 30577, (706) 886-7571
or 1-800-282-0709.  Offer is made only by the Prospectus.

             PROSPECTUS SUPPLEMENT dated as of June 14, 2001

(1)	INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE on page 2 of
 	the Prospectus is hereby changed to read in its entirety, as
 	changed, as follows:

	"The Company incorporates herein by reference the following
 	documents:

	(a)	The Company's Annual Report on Form 10-K dated as of
		December 31, 2000 and filed pursuant to Section 15(d)
 		of the Exchange Act with the Commission.

	(b)	From the Company's annual report to security holders
		dated as of December 31, 2000 which is delivered with
 		this Prospectus, the following:

		(i)	Description of business furnished in accordance
			with the provisions of Rule 14a-3(b)(6)under the
			Exchange Act:

		(ii)	Financial statements and information furnished in
			accordance with the provisions of Rule 14a-3(b)1);

		(iii)	Selected financial data furnished as required by
			Item 301 of Regulation S-K;

		(iv)	Supplementary financial data furnished as
			required by Item 302 of Regulation S-K;

		(v)	Management's Discussion and Analysis of Financial
			Condition and Results of Operations furnished as
			required by Item 303 of Regulation S-K."

	(c)	The Company's Quarterly Report on Form 10-Q dated as of
		March 31, 2001 and the quarterly report to security
		holders, included therein, which is delivered with the
		Prospectus.

	Any statement in the documents incorporated by reference
	herein shall be deemed to be modified or superseded for
	purposes of this Prospectus and the Registration statement of
	which it is a part to the extent that a statement contained
	herein modifies or supersedes such statement. Any statement
	so modified or superseded shall not be deemed, except as
	modified or superseded, to constitute a part of the
	Prospectus or the Registration Statement of which it is a
	part.

(2)	APPENDIX 1 on page 11 of the Prospectus is hereby changed to
	read in its entirety, as changed, as follows:

                        "Appendix 1 to Prospectus
                     Information as of March 31, 2001

	1.	Ratio of Earnings to Fixed Charges (page 3):

		March 31			   December 31
		  2000		2000	1999	1998	1997	1996

		  1.46		1.74	2.00	1.94	1.72	1.95

	2.	Unused borrowings under Credit
			Agreement (page 6):  		$ 21,000,000

	3.	Amount of Debentures outstanding under
			Indenture (page 7): 		$ 51,765,603

	4.	Senior Debt outstanding (page 8):	$117,582,925

	A more current Appendix 1, if appropriate, will be
attached to the cover page of the Prospectus as a supplement.
If attached, that supplement Appendix 1 supersedes this information."


               1st FRANKLIN FINANCIAL CORPORATION

               PROSPECTUS dated February 26, 2001

        $30,000,000 VARIABLE RATE SUBORDINATED DEBENTURES


        _________________________________________________


1st  Franklin Financial Corporation will issue the Variable  Rate
Subordinated  Debentures (the "Debentures")  in  varying  minimum
purchase  amounts  that we will establish  each  Thursday,  on  a
weekly  basis.   For  each respective purchase  amount,  we  will
establish an interest rate and an interest adjustment period that
may  range from one month to four years ("established features").
The  established features will be available for the  period  from
each  Thursday  through  the  following  Wednesday  and  will  be
applicable to all Debentures that we sell during that period.  At
the  end  of  each interest adjustment period, the interest  rate
will  automatically adjust to the then current rate.   All  other
provisions  will  remain unchanged for the  entire  term  of  the
Debenture.

We will publish the established features weekly in a newspaper of
general  circulation  and,  in  addition,  you  can  obtain   the
established features from our web site at http://www.1ffc.com  or
from  our  executive offices in Toccoa, Georgia. A Rule 424(b)(2)
prospectus supplement setting forth the established features will
be filed weekly with the Securities and Exchange Commission.

We  may  redeem  the Debentures, upon at least  30  days  written
notice,  at  any  time prior to maturity for a  redemption  price
equal to the principal amount plus any unpaid interest thereon to
the  date  of  redemption.   Holders of  Debentures  may  request
redemption  of  the  Debentures  at  the  end  of  any   interest
adjustment  period for a redemption price equal to the  principal
amount   plus  any  unpaid  interest  thereon  to  the  date   of
redemption.   In  addition,  at  the  request  of  a  holder   of
Debentures,   we  may,  at  our  option,  redeem  such   holder's
Debentures during any interest adjustment period for a redemption
price equal to the principal amount plus interest thereon at  the
rate of one-half the stated rate on such Debentures.

The Debentures mature four years from date of issue , subject  to
automatic extension for one four year period, but the holder  may
redeem  his  or her Debenture without penalty at the end  of  any
interest adjustment period or at maturity.

There  is  not,  nor is there likely to be, a  market  for  these
securities.

   Investing  in  our Debentures involves  risk.   See  "Risk
   Factors"  beginning on page 3 for a description  of  these
   risks.


The  Securities  and  Exchange Commission  and  state  securities
regulators have not approved or disapproved these securities,  or
determined  if  this  prospectus is truthful  or  complete.   Any
representation to the contrary is a criminal offense.

THESE  SECURITIES ARE NOT BANK DEPOSITS NOR BANK OBLIGATIONS  AND
ARE NOT INSURED BY THE FDIC.
-----------------------------------------------------------------
                                     Underwriting
                          Price to   Discounts and    Proceeds to
                           Public    Commissions (a)  Company (b)
-----------------------------------------------------------------
Per Debenture....          100%          None             100%
-----------------------------------------------------------------
     Total.......      $30,000,000       None         $30,000,000
-----------------------------------------------------------------

(a)  None  of the securities described above will be underwritten
     and  no  commissions or other remunerations will be paid  in
     connection with their sale.  We will sell them at face value
     through our executive officers.

(b)   Before  deduction of the Company's expenses,  estimated  at
$38,700.
                      AVAILABLE INFORMATION

1st   Franklin   Financial  Corporation   is   subject   to   the
informational  requirements  of the Securities  Exchange  Act  of
1934,   as  amended  (the  "Exchange  Act"),  and  in  accordance
therewith files reports and other information with the Securities
and  Exchange  Commission (the "Commission").  Such  reports  and
other  information  can be inspected and  copied  at  the  public
reference  facilities maintained by the Commission at Room  1024,
450   Fifth  St.,  N.W.,  Washington,  D.C.  20549  and  at   the
Commission's  Regional  Offices or the public  reference  offices
thereof  located at 7 World Trade Center, 13th Floor,  New  York,
New  York  10048  and  at  500 West Madison Street,  Suite  1400,
Chicago,  Illinois 60661.  In addition, copies of  such  material
may  be  obtained  from  the  Public  Reference  Section  of  the
Commission at 450 Fifth St., N.W., Washington, D.C. 20549 at  the
rates  prescribed by the Commission.  The Commission maintains  a
Web  site that contains reports, proxy and information statements
and   other   information   regarding   registrants   that   file
electronically with the Commission.  The address of that site  is
http://www.sec.gov.

         INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The  Company  incorporates  herein  by  reference  the  following
documents:

     (a)   The Company's Annual Report on Form 10-K for the  year
     ended  December 31, 1999 and filed pursuant to Section 15(d)
     of the Exchange Act with the Commission.

     (b)   From  the Company's annual report to security  holders
     for the year ended December 31,1999, which is delivered with
     this Prospectus, the following:

                 (i)    Description  of  business  furnished   in
          accordance  with  the  provisions of  Rule  14a-3(b)(6)
          under the Exchange Act;

                 (ii)   Financial   statements  and   information
          furnished in accordance with the provisions of Rule 14a-
          3(b)(1);

                (iii)   Selected financial data  furnished  as
          required by Item 301 of Regulation S-K;

                (iv)  Supplementary financial data  furnished  as
          required by Item 302 of Regulation S-K; and

                (v)   Management's  Discussion  and  Analysis  of
          Financial Condition and Results of Operations furnished
          as required by Item 303 of Regulation S-K.

     (c)   The Company's Quarterly Reports on Form 10-Q dated  as
     of  March  31,  2000  and June 30, 2000  filed  pursuant  to
     Section 15(d) of the Exchange Act with the Commission.

     (d)  The Company's Quarterly Report on Form 10-Q dated as of
     September  30,  2000  and the quarterly report  to  security
     holders,  included  therein, which is  delivered  with  this
     Prospectus.

Any  statement in the documents incorporated by reference  herein
shall be deemed to be modified or superseded for purposes of this
Prospectus and the Registration Statement of which it is  a  part
to  the  extent  that  a statement contained herein  modifies  or
supersedes   such  statement.   Any  statement  so  modified   or
superseded shall not be deemed, except as modified or superseded,
to  constitute  a  part of this Prospectus  or  the  Registration
Statement of which it is a part.

Copies  of  documents  incorporated  by  reference  (other   than
exhibits)  will  be provided without charge upon request  to  the
Company's  Secretary at 213 East Tugalo Street, Post  Office  Box
880, Toccoa, Georgia 30577, telephone number (706) 886-7571 or 1-
(800)-282-0709.

                   REPORTS TO SECURITY HOLDERS

The  Company provides each security holder with an annual  report
containing  financial  information that  has  been  examined  and
reported  upon,  with  an opinion expressed,  by  an  independent
public  accountant.   Additionally,  the  Company  provides  each
security  holder  with  a quarterly report  containing  unaudited
financial  information.  Each of these reports  for  the  current
year   are   also  available  on  the  Company's  web   site   at
hppt://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

                             -2-
reference, in this prospectus in deciding whether to purchase the
Debentures.

                          RISK FACTORS

You  should  carefully consider the risks described below  before
making  an  investment decision.  If any of the  following  risks
actually  occur, our business, financial condition or results  of
operations  could  be  materially adversely  affected.   In  that
event, you may lose part or all of your investment.

We  are subject to many laws and government regulations, and  any
changes in these laws or regulations may materially and adversely
affect our financial condition and our business operations.

Our  operations are subject to regulation by federal,  state  and
local government authorities and are subject to various laws  and
judicial   and   administrative   decisions   imposing    various
requirements and restrictions which, among other things,  require
that  we obtain and maintain certain licenses and qualifications,
limit  the interest rates, fees and other charges we are  allowed
to  charge, limit or prescribe other terms of our loans,  require
specified disclosures to borrowers, govern the sale and terms  of
insurance  products that we offer and the insurers for  which  we
act  as  agent,  and  define our rights  to  repossess  and  sell
collateral.  Although we believe that we are in compliance in all
material respects with applicable federal, state and local  laws,
rules and regulations, there can be no assurance that a change in
such  laws, or in the interpretation thereof, will not  make  our
compliance  therewith more difficult or expensive,  restrict  our
ability to originate loans, further limit or restrict the  amount
of  interest  and  other charges we earn  under  such  loans,  or
otherwise  adversely affect our financial condition  or  business
operations.

An increase in the interest we pay on our debt and borrowings can
materially and adversely affect our net interest margin.

The  loans  we  make in the ordinary course of our  business  are
subject  to the interest rate and regulatory provisions  of  each
applicable state's lending laws and are made at fixed rates which
are  not adjustable during the term of the loan.  Since the loans
are  made at fixed interest rates and are made using the proceeds
from   the  sale  of  our  fixed  and  variable  rate  securities
(including  the securities offered hereby), we may  experience  a
decrease  in  our net interest margin because increased  interest
costs  cannot  be  passed on to all of our  loan  customers.  Net
interest margin represents the difference between the amount that
we  earn on loans and investments and the amount that we  pay  on
debt  securities and other borrowings.  An increase in prevailing
interest rates could adversely affect our net interest margin.

A  decrease in the sale of our debt securities or an increase  in
requests  for  the redemption of the securities sold  hereby  may
have  a  material adverse affect on our liquidity  and  financial
condition.

Our  liquidity  depends on the sale of our debt  securities,  the
continued availability of unused bank credit from our lenders and
the   collection   of   our  receivables.   Numerous   investment
alternatives  have caused investors to evaluate  more  critically
their  investment  opportunities. The securities  offered  hereby
will  have  interest rates and redemption terms which we  believe
will  generate sufficient sales of debt securities  to  meet  our
liquidity requirements.  Although all of our debt securities  are
subject  to  redemption prior to maturity at the  option  of  the
holder  thereof,  we  are not obligated to  accept  requests  for
redemption  of Debentures during any interest adjustment  period,
and  any  requests  for redemption during an interest  adjustment
period  are  subject  to interest at one-half  the  stated  rate.
Based  upon  the  our  experience,  we  do  not  anticipate  that
redemptions will have a material adverse effect on our liquidity.
However,  there  can be no assurance that we will not  experience
unanticipated  declines in sales of securities  or  increases  in
redemption  requests,  either  of which  could  have  a  material
adverse effect on our liquidity or financial condition.

We  rely  on  credit agreements with banks to meet our redemption
obligations and fund a portion of our general operations.  If  we
are  unable  to continue to borrow under these credit agreements,
or  if  we are unable to collect our receivables, we may  not  be
able  to  meet  our  obligations  under  the  securities  offered
hereunder.
                             -3-
We  have a Credit Agreement with three banks under which  we  may
make  borrowings in order to meet the redemption requests of  our
security   holders   and  our  other  liquidity   and   operating
requirements.    The  Credit  Agreement  provides   for   maximum
borrowings  of $21,000,000 or 70% of the net finance receivables,
whichever is less.  Borrowings are on an unsecured basis at  1/4%
above  the  prime  rate  of interest.  In addition,  there  is  a
commitment  fee  of  5/8%  of  the available  line  less  average
borrowings  and  an agent's fee of 1/8% of the total  line.   The
Credit Agreement has a commitment termination date of June 30  in
any  year in which written notice of termination is given by  the
banks.   If  written  notice  is given  in  accordance  with  the
agreement, the outstanding balance of the loans shall be paid  in
full  on  the  date which is three and one half years  after  the
commitment  termination date.  The banks also may  terminate  the
agreement  upon  the  violation of any  of  the  financial  ratio
requirements or covenants contained in the agreement or  in  June
of   any   calendar  year  if  our  financial  condition  becomes
unsatisfactory  to the banks.  Such financial ratio  requirements
include   a  minimum  equity  requirement,  an  interest  expense
coverage ratio and a minimum debt to equity ratio.

We  have another Credit Agreement that provides for an additional
$2,000,000  in  borrowings for general operating purposes.   This
agreement provides for borrowings on an unsecured basis  at  1/8%
above the prime rate of interest and has a commitment termination
date  of  July  1  in any year in which notice of termination  is
given by the bank.  There can be no assurances that either of our
Credit  Agreements will continue to be available to us  at  their
present  amounts, or at all, because each is subject to  periodic
reviews   by   the   lenders,  which  take   into   account   our
profitability,  economic conditions and other  lending  criteria.
We  believe the available borrowings under the two aforementioned
Credit  Agreements  will be adequate to meet  the  our  presently
anticipated funding needs for the foreseeable future.

Our liquidity is dependent, among other things, on the collection
of  our  receivables.   We  continually monitor  the  delinquency
status  of  its  receivables  and promptly  institute  collection
efforts on each delinquent account. Delinquencies of our consumer
finance receivables are likely to be affected by general economic
conditions.  Although current economic conditions have not had  a
material   adverse  effect  on  our  ability   to   collect   our
receivables, no assurances can be given regarding future economic
conditions  or  their  effect  on  our  ability  to  collect  our
receivables.

If  one  or  more  of  the sources of funds discussed  above  are
significantly curtailed for any reason, our ability to  meet  our
obligations,  including  our  obligations  with  respect  to  the
securities offered hereby, could be adversely affected.

The  Debentures are general and unsecured and are subordinate  to
our  Senior  Debt, and the holders of Senior Debt  have  priority
over  the  Debenture holders to recover their investment  in  the
event of our bankruptcy or dissolution.

The  Debentures  will be general, unsecured  obligations  of  1ST
Franklin  Financial  Corporation and  subordinated  in  right  of
payment to all of our Senior Debt (as defined in "Description  of
Variable Rate Subordinated Debentures - Subordination").  We  are
not  limited in the amount  of additional Senior Debt or  secured
obligations we may incur.  For information regarding Senior  Debt
outstanding  as  of  a  recent  date,  see  Appendix  I  to  this
prospectus or the most recent prospectus supplement.

In  the event of any insolvency or bankruptcy proceeding,  or  of
any  receivership, liquidation, reorganization or  other  similar
proceeding  in  connection therewith, relative  to  1st  Franklin
Financial  Corporation or to our creditors, as such,  or  to  our
property,  or  in  the  event  of any  proceeding  for  voluntary
liquidation,  dissolution or other winding  up  of  1st  Franklin
Financial  Corporation,  whether or not involving  insolvency  or
bankruptcy,  then the holders of Senior Debt will be entitled  to
receive  payment  in full of all principal and  interest  on  all
Senior Debt before the holders of the Debentures are entitled  to
receive any payments.

The  ability  of our customers to repay their obligations  to  us
depends  on  their  continued financial stability;  therefore,  a
recession  or  economic  downturn  which  adversely  affects  the
financial  resources  of  our customers  may  have  a  materially
adverse effect on our collections and profitability.

Because  our business consists mainly of the making of  loans  to
individuals   who  depend  on  their  earnings  to   make   their
                             -4-
repayments, our continued profitable operation will depend  to  a
large  extent  on  the continued employment of those  people  and
their  ability to meet their financial obligations as they become
due.   In  the  event of a sustained recession or  a  significant
downturn  in  business with consequent unemployment or  continued
increases  in  the  number  of personal  bankruptcies  among  our
typical  customer base, which events are beyond our  control,  we
could  experience  increased credit  losses  and  our  collection
ratios and profitability could be adversely affected.

            SUMMARY DESCRIPTION OF SECURITIES OFFERED

 The  following is a summary of the principal features  of  the
 securities   being  offered  hereby.   For  a  more   detailed
 discussion,  see  "Description of Variable  Rate  Subordinated
 Debentures".


              Variable Rate Subordinated Debentures
-------------------------------------------------------------
Denominations      Established weekly by the Company
-------------------------------------------------------------
Indenture          The Debentures will be issued pursuant  to
Trustee            an   indenture  between  the  Company  and
                   Synovus  Trust  Company, an  affiliate  of
                   Columbus   Bank  and  Trust  Company,   as
                   Trustee.
-------------------------------------------------------------
Interest Rate      Weekly  offering  rate, compounded  daily,
                   for each established amount.
-------------------------------------------------------------
Interest           Rate  adjusted at the end of each interest
Adjustment         adjustment period to the current  interest
                   rate, compounded daily.
-------------------------------------------------------------
Payment of         Interest will be earned daily and will  be
Interest           payable   at  any  time  at  the  holder's
                   request.
-------------------------------------------------------------
Maturity           Four  years from date of issue but may  be
                   redeemed   at  the  end  of  any  interest
                   adjustment period without penalty.
-------------------------------------------------------------
Redemption by      At  the  end  of  any interest  adjustment
Holder             period without penalty; redemption at  any
                   other time subject to an interest penalty.
-------------------------------------------------------------
Redemption by      The  Company may redeem prior to  maturity
Company            upon 30 days written notice to holder  for
                   a  price  equal to principal plus interest
                   accrued to date of redemption.
-------------------------------------------------------------
Extension of       Maturity    of    each    Debenture     is
Maturity           automatically  extended  on  its  original
                   terms  for  one additional four-year  term
                   subject  to  Interest Adjustment.   Holder
                   may  prevent  such extension by  redeeming
                   the   Debenture  within  15   days   after
                   maturity.  The Company will notify holders
                   30 days in advance of maturity date.
-------------------------------------------------------------
Compound           Debentures  are offered at interest  rates
Interest           which  are compounded daily.  Examples  of
                   annualized  effective  yields  for   daily
                   compounded rates are set forth below:

                          Example      Effective
                          Nominal        Annual
                            Rate          Rate
                             5.0%        5.13%
                             6.0          6.18
                             7.0          7.25
                             8.0          8.33
                             9.0          9.42

                              -5-
                           THE COMPANY

1st  Franklin  Financial  Corporation has  been  engaged  in  the
consumer finance business since 1941, particularly in making  and
servicing direct cash, real estate and sales finance loans.   Our
business is operated through 100 branch offices in Georgia, 33 in
Alabama, 25 in South Carolina, 14 in Mississippi, 13 in Louisiana
and  2  in  North  Carolina.  We fund our loan demand  through  a
combination  of issuance of debt securities and borrowings  under
credit  facilities  with  various  banks.   Our  credit  facility
provides  for borrowings on an unsecured basis up to  $21,000,000
or  70%  of the net finance receivables (as defined by our Credit
Agreement), whichever is less.  Appendix I hereto sets forth  the
amount  of  unused borrowings under the Credit  Agreement  as  of
September 30, 2000.

                         USE OF PROCEEDS

Net  proceeds from sales of the securities offered hereby,  after
payment of estimated expenses of $38,700, will be placed  in  the
general   treasury  of  the  Company  as  sales  are  made.    No
segregation of proceeds will be made, but we expect  to  use  the
net  proceeds  for the redemption of our outstanding  senior  and
subordinated  securities as such debtholders  request  redemption
over  the  next  two years.  The subordinated securities  include
debentures  of the same series as the Debentures offered  hereby;
the senior securities include senior demand notes of the Company,
which are sold from time to time in varying principal amounts and
at  various  interest  rates.  We cannot presently  estimate  the
amount  of  proceeds  which will be required  to  make  mandatory
redemption payments.  Any proceeds not used for redemptions  will
be  used  to  repay bank borrowings and repay amounts outstanding
under our commercial paper program as such amounts come due, make
additional  consumer  finance loans  and  for  general  operating
purposes.

                      PLAN OF DISTRIBUTION

The  Debentures  will  be  offered by  the  Company  through  its
executive   officers.    No   selling   commissions   or    other
remunerations  will  be  paid  directly  or  indirectly  to   any
officers,  directors  or employees of the Company  in  connection
with the sale of the Debentures.  All proceeds from sales of  the
Debentures will be placed in the general treasury of the  Company
as  sales  are  made  (See  "Use  of  Proceeds").   All  offering
expenses,  including  registration fees,  printing,  advertising,
postage and professional fees, will be paid by the Company.

The  offering  is  to  be conducted by the  Company  through  its
executive  officers and there is no assurance  that  all  of  the
securities  offered herein will be sold.  The offering,  however,
is  not  made  contingent upon any minimum amount  of  securities
being sold.

The  Debentures  will  be  sold and  redeemed  at  the  Company's
executive  office located at 213 East Tugalo Street, Post  Office
Box  880,  Toccoa, Georgia 30577.  The telephone number is  (706)
886-7571 or 1-(800)-282-0709.

                   FORWARD-LOOKING INFORMATION

This  registration  statement contains  certain  "forward-looking
statements"   within  the  meaning  of  the  Private   Securities
Litigation  Reform Act of 1995 .  Such forward-looking statements
involve  known and unknown risks, uncertainties and other factors
which  may  cause the actual results, performance or achievements
of  the  Company  to  be  materially different  from  any  future
results, performance or achievements expressed or implied by such
forward-looking statements.  Such factors include  the  risks  we
face  and that are described in the "Risk Factors" section  above
and  as  otherwise  described in our  Form  10-K  and  the  other
periodic  reports that we file with the Commission from  time  to
time.   If  any  of  the events described in  th  "Risk  Factors"
section  and elsewhere in this prospectus occur, they could  have
an  adverse effect on the Company's business, financial condition
and results of operation.  The Company is not obligated to update
any forward-looking statements.
                              -6-
      DESCRIPTION OF VARIABLE RATE SUBORDINATED DEBENTURES

General
-------
In  January  1995,  Columbus Bank and Trust  Company  (the  prior
trustee under the Variable Rate Indenture) transferred its  trust
operations  to  its  new separate trust company  affiliate  named
Synovus  Trust  Company,  which has thereby  become  the  Trustee
(hereinafter  called  the  "Trustee")  under  the  Variable  Rate
Indenture.  All references to the Trustee in this Prospectus  and
the  Registration Statement of which it is a part shall be deemed
to  refer  to Synovus Trust Company unless the context  otherwise
requires.   The  Company has been informed that  the  counsel  to
Columbus  Bank  and  Trust  Company  believes  that  pursuant  to
applicable banking regulations and by agreement with the Company,
Columbus Bank and Trust Company remains responsible to holders of
Debentures  for  all  actions  of Synovus  Trust  Company  as  if
performed  by  Columbus  Bank  and  Trust  Company  itself.   The
following  statements with respect to the Debentures are  subject
to  the  detailed  provisions  of the  Variable  Rate  Indenture.
Whenever  any particular article or section of the Variable  Rate
Indenture  is referred to, the statement made in connection  with
such reference is qualified in its entirety by such reference.

The  Debentures  are  registered and issued  without  coupons  in
Series  form.  Any amount of any Series may be issued.  There  is
no  limit on the principal amount of Debentures of any Series, or
of  all  Series issuable under the Variable Rate Indenture.   The
dollar  amount of Debentures outstanding under the Variable  Rate
Indenture  as of a recent date is set forth on Appendix  I.   The
Company and the Trustee may amend the Variable Rate Indenture  to
limit  the  principal amount of a particular Series or  to  allow
additional  Series of Debentures with no limitations  as  to  the
maximum  amount  of  any increase or to the number  of  increases
which may be made.  The Company may change the interest rates and
the  maturities  of  the Debentures offered  herein  and  of  any
subsequent  Series which may be offered, provided  that  no  such
change  shall affect any Debenture of any Series issued prior  to
the date of change.

The Debentures are direct obligations of the Company, but are not
secured.   Principal and interest are payable  at  the  executive
office  of  the  Company in Toccoa, Georgia.  The Debentures  are
executed  by the Company and authenticated and delivered  to  the
purchaser by the Trustee upon written order of the Company.

Established Features of Series 1 Debentures
-------------------------------------------
The  Variable  Rate Subordinated Debentures Series 1  ("Series  1
Debentures") offered herein are issued and dated as of  the  date
when  purchased.  The interest rate for a Series 1  Debenture  is
compounded  daily  and  is payable at any time  at  the  holder's
request.  This request may be made to the Company by phone,  mail
or  in  person at the Investment Center.  The Series 1 Debentures
mature four years from date of issue, and may be extended for one
additional  four-year  term as described under  "Extension  After
Maturity".

Each Thursday, on a weekly basis, the Company establishes various
minimum purchase amounts with varying interest rates and interest
adjustment  periods ("established features") for each  respective
minimum  purchase amount.  The purchase amount and  the  interest
adjustment period thereby established are maintained for the term
of the Series 1 Debenture.  The interest rate at which the Series
1  Debenture  is  sold  is  set only  for  the  initial  interest
adjustment  period.  The Company anticipates that it  will  offer
the  Series  1  Debentures with interest rate adjustment  periods
ranging from one month to four years.

At  the  end of each interest adjustment period the Company  will
notify  the holder by mail of the new interest rate,  which  will
be the same interest rate that is applicable to all new Series  1
Debentures  being offered during the same week and  at  the  same
terms.   The new interest rate will be determined by the Company,
in its discretion, based on general market rates of interest.  If
the  holder  elects to retain the Series 1 Debenture at  the  new
rate,  no  action is required of the holder as the new rate  will
become  effective as of the first day of the interest  adjustment
period.   If  the holder elects not to accept the new  rate,  the
holder  can redeem the Series 1 Debenture without penalty at  the
end  of  the interest adjustment period, either in person  or  by
mail.  See "Redemption at Request of Holder Prior to Maturity".
                             -7-
Debentures  with the current established features  are  available
for  the  period  from Thursday through the following  Wednesday.
The  current established features are applicable to all Series  1
Debentures  sold by the Company during that period.  The  Company
publishes  this information in a newspaper of general circulation
and,  in  addition,  such information may be  obtained  from  the
Company's web site maintained at http://www.1ffc.com or  directly
from   the   Company's  executive  offices  in  Toccoa,  Georgia.
Established  features  are  also set  forth  in  Rule   424(b)(2)
prospectus  supplements that are filed weekly with the Securities
and Exchange Commission.

Subordination
-------------
The  payment  of the principal and interest on the Debentures  is
subordinate in right of payment, as set forth in Article  Ten  of
the Variable Rate Indenture, to all Senior Debt of the Company.

The  term  "Senior Debt" means all indebtedness  of  the  Company
outstanding  at any time except debt of the Company that  by  its
terms  is  not senior in right of payment to the Debentures,  and
indebtedness represented by the Company's outstanding Debentures,
all of which are pari passu.

The  indebtedness evidenced by the Debentures shall, in case  the
Debentures  are  declared due and payable before their  expressed
maturity  because  of  the occurrence  of  a  default  under  the
Variable Rate Indenture, be entitled to payment only after  there
shall  have been paid in full all principal and interest on  such
Senior  Debt.   Likewise,  in  the event  of  any  insolvency  or
bankruptcy  proceeding,  or  of  any  receivership,  liquidation,
reorganization   or  other  similar  proceeding   in   connection
therewith, relative to the Company or to its creditors, as  such,
or  to  its  property,  or in the event  of  any  proceeding  for
voluntary  liquidation, dissolution or other winding  up  of  the
Company, whether or not involving insolvency or bankruptcy,  then
the  holders of Senior Debt shall be entitled to receive  payment
in  full of all principal and interest on all Senior Debt  before
the  holders  of  the  Debentures are  entitled  to  receive  any
payments.

The  amount of the Company's Senior Debt outstanding at a  recent
date is set forth in Appendix I.

Redemption by Company Prior to Maturity
---------------------------------------
The  Company may redeem any Debenture of any Series at  any  time
prior  to  maturity for a redemption price equal to the principal
amount  plus  any unpaid interest thereon to date of  redemption.
The Company will notify Debentureholders whose Debentures are  to
be  redeemed not less than 30 nor more than 60 days prior to  the
date fixed for redemption.  In the event the entire Series is not
called  for  redemption, the redemption call shall be  made   pro
rata.

Redemption at Request of Holder Prior to Maturity
-------------------------------------------------
At  the request of the holder, the Company will redeem any Series
1  Debenture at the end of any interest adjustment period  for  a
redemption  price equal to the principal amount plus  any  unpaid
interest thereon to date of redemption.

At  the  request of the holder, the Company may, at  its  option,
redeem  any  Series  1  Debenture during any interest  adjustment
period for a price equal to the principal amount plus interest at
one-half the stated rate on the Series 1 Debenture.

If  the  holder  dies before maturity, the Company  may,  at  its
option,  redeem  any  Series 1 Debenture for a  redemption  price
equal to the principal amount plus any unpaid interest thereon to
date  of  redemption. Historically, the Company has  honored  all
such requests for early redemption.

All  redemptions will be made at the Company's executive  offices
in Toccoa, Georgia, either in person or by mail.
                             -8-
Extension After Maturity
------------------------
The  maturity  of  a  Series 1 Debenture  will  be  automatically
extended  from the original maturity date for a period  equal  to
the  original term of such Series 1 Debenture unless  the  holder
submits  the  Series 1 Debenture for redemption  within  15  days
after  its  maturity or the Company tenders the  amount  due  the
holder  within 15 days after maturity.  In the event of  such  an
extension,  all provisions of the Series 1 Debenture will  remain
unchanged with the exception of the interest rate which  will  be
changed in accordance with the interest adjustment provision.  If
the  Company does not elect to tender payment, it will notify the
holder of this extension provision at least 30 days prior to  the
maturity date.

Restrictions Upon the Company
-----------------------------
There  are no restrictions in the Variable Rate Indenture against
the  issuance  of  additional  securities  or  the  incurring  of
additional debt including Senior Debt and secured obligations.

Modification of the Variable Rate Indenture
-------------------------------------------
The  Variable  Rate Indenture contains provisions permitting  the
Company and the Trustee, with the consent of the holders  of  not
less  than two-thirds of the outstanding principal amount of  the
Debentures,  to  execute  supplemental  indentures   adding   any
provisions to or changing in any manner or eliminating any of the
provisions  of the Variable Rate Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of
such  Debentures;  provided, however, that no  such  supplemental
indenture  shall  change  the fixed maturity  of  any  Debenture,
reduce the principal amount thereof, reduce the rate, change  the
time  of  payment  of  interest thereon,  reduce  the  amount  of
Debentures  whose holders must consent to an amendment,  or  make
any changes regarding the Variable Rate Indenture that relate  to
waiver of default, the rights of holders to receive payments, and
the  requirements of consent of the Debentureholders, without the
consent of the holder of each Debenture so affected.

The Company and the Trustee may amend the Variable Rate Indenture
to  allow  the  issuance of additional amounts  of  a  particular
Series or additional Series of Debentures without the consent  of
the Debentureholders.  There are no limitations as to the maximum
amount of any increase or to the number of increases which may be
made.   The  Company  may  change  the  interest  rates  and  the
maturities of the Debentures offered hereby and of any subsequent
Series  which may be offered without entering into a supplemental
indenture, provided that no such change will affect any Debenture
of any Series issued prior to the date of change.

Events of Default and Notice Thereof
------------------------------------
An  Event of Default is defined by the Variable Rate Indenture to
mean any of the following:  (a) failure to pay principal upon any
Debenture when the same becomes due; (b) failure to pay  interest
upon  any  Debenture when the same becomes due  and  the  Default
continues for 30 days; (c) failure, after notice from the Trustee
or  from the holders of at least 25% in principal amount  of  the
Debentures  of the affected Series, to observe or perform  within
30  days   any  of the covenants contained in the  Variable  Rate
Indenture or Debentures; or (d) the occurrence of certain  events
of bankruptcy, insolvency or reorganization.

The  Variable  Rate  Indenture provides that the  Trustee  shall,
within  90 days after the occurrence thereof, give the registered
holders of the Debentures 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  such  holders.
                             -9-
Rights on Default
-----------------
The  Trustee by notice to the Company, or the holders of at least
25% in principal amount of the Debentures of the affected Series,
may  declare  the  principal  of  and  accrued  interest  on  all
Debentures due upon the happening of any of the Events of Default
specified  in the Variable Rate Indenture, but the holders  of  a
majority  of the outstanding principal amount of such  Debentures
may waive any default and rescind such declaration if the default
is  cured  within  the 30 day period, except  a  default  in  the
payment  of  the principal of or interest on any Debenture  or  a
default  on  Senior  Debt.  The holders  of  a  majority  of  the
outstanding  principal amount of the Debentures of  the  affected
Series  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, provisions  of
the  Variable  Rate  Indenture, or is unduly prejudicial  to  the
rights of the other Debentureholders or would involve the Trustee
in  personal liability.  Holders may not institute any proceeding
to enforce the Variable Rate Indenture unless the Trustee refuses
to act for 60 days after request from the holders of at least 25%
in  principal amount of the Debentures of the affected Series and
during  such 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 the holder's Debenture when due.

Concerning the Trustee
----------------------
The  Trustee  does not have any other business relationship  with
the Company.  The Trustee maintains its principal corporate trust
office in Columbus, Georgia.

Evidence to be Furnished Trustee
--------------------------------
The  Variable  Rate  Indenture  provides  that,  as  evidence  of
compliance  with  the conditions precedent provided  for  in  the
Variable Rate Indenture relating to any action to be taken by the
Trustee  upon  the  application or demand  of  the  Company,  the
Company shall furnish to the Trustee an officer's certificate and
an  opinion of counsel stating that all such conditions precedent
have  been  met.   Within 120 days after the end of  each  fiscal
year,  the  Company  shall  file with the  Trustee  an  officer's
certificate stating whether or not, to the best knowledge of  the
signers,  the  Company is in default in the  performance  of  any
covenant,  agreement or condition contained in the Variable  Rate
Indenture  and,  if so, specifying each such default,  and,  with
respect to each, the action taken or proposed to be taken by  the
Company to remedy such default.


                          LEGAL OPINION

The  validity  of the securities offered hereby has  been  passed
upon  for  the  Company by Jones, Day, Reavis &  Pogue,  Atlanta,
Georgia.

                               -10-

               1st FRANKLIN FINANCIAL CORPORATION

                    Appendix I to Prospectus
              Information as of September 30, 2000


1.   Ratio of Earnings to Fixed Charges:


      Sept.                December 31
       30       ---------------------------------
      2000      1999   1998   1997   1996    1995
      ----      ----   ----   ----   ----    ----
      1.87      2.00   1.94   1.72   1.95    2.06



2.   Unused  borrowings  under   the
     $21,000,000 Credit
     Agreement: ...................... $ 21,000,000

3.   Debentures  outstanding   under
     Indenture: ...................... $ 42,377,612

4.   Senior  Debt (as defined  under
     the  caption   "Description  of
     Variable    Rate   Subordinated
     Debentures   -  Subordination")
     outstanding:  ................... $114,685,879


A  more  current Appendix I, if appropriate, will be attached  to
the  cover page of this Prospectus as a supplement.  If attached,
that supplemental Appendix I supersedes this information.
                              -11-

You  should  rely  only  on  the information  contained  in  this
prospectus.   We have not authorized anyone to provide  you  with
information different from that contained in this prospectus.  We
are  offering to sell, and seeking offers to buy, the  securities
covered  by  this  prospectus only in jurisdictions  where  these
ofers and sales are permitted.  The information contained in this
prospectus  is  accurate only as of the date of this  prospectus,
regardless of the time of delivery of this prospectus or  of  any
sale of the securities covered hereby.



                        TABLE OF CONTENTS


        Available Information                              2
        Incorporation of Certain Documents by Reference    2
        Reports to Security Holders                        2
        Risk Factors                                       3
        Summary Description of Securities Offered          5
        The Company                                        6
        Use of Proceeds                                    6
        Plan of Distribution                               6
        Forward-Looking Information                        6
        Description of Variable Rate
            Subordinated Debentures                        7
        Legal Opinion                                     10
        Appendix I                                        11












                           $30,000,000

             Variable Rate Subordinated Debentures -

                            Series 1





                               -12-