10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2023

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to _____________

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Commission File Number 2-27985

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1st FRANKLIN FINANCIAL CORPORATION

A Georgia Corporation I.R.S. Employer Identification No. 58-0521233

135 East Tugalo Street

Post Office Box 880

Toccoa, Georgia 30577

(706) 886-7571

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Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one) Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer x Smaller Reporting Company o Emerging Growth Company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Outstanding April 30, 2023
Voting Common Stock, par value $100 per share	1,700 Shares
Non-Voting Common Stock, no par value	168,300 Shares

PART I. FINANCIAL INFORMATION

ITEM 1.    Financial Statements:

The information contained under the following captions in the Company's Quarterly Report to Investors as of and for the three months ended March 31, 2023 is incorporated by reference herein. See Exhibit 13.

Condensed Consolidated Statements of Financial Position (Unaudited): March 31, 2023 and December 31, 2022

Condensed Consolidated Statements of Income and Retained Earnings (Unaudited): Three Months Ended March 31, 2023 and March 31, 2022

Condensed Consolidated Statements of Comprehensive Income (Unaudited): Three Months Ended March 31, 2023 and March 31, 2022

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited): Three Months Ended March 31, 2023 and March 31, 2022

Condensed Consolidated Statements of Cash Flows (Unaudited): Three Months Ended March 31, 2023 and March 31, 2022

Notes to Unaudited Condensed Consolidated Financial Statements

ITEM 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations:

The information contained under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the Company's Quarterly Report to Investors as of and for the three months ended March 31, 2023 is incorporated by reference herein. See Exhibit 13.

ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk:

The information contained under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operations -- Quantitative and Qualitative Disclosures About Market Risk" in the Company's Quarterly Report to Investors as of and for the three months ended March 31, 2023 is incorporated by reference herein. See Exhibit 13.

ITEM 4.    Controls and Procedures:

We maintain a set of disclosure controls and procedures, as such term is defined in Rule 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. An evaluation was carried out as of the end of the period covered by this report, under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of our disclosure controls and procedures. Based on that evaluation, the CEO and CFO have concluded that, as of March 31, 2023, the Company’s disclosure controls and procedures were effective. No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

There were no changes in the Company's internal control over financial reporting that occurred during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1.    Legal Proceedings:

Between March and April 2023, five putative class action lawsuits were filed against the Company in the United States District Court for the Northern District of Georgia. The complaints generally assert claims of negligence, breach of implied contract and, in one case, violations of the Georgia Deceptive Practices Act, on behalf of a putative class of individuals whose personally identifiable information (“PII”) was accessed in the previously disclosed November 2022 cyber-attack on the Company and related data breach. The plaintiffs are seeking equitable and injunctive relief and an unspecified amount of damages in connection with their claims, as well as an award of attorneys’ fees and costs. The Company intends to vigorously defend against these matters. On May 4, 2023, the Court entered a sua sponte Order consolidating all five (5) cases into one which is captioned Morehead v. 1st Franklin Financial Corporation, Case No. 2023-CV-0038=SCJ.

In addition, the Company is, and expects to be, involved in various legal proceedings incidental to its business from time to time. In the opinion of Management, the ultimate resolution of any such known claims or proceedings is not expected to have a material adverse effect on the Company’s financial position, liquidity or results of operations.

ITEM 6.    Exhibits:

(a)Exhibits:
13	Quarterly Report to Investors as of and for the Three Months Ended March 31, 2023.
31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934.
31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934.
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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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 thereunto duly authorized.

	1st FRANKLIN FINANCIAL CORPORATION
	Registrant
	/s/ Virginia C. Herring
	President and Chief Executive Officer
	(Principal Executive Officer)
	/s/ Brian J. Gyomory
	Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)
Date:    May 15, 2023

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Exhibit 13

1st

FRANKLIN

FINANCIAL

CORPORATION

QUARTERLY

REPORT TO INVESTORS

AS OF AND FOR THE

THREE MONTHS ENDED

MARCH 31, 2023

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following narrative is Management’s discussion and analysis of the foremost factors that influenced 1st Franklin Financial Corporation’s and its consolidated subsidiaries’ (the “Company”, “our” or “we”) financial condition and operating results as of and for the three-month periods ended March 31, 2023 and 2022. This discussion and analysis and the accompanying unaudited condensed consolidated financial information should be read in conjunction with the Company's audited consolidated financial statements and related notes included in the Company’s 2022 Annual Report. Results achieved in any interim period are not necessarily indicative of the results to be expected for any other interim or full year period.

Forward-Looking Statements:

Certain information in this discussion and other statements contained in this Quarterly Report are forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are all statements other than those of historical fact. The Company's actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein which involve known and unknown risks and uncertainties. Possible factors that could cause actual future results to differ from expectations include, but are not limited to, adverse general economic conditions, including changes in employment rates or in the interest rate environment, unexpected reductions in the size or collectability of our loan portfolio, unexpected increases in our allowance for credit losses, reduced sales or increased redemptions of our securities, unavailability of borrowings under our credit facility, federal and state regulatory changes affecting consumer finance companies, unfavorable outcomes in legal proceedings and adverse or unforeseen developments in any of the matters described under “Risk Factors” in our 2022 Annual Report, as well as other factors referenced elsewhere in our filings with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to update any forward-looking statements, except as required by law.

The Company:

We are engaged in the consumer finance business, primarily in making consumer installment loans to individuals. Other lending-related activities include the purchase of sales finance contracts from various dealers and the making of first and second mortgage real estate loans on real estate. All of our loans are at fixed rates, and contain fixed terms and fixed payments. As of March 31, 2023, the Company’s business was operated through 119 branch offices in Georgia, 46 in Alabama, 43 in South Carolina, 40 in Mississippi, 40 in Tennessee, 37 in Louisiana, 14 in Texas, 7 in Kentucky, and 1 in Virginia. The Company and its operations are guided by a strategic plan which includes planned growth through strategic expansion of our branch office network. The majority of our revenues are derived from finance charges earned on loans outstanding. Additional revenues are derived from earnings on investment securities, insurance income and other miscellaneous income.

As previously disclosed, the Company suffered a cyber-attack against certain systems within the Company's network environment on or about November 17, 2022. The attack temporarily affected operations and caused delays in originating and servicing loans and investments at some locations. During the incident, the attackers had access to personally identifiable information ("PII") of certain Company employees, customers, and investors. The incident which only affected systems, was limited to the Company's on-site file directory system, but not its off-site core operating system. Full lending and investing operations were restored within days of the incident, and the Company provided notifications to all potentially-affected individuals. As of May 15, 2023, the Company is named as a defendant in one consolidated consumer class action suit (originally began as five separate cases alleging harm from the cyber-attack). The Company maintains a cyber insurance policy that we expect indemnify the company for the majority of the costs of investigation, remediation, business interruption, and costs pertaining to the breach.

Financial Condition:

The Company’s total assets decreased $10.1 million (0.6%) to $1,152.8 million at March 31, 2023 compared to $1,162.9 million at December 31, 2022. The decrease was primarily due to a lower loan portfolio and was partially offset by increases in cash and in the investments in securities portfolio.

Cash and cash equivalents (excluding restricted cash) increased $4.5 million (9%) at March 31, 2023 compared to prior year-end. Funds generated from operations and an increase in sales of the Company’s senior

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debt securities were responsible for the increase. Restricted cash consists of funds maintained in restricted accounts at the Company's insurance subsidiaries in order to comply with certain requirements imposed on insurance companies by the State of Georgia and to meet the reserve requirements of its reinsurance agreements. Restricted cash also includes escrow deposits held by the Company on behalf of certain mortgage real estate customers. At March 31, 2023, restricted cash increased $0.6 million (4%) compared to December 31, 2022. See Note 3, "Investment Securities" in the accompanying "Notes to Unaudited Condensed Consolidated Financial Statements" for further discussion of amounts held in trust.

Gross Loan originations decreased $19.7 million for the three-month period ended March 31, 2023 compared to the same period last year. Our net loan portfolio decreased $19.9 million (2%) to $780.4 million at March 31, 2023 compared to $800.3 million at December 31, 2022. Included in our net loan portfolio is our allowance for credit losses which reflects estimated current expected credit losses in the loan portfolio as of the date of the statement of financial position. Management decreased the allowance $0.7 million to $74.5 million at March 31, 2023, compared to $75.2 million at December 31, 2022. See Note 2, “Allowance for Credit Losses,” in the accompanying “Notes to Unaudited Condensed Consolidated Financial Statements” for further discussion of the Company’s allowance for credit losses. Management believes the allowance for credit losses is adequate to cover expected losses inherent in the portfolio as of March 31, 2023; however, unexpected changes in trends or deterioration in economic conditions could result in additional changes in the allowance. Any change in our allowance for credit losses could have a material impact on our results of operations or financial condition in the future.

The Company’s investment securities portfolio increased $3.9 million (2%) compared to the prior year-end. The majority of the increase was due to an increase in fair market values. The portfolio consists primarily of invested surplus funds generated by the Company's insurance subsidiaries. Management maintains what it believes to be a conservative approach when formulating its investment strategy. The Company does not participate in hedging programs, interest rate swaps or other similar activities. This investment portfolio consists mainly of U.S. Treasury bonds, government agency bonds, and various municipal bonds. Investment securities have been designated as “available for sale” at March 31, 2023 with any unrealized gain or loss accounted for in the equity section of the Company’s consolidated statement of financial position, net of deferred income taxes for those investments held by the insurance subsidiaries as well as the statement of comprehensive income.

Other assets increased $0.8 (1%) at March 31, 2023 compared to December 31, 2022. Operating lease right-of-use assets increased $1.6 million (4%) mainly due to an increase in the number branches in the Company's network. Other assets decreased by $0.8 million (2%). Increases in miscellaneous receivables were offset by decreases in prepaid expenses.

The Company's senior debt is comprised of a line of credit from a bank and the Company’s senior demand notes and commercial paper debt securities. Our subordinated debt is comprised of the variable rate subordinated debentures sold by the Company. The aggregate amount of senior and subordinated debt outstanding at March 31, 2023 was $840.2 million compared to $833.4 million at December 31, 2022, representing an increase of $6.8 million (1%). The Company had out-flows of cash with a distribution of $10.3 million for the 2022's incentive bonus program, a decrease of $5.7 million in senior demand notes, and a decrease of $0.8 million in subordinated debentures. The Company had an in-flow of cash through its normal business operations of $5.1 million. This resulted in an increase in the outstanding balance on the bank line of credit by $13.0 million.

Operating lease liabilities increased $1.6 million (4%) while accrued expenses and other liabilities decreased $14.3 million (46%) to $16.8 million at March 31, 2023 compared to $31.2 million at December 31, 2022. Payment of $10.3 million for 2022 incentive bonuses in February 2023 was the primary factor causing the decrease in accrued expenses and other liabilities.

Results of Operations:

During the three-month period ended March 31, 2023, total revenues were $84.3 million compared to $81.7 million during the same period a year ago. Growth in the Company’s loan portfolio since the prior year comparable period resulted in higher interest and finance charge revenue. The increase was partially offset by a $0.3 million decrease in insurance premium and commission revenue.

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Net loss was $6.7 million for the three-month period ended March 31, 2023, which is a $12.7 million change compared to the net income of $6.1 million for the period ended March 31, 2022. Higher revenues were offset by higher other expenses, higher interest costs and an increased provision for loan losses during the quarter just ended compared to a year ago.

Net Interest Income

Net interest income represents the difference between income on earning assets (loans and investments) and the cost of funds on interest bearing liabilities. Our net interest income is affected by the size and mix of our loan and investment portfolios as well as the spread between interest and finance charges earned on the respective assets and interest incurred on our debt. Net interest income increased $0.5 million during the three-month period ended March 31, 2023 compared to the same period in 2022. An increase in our average daily net loan balances of $36.2 million (4%) during the three months just ended compared to the same period a year ago resulted in higher interest and finance charges earned during the current year.

Average daily borrowings increased $69.7 million (9%) during the three-month period ended March 31, 2023, compared to the same period in 2022. The Company's average borrowing rates were 4.00% and 3.37% during the three-month period ended March 31, 2023, and 2022, respectively. Interest expense increased $2.4 million (37%) during the three-month period just ended compared to the same period a year ago due to the higher average daily borrowings.

Management projects that, based on historical results and current estimates, average net receivables will grow during the remainder of 2023, and net interest income is expected to increase accordingly. However, a decrease in net receivables or an increase in interest rates on outstanding borrowings could negatively impact our net interest income.

Insurance Revenue

Insurance revenues were $0.3 million (2%) lower during the three-month period ended March 31, 2023, compared to March 31, 2022. Insurance claims and expenses decreased $0.7 million (13%) during the three-month period just ended compared to the same period a year ago.

Other Revenue

Other revenue increased $0.1 million (6%) during the three-month ended March 31, 2023, compared to the same period a year ago mainly due to increased sales of auto club memberships offered to loan customers and a cash-back rebate received by the company's credit card.

Provision for Credit Losses

The Company’s provision for credit losses is a charge against earnings to maintain the allowance for credit losses at a level that Management estimates is adequate to cover expected losses as of the date of the statement of financial position. See Note 2. “Allowance for Credit Losses,” in the accompanying “Notes to Consolidated Financial Statements” for further discussion of the Company’s provision for credit losses.

The provision for credit losses increased $9.0 million (54%) during the three-month period ended March 31, 2023 compared the same period last year. Net charge-offs increased $10 million (67%) to $26.1 million and $15.7 million during the three-month period ended March 31, 2023, and 2022, respectively.

Determining a proper allowance for credit losses is a critical accounting estimate which involves Management’s judgment with respect to certain relevant factors, such as historical and expected loss trends, unemployment rates in various locales, delinquency levels, bankruptcy trends and overall general and industry specific economic conditions. The percent of the loan portfolio greater than 30 days delinquent is 7.37% at March 31, 2023 compared to 9.44% at December 31, 2022. The ratio of bankrupt accounts to the loan portfolio balance was 1.62% at March 31, 2023 and 1.56% at December 31, 2022, respectively.

Management considers recent economic factors in its analysis. The U.S. Federal Reserve raised the Federal Funds Rate for the 10th consecutive time on May 3, 2023, representing a cumulative increase of 5% since March 2022’s near zero rate. The benchmark Federal Funds Rate is at a 16-year high. Despite the central bank’s efforts, prices of consumer goods have increased, although energy prices appear to have stabilized. Unemployment remains near historic lows at 3.4% as of April 2023. The Federal Reserve Chairman Powell stated that conditions in the banking sector improved since the failure of two large banks in March.

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The allowance for credit losses decreased by $0.7 million to $74.5 million which includes a qualitative adjustment of $7.6 million, for the three-month period ended March 31, 2023, compared to the prior year-end.

Management believes that the allowance for credit losses, as calculated in accordance with the Company’s current expected credit loss (“CECL”) methodology, is appropriate to cover expected credit losses on loans at March 31, 2023; however, because the allowance for credit losses is based on estimates, there can be no assurance that the ultimate charge-off amount will match such estimates. Management may determine it is appropriate to increase or decrease the allowance for expected credit losses in future period, or actual losses in any period, either of which events could have a material impact on our results of operations in the future.

Other Operating Expenses

Other operating expenses increased $4.5 million (10%) during the three-month period ended March 31, 2023, compared to the same period a year ago. Other operating expenses encompass personnel expense, occupancy expense and miscellaneous other expenses.

Personnel expense increased $0.2 million (1%) during the three-month period ended March 31, 2023, compared to the same period in 2022. Inflation-based salary adjustments for certain team members were offset by the lower bonus accrual for the three-month period.

Occupancy expenses increased $0.8 million (18%) during the three-month period ended March 31, 2023, compared to the same period a year ago. Increases in depreciation expenses due to additional fixed assets purchased, monthly rent expenses, and maintenance expenses attributed to the increase in occupancy expenses.

Other expenses increased $3.5 million (25%) during the three-month period ended March 31, 2023, compared to the same period in 2022. Higher consultant fees, information technology expenses, credit bureau dues, and legal and audit fees were the primary factors driving the increase in miscellaneous other operating expenses during the three-month period ended March 31, 2023 as compared to the same period in 2022.

Income Taxes

The Company has elected to be, and is, treated as an S corporation for income tax reporting purposes. Taxable income or loss of an S corporation is passed through to, and included in, the individual tax returns of the shareholders of the Company, rather than being taxed at the corporate level. Notwithstanding this election, however, income taxes continue to be reported for, and paid by, the Company's insurance subsidiaries as they are not allowed to be treated as S corporations, and for the Company’s state taxes in Louisiana, which does not recognize S corporation status. Deferred income tax assets and liabilities are recognized and provisions for current and deferred income taxes continue to be recorded by the Company’s subsidiaries. The Company uses the liability method of accounting for deferred income taxes and provides deferred income taxes for all significant income tax temporary differences.

Effective income tax rate was -17% during the three-month period ended March 31, 2023 compared to 11% and during the three-month period ended March 31, 2022. The effective income tax rate differs from the statutory rate due to changes in the proportion of income earned by the Company's insurance subsidiaries.

Quantitative and Qualitative Disclosures About Market Risk:

The possibility of market fluctuations in market interest rates during the remainder of the year could have an impact on our net interest margin. Please refer to the market risk analysis discussion contained in our Annual Report as of and for the year ended December 31, 2022 for a more detailed analysis of our market risk exposure. There have been no material changes to our market risk during the three-month ended March 31, 2023.

Liquidity and Capital Resources:

As of March 31, 2023 and December 31, 2022, the Company had $54.2 million and $49.7 million, respectively, invested in cash and cash equivalents (excluding restricted cash), the majority of which was held by the insurance subsidiaries.

The Company’s investments in marketable securities can be readily converted into cash, if necessary. State insurance regulations limit the use an insurance company can make of its assets. Dividend payments to a parent company by its wholly-owned life insurance subsidiary are subject to annual limitations and are restricted to the lesser of 10% of policyholders’ surplus or the net statutory gain from operations before recognizing

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realized investment gains of the individual insurance subsidiary during the prior year. Dividend payments to a parent company by its wholly-owned property and casualty insurance subsidiary are subject to annual limitations and are restricted to the lesser of 10% of policyholders’ surplus or the net statutory income before recognizing realized investment gains of the individual insurance subsidiary during the prior two years.

At December 31, 2022, Frandisco Property and Casualty Insurance Company and Frandisco Life Insurance Company had a statutory surplus of $132.0 million and $96.2 million, respectively. The maximum aggregate amount of dividends these subsidiaries can pay to the Company during 2023, without prior approval of the Georgia Insurance Commissioner, is approximately $46.8 million. The Company requested and received approval from the Georgia Insurance Department for two separate transactions involving dividends and/or lines of credit with maximum amounts of $75.0 million from Frandisco Life Insurance Company and $105.0 million from Frandisco Property and Casualty Insurance Company for transactions on or before December 31, 2023. Effective March 31, 2023, Frandisco Property and Casualty Insurance Company and Frandisco Life Insurance Company amended their previous unsecured revolving lines of credit available to the Company to $105.0 million and $75.0 million, respectively and extended the term of each respective line of credit to December 31, 2026. No amounts are currently outstanding on these lines.

Most of the Company’s liquidity requirements are financed through the collection of receivables and through the sale of short-term and long-term debt securities. The Company’s continued liquidity is therefore dependent on the collection of its receivables and the sale of debt securities that meet the investment requirements of the public. Overall, debt securities increased $6.2 million (1%) between December 31, 2022 and March 31, 2023. In addition to its receivables and securities sales, the Company has an external source of funds available under a credit facility with Wells Fargo Bank, N.A. (as amended, the “credit agreement”). The credit agreement provides for borrowings of up to $230.0 million or 70% of the Company's net finance receivables (as defined in the credit agreement), whichever is less, and has a maturity date of February 28, 2025. Available borrowings under the credit agreement were $149.4 million and $162.5 million at March 31, 2023 and December 31, 2022 at an interest rate of 7.52% and 6.97%, respectively.

The credit agreement requires the Company to comply with certain covenants customary for financing transactions of this nature, including, among others, maintaining a minimum interest coverage ratio, a minimum loss reserve ratio, a minimum ratio of earnings to interest, taxes and depreciation and amortization to interest expense, a minimum asset quality ratio, a minimum consolidated tangible net worth ratio, and a maximum debt to tangible net worth ratio, each as defined. The Company must also comply with certain restrictions on its activities consistent with credit facilities of this type, including limitations on: (a) restricted payments; (b) additional debt obligations (other than specified debt obligations); (c) investments (other than specified investments); (d) mergers, acquisitions, or a liquidation or winding up; (e) modifying its organizational documents or changing lines of business; (f) modifying certain contracts; (g) certain affiliate transactions; (h) sale-leaseback, synthetic lease, or similar transactions; (i) guaranteeing additional indebtedness (other than specified indebtedness); (j) capital expenditures; or (k) speculative transactions. The credit agreement also restricts the Company or any of its subsidiaries from creating or allowing certain liens on their assets, entering into agreements that restrict their ability to grant liens (other than specified agreements), or creating or allowing restrictions on any of their ability to make dividends, distributions, inter-company loans or guaranties, or other inter-company payments, or inter-company asset transfers.

On May 12, 2023, the Company entered into an amendment to the credit agreement waiving the Company's failure to comply with the EBITDA Ratio, modifying the definition of the EBITDA Ratio, and modifying the definition of Restricted Payments. See Note 11, "Subsequent Event" in the accompanying "Notes to Unaudited Condensed Consolidated Financial Statements" for further discussion.

Any increase in the Company’s allowance for credit losses would not directly affect the Company’s liquidity, as any adjustment to the allowance has no impact on cash; however, an increase in the actual loss rate may have a material adverse effect on the Company’s liquidity. The inability to collect loans could materially impact the Company’s liquidity in the future.

Critical Accounting Policies:

The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States and conform to general practices within the financial services industry. The Company’s critical accounting and reporting policies include the allowance for credit losses, revenue recognition and insurance claims reserves.

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Allowance for Credit Losses

Provisions for credit losses are charged to operations in amounts sufficient to maintain the allowance for credit losses at a level considered adequate to cover expected credit losses in our loan portfolio.

The allowance for credit losses is established based on the determination of the amount of expected losses inherent in the loan portfolio as of the reporting date. Loans outstanding with similar risk characteristics are collectively evaluated in pools utilizing an open pool loss rate method, whereby a historical loss rate is calculated and applied to the balance of loans outstanding in the portfolio at each reporting period. This historical loss rate is then adjusted by a macroeconomic forecast and other qualitative factors, as appropriate, to fully reflect the expected losses in the loan portfolio.

Revenue Recognition

Accounting principles generally accepted in the United States require that an interest yield method be used to calculate the income recognized on accounts which have precomputed charges. An interest yield method is used by the Company on each individual account with precomputed charges to calculate income for those active accounts; however, state regulations often allow interest refunds to be made according to the Rule of 78’s method for payoffs and renewals. Since the majority of the Company's accounts with precomputed charges are paid off or renewed prior to maturity, the result is that most of those accounts effectively yield on a Rule of 78's basis.

Precomputed finance charges are included in the gross amount of certain direct cash loans and sales finance contracts. These precomputed charges are deferred and recognized as income on an accrual basis using the effective interest method. Some other cash loans and real estate loans, which do not have precomputed charges, have income recognized on a simple interest accrual basis. Income is not accrued on any loan that is more than 60 days past due.

Loan fees and origination costs are deferred and recognized as adjustments to the loan yield over the contractual life of the related loan.

The property and casualty credit insurance policies written by the Company, as agent for a non-affiliated insurance company, are reinsured by the Company’s property and casualty insurance subsidiary. The premiums on these policies are deferred and earned over the period of insurance coverage using the pro-rata method or the effective yield method, depending on whether the amount of insurance coverage generally remains level or declines.

The credit life and accident and health insurance policies written by the Company, as agent for a non-affiliated insurance company, are reinsured by the Company’s life insurance subsidiary. The premiums are deferred and earned using the pro-rata method for level-term life insurance policies and the effective yield method for decreasing-term life policies. Premiums on accident and health insurance policies are earned based on an average of the pro-rata method and the effective yield method.

Insurance Claims Reserves

Included in unearned insurance premiums and commissions on the Unaudited Condensed Consolidated Statements of Financial Position are reserves for incurred but unpaid credit insurance claims for policies written by the Company, as agent for a non-affiliated insurance underwriter, and reinsured by the Company’s wholly-owned insurance subsidiaries. These reserves are established based on generally accepted actuarial methods. In the event that the Company’s actual reported losses for any given period are materially in excess of the previously estimated amounts, such losses could have a material adverse effect on the Company’s results of operations.

Different assumptions in the application of any of these policies could result in material changes in the Company’s consolidated financial position or consolidated results of operations.

7

Recent Accounting Pronouncements:

See “Recent Accounting Pronouncements” in Note 1 to the accompanying “Notes to Unaudited Condensed Consolidated Financial Statements” for a discussion of any applicable recently adopted accounting standards and the expected impact of accounting standards recently issued but not yet required to be adopted. For pronouncements already adopted, any material impacts on the Company’s condensed consolidated financial statements are discussed in the applicable section(s) of this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

8

1st FRANKLIN FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

	March 31, 2023		December 31, 2022
ASSETS
CASH AND CASH EQUIVALENTS	$	54,175,030	$	49,652,729
RESTRICTED CASH	16,344,276		15,781,499
LOANS:
Direct Cash Loans	883,230,639		911,821,593
Real Estate Loans	35,681,439		37,323,155
Sales Finance Contracts	150,286,095		146,507,130
	1,069,198,173		1,095,651,878
Less: Unearned Finance Charges	150,838,197		154,630,023
Unearned Insurance Premiums and Commissions	63,476,321		65,536,077
Allowance for Credit Losses	74,481,732		75,210,063
Net Loans	780,401,923		800,275,715
INVESTMENT SECURITIES:
Available for Sale, at fair value	223,953,694		220,028,343
OTHER ASSETS:
Operating Lease Right-of-Use Assets	39,735,335		38,153,238
Other Assets	38,212,176		39,032,732
	77,947,511		77,185,970
TOTAL ASSETS	$	1,152,822,434	$	1,162,924,256
LIABILITIES AND STOCKHOLDERS' EQUITY
SENIOR DEBT	$	812,021,388	$	804,442,227
OPERATING LEASE LIABILITIES	40,626,083		39,019,208
ACCRUED EXPENSES AND OTHER LIABILITIES	16,845,692		31,163,971
SUBORDINATED DEBT	28,207,573		29,005,826
Total Liabilities	897,700,736		903,631,232
STOCKHOLDERS' EQUITY:
Preferred Stock: $100 par value, 6,000 shares authorized; no shares outstanding	—		—
Common Stock
Voting Shares; $100 par value; 2,000 shares authorized; 1,700 shares outstanding	170,000		170,000
Non-Voting Shares; no par value; 198,000 shares authorized; 168,300 shares outstanding	—		—
Accumulated Other Comprehensive (Loss)	(21,203,088)		(26,401,816)
Retained Earnings	276,154,786		285,524,840
Total Stockholders' Equity	255,121,698		259,293,024
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,152,822,434	$	1,162,924,256

See Notes to Unaudited Condensed Consolidated Financial Statements

9

1st FRANKLIN FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS

(Unaudited)

	Three Months Ended March 31,
	2023		2022
INTEREST INCOME	$	68,966,641	$	66,133,832
INTEREST EXPENSE	8,629,059		6,278,364
NET INTEREST INCOME	60,337,582		59,855,468
Provision for Credit Losses	25,414,420		16,456,849
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	34,923,162		43,398,619
INSURANCE INCOME
Premiums and Commissions	13,773,450		14,103,952
Insurance Claims and Expenses	4,734,793		5,422,259
Total Net Insurance Income	9,038,657		8,681,693
OTHER REVENUE	1,569,723		1,476,848
OTHER OPERATING EXPENSES
Personnel Expense	28,304,267		28,118,964
Occupancy Expense	5,141,670		4,353,707
Other	17,822,539		14,283,333
Total	51,268,476		46,756,004
(LOSS) / INCOME BEFORE INCOME TAXES	(5,736,934)		6,801,156
Provision for Income Taxes	948,030		737,250
NET (LOSS) / INCOME	$	(6,684,964)	$	6,063,906
BASIC AND DILUTED EARNINGS PER SHARE
170,000 Shares Outstanding for All Periods (1,700 voting, 168,300 non-voting)	$	(39.32)	$	35.67

See Notes to Unaudited Condensed Consolidated Financial Statements

10

1st FRANKLIN FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended
	March 31,
	2023		2022
Net (Loss) / Income	$	(6,684,964)	$	6,063,906
Other Comprehensive Income /(Loss):
Net changes related to available-for-sale securities
Unrealized gains / (losses)	6,618,074		(23,217,694)
Income tax (provision) / benefit	(1,387,399)		4,886,225
Net unrealized losses	5,230,675		(18,331,469)
Less reclassification of gain to net income	31,947		119,811
Total Other Comprehensive Gain / (Loss)	5,198,728		(18,451,280)
Total Comprehensive (Loss)	$	(1,486,236)	$	(12,387,374)

See Notes to Unaudited Condensed Consolidated Financial Statements

11

1st FRANKLIN FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

	Common Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
	Shares	Amount
Three Months Ended March 31, 2023:
Balance at December 31, 2022	170,000	$	170,000	$	285,524,840	$	(26,401,816)	$	259,293,024
Comprehensive Income:
Net Loss	—	—		(6,684,964)		—
Other Comprehensive Income	—	—		—		5,198,728
Total Comprehensive Loss	—	—		—		—		(1,486,236)
Cash Distributions Paid	—	—		(2,685,090)		—		(2,685,090)
Balance at March 31, 2023	170,000	$	170,000	$	276,154,786	$	(21,203,088)	$	255,121,698
Three Months Ended March 31, 2022:
Balance at December 31, 2021	170,000	$	170,000	$	286,851,102	$	9,736,651	$	296,587,753
Comprehensive Income:
Net Income	—	—		6,063,906		—
Other Comprehensive Loss	—	—		—		(18,451,280)
Total Comprehensive Loss	—	—		—		—		(12,387,374)
Cash Distributions Paid	—	—		—		—		—
Balance at March 31, 2022	170,000	$	170,000	$	292,915,008	$	(8,714,629)	$	284,370,379

See Notes to Unaudited Condensed Consolidated Financial Statements

12

1ST FRANKLIN FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) / Income	$	(6,684,964)	$	6,063,906
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	25,414,420		16,456,849
Depreciation and amortization	1,297,425		1,114,033
Deferred tax benefit	(16,992)		(70,624)
Net gains due to called redemptions of marketable securities and amortization on securities	(102,281)		(194,102)
(Increase) / decrease in other assets	(1,481,936)		1,769,049
Decrease in other liabilities	(14,339,490)		(14,766,755)
Net Cash Provided	4,086,182		10,372,356
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans originated or purchased	(136,896,019)		(146,094,117)
Loan payments	131,355,392		124,383,650
Purchases of securities, available for sale	(2,569,750)		(3,741,889)
Redemptions of securities, available for sale	5,350,000		7,425,000
Capital Expenditures	(336,545)		(486,796)
Net Cash Used	(3,096,922)		(18,514,152)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) / increase in senior demand notes	(5,668,242)		10,416,031
Advances on credit line	63,131,238		56,057,869
Payments on credit line	(50,112,238)		(83,232,869)
Commercial paper issued	36,645,461		57,188,353
Commercial paper redeemed	(36,417,058)		(16,860,169)
Subordinated debt securities issued	1,310,062		1,573,563
Subordinated debt securities redeemed	(2,108,315)		(1,665,555)
Dividends / distributions	(2,685,090)		—
Net Cash Provided	4,095,818		23,477,223
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	5,085,078		15,335,427
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning	65,434,228		40,366,820
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ending	$	70,519,306	$	55,702,247
Cash paid during the year for -
Interest Paid	$	8,629,059	$	6,273,560
Income Taxes Paid	21,212		—
Non-cash transactions for -
ASC 842 - Lease assets and associated liabilities	2,441,577		2,224,600

See Notes to Unaudited Condensed Consolidated Financial Statements

13

-NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-

Note 1 – Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of 1st Franklin Financial Corporation and subsidiaries (the "Company") should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto as of December 31, 2022 and for the year then ended included in the Company's 2022 Annual Report filed with the Securities and Exchange Commission. Inter-company accounts and transactions have been eliminated from the condensed consolidated financial statements.

In the opinion of Management of the Company, the accompanying unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the Company's consolidated financial position as of March 31, 2023 and December 31, 2022, its consolidated results of operations and comprehensive income for the three-month period ended March 31, 2023 and 2022 and its consolidated cash flows for the three months ended March 31, 2023 and 2022. While certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, the Company believes that the disclosures herein are adequate to make the information presented not misleading.

The Company’s financial condition and results of operations as of and for the three-month period ended March 31, 2023 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at and as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

The computation of earnings per share is self-evident from the accompanying Condensed Consolidated Statements of Income and Retained Earnings (Unaudited). The Company has no dilutive securities outstanding.

The following table provides a reconciliation of cash, cash equivalents and restricted cash (in 000's) reported in the condensed consolidated statements of cash flows:

	March 31, 2023		March 31, 2022
Cash and Cash Equivalents	$	54,175	$	42,179
Restricted Cash	$	16,344	$	13,523
Total Cash, Cash Equivalents and Restricted Cash	$	70,519	$	55,702

The Company categorizes its primary sources of revenue into three categories: (1) interest related revenue, (2) insurance related revenue and (3) other revenue from contracts with customers.

•Interest related revenues are specifically excluded from the scope of ASC Topic 606, Revenue from Contracts with Customers, and accounted for under ASC Topic 310, “Receivables”.

•Insurance related revenues are subject to industry-specific guidance within the scope of ASC Topic 944, “Financial Services – Insurance”.

•Other revenues primarily relate to commissions earned by the Company on sales of auto club memberships. Auto club commissions are revenue from contracts with customers and are accounted for in accordance with the guidance set forth in ASC Topic 606.

During the three months ended March 31, 2023, and 2022, the Company recognized interest related revenue of $69.0 million and $66.1 million, respectively, insurance related revenue of $13.8 million and $14.1 million, respectively, and other revenue from contracts with customers of $1.6 million and $1.5 million, respectively.

14

Recent Accounting Pronouncements:

In March 2022 the Financial Accounting Standards Board ("FASB") issued an accounting update ("ASU No. 2022-02") eliminating the accounting for troubled debt restructurings (each, a "TDR") by creditors while enhancing the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendment also requires disclosure of gross credit losses by year of origination for finance receivables. The amendments in this update are effective for annual and interim period beginning after December 15, 2022. The elimination of TDR guidance may be adopted prospectively for loan modifications after adoption or on a modified retrospective basis, which would also apply to loans previously modified, resulting in a cumulative effect adjustment to retained earnings in the period of adoption for changes in the allowance for credit losses.

The Company adopted the new standard on January 1, 2023 and elected to apply the new measurement prospectively. Adoption did not have a material impact on the Company's consolidated financial statements.

Note 2 – Loans

The Company’s consumer loans are made to individuals, who may be new customers, existing customers (loan renewals), former customers or customers converting from a sales contract, in relatively small amounts for relatively short period of time. First and second mortgage loans on real estate are made in larger amounts and for longer periods of time. The Company also purchases sales finance contracts from various dealers. All loans and sales contracts are held for investment.

Cash, unearned finance charges, origination fees, discounts, premiums, deferred fees, and, in the instance of a loan renewal, the net payoff of the of the renewed loan are included in the loan origination amount. The cash component of the loan origination is included in the Statement of Cash Flows in the Cash Flows from Investing Activities as Loans Originated or Purchased.

Loan Renewals

Loan renewals are accounted for in accordance with the applicable guidance in ASC Topic 310-20 Nonrefundable Fees and Other Costs. Loan renewals are a product the Company offers to existing customers that allows them to borrow additional funds from the Company. In evaluating a loan for renewal, in addition to our standard underwriting requirements, we may take into consideration the customer’s prior payment performance with us, which we believe to be an indicator of the customer’s future credit performance. If the terms of the new loan resulting from a loan renewal are at least as favorable to us as the terms for comparable loans to other customers with similar collection risks who are not renewing a loan, the renewal is accounted for as a new loan. The criteria is met if the new loan's effective yield is at least equal to the effective yield for such comparable loans and the modification of the original loan is more than minor. A modification of a loan is more than minor if the present value of the cash flows under the terms of the renewal is at least 10 percent different from the present value of the remaining cash flows under the terms of the original loan. Accordingly, when a renewal is generated, the original loan(s) are extinguished along with the associated unearned finance charges and a new loan is originated. Substantially all renewals include a non-cash component that represents the exchange of the original principal balance for the new principal balance and a cash component for the net proceeds distributed to the customer for the additional amount borrowed. The cash component is presented as outflows from investing activities and the non-cash component is presented as a non-cash investing activity.

Cash, unearned finance charges, origination fees, discounts, premiums, deferred fees, and, in the instance of a loan renewal, the net payoff of the of the renewed loan are included in the loan origination amount. The cash component of the loan origination is included in the Statement of Cash Flows in the Cash Flows from Investing Activities as Loans Originated or Purchased.

15

Reconciliation of Gross Loans Originated / Acquired to Loans Originated or Purchased in Consolidated Statements of Cash Flows (in 000's):

		Three months ended March 31,
		2023		2022
Loans Originated / Acquired:		$	246,983	$	265,539
Less Non-Cash Reconciling items:
	Other Consumer renewed loans (live check and premier)	49,626		54,837
	Other non-cash activity: unearned finance charges, origination fees, discounts, premiums, and deferred fees	60,461		64,609
Loans originated or purchased per Consolidated Statements of Cash Flows:		$	136,896	$	146,094

Description of Loans

Loans outstanding on the Consolidated Statements of Financial Position (“Financial Gross Outstanding(s)”) include principal, origination fees, premiums, discounts, and in the case of interest-bearing loans, deferred fees, other fees receivable, and accrued interest receivable.

Loan performance reporting is generally based on a loan’s gross outstanding balance (“Gross Outstanding(s)”), (“Gross Balance”), ("Gross Amount"), or ("Gross Loan") that includes principal plus origination fees for interest-bearing loans and the total of payments for loans with pre-computed interest.

The allowance for credit losses is based on the underlying financial instrument’s amortized cost basis ("Amortized Cost Basis"), with the allowance representing the portion of Amortized Cost Basis the Company does not expect to recover due to credit losses. The following are included in the Company’s Amortized Cost Basis:

•For pre-computed loans: Principal Balance, net of unearned finance charges and unearned insurance1.

•For interest-bearing loans: Principal Balance, net of unearned insurance1.

1 The state of Louisiana classifies certain insurance products as non-refundable. Non-refundable products are not netted against the principal balance for calculation of the amortized cost basis.

The Company’s Gross Balances (in 000's) on non-accrual loans by loan class as of March 31, 2023 and December 31, 2022:

Gross Balance (in 000's) by Origination Year as of March 31, 2023:

Loan Class	2023(1)		2022		2021		2020		2019		Prior		Total
Live Check Loans	$	55,682	$	85,131	$	8,901	$	1,485	$	177	$	30	$	151,406
Premier Loans	6,592		56,213		23,131		5,470		1,546		465		93,417
Other Consumer Loans	143,138		366,281		100,086		18,780		6,126		2,147		636,558
Real Estate Loans	—		3,670		12,851		5,760		4,996		7,782		35,059
Sales Finance Contracts	24,760		73,894		31,677		15,826		2,890		428		149,475
Total	$	230,172	$	585,189	$	176,646	$	47,321	$	15,735	$	10,852	$	1,065,915

(1) Includes loans originated during the three-months ended March 31, 2023.

16

Gross Balance (in 000's) by Origination year as of December 31, 2022:

Loan Class	2022		2021		2020		2019		2018		Prior		Total
Live Check Loans	$	129,140	$	15,432	$	2,234	$	292	$	32	$	10	$	147,140
Premier Loans	68,166		29,236		7,155		2,101		528		82		107,268
Other Consumer Loans	482,667		136,511		24,941		8,134		2,333		526		655,112
Real Estate Loans	3,640		13,216		6,098		5,261		3,876		4,517		36,608
Sales Finance Contracts	85,001		37,060		19,145		3,817		585		68		145,676
Total	$	768,614	$	231,455	$	59,573	$	19,605	$	7,354	$	5,203	$	1,091,804

The Company’s Gross Balance (in 000's) on non-accrual loans by loan class as of March 31, 2023 and December 31, 2022 are as follows:

Loan Class	March 31, 2023		December 31, 2022
Live Check Loans	$	8,979	$	13,527
Premier Loans	3,464		4,738
Other Consumer Loans	26,782		41,240
Real Estate Loans	1,674		1,870
Sales Finance Contracts	4,921		5,656
Total	$	45,820	$	67,031

Age analysis of Gross Balance (in 000's) on past due loans, segregated by loan class, as of March 31, 2023:

Loan Class	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due Loans
Live Check Loans	$	4,989	$	2,617	$	6,637	$	14,243
Premier Loans	1,506		1,042		2,171		4,719
Other Consumer Loans	17,176		9,641		22,299		49,116
Real Estate Loans	772		513		1,406		2,691
Sales Finance Contracts	2,727		1,570		3,540		7,837
Total	$	27,170	$	15,383	$	36,053	$	78,606

Age analysis of Gross Balance (in 000's) on past due loans, segregated by loan class, as of December 31, 2022:

Loan Class	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due Loans
Live Check Loans	$	6,217	$	4,524	$	8,232	$	18,973
Premier Loans	2,164		1,302		2,416		5,882
Other Consumer Loans	24,681		14,373		26,818		65,872
Real Estate Loans	894		436		1,380		2,710
Sales Finance Contracts	4,257		2,066		3,315		9,638
Total	$	38,213	$	22,701	$	42,161	$	103,075

17

While aging analysis is the primary credit quality indicator, we also consider loans in non-accrual status, loan restructures where the borrower is experiencing financial difficulty, the ratio of bankrupt accounts to the total Gross Outstanding, and economic factors in evaluating whether any qualitative adjustments were necessary to the allowance for credit losses.

The ratio of bankrupt accounts to the Gross Balance was 1.62% at March 31, 2023, compared to 1.56% at December 31, 2022.

For each segment in the portfolio, the Company also evaluates credit quality based on the aging status of the loan and by payment activity. The following table presents the Gross Outstanding in each segment of the portfolio as of March 31, 2023 based on year of origination:

Payment Performance by Origination Year (in thousands)
	2023(1)		2022		2021		2020		2019		Prior		Total Gross Balance Balance
Live Check Loans:
Performing	$	55,239	$	77,392	$	8,196	$	1,407	$	167	$	26	$	142,427
Nonperforming	443		7,739		705		78		10		4		8,979
	$	55,682	$	85,131	$	8,901	$	1,485	$	177	$	30	$	151,406
Premier Loans:
Performing	$	6,587	$	54,210	$	22,043	$	5,205	$	1,472	$	436	$	89,953
Nonperforming	5		2,003		1,088		265		74		29		3,464
	$	6,592	$	56,213	$	23,131	$	5,470	$	1,546	$	465	$	93,417
Other Consumer Loans:
Performing	$	142,772	$	348,751	$	93,018	$	17,575	$	5,689	$	1,972	$	609,777
Nonperforming	366		17,530		7,068		1,205		437		175		26,781
	$	143,138	$	366,281	$	100,086	$	18,780	$	6,126	$	2,147	$	636,558
Real Estate Loans:
Performing	$	—	$	3,575	$	12,046	$	5,576	$	4,696	$	7,492	$	33,385
Nonperforming	—		95		805		184		300		290		1,674
	$	—	$	3,670	$	12,851	$	5,760	$	4,996	$	7,782	$	35,059
Sales Finance Contracts:
Performing	$	24,757	$	71,625	$	30,091	$	14,984	$	2,705	$	392	$	144,554
Nonperforming	3		2,269		1,586		842		185		36		4,921
	$	24,760	$	73,894	$	31,677	$	15,826	$	2,890	$	428	$	149,475

(1)Includes loans originated during the three months ended March 31, 2023.

In March 2022 the Financial Accounting Standards Board ("FASB") issued an accounting update ("ASU No. 2022-02 ") eliminating the accounting for troubled debt restructurings (each, a "TDR") by creditors while enhancing the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendment also requires disclosure of gross credit losses by year of origination for finance receivables. The amendments in this update are effective for annual and interim periods beginning after December 15, 2022. The elimination of TDR guidance was adopted prospectively for loan modifications after adoption. Adoption did not have a material impact on the Company's consolidated financial statements.

Modifications that lower the principal balance experience a direct charge-off for the difference of the original and modified principal amount. The Company only lowers the principal balance due in the event of a court order. The information relating to modifications made to borrowers experiencing financial difficulty (dollars in 000's) for the period indicated are as follows:

18

	As of and for the three months ended March 31, 2023 (in 000's)
Loan Class	Interest Rate Reduction				Term Extension				Principal Forgiveness				Combination - Term Extension and Principal Forgiveness				Combination - Term Extension and Interest Rate Reduction
Live Check Loans	$	1,224	0.8	%	$	670	0.4	%	$	663	0.4	%	$	890	0.6	%	$	317	0.2	%
Premier Loans	319		0.3	%	578		0.6	%	227		0.2	%	493		0.5	%	393		0.4	%
Other Consumer Loans	3,807		0.6	%	3,620		0.6	%	2,770		0.4	%	7,948		1.2	%	4,791		0.8	%
Real Estate Loans	47		0.1	%	—		—	%	5		—	%	—		—	%	—		—	%
Sales Finance Contracts	177		0.1	%	174		0.1	%	503		0.3	%	1,833		1.2	%	125		0.1	%
Total	$	5,574	0.5	%	$	5,042	0.5	%	$	4,168	0.4	%	$	11,165	1.0	%	$	5,626	0.5	%

The financial effects of the modifications made to borrowers experiencing financial difficulty in the three months ended March 31, 2023 are as follows:

Loan Modification	Loan Class	Financial Effect
Principal Forgiveness	Live Check Loans	Reduced the gross balance of the loans $0.7 million
	Premier Loans	Reduced the gross balance of the loans $0.2 million
	Other Consumer Loans	Reduced the gross balance of the loans $2.8 million
	Real Estate Loans	No Financial Effect
	Sales Finance Contracts	Reduced the gross balance of the loans $0.5 million
Interest Rate Reduction	Live Check Loans	Reduced the weighted-weighted average contractual interest rate from 26.7% to 16.5%
	Premier Loans	Reduced the weighted-weighted average contractual interest rate from 20.2% to 15.1%
	Other Consumer Loans	Reduced the weighted-weighted average contractual interest rate from 29.2% to 19.3%
	Real Estate Loans	Reduced the weighted-weighted average contractual interest rate from 17.9% to 6.0%
	Sales Finance Contracts	Reduced the weighted-weighted average contractual interest rate from 21.9% to 15.6%
Term Extension	Live Check Loans	Added a weighted average 14 months to the term
	Premier Loans	Added a weighted average 27 months to the term
	Other Consumer Loans	Added a weighted average 16 months to the term
	Real Estate Loans	No Financial Effect
	Sales Finance Contracts	Added a weighted average 18 months to the term

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Loans modified for borrowers experiencing financial difficulty during the prior 12 months that subsequently defaulted during the three month period ended March 31, 2023 (in 000's):

	March 31, 2023
Loan Class	Interest Rate Reduction		Term Extension		Principal Forgiveness		Combination- Term Extension and Principal Forgiveness		Combination - Term Extension and Interest Rate Reduction
Live Check Loans	$	864	$	105	$	369	$	144	$	81
Premier Loans	85		45		76		189		67
Other Consumer Loans	1,583		665		927		1,603		708
Real Estate Loans	3		—		5		—		—
Sales Finance Contracts	81		22		120		245		17
Total	$	2,616	$	837	$	1,497	$	2,181	$	873

The aging for loans that were modified to borrowers experiencing financial difficulty in the past 12 months (in 000's):

	March 31, 2023
Loan Class	Current		30 - 89 Past Due		90+ Past Due		Total
Live Check Loans	$	4,171	$	887	$	1,617	$	6,674
Premier Loans	4,293		696		740		5,729
Other Consumer Loans	49,933		8,003		10,093		68,029
Real Estate Loans	127		10		152		290
Sales Finance Contracts	6,555		787		1,138		8,480
Total	$	65,079	$	10,382	$	13,741	$	89,202

Prior to January 1, 2023, the Company classified a receivable as a TDR when the Company modified a loan's contractual terms for economic or other reasons related to the borrower's financial difficulties and granted a concession that would not have otherwise been considered.

The following table presents a summary of loans that were restructured during the three months ended March 31, 2022 ($ in 000's):

Loan Class	Number Of Loans	Pre-Modification Gross Balance		Post-Modification Gross Balance
Live Check Loans	1,072	$	2,037	$	1,990
Premier Loans	196	1,318		1,263
Other Consumer Loans	4,535	17,081		16,386
Real Estate Loans	7	87		87
Sales Finance Contracts	221	1,581		1,493
Total	6,031	$	22,104	$	21,219

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TDRs that occurred during the twelve months ended March 31, 2022 and subsequently defaulted during the three months ended March 31, 2022 are listed below ($ in 000's):

Loan Class	Number Of Loans	Pre-Modification Gross Balance
Live Check Loans	361	$	663
Premier Loans	46	234
Other Consumer Loans	1,226	2,748
Real Estate Loans	—	—
Sales Finance Contracts	46	220
Total	1,679	$	3,865

Allowance for Credit Losses

The allowance for credit losses is based on Management's evaluation of the inherent risks and changes in the composition of the Company's loan portfolio. Management estimates and evaluates the allowance for credit losses utilizing an open pool loss rate method on collectively evaluated loans with similar risk characteristics in segments, whereby a historical loss rate is calculated and applied to the balance of loans outstanding in the portfolio at each reporting date. This historical loss rate then may be adjusted by macroeconomic forecast and other qualitative factors, as appropriate, to fully reflect the Company’s expected losses in its loan portfolio. The Company’s allowance for credit losses recorded in the balance sheet reflects Management’s best estimate of expected credit losses.

The Company calculates an expected credit loss by utilizing a snapshot of each specific loan segment at a point in history and tracing that segment’s performance until charge-offs were substantially exhausted for that particular segment. Charge-offs in subsequent period are aggregated to derive an unadjusted lifetime historical charge-off rate by segment. The receivables balance at the balance sheet date is reviewed and adjustments to the allowance for credit losses are made if Management determines the receivables balance warrants an adjustment. The Company performs a correlation analysis between macroeconomic factors and prior charge-offs for the following macroeconomic factors: Annual Unemployment Rates, Real Gross Domestic Product, Consumer Price Index (CPI), and US National Home Price Index (HPI). To evaluate the overall adequacy of the Company’s allowance for credit losses, Management considers the level of loan receivables, historical loss trends, loan delinquency trends, bankruptcy trends and overall economic conditions. Such allowance is, in the opinion of Management, adequate for expected losses in the current loan portfolio. As the estimates used in determining the loan loss reserve are influenced by outside factors, such as consumer payment patterns and general economic conditions, there is uncertainty inherent in these estimates. Actual results could vary based on future changes in significant assumptions.

Management disaggregates the Company’s loan portfolio by loan class when evaluating loan performance and estimating the allowance for credit losses. Although most loans are similar in nature, the Company concluded that based on variations in loss experience (severity and duration) driven by product type it is most relevant to segment the portfolio into classes by loan product consisting of five different classes: live check loans, premier loans, other consumer loans, real estate loans, and sales finance contracts.

The total classes are monitored for credit losses based on graded contractual delinquency and other economic conditions. The Company classifies delinquent accounts at the end of each month according to the Company’s graded delinquency rules which includes the number of installments past due at that time, based on the then-existing terms of the contract. Accounts are classified in delinquency categories of 30-59 days past due, 60-89 days past due, or 90 or more days past due based on the Company’s graded delinquency policy. When a loan meets the Company’s charge-off policy, the loan is charged off, unless Management directs that it be retained as an active loan. In making this charge-off evaluation, Management considers factors such as pending insurance, bankruptcy status and other indicators of collectability. The amount charged off is the unpaid balance less the unearned finance charges and the unearned insurance premiums, if applicable.

Management ceases accruing finance charges on loans that meet the Company’s non-accrual policy based on grade delinquency rules, generally when two payments remain unpaid on precomputed loans or when the interest paid-to-date on an interest-bearing loan is 60 days or more past due. Finance charges are then only

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recognized to the extent there is a loan payment received or when the account qualifies for return to accrual status. Accounts qualify for return to accrual status when the graded delinquency on a precomputed loan is less than two payments and on when the interest paid-to-date on an interest-bearing loan is less than 60 days past due. There were no loans that met the non-accrual policy still accruing interest at March 31, 2023 or December 31, 2022.

Due to the composition of the loan portfolio, the Company determines and monitors the allowance for credit losses on a portfolio segment basis. As of March 31, 2023, a historical look back period of five quarters was utilized for live checks; six quarters for other consumer loans, premier loans, and sales finance contracts; and a look back period of five years was utilized for real estate loans. Expected look back periods are determined based on analyzing the history of each segment’s snapshot at a point in history and tracing performance until charge-offs are mostly exhausted. The Company addresses seasonality primarily through the use of an average in quarterly historical loss rates over a 4-quarter snapshot time span instead of using one specific snapshot quarter’s historical loss rates.

Determining a proper allowance for credit losses is a critical accounting estimate which involves Management’s judgment with respect to certain relevant factors, such as historical and expected loss trends, unemployment rates in various locales, delinquency levels, bankruptcy trends and overall general and industry specific economic conditions.

The Company considered factors such as rising energy, food and services prices and the potential market disruptions resulting from recent bank failures. The Company also considered the potential impact of an increased Federal Funds Rate. Despite increase to the Federal Funds Rate, the economy has been resilient with unemployment remaining historically low. 1st Franklin loans are contracted at a fixed rate; therefore, borrowers will not be directly affected by rising interest rates.

The allowance for credit losses decreased by $0.7 million to $74.5 million which includes a qualitative adjustment of $7.6 million, for the three-month period ended March 31, 2023, compared to $75.2 million at December 31, 2022.

It is difficult to estimate how potential changes in any one economic factor might affect the overall allowance because a wide variety of factors and inputs are considered in the allowance estimate. Changes in the factors and inputs may not occur at the same rate and may not be consistent across all product types. Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others.

Management believes that the allowance for credit losses, as calculated in accordance with the Company’s current expected credit loss (“CECL”) methodology, is appropriate to cover expected credit losses on loans at March 31, 2023; however, because the allowance for credit losses is based on estimates, there can be no assurance that the ultimate charge-off amount will match such estimates. Management may determine it is appropriate to increase or decrease the allowance for expected credit losses in future periods, or actual losses in any period, either of which events could have a material impact on our results of operations in the future.

Gross charge offs by origination year during the three months ended March 31, 2023 (in 000's):

Loan Class	2023		2022		2021		2020		2019		Prior		Total
Live Check Loans	$	14	$	8,025	$	1,074	$	70	$	19	$	12	$	9,214
Premier Loans	—		1,066		799		153		61		15		2,094
Other Consumer Loans	4		11,281		6,041		856		307		173		18,662
Real Estate Loans	—		—		1		7		—		6		14
Sales Finance Contracts	—		1,012		754		518		89		21		2,394
Total	$	18	$	21,384	$	8,669	$	1,604	$	476	$	227	$	32,378

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Segmentation of the portfolio began with the adoption of ASC Topic 326 on January 1, 2020. The following table provides additional information on our allowance for credit losses (in 000's) based on a collective evaluation.

	Three Months Ended March 31, 2023
	Live Check Loans		Premier Loans		Other Consumer Loans		Real Estate Loans		Sales Finance Contracts		Total
Allowance for Credit Losses:
Balance as of 12/31/2022	$	14,896	$	6,108	$	46,412	$	143	$	7,651	$	75,210
Provision for Credit Losses	9,430		1,087		12,871		22		2,004		$	25,414
Charge-offs	(9,222)		(2,094)		(18,662)		(14)		(2,394)		$	(32,386)
Recoveries	1,231		309		4,195		2		507		$	6,244
Ending Balance 3/31/2023	$	16,335	$	5,410	$	44,816	$	153	$	7,768	$	74,482

Note 3 – Investment Securities

Investment Securities available for sale are carried at estimated fair market value. The amortized cost and estimated fair values of these investment securities are as follows (in 000's):

	As of March 31, 2023				As of December 31, 2022
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Available-for-Sale
Obligations of states and political subdivisions	$	250,390	$	223,551	$	253,068	$	219,648
Corporate securities	$	403	$	403	$	380	$	380
	$	250,793	$	223,954	$	253,448	$	220,028

Gross unrealized losses on investment securities totaled $28.6 million and $34.5 million at March 31, 2023 and December 31, 2022, respectively. The following table provides an analysis of investment securities in an unrealized loss position (in 000's) for which an allowance for credit losses is unnecessary as of March 31, 2023 and December 31, 2022:

	Less than 12 Months				12 Months or Longer				Total
March 31, 2023	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale:
Obligations of states and political subdivisions	$	44,980	$	(978)	$	97,381	$	(27,613)	$	142,361	$	(28,591)

	Less than 12 Months				12 Months or Longer				Total
December 31, 2022	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale:
Obligations of states and political subdivisions	$	118,495	$	(9,327)	$	42,314	$	(25,126)	$	160,809	$	(34,454)

The previous two tables represent 152 and 184 investments held by the Company at March 31, 2023 and December 31, 2022, respectively, the majority of which are rated “A” or higher by Moody’s and/or Standard & Poor’s. The unrealized losses on the Company’s investments listed in the above table were primarily the result of interest rate and market fluctuations. Based on the credit ratings of these investments, along with the consideration of whether the Company has the intent to sell or will be more likely than not required to sell the applicable investment before recovery of amortized cost basis, no other than temporary impairment was determined to be necessary as of March 31, 2023 and December 31, 2022.

No securities were sold to date in 2023. Additionally, the Company sold no securities during the year ended December 31, 2022. Proceeds from redemption of investments due the exercise of call provisions by the issuers thereof and regularly scheduled maturities totaled $5.4 million with a net gain of $0.0 million and $26.8 million with a net gain of $0.6 million as of March 31, 2023 and December 31, 2022 respectively.

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The Company’s insurance subsidiaries internally designate certain investments as restricted to cover their policy reserves and loss reserves. Funds are held in separate trusts for the benefit of each insurance subsidiary at U.S. Bank National Association ("US Bank"). US Bank serves as trustee under trust agreements with the Company's property and casualty insurance company subsidiary (“Frandisco P&C”), as grantor, and American Bankers Insurance Company of Florida, as beneficiary. At March 31, 2023, these trusts held $48.3 million in available-for-sale investment securities at market value. US Bank also serves as trustee under trust agreements with the Company's life insurance company subsidiary (“Frandisco Life”), as grantor, and American Bankers Life Assurance Company, as beneficiary. At March 31, 2023, these trusts held $27.7 million in available-for-sale investment securities at market value. The amounts required to be held in each trust change as required reserves change. All earnings on assets in the trusts are remitted to the Company's insurance subsidiaries.

Note 4 – Fair Value

Under ASC Topic 820, fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs used to determine the fair value of an asset or liability, with the highest priority given to Level 1, as these are the most transparent or reliable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurements.

Level 1 - Quoted prices for identical instruments in active markets.

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

The following methods and assumptions are used by the Company in estimating fair values of its financial instruments:

Cash and Cash Equivalents: Cash includes cash on hand and with banks. Cash equivalents are short-term highly liquid investments with original maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value due to the relatively short period of time between the origination of the instruments and their expected realization. Cash and cash equivalents are classified as a Level 1 financial asset.

Loans: The fair value of the Company's direct cash loans and sales finance contracts approximate the carrying value since the estimated life, assuming prepayments, is short-term in nature. The fair value of the Company's real estate loans approximates the carrying value since the interest rate charged by the Company approximates market rates. Loans are classified as a Level 3 financial asset.

Marketable Debt Securities: Management has designated the Company's investment securities held in the Company's investment portfolio at March 31, 2023 and December 31, 2022 as being available-for-sale. The investment portfolio is reported at fair value with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss) included in the consolidated statements of comprehensive income (loss). Gains and losses on sales of securities designated as available-for-sale are determined based on the specific identification method; therefore, Marketable Debt Securities are classified as a Level 2 financial asset.

Corporate Securities: The Company estimates the fair value of corporate securities with readily determinable fair values based on quoted prices observed in active markets; therefore, these investments are classified as a Level 1 financial asset.

Senior Debt Securities: The carrying value of the Company's senior debt securities approximates fair value due to the relatively short period of time between the origination of the instruments and their expected payment. Senior debt securities are classified as a Level 2 financial liability.

Subordinated Debt Securities: The carrying value of the Company's subordinated debt securities approximates fair value due to the re-pricing frequency of the securities. Subordinated debt securities are classified as a Level 2 financial liability.

The Company is responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. The Company performs due diligence to understand the inputs and how the

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data was calculated or derived. The Company employs a market approach in the valuation of its obligations of states, political subdivisions and municipal revenue bonds that are available-for-sale. These investments are valued on the basis of current market quotations provided by independent pricing services selected by Management based on the advice of an investment manager. To determine the value of a particular investment, these independent pricing services may use certain information with respect to market transactions in such investment or comparable investments, various relationships observed in the market between investments, quotations from dealers, and pricing metrics and calculated yield measures based on valuation methodologies commonly employed in the market for such investments. Quoted prices are subject to our internal price verification procedures. We validate prices received using a variety of methods including, but not limited, to comparison to other pricing services or corroboration of pricing by reference to independent market data such as a secondary broker. There was no change in this methodology during any period reported.

Assets measured at fair value (in 000's) as of March 31, 2023 and December 31, 2022 were available-for-sale investment securities which are summarized below:

			Fair Value Measurements at Reporting Date Using
Description	March 31, 2023		Quoted Prices In Active Markets for Identical Assets (Level1)		Significant Other Observable Inputs (Level2)		Significant Unobservable Inputs (Level3)
Corporate securities	$	403	$	403	$	—	$	—
Obligations of states and political subdivisions	223,551		—		223,551		—
Total	$	223,954	$	403	$	223,551	$	—

			Fair Value Measurements at Reporting Date Using
Description	December 31, 2022		Quoted Prices In Active Markets for Identical Assets (Level1)		Significant Other Observable Inputs (Level2)		Significant Unobservable Inputs (Level3)
Corporate securities	$	380	$	380	$	—	$	—
Obligations of states and political subdivisions	219,648		—		219,648		—
Total	$	220,028	$	380	$	219,648	$	—

Note 5 – Leases

The Company's operations are carried on in locations which are occupied under operating lease agreements. These lease agreements are recorded as operating lease right-of-use (“ROU”) assets and operating lease liabilities. Actual lease payments were $2.4 million and $2.2 million for the periods ended March 31, 2023, 2022 respectively. The Company’s minimum aggregate future lease commitments at March 31, 2023 and 2022 are presented in the tables that follows.

ROU assets represent the Company’s right to use an underlying asset during the lease term and the operating lease liabilities represent the Company’s obligations for lease payments in accordance with the lease. Recognition of ROU assets and liabilities are recognized at the lease commitment date based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commitment date or the ASC Topic 842 adoption date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is recorded in occupancy expense in the condensed consolidated statement of income.

Remaining lease terms range from 1 to 10 years. The Company’s leases are not complex and do not contain residual value guarantees, variable lease payments, or significant assumptions or judgments made in applying the requirements of ASC Topic 842. Operating leases with a term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. Operating lease ROU assets and operating lease liabilities were $39.7 million and $40.6 million at March 31, 2023, respectively and $34.6 million and $35.3 million at March 31, 2022, respectively. At December 31, 2022 the operating lease ROU assets and operating liabilities were $38.2 million and $39.0 million, respectively.

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The table below summarizes our lease expense and other information related to the Company’s operating leases with respect to ASC Topic 842:

	Three Months Ended March 31, 2023
Operating lease expense	$	2,037,653
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	2,012,876
Weighted-average remaining lease term – operating leases (in years)	7.14
Weighted-average discount rate – operating leases	5.02		%
Lease maturity schedule as of March 31, 2023:	Amount
Remainder of 2023	$	6,046,064
2024	7,518,396
2025	7,142,249
2026	6,564,468
2027	5,735,407
2028 and beyond	15,400,960
Total	48,407,544
Less: Discount	(7,781,461)
Present Value of Lease Liability	$	40,626,083

	Three Months Ended March 31, 2022
Operating lease expense	$	1,908,863
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	1,882,720
Weighted-average remaining lease term – operating leases (in years)	6.94
Weighted-average discount rate – operating leases	4.44		%
Lease maturity schedule as of March 31, 2022:	Amount
Remainder of 2022	$	5,522,567
2023	6,603,868
2024	5,799,836
2025	5,447,253
2026	4,898,186
2027 and beyond	12,566,743
Total	40,838,453
Less: Discount	(5,566,770)
Present Value of Lease Liability	$	35,271,683

Note 6 – Commitments and Contingencies

We conduct our lending operations under the provisions of various federal and state laws, implementing regulations, and insurance regulations. Changes in the current regulatory environment, or the interpretation or application of current regulations, could impact our business.

The Company is subject to various legal proceedings, claims and administrative proceedings arising in the ordinary course of its business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable

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outcome is probable the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss (whether on the merits or by virtue of the existence of collectible insurance) would not be material. Based on current expectations, such matters, both individually and in aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company.

As previously disclosed, the Company suffered a cyber-attack against certain systems within the Company's network environment on or about November 17, 2022. The attack temporarily affected operations and caused delays in originating and servicing loans and investments at some locations. During the incident, the attackers had access to personally identifiable information ("PII") of certain Company employees, customers, and investors. The incident which only affected systems, was limited to the Company's on-site file directory system, but not its off-site core operating system. Full lending and investing operations were restored within days of the incident, and the Company provided notifications to all potentially-affected individuals. As of May 15, 2023, the Company is named as a defendant in one consolidated consumer class action suit (originally began as five separate cases alleging harm from the cyber-attack). The Company maintains a cyber insurance policy that we expect indemnify the company for the majority of the costs of investigation, remediation, business interruption, and costs pertaining to the breach.

The Company incurred investigation and remediation costs totaling $2.8 million as of March 31, 2023. This amount is recognized in the Company's consolidated statements of financial position as receivable from the insurance company in miscellaneous assets. A recovery of $2.4 million from the cyber insurance policy was received in April 2023. Additional insurance recoveries from the cyber insurance policy are expected; however, the Company is currently unable to estimate the timing and amount of such recoveries.

Note 7 – Income Taxes

The Company has elected to be treated as an S corporation for income tax reporting purposes. The taxable income or loss of an S corporation is treated as income of and is reportable in the individual tax returns of the shareholders of the Company in an appropriate allocation. Accordingly, deferred income tax assets and liabilities have been eliminated and no provisions for current and deferred income taxes were made by the Company except for amounts attributable to state income taxes for certain states, which do not recognize S corporation status for income tax reporting purposes. Deferred income tax assets and liabilities will continue to be recognized and provisions for current and deferred income taxes will be made by the Company’s subsidiaries as they are not permitted to be treated as S Corporations.

Effective income tax rate was -17% during the three-month period ended March 31, 2023 compared to 11% and during the three-month period ended March 31, 2022. The effective income tax rate differs from the statutory rate due to changes in the proportion of income earned by the Company's insurance subsidiaries.

Note 8 – Credit Agreement

The Company is party to a credit agreement with Wells Fargo Bank, N.A. As amended to date, the credit agreement provides for borrowings and reborrrowings up to the lesser of $230.0 million or 70% of the Company’s net finance receivables (as defined in the credit agreement). Available borrowings under the credit agreement were $149.4 million and $162.5 million at March 31, 2023 and December 31, 2022, at an interest rate of 7.52% and 6.97%, respectively. Outstanding borrowings on the credit line were $80.6 million and $67.5 million at March 31, 2023 and December 31, 2022, respectively. The credit agreement contains covenants customary for financing transactions of this type. The credit agreement has a commitment termination date of February 28, 2025.

Note 9 – Related Party Transactions

The Company leased a portion of its properties (see Note 8) for an aggregate of $160,800 per year from certain officers or stockholders.

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The Company engages from time to time in transactions with related parties. The Company has an outstanding loan to a real estate development partnership of which David Cheek (son of Ben F. Cheek, III) who beneficially owns 24.24% of the Company’s voting stock, is a partner. The balance on this commercial loan (including principal and accrued interest) was $2.0 million at March 31, 2023.

The Company also has a loan for premium payments to a trust of an executive officer’s irrevocable life insurance policy. The principal balance on this loan at March 31, 2023 was $0.5 million. Please refer to the disclosure contained in Note 12 “Related Party Transactions” in the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2022 for additional information on related party transactions.

Note 10 – Segment Financial Information

The Company discloses segment information in accordance with ASC Topic 280. ASC Topic 280 requires companies to determine segments based on how Management makes decisions about allocating resources to segments and measuring their performance.

The Company has nine divisions which comprise its operations. Each division consists of branch offices that are aggregated based on vice president responsibility and geographic location. Division I consists of offices located in South Carolina. Offices in North Georgia comprises Division II, Division III consists of offices in South Georgia and Division IX consists of offices in West Georgia. Division IV represents our Alabama offices, Division V represents our Mississippi offices, Division VI represents our Virginia offices, Division VII represents our Kentucky and Tennessee branch offices and Division VIII represents our Louisiana and Texas offices.

Accounting policies of each of the divisions are the same as those for the Company as a whole. Performance is measured based on objectives set at the beginning of each year and include various factors such as division profit, growth in earning assets and delinquency and loan loss management. All division revenues result from transactions with third parties. The Company does not allocate income taxes or corporate headquarter expenses to the divisions.

Below is a performance recap of each of the Company’s divisions for the three-month period ended March 31, 2023, and 2022, followed by a reconciliation to consolidated Company data.

	Division I				Division II		Division III		Division IV		Division V		Division VI		Division VII		Division VIII		Division IX		Total
	(in thousands)
Division Revenues:
3 Months Ended 03/31/2023	$	10,962			$	10,445	$	10,916	$	11,978	$	8,648	$	19	$	8,747	$	8,559	$	9,397	$	79,671
3 Months Ended 03/31/2022	$	10,509			$	10,207	$	10,838	$	11,955	$	8,303	$	—	$	7,464	$	7,828	$	9,032	$	76,136
Division Profit:
3 Months Ended 03/31/2023	$	1,466			$	2,754	$	3,647	$	1,930	$	1,263	$	(36)	$	449	$	439	$	1,908	$	13,820
3 Months Ended 03/31/2022	$	3,717			$	4,388	$	4,653	$	4,676	$	3,013	$	—	$	2,050	$	2,168	$	3,235	$	27,900
Division Assets:
03/31/2023	$	117,227			$	249,237	$	262,463	$	149,308	$	79,505	$	208	$	24,721	$	43,289	$	252,494	$	1,178,452
12/31/2022	$	117,867	$	—	$	250,526	$	263,495	$	150,290	$	80,822	$	244	$	25,861	$	45,287	$	253,630	$	1,188,022

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	3 Months Ended 03/31/2023		3 Months Ended 03/31/2022
	(in 000’s)		(in 000’s)
Reconciliation of Revenues:
Total revenues from reportable divisions	$	79,671	$	76,136
Corporate finance charges earned, not allocated to divisions	41		22
Corporate investment income earned, not allocated to divisions	2,412		1,961
Timing difference of insurance income allocation to divisions	2,126		3,594
Other revenue not allocated to divisions	61		2
Consolidated Revenues (1)	$	84,311	$	81,715
	3 Months Ended 03/31/2023		3 Months Ended 03/31/2022
	(in 000’s)		(in 000’s)
Reconciliation of Profit:
Profit per division	$	13,820	$	27,900
Corporate earnings not allocated	4,640		5,579
Corporate expenses not allocated	(24,197)		(26,678)
Consolidated Income Before Income Taxes	$	(5,737)	$	6,801

(1) Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.

Note 11 – Subsequent Event

On May 12, 2023, the Company, Wells Fargo Bank, N.A. and the other lenders party to the credit agreement entered into that certain fifth amendment to the loan and security agreement (“the Amendment”). The credit agreement was amended to reduce the required covenant ratio of earnings before interest, taxes, depreciation and amortization to interest expense and to waive identified failures to comply with such ratio prior to the date of amendment.

29

BRANCH OPERATIONS
DIVISION I – SOUTH CAROLINA		DIVISION II – MIDDLE GEORGIA
M. Summer Clevenger	Vice President	Michael J. Whitaker	Vice President
Regional Operations Directors		Regional Operations Directors
Nicholas D. Blevins	Gerald D. Rhoden	Janet R. Brownlee	James A. Mahaffey
Jenna L. Henderson	Gregory A. Shealy	Ronald E. Byerly	Deloris O’Neal
Becki B. Lawhon	Louise S. Stokes	Kathryn Landry	Harriet H. Welch
Tammy T. Lee
DIVISION III – SOUTH GEORGIA		DIVISION IX – NORTH GEORGIA
Michael E. Shankles	Vice President	Jennifer C. Purser	Vice President
Regional Operations Directors		Regional Operations Directors
Stacy M. Courson	Sylvia J. McClung	James D. Blalock	Nokie Moore
Deirdre A. Dunnam	Wanda Parham	Kimberly L. Golka	April Pelphrey
Jeffrey C. Lee	Robert D. Whitlock	Kevin M. Gray	F. Cliff Snyder
DIVISION IV – ALABAMA		DIVISION V – MISSISSIPPI
Jerry W. Hughes	Vice President	Marty B. Miskelly	Vice President
Regional Operations Directors		Regional Operations Directors
M. Peyton Givens	Johnny M. Olive	Maurice J. Bize, Jr.	Teresa Grantham
Tomerria S. Iser	Tonya Slaten	Carla A. Eldridge	Rebecca L. Holloway
Jonathan M. Kendrick	Michael L. Spriggs	Jimmy R. Fairbanks, Jr.
Jeffrey A. Lindberg
DIVISION VII – KENTUCKY and TENNESSEE		DIVISION VIII – LOUISIANA and TEXAS
Joseph R. Cherry	Vice President	John B. Gray	Vice President
Chad Frederick	Assistant Vice President	Lori Sanchez	Assistant Vice President
Regional Operations Directors		Regional Operations Directors
Brian M. Hill	William N. Murillo	Sonya L. Acosta	Lauren M. Munoz
Tammy R. Hood	Joshua C. Nickerson	Bryan W. Cook	Anthony B. Seney
J. Steven Knotts	Melissa D. Storck	L. Christopher Deakle	Chadd Stewart
		Tabatha A. Green
DIVISION VI - VIRGINIA
Lee Wright	Assistant Vice President

30

BRANCH OPERATIONS
ALABAMA
Adamsville	Brewton	Fort Payne	Moody	Prattville	Talladega
Albertville	Clanton	Gadsden	Moulton	Robertsdale	Tallassee
Alexander City	Cullman	Hamilton	Muscle Shoals	Russellville (2)	Troy
Andalusia	Decatur	Huntsville (2)	Opelika	Saraland	Trussville
Arab	Dothan (2)	Jackson	Oxford	Scottsboro	Tuscaloosa
Athens	Enterprise	Jasper	Ozark	Selma	Wetumpka
Bay Minette	Fayette	Mobile	Pelham	Sylacauga
Bessemer	Florence
GEORGIA
Acworth	Canton	Dalton	Greensboro	Manchester	Swainsboro
Adel	Carrollton	Dawson	Griffin	McDonough	Sylvania
Albany (2)	Cartersville	Douglas (2)	Hartwell	Milledgeville	Sylvester
Alma	Cedartown	Douglasville	Hawkinsville	Monroe	Thomaston
Americus	Chatsworth	Dublin	Hazlehurst	Montezuma	Thomasville
Athens (2)	Clarkesville	East Ellijay	Helena	Monticello	Thomson
Augusta	Claxton	Eastman	Hinesville (2)	Moultrie	Tifton
Bainbridge	Clayton	Eatonton	Hiram	Nashville	Toccoa
Barnesville	Cleveland	Elberton	Hogansville	Newnan	Tucker
Baxley	Cochran	Fayetteville	Jackson	Perry	Valdosta
Blairsville	Colquitt	Fitzgerald	Jasper	Pooler	Vidalia
Blakely	Columbus (2)	Flowery Branch	Jefferson	Richmond Hill	Villa Rica
Blue Ridge	Commerce	Forest Park	Jesup	Rome	Warner Robins (2)
Bremen	Conyers	Forsyth	Kennesaw	Royston	Washington
Brunswick	Cordele	Fort Valley	LaGrange	Sandersville	Waycross
Buford	Cornelia	Ft. Oglethorpe	Lavonia	Sandy Springs	Waynesboro
Butler	Covington	Gainesville	Lawrenceville	Savannah	Winder
Cairo	Cumming	Garden City	Macon (2)	Statesboro
Calhoun	Dahlonega	Georgetown	Madison	Stockbridge
KENTUCKY
Elizabethtown	Louisville	Paducah	Shelbyville	Shepherdsville	Somerset
Jackson

31

BRANCH OPERATIONS
(Continued)
LOUISIANA
Abbeville	Crowley	Jena	Marksville	New Iberia	Slidell
Alexandria	Denham Springs	Kenner	Marrero	Opelousas	Sulphur
Baker	DeRidder	Lafayette	Minden	Pineville	Thibodaux
Bastrop	Eunice	Lake Charles	Monroe	Prairieville	West Monroe
Baton Rouge	Franklin	LaPlace	Morgan City	Ruston	Winnsboro
Bossier City	Hammond	Leesville	Natchitoches	Shreveport
Covington	Houma
MISSISSIPPI
Amory	Columbia	Gulfport	Laurel	Olive Branch	Ridgeland
Batesville	Columbus	Hattiesburg	Louisville	Oxford	Ripley
Bay St. Louis	Corinth	Hazlehurst	Magee	Pearl	Senatobia
Booneville	D’Iberville	Hernando	McComb	Philadelphia	Starkville
Brookhaven	Forest	Houston	Meridian	Picayune	Tupelo
Carthage	Greenwood	Iuka	New Albany	Pontotoc	Winona
Clinton	Grenada	Kosciusko	Newton
SOUTH CAROLINA
Aiken	Cheraw	Gaffney	Lancaster	Newberry	Spartanburg
Anderson	Chester	Georgetown	Laurens	North Charleston	Summerville
Batesburg- Leesvile	Columbia	Greenwood	Lexington	North Greenville	Sumter
Beaufort	Conway	Greer	Manning	Orangeburg	Union
Boling Springs	Dillon	Hartsville	Marion	Rock Hill	Walterboro
Camden	Easley	Irmo	Moncks Corner	Seneca	Winnsboro
Cayce	Florence	Lake City	Myrtle Beach	Simpsonville	York
Charleston
TENNESSEE
Athens	Crossville	Greeneville	Lebanon	Murfreesboro	Smyrna
Bristol	Dayton	Hixson	Lenoir City	Newport	Springfield
Clarksville	Dickson	Jacksboro	Lexington	Powell	Tazewell
Cleveland	Dyersburg	Jackson	Madisonville	Pulaski	Tullahoma
Columbia	Elizabethton	Johnson City	Maryville	Savannah	Winchester
Cookeville	Fayetteville	Kingsport	Millington	Sevierville
Cordova	Gallatin	Lafayette	Morristown
TEXAS
Austin (2)	Conroe	Longview	New Braunfels	Pearland	Temple
Bastrop	Corpus Christi	Missouri City	Pasadena	San Antonio (2)	Texarkana
Virginia
Abingdon

32

DIRECTORS
Ben F. Cheek, IV Chairman 1st Franklin Financial Corporation Ben F. Cheek, III Chairman Emeritus 1st Franklin Financial Corporation Virginia C. Herring Vice Chairman, President and Chief Executive Officer 1st Franklin Financial Corporation	Jerry J. Harrison, Jr. Project Engineer 1st Franklin Financial Corporation Donata Ison VP Finance Controller Libra Solutions John G. Sample, Jr. CPA
A. Roger Guimond Retired Executive Officer, 1st Franklin Financial Corporation Jim H. Harris, III Retired Founder / Co-owner Unichem Technologies Retired Founder / Owner / President Moonrise Distillery	C. Dean Scarborough Retired Retail Business Owner Keith D. Watson Chairman Bowen & Watson, Inc.

33

EXECUTIVE OFFICERS

Ben F. Cheek, IV
Chairman

Ben F. Cheek, III
Chairman Emeritus

Virginia C. Herring
Vice Chairman, President and Chief Executive Officer

Brian J. Gyomory
Executive Vice President and Chief Financial Officer

Julie I. Baker
Executive Vice President and Chief Information Security Officer

Daniel E. Clevenger, II
Executive Vice President and Chief Compliance

Gary L. McQuain
Executive Vice President and Chief Operating Officer

Mark J. Scarpitti
Executive Vice President and General Counsel
Corporate Secretary / Treasurer

Joseph A. Shaw
Executive Vice President and Chief Information Officer

Jeffrey R. Thompson
Executive Vice President and Chief Human Resources Officer

Chip Vercelli
Executive Vice President and Chief Regulatory and Government Affairs Officer

LEGAL COUNSEL

Jones Day
1221 Peachtree Street, N.E.
Suite 400
Atlanta, Georgia 30361

INDEPENDENT AUDITORS

Deloitte & Touche LLP
191 Peachtree Street, N.E.
Atlanta, Georgia 30303

34

EX-31.1

Exhibit 31.1

RULE 13a-14(a)/15d-14(a)

CERTIFICATIONS

I, Virginia C. Herring, certify that:

1.I have reviewed this quarterly report on Form 10-Q of 1st Franklin Financial Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 15, 2023
	/s/ Virginia C. Herring
	Virginia C. Herring, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

RULE 13a-14(a)/15d-14(a)

CERTIFICATIONS

I, Brian J. Gyomory, certify that:

1.I have reviewed this quarterly report on Form 10-Q of 1st Franklin Financial Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 15, 2023
	/s/ Brian J. Gyomory
	Brian J. Gyomory, Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

1st FRANKLIN FINANCIAL CORPORATION

135 EAST TUGALO STREET

P.O. BOX 880

TOCCOA, GEORGIA 30577

TELEPHONE: (706) 886-7571

May 15, 2023

Re:    Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002

Ladies and Gentlemen:

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, in connection with the filing of the quarterly report of 1st Franklin Financial Corporation (the "Company") for the quarter ended March 31, 2023 as filed with the Securities and Exchange Commission on Form 10-Q on the date hereof (the "Report"), the undersigned officer of the Company certifies, that, to such officer’s knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

/s/ Virginia C. Herring

Name: Virginia C. Herring

Title: President and Chief Executive Officer

EX-32.2

Exhibit 32.2

1st FRANKLIN FINANCIAL CORPORATION

135 EAST TUGALO STREET

P.O. BOX 880

TOCCOA, GEORGIA 30577

TELEPHONE: (706) 886-7571

May 15, 2023

Re:Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002

Ladies and Gentlemen:

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, in connection with the filing of the quarterly report of 1st Franklin Financial Corporation (the "Company") for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on Form 10-Q on the date hereof (the "Report"), the undersigned officer of the Company certifies, that, to such officer’s knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

/s/ Brian J. Gyomory

Name: Brian J. Gyomory

Title: Executive Vice President and

Chief Financial Officer

XML

Cover - shares	3 Months Ended
	Mar. 31, 2023	Apr. 30, 2023
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	2-27985
Entity Registrant Name	1st FRANKLIN FINANCIAL CORPORATION
Entity Incorporation, State or Country Code	GA
Entity Tax Identification Number	58-0521233
Entity Address, Address Line One	135 East Tugalo Street
Entity Address, Address Line Two	Post Office Box 880
Entity Address, City or Town	Toccoa
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30577
City Area Code	706
Local Phone Number	886-7571
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0000038723
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Voting Common Stock
Entity Common Stock, Shares Outstanding		1,700
Nonvoting Common Stock
Entity Common Stock, Shares Outstanding		168,300

XML

Condensed Consolidated Statements of Financial Position (Unaudited) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
ASSETS
CASH AND CASH EQUIVALENTS	$ 54,175,030	$ 49,652,729
RESTRICTED CASH	16,344,276	15,781,499
LOANS:
Direct Cash Loans	883,230,639	911,821,593
Real Estate Loans	35,681,439	37,323,155
Sales Finance Contracts	150,286,095	146,507,130
Financing Receivable, before Allowance for Credit Loss, Fee and Loan in Process	1,069,198,173	1,095,651,878
Less: Unearned Finance Charges	150,838,197	154,630,023
Unearned Insurance Premiums and Commissions	63,476,321	65,536,077
Allowance for Credit Losses	74,481,732	75,210,063
Net Loans	780,401,923	800,275,715
INVESTMENT SECURITIES:
Available for Sale, at fair value	223,953,694	220,028,343
OTHER ASSETS:
Operating Lease Right-of-Use Assets	39,735,335	38,153,238
Other Assets	38,212,176	39,032,732
Total other assets	77,947,511	77,185,970
TOTAL ASSETS	1,152,822,434	1,162,924,256
LIABILITIES AND STOCKHOLDERS' EQUITY
SENIOR DEBT	812,021,388	804,442,227
OPERATING LEASE LIABILITIES	40,626,083	39,019,208
ACCRUED EXPENSES AND OTHER LIABILITIES	16,845,692	31,163,971
SUBORDINATED DEBT	28,207,573	29,005,826
Total Liabilities	897,700,736	903,631,232
STOCKHOLDERS' EQUITY:
Preferred Stock: $100 par value, 6,000 shares authorized; no shares outstanding	0	0
Accumulated Other Comprehensive (Loss)	(21,203,088)	(26,401,816)
Retained Earnings	276,154,786	285,524,840
Total Stockholders' Equity	255,121,698	259,293,024
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	1,152,822,434	1,162,924,256
Voting Common Stock
STOCKHOLDERS' EQUITY:
Common Stock	170,000	170,000
Nonvoting Common Stock
STOCKHOLDERS' EQUITY:
Common Stock	$ 0	$ 0

XML

Condensed Consolidated Statements of Financial Position (Unaudited) - Parenthetical - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Preferred stock, par value (in dollars per share)	$ 100	$ 100
Preferred stock, shares authorized (in shares)	6,000	6,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Voting Common Stock
Common stock, par value (in dollars per share)	$ 100	$ 100
Common stock, shares authorized (in shares)	2,000	2,000
Common stock, shares outstanding (in shares)	1,700	1,700
Nonvoting Common Stock
Common stock, shares authorized (in shares)	198,000	198,000
Common stock, shares outstanding (in shares)	168,300	168,300

XML

Condensed Consolidated Statements of Income and Retained Earnings (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
INTEREST INCOME	$ 68,966,641	$ 66,133,832
INTEREST EXPENSE	8,629,059	6,278,364
NET INTEREST INCOME	60,337,582	59,855,468
Provision for Credit Losses	25,414,420	16,456,849
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	34,923,162	43,398,619
INSURANCE INCOME
Premiums and Commissions	13,773,450	14,103,952
Insurance Claims and Expenses	4,734,793	5,422,259
Total Net Insurance Income	9,038,657	8,681,693
OTHER REVENUE	1,569,723	1,476,848
OTHER OPERATING EXPENSES
Personnel Expense	28,304,267	28,118,964
Occupancy Expense	5,141,670	4,353,707
Other	17,822,539	14,283,333
Total	51,268,476	46,756,004
(LOSS) / INCOME BEFORE INCOME TAXES	(5,736,934)	6,801,156
Provision for Income Taxes	948,030	737,250
NET (LOSS) / INCOME	$ (6,684,964)	$ 6,063,906
BASIC AND DILUTED EARNINGS PER SHARE
Earnings per share, basic (in dollars per share)	$ (39.32)	$ 35.67
Earnings per share, diluted (in dollars per share)	$ (39.32)	$ 35.67

XML

Condensed Consolidated Statements of Income and Retained Earnings (Unaudited) - Parenthetical - shares	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Voting Common Stock
Common stock, shares outstanding (in shares)	1,700	1,700
Nonvoting Common Stock
Common stock, shares outstanding (in shares)	168,300	168,300
Common Stock
Shares outstanding (in shares)	170,000	170,000	170,000	170,000

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net (Loss) / Income	$ (6,684,964)	$ 6,063,906
Net changes related to available-for-sale securities
Unrealized gains / (losses)	6,618,074	(23,217,694)
Income tax (provision) / benefit	(1,387,399)	4,886,225
Net unrealized losses	5,230,675	(18,331,469)
Less reclassification of gain to net income	31,947	119,811
Total Other Comprehensive Gain / (Loss)	5,198,728	(18,451,280)
Total Comprehensive (Loss)	$ (1,486,236)	$ (12,387,374)

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2021		170,000
Beginning balance at Dec. 31, 2021	$ 296,587,753	$ 170,000	$ 286,851,102	$ 9,736,651
Comprehensive Income:
Net Loss			6,063,906
Other Comprehensive Income				(18,451,280)
Total Comprehensive Loss	(12,387,374)
Ending balance (in shares) at Mar. 31, 2022		170,000
Ending balance at Mar. 31, 2022	284,370,379	$ 170,000	292,915,008	(8,714,629)
Beginning balance (in shares) at Dec. 31, 2022		170,000
Beginning balance at Dec. 31, 2022	259,293,024	$ 170,000	285,524,840	(26,401,816)
Comprehensive Income:
Net Loss			(6,684,964)
Other Comprehensive Income				5,198,728
Total Comprehensive Loss	(1,486,236)
Cash Distributions Paid	(2,685,090)		(2,685,090)
Ending balance (in shares) at Mar. 31, 2023		170,000
Ending balance at Mar. 31, 2023	$ 255,121,698	$ 170,000	$ 276,154,786	$ (21,203,088)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) / Income	$ (6,684,964)	$ 6,063,906
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	25,414,420	16,456,849
Depreciation and amortization	1,297,425	1,114,033
Deferred tax benefit	(16,992)	(70,624)
Net gains due to called redemptions of marketable securities and amortization on securities	(102,281)	(194,102)
(Increase) / decrease in other assets	(1,481,936)	1,769,049
Decrease in other liabilities	(14,339,490)	(14,766,755)
Net Cash Provided	4,086,182	10,372,356
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans originated or purchased	(136,896,019)	(146,094,117)
Loan payments	131,355,392	124,383,650
Purchases of securities, available for sale	(2,569,750)	(3,741,889)
Redemptions of securities, available for sale	5,350,000	7,425,000
Capital Expenditures	(336,545)	(486,796)
Net Cash Used	(3,096,922)	(18,514,152)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) / increase in senior demand notes	(5,668,242)	10,416,031
Advances on credit line	63,131,238	56,057,869
Payments on credit line	(50,112,238)	(83,232,869)
Commercial paper issued	36,645,461	57,188,353
Commercial paper redeemed	(36,417,058)	(16,860,169)
Subordinated debt securities issued	1,310,062	1,573,563
Subordinated debt securities redeemed	(2,108,315)	(1,665,555)
Dividends / distributions	(2,685,090)	0
Net Cash Provided	4,095,818	23,477,223
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	5,085,078	15,335,427
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning	65,434,228	40,366,820
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ending	70,519,306	55,702,247
Cash paid during the year for -
Interest Paid	8,629,059	6,273,560
Income Taxes Paid	21,212	0
Non-cash transactions for -
ASC 842 - Lease assets and associated liabilities	$ 2,441,577	$ 2,224,600

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of 1st Franklin Financial Corporation and subsidiaries (the "Company") should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto as of December 31, 2022 and for the year then ended included in the Company's 2022 Annual Report filed with the Securities and Exchange Commission. Inter-company accounts and transactions have been eliminated from the condensed consolidated financial statements.

In the opinion of Management of the Company, the accompanying unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the Company's consolidated financial position as of March 31, 2023 and December 31, 2022, its consolidated results of operations and comprehensive income for the three-month period ended March 31, 2023 and 2022 and its consolidated cash flows for the three months ended March 31, 2023 and 2022. While certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, the Company believes that the disclosures herein are adequate to make the information presented not misleading.

The Company’s financial condition and results of operations as of and for the three-month period ended March 31, 2023 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at and as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

The computation of earnings per share is self-evident from the accompanying Condensed Consolidated Statements of Income and Retained Earnings (Unaudited). The Company has no dilutive securities outstanding.

The following table provides a reconciliation of cash, cash equivalents and restricted cash (in 000's) reported in the condensed consolidated statements of cash flows:

	March 31, 2023		March 31, 2022
Cash and Cash Equivalents	$	54,175	$	42,179
Restricted Cash	$	16,344	$	13,523
Total Cash, Cash Equivalents and Restricted Cash	$	70,519	$	55,702

The Company categorizes its primary sources of revenue into three categories: (1) interest related revenue, (2) insurance related revenue and (3) other revenue from contracts with customers.

•Interest related revenues are specifically excluded from the scope of ASC Topic 606, Revenue from Contracts with Customers, and accounted for under ASC Topic 310, “Receivables”.

•Insurance related revenues are subject to industry-specific guidance within the scope of ASC Topic 944, “Financial Services – Insurance”.

•Other revenues primarily relate to commissions earned by the Company on sales of auto club memberships. Auto club commissions are revenue from contracts with customers and are accounted for in accordance with the guidance set forth in ASC Topic 606.

During the three months ended March 31, 2023, and 2022, the Company recognized interest related revenue of $69.0 million and $66.1 million, respectively, insurance related revenue of $13.8 million and $14.1 million, respectively, and other revenue from contracts with customers of $1.6 million and $1.5 million, respectively.

Recent Accounting Pronouncements:

In March 2022 the Financial Accounting Standards Board ("FASB") issued an accounting update ("ASU No. 2022-02") eliminating the accounting for troubled debt restructurings (each, a "TDR") by creditors while enhancing the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendment also requires disclosure of gross credit losses by year of origination for finance receivables. The amendments in this update are effective for annual and interim period beginning after December 15, 2022. The elimination of TDR guidance may be adopted prospectively for loan modifications after adoption or on a modified retrospective basis, which would also apply to loans previously modified, resulting in a cumulative effect adjustment to retained earnings in the period of adoption for changes in the allowance for credit losses.

The Company adopted the new standard on January 1, 2023 and elected to apply the new measurement prospectively. Adoption did not have a material impact on the Company's consolidated financial statements.

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Loans

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Loans

Loans

The Company’s consumer loans are made to individuals, who may be new customers, existing customers (loan renewals), former customers or customers converting from a sales contract, in relatively small amounts for relatively short period of time. First and second mortgage loans on real estate are made in larger amounts and for longer periods of time. The Company also purchases sales finance contracts from various dealers. All loans and sales contracts are held for investment.

Cash, unearned finance charges, origination fees, discounts, premiums, deferred fees, and, in the instance of a loan renewal, the net payoff of the of the renewed loan are included in the loan origination amount. The cash component of the loan origination is included in the Statement of Cash Flows in the Cash Flows from Investing Activities as Loans Originated or Purchased.

Loan Renewals

Loan renewals are accounted for in accordance with the applicable guidance in ASC Topic 310-20 Nonrefundable Fees and Other Costs. Loan renewals are a product the Company offers to existing customers that allows them to borrow additional funds from the Company. In evaluating a loan for renewal, in addition to our standard underwriting requirements, we may take into consideration the customer’s prior payment performance with us, which we believe to be an indicator of the customer’s future credit performance. If the terms of the new loan resulting from a loan renewal are at least as favorable to us as the terms for comparable loans to other customers with similar collection risks who are not renewing a loan, the renewal is accounted for as a new loan. The criteria is met if the new loan's effective yield is at least equal to the effective yield for such comparable loans and the modification of the original loan is more than minor. A modification of a loan is more than minor if the present value of the cash flows under the terms of the renewal is at least 10 percent different from the present value of the remaining cash flows under the terms of the original loan. Accordingly, when a renewal is generated, the original loan(s) are extinguished along with the associated unearned finance charges and a new loan is originated. Substantially all renewals include a non-cash component that represents the exchange of the original principal balance for the new principal balance and a cash component for the net proceeds distributed to the customer for the additional amount borrowed. The cash component is presented as outflows from investing activities and the non-cash component is presented as a non-cash investing activity.

Cash, unearned finance charges, origination fees, discounts, premiums, deferred fees, and, in the instance of a loan renewal, the net payoff of the of the renewed loan are included in the loan origination amount. The cash component of the loan origination is included in the Statement of Cash Flows in the Cash Flows from Investing Activities as Loans Originated or Purchased.

Reconciliation of Gross Loans Originated / Acquired to Loans Originated or Purchased in Consolidated Statements of Cash Flows (in 000's):

		Three months ended March 31,
		2023		2022
Loans Originated / Acquired:		$	246,983	$	265,539
Less Non-Cash Reconciling items:
	Other Consumer renewed loans (live check and premier)	49,626		54,837
	Other non-cash activity: unearned finance charges, origination fees, discounts, premiums, and deferred fees	60,461		64,609
Loans originated or purchased per Consolidated Statements of Cash Flows:		$	136,896	$	146,094

Description of Loans

Loans outstanding on the Consolidated Statements of Financial Position (“Financial Gross Outstanding(s)”) include principal, origination fees, premiums, discounts, and in the case of interest-bearing loans, deferred fees, other fees receivable, and accrued interest receivable.

Loan performance reporting is generally based on a loan’s gross outstanding balance (“Gross Outstanding(s)”), (“Gross Balance”), ("Gross Amount"), or ("Gross Loan") that includes principal plus origination fees for interest-bearing loans and the total of payments for loans with pre-computed interest.

The allowance for credit losses is based on the underlying financial instrument’s amortized cost basis ("Amortized Cost Basis"), with the allowance representing the portion of Amortized Cost Basis the Company does not expect to recover due to credit losses. The following are included in the Company’s Amortized Cost Basis:

•For pre-computed loans: Principal Balance, net of unearned finance charges and unearned insurance1.

•For interest-bearing loans: Principal Balance, net of unearned insurance1.

1 The state of Louisiana classifies certain insurance products as non-refundable. Non-refundable products are not netted against the principal balance for calculation of the amortized cost basis.

The Company’s Gross Balances (in 000's) on non-accrual loans by loan class as of March 31, 2023 and December 31, 2022:

Gross Balance (in 000's) by Origination Year as of March 31, 2023:

Loan Class	2023(1)		2022		2021		2020		2019		Prior		Total
Live Check Loans	$	55,682	$	85,131	$	8,901	$	1,485	$	177	$	30	$	151,406
Premier Loans	6,592		56,213		23,131		5,470		1,546		465		93,417
Other Consumer Loans	143,138		366,281		100,086		18,780		6,126		2,147		636,558
Real Estate Loans	—		3,670		12,851		5,760		4,996		7,782		35,059
Sales Finance Contracts	24,760		73,894		31,677		15,826		2,890		428		149,475
Total	$	230,172	$	585,189	$	176,646	$	47,321	$	15,735	$	10,852	$	1,065,915

(1) Includes loans originated during the three-months ended March 31, 2023.

Gross Balance (in 000's) by Origination year as of December 31, 2022:

Loan Class	2022		2021		2020		2019		2018		Prior		Total
Live Check Loans	$	129,140	$	15,432	$	2,234	$	292	$	32	$	10	$	147,140
Premier Loans	68,166		29,236		7,155		2,101		528		82		107,268
Other Consumer Loans	482,667		136,511		24,941		8,134		2,333		526		655,112
Real Estate Loans	3,640		13,216		6,098		5,261		3,876		4,517		36,608
Sales Finance Contracts	85,001		37,060		19,145		3,817		585		68		145,676
Total	$	768,614	$	231,455	$	59,573	$	19,605	$	7,354	$	5,203	$	1,091,804

The Company’s Gross Balance (in 000's) on non-accrual loans by loan class as of March 31, 2023 and December 31, 2022 are as follows:

Loan Class	March 31, 2023		December 31, 2022
Live Check Loans	$	8,979	$	13,527
Premier Loans	3,464		4,738
Other Consumer Loans	26,782		41,240
Real Estate Loans	1,674		1,870
Sales Finance Contracts	4,921		5,656
Total	$	45,820	$	67,031

Age analysis of Gross Balance (in 000's) on past due loans, segregated by loan class, as of March 31, 2023:

Loan Class	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due Loans
Live Check Loans	$	4,989	$	2,617	$	6,637	$	14,243
Premier Loans	1,506		1,042		2,171		4,719
Other Consumer Loans	17,176		9,641		22,299		49,116
Real Estate Loans	772		513		1,406		2,691
Sales Finance Contracts	2,727		1,570		3,540		7,837
Total	$	27,170	$	15,383	$	36,053	$	78,606

Age analysis of Gross Balance (in 000's) on past due loans, segregated by loan class, as of December 31, 2022:

Loan Class	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due Loans
Live Check Loans	$	6,217	$	4,524	$	8,232	$	18,973
Premier Loans	2,164		1,302		2,416		5,882
Other Consumer Loans	24,681		14,373		26,818		65,872
Real Estate Loans	894		436		1,380		2,710
Sales Finance Contracts	4,257		2,066		3,315		9,638
Total	$	38,213	$	22,701	$	42,161	$	103,075

While aging analysis is the primary credit quality indicator, we also consider loans in non-accrual status, loan restructures where the borrower is experiencing financial difficulty, the ratio of bankrupt accounts to the total Gross Outstanding, and economic factors in evaluating whether any qualitative adjustments were necessary to the allowance for credit losses.

The ratio of bankrupt accounts to the Gross Balance was 1.62% at March 31, 2023, compared to 1.56% at December 31, 2022.

For each segment in the portfolio, the Company also evaluates credit quality based on the aging status of the loan and by payment activity. The following table presents the Gross Outstanding in each segment of the portfolio as of March 31, 2023 based on year of origination:

Payment Performance by Origination Year (in thousands)
	2023(1)		2022		2021		2020		2019		Prior		Total Gross Balance Balance
Live Check Loans:
Performing	$	55,239	$	77,392	$	8,196	$	1,407	$	167	$	26	$	142,427
Nonperforming	443		7,739		705		78		10		4		8,979
	$	55,682	$	85,131	$	8,901	$	1,485	$	177	$	30	$	151,406
Premier Loans:
Performing	$	6,587	$	54,210	$	22,043	$	5,205	$	1,472	$	436	$	89,953
Nonperforming	5		2,003		1,088		265		74		29		3,464
	$	6,592	$	56,213	$	23,131	$	5,470	$	1,546	$	465	$	93,417
Other Consumer Loans:
Performing	$	142,772	$	348,751	$	93,018	$	17,575	$	5,689	$	1,972	$	609,777
Nonperforming	366		17,530		7,068		1,205		437		175		26,781
	$	143,138	$	366,281	$	100,086	$	18,780	$	6,126	$	2,147	$	636,558
Real Estate Loans:
Performing	$	—	$	3,575	$	12,046	$	5,576	$	4,696	$	7,492	$	33,385
Nonperforming	—		95		805		184		300		290		1,674
	$	—	$	3,670	$	12,851	$	5,760	$	4,996	$	7,782	$	35,059
Sales Finance Contracts:
Performing	$	24,757	$	71,625	$	30,091	$	14,984	$	2,705	$	392	$	144,554
Nonperforming	3		2,269		1,586		842		185		36		4,921
	$	24,760	$	73,894	$	31,677	$	15,826	$	2,890	$	428	$	149,475

(1)Includes loans originated during the three months ended March 31, 2023.

In March 2022 the Financial Accounting Standards Board ("FASB") issued an accounting update ("ASU No. 2022-02 ") eliminating the accounting for troubled debt restructurings (each, a "TDR") by creditors while enhancing the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendment also requires disclosure of gross credit losses by year of origination for finance receivables. The amendments in this update are effective for annual and interim periods beginning after December 15, 2022. The elimination of TDR guidance was adopted prospectively for loan modifications after adoption. Adoption did not have a material impact on the Company's consolidated financial statements.

Modifications that lower the principal balance experience a direct charge-off for the difference of the original and modified principal amount. The Company only lowers the principal balance due in the event of a court order. The information relating to modifications made to borrowers experiencing financial difficulty (dollars in 000's) for the period indicated are as follows:

	As of and for the three months ended March 31, 2023 (in 000's)
Loan Class	Interest Rate Reduction				Term Extension				Principal Forgiveness				Combination - Term Extension and Principal Forgiveness				Combination - Term Extension and Interest Rate Reduction
Live Check Loans	$	1,224	0.8	%	$	670	0.4	%	$	663	0.4	%	$	890	0.6	%	$	317	0.2	%
Premier Loans	319		0.3	%	578		0.6	%	227		0.2	%	493		0.5	%	393		0.4	%
Other Consumer Loans	3,807		0.6	%	3,620		0.6	%	2,770		0.4	%	7,948		1.2	%	4,791		0.8	%
Real Estate Loans	47		0.1	%	—		—	%	5		—	%	—		—	%	—		—	%
Sales Finance Contracts	177		0.1	%	174		0.1	%	503		0.3	%	1,833		1.2	%	125		0.1	%
Total	$	5,574	0.5	%	$	5,042	0.5	%	$	4,168	0.4	%	$	11,165	1.0	%	$	5,626	0.5	%

The financial effects of the modifications made to borrowers experiencing financial difficulty in the three months ended March 31, 2023 are as follows:

Loan Modification	Loan Class	Financial Effect
Principal Forgiveness	Live Check Loans	Reduced the gross balance of the loans $0.7 million
	Premier Loans	Reduced the gross balance of the loans $0.2 million
	Other Consumer Loans	Reduced the gross balance of the loans $2.8 million
	Real Estate Loans	No Financial Effect
	Sales Finance Contracts	Reduced the gross balance of the loans $0.5 million
Interest Rate Reduction	Live Check Loans	Reduced the weighted-weighted average contractual interest rate from 26.7% to 16.5%
	Premier Loans	Reduced the weighted-weighted average contractual interest rate from 20.2% to 15.1%
	Other Consumer Loans	Reduced the weighted-weighted average contractual interest rate from 29.2% to 19.3%
	Real Estate Loans	Reduced the weighted-weighted average contractual interest rate from 17.9% to 6.0%
	Sales Finance Contracts	Reduced the weighted-weighted average contractual interest rate from 21.9% to 15.6%
Term Extension	Live Check Loans	Added a weighted average 14 months to the term
	Premier Loans	Added a weighted average 27 months to the term
	Other Consumer Loans	Added a weighted average 16 months to the term
	Real Estate Loans	No Financial Effect
	Sales Finance Contracts	Added a weighted average 18 months to the term

Loans modified for borrowers experiencing financial difficulty during the prior 12 months that subsequently defaulted during the three month period ended March 31, 2023 (in 000's):

	March 31, 2023
Loan Class	Interest Rate Reduction		Term Extension		Principal Forgiveness		Combination- Term Extension and Principal Forgiveness		Combination - Term Extension and Interest Rate Reduction
Live Check Loans	$	864	$	105	$	369	$	144	$	81
Premier Loans	85		45		76		189		67
Other Consumer Loans	1,583		665		927		1,603		708
Real Estate Loans	3		—		5		—		—
Sales Finance Contracts	81		22		120		245		17
Total	$	2,616	$	837	$	1,497	$	2,181	$	873

The aging for loans that were modified to borrowers experiencing financial difficulty in the past 12 months (in 000's):

	March 31, 2023
Loan Class	Current		30 - 89 Past Due		90+ Past Due		Total
Live Check Loans	$	4,171	$	887	$	1,617	$	6,674
Premier Loans	4,293		696		740		5,729
Other Consumer Loans	49,933		8,003		10,093		68,029
Real Estate Loans	127		10		152		290
Sales Finance Contracts	6,555		787		1,138		8,480
Total	$	65,079	$	10,382	$	13,741	$	89,202

Prior to January 1, 2023, the Company classified a receivable as a TDR when the Company modified a loan's contractual terms for economic or other reasons related to the borrower's financial difficulties and granted a concession that would not have otherwise been considered.

The following table presents a summary of loans that were restructured during the three months ended March 31, 2022 ($ in 000's):

Loan Class	Number Of Loans	Pre-Modification Gross Balance		Post-Modification Gross Balance
Live Check Loans	1,072	$	2,037	$	1,990
Premier Loans	196	1,318		1,263
Other Consumer Loans	4,535	17,081		16,386
Real Estate Loans	7	87		87
Sales Finance Contracts	221	1,581		1,493
Total	6,031	$	22,104	$	21,219

TDRs that occurred during the twelve months ended March 31, 2022 and subsequently defaulted during the three months ended March 31, 2022 are listed below ($ in 000's):

Loan Class	Number Of Loans	Pre-Modification Gross Balance
Live Check Loans	361	$	663
Premier Loans	46	234
Other Consumer Loans	1,226	2,748
Real Estate Loans	—	—
Sales Finance Contracts	46	220
Total	1,679	$	3,865

Allowance for Credit Losses

The allowance for credit losses is based on Management's evaluation of the inherent risks and changes in the composition of the Company's loan portfolio. Management estimates and evaluates the allowance for credit losses utilizing an open pool loss rate method on collectively evaluated loans with similar risk characteristics in segments, whereby a historical loss rate is calculated and applied to the balance of loans outstanding in the portfolio at each reporting date. This historical loss rate then may be adjusted by macroeconomic forecast and other qualitative factors, as appropriate, to fully reflect the Company’s expected losses in its loan portfolio. The Company’s allowance for credit losses recorded in the balance sheet reflects Management’s best estimate of expected credit losses.

The Company calculates an expected credit loss by utilizing a snapshot of each specific loan segment at a point in history and tracing that segment’s performance until charge-offs were substantially exhausted for that particular segment. Charge-offs in subsequent period are aggregated to derive an unadjusted lifetime historical charge-off rate by segment. The receivables balance at the balance sheet date is reviewed and adjustments to the allowance for credit losses are made if Management determines the receivables balance warrants an adjustment. The Company performs a correlation analysis between macroeconomic factors and prior charge-offs for the following macroeconomic factors: Annual Unemployment Rates, Real Gross Domestic Product, Consumer Price Index (CPI), and US National Home Price Index (HPI). To evaluate the overall adequacy of the Company’s allowance for credit losses, Management considers the level of loan receivables, historical loss trends, loan delinquency trends, bankruptcy trends and overall economic conditions. Such allowance is, in the opinion of Management, adequate for expected losses in the current loan portfolio. As the estimates used in determining the loan loss reserve are influenced by outside factors, such as consumer payment patterns and general economic conditions, there is uncertainty inherent in these estimates. Actual results could vary based on future changes in significant assumptions.

Management disaggregates the Company’s loan portfolio by loan class when evaluating loan performance and estimating the allowance for credit losses. Although most loans are similar in nature, the Company concluded that based on variations in loss experience (severity and duration) driven by product type it is most relevant to segment the portfolio into classes by loan product consisting of five different classes: live check loans, premier loans, other consumer loans, real estate loans, and sales finance contracts.

The total classes are monitored for credit losses based on graded contractual delinquency and other economic conditions. The Company classifies delinquent accounts at the end of each month according to the Company’s graded delinquency rules which includes the number of installments past due at that time, based on the then-existing terms of the contract. Accounts are classified in delinquency categories of 30-59 days past due, 60-89 days past due, or 90 or more days past due based on the Company’s graded delinquency policy. When a loan meets the Company’s charge-off policy, the loan is charged off, unless Management directs that it be retained as an active loan. In making this charge-off evaluation, Management considers factors such as pending insurance, bankruptcy status and other indicators of collectability. The amount charged off is the unpaid balance less the unearned finance charges and the unearned insurance premiums, if applicable.

Management ceases accruing finance charges on loans that meet the Company’s non-accrual policy based on grade delinquency rules, generally when two payments remain unpaid on precomputed loans or when the interest paid-to-date on an interest-bearing loan is 60 days or more past due. Finance charges are then only

recognized to the extent there is a loan payment received or when the account qualifies for return to accrual status. Accounts qualify for return to accrual status when the graded delinquency on a precomputed loan is less than two payments and on when the interest paid-to-date on an interest-bearing loan is less than 60 days past due. There were no loans that met the non-accrual policy still accruing interest at March 31, 2023 or December 31, 2022.

Due to the composition of the loan portfolio, the Company determines and monitors the allowance for credit losses on a portfolio segment basis. As of March 31, 2023, a historical look back period of five quarters was utilized for live checks; six quarters for other consumer loans, premier loans, and sales finance contracts; and a look back period of five years was utilized for real estate loans. Expected look back periods are determined based on analyzing the history of each segment’s snapshot at a point in history and tracing performance until charge-offs are mostly exhausted. The Company addresses seasonality primarily through the use of an average in quarterly historical loss rates over a 4-quarter snapshot time span instead of using one specific snapshot quarter’s historical loss rates.

Determining a proper allowance for credit losses is a critical accounting estimate which involves Management’s judgment with respect to certain relevant factors, such as historical and expected loss trends, unemployment rates in various locales, delinquency levels, bankruptcy trends and overall general and industry specific economic conditions.

The Company considered factors such as rising energy, food and services prices and the potential market disruptions resulting from recent bank failures. The Company also considered the potential impact of an increased Federal Funds Rate. Despite increase to the Federal Funds Rate, the economy has been resilient with unemployment remaining historically low. 1st Franklin loans are contracted at a fixed rate; therefore, borrowers will not be directly affected by rising interest rates.

The allowance for credit losses decreased by $0.7 million to $74.5 million which includes a qualitative adjustment of $7.6 million, for the three-month period ended March 31, 2023, compared to $75.2 million at December 31, 2022.

It is difficult to estimate how potential changes in any one economic factor might affect the overall allowance because a wide variety of factors and inputs are considered in the allowance estimate. Changes in the factors and inputs may not occur at the same rate and may not be consistent across all product types. Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others.

Management believes that the allowance for credit losses, as calculated in accordance with the Company’s current expected credit loss (“CECL”) methodology, is appropriate to cover expected credit losses on loans at March 31, 2023; however, because the allowance for credit losses is based on estimates, there can be no assurance that the ultimate charge-off amount will match such estimates. Management may determine it is appropriate to increase or decrease the allowance for expected credit losses in future periods, or actual losses in any period, either of which events could have a material impact on our results of operations in the future.

Gross charge offs by origination year during the three months ended March 31, 2023 (in 000's):

Loan Class	2023		2022		2021		2020		2019		Prior		Total
Live Check Loans	$	14	$	8,025	$	1,074	$	70	$	19	$	12	$	9,214
Premier Loans	—		1,066		799		153		61		15		2,094
Other Consumer Loans	4		11,281		6,041		856		307		173		18,662
Real Estate Loans	—		—		1		7		—		6		14
Sales Finance Contracts	—		1,012		754		518		89		21		2,394
Total	$	18	$	21,384	$	8,669	$	1,604	$	476	$	227	$	32,378

Segmentation of the portfolio began with the adoption of ASC Topic 326 on January 1, 2020. The following table provides additional information on our allowance for credit losses (in 000's) based on a collective evaluation.

	Three Months Ended March 31, 2023
	Live Check Loans		Premier Loans		Other Consumer Loans		Real Estate Loans		Sales Finance Contracts		Total
Allowance for Credit Losses:
Balance as of 12/31/2022	$	14,896	$	6,108	$	46,412	$	143	$	7,651	$	75,210
Provision for Credit Losses	9,430		1,087		12,871		22		2,004		$	25,414
Charge-offs	(9,222)		(2,094)		(18,662)		(14)		(2,394)		$	(32,386)
Recoveries	1,231		309		4,195		2		507		$	6,244
Ending Balance 3/31/2023	$	16,335	$	5,410	$	44,816	$	153	$	7,768	$	74,482

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Investment Securities

3 Months Ended

Mar. 31, 2023

Investments [Abstract]

Investments Securities

Investment Securities

Investment Securities available for sale are carried at estimated fair market value. The amortized cost and estimated fair values of these investment securities are as follows (in 000's):

	As of March 31, 2023				As of December 31, 2022
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Available-for-Sale
Obligations of states and political subdivisions	$	250,390	$	223,551	$	253,068	$	219,648
Corporate securities	$	403	$	403	$	380	$	380
	$	250,793	$	223,954	$	253,448	$	220,028

Gross unrealized losses on investment securities totaled $28.6 million and $34.5 million at March 31, 2023 and December 31, 2022, respectively. The following table provides an analysis of investment securities in an unrealized loss position (in 000's) for which an allowance for credit losses is unnecessary as of March 31, 2023 and December 31, 2022:

	Less than 12 Months				12 Months or Longer				Total
March 31, 2023	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale:
Obligations of states and political subdivisions	$	44,980	$	(978)	$	97,381	$	(27,613)	$	142,361	$	(28,591)

	Less than 12 Months				12 Months or Longer				Total
December 31, 2022	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale:
Obligations of states and political subdivisions	$	118,495	$	(9,327)	$	42,314	$	(25,126)	$	160,809	$	(34,454)

The previous two tables represent 152 and 184 investments held by the Company at March 31, 2023 and December 31, 2022, respectively, the majority of which are rated “A” or higher by Moody’s and/or Standard & Poor’s. The unrealized losses on the Company’s investments listed in the above table were primarily the result of interest rate and market fluctuations. Based on the credit ratings of these investments, along with the consideration of whether the Company has the intent to sell or will be more likely than not required to sell the applicable investment before recovery of amortized cost basis, no other than temporary impairment was determined to be necessary as of March 31, 2023 and December 31, 2022.

No securities were sold to date in 2023. Additionally, the Company sold no securities during the year ended December 31, 2022. Proceeds from redemption of investments due the exercise of call provisions by the issuers thereof and regularly scheduled maturities totaled $5.4 million with a net gain of $0.0 million and $26.8 million with a net gain of $0.6 million as of March 31, 2023 and December 31, 2022 respectively.

The Company’s insurance subsidiaries internally designate certain investments as restricted to cover their policy reserves and loss reserves. Funds are held in separate trusts for the benefit of each insurance subsidiary at U.S. Bank National Association ("US Bank"). US Bank serves as trustee under trust agreements with the Company's property and casualty insurance company subsidiary (“Frandisco P&C”), as grantor, and American Bankers Insurance Company of Florida, as beneficiary. At March 31, 2023, these trusts held $48.3 million in available-for-sale investment securities at market value. US Bank also serves as trustee under trust agreements with the Company's life insurance company subsidiary (“Frandisco Life”), as grantor, and American Bankers Life Assurance Company, as beneficiary. At March 31, 2023, these trusts held $27.7 million in available-for-sale investment securities at market value. The amounts required to be held in each trust change as required reserves change. All earnings on assets in the trusts are remitted to the Company's insurance subsidiaries.

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Fair Value

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Under ASC Topic 820, fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs used to determine the fair value of an asset or liability, with the highest priority given to Level 1, as these are the most transparent or reliable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurements.

Level 1 - Quoted prices for identical instruments in active markets.

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

The following methods and assumptions are used by the Company in estimating fair values of its financial instruments:

Cash and Cash Equivalents: Cash includes cash on hand and with banks. Cash equivalents are short-term highly liquid investments with original maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value due to the relatively short period of time between the origination of the instruments and their expected realization. Cash and cash equivalents are classified as a Level 1 financial asset.

Loans: The fair value of the Company's direct cash loans and sales finance contracts approximate the carrying value since the estimated life, assuming prepayments, is short-term in nature. The fair value of the Company's real estate loans approximates the carrying value since the interest rate charged by the Company approximates market rates. Loans are classified as a Level 3 financial asset.

Marketable Debt Securities: Management has designated the Company's investment securities held in the Company's investment portfolio at March 31, 2023 and December 31, 2022 as being available-for-sale. The investment portfolio is reported at fair value with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss) included in the consolidated statements of comprehensive income (loss). Gains and losses on sales of securities designated as available-for-sale are determined based on the specific identification method; therefore, Marketable Debt Securities are classified as a Level 2 financial asset.

Corporate Securities: The Company estimates the fair value of corporate securities with readily determinable fair values based on quoted prices observed in active markets; therefore, these investments are classified as a Level 1 financial asset.

Senior Debt Securities: The carrying value of the Company's senior debt securities approximates fair value due to the relatively short period of time between the origination of the instruments and their expected payment. Senior debt securities are classified as a Level 2 financial liability.

Subordinated Debt Securities: The carrying value of the Company's subordinated debt securities approximates fair value due to the re-pricing frequency of the securities. Subordinated debt securities are classified as a Level 2 financial liability.

The Company is responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. The Company performs due diligence to understand the inputs and how the

data was calculated or derived. The Company employs a market approach in the valuation of its obligations of states, political subdivisions and municipal revenue bonds that are available-for-sale. These investments are valued on the basis of current market quotations provided by independent pricing services selected by Management based on the advice of an investment manager. To determine the value of a particular investment, these independent pricing services may use certain information with respect to market transactions in such investment or comparable investments, various relationships observed in the market between investments, quotations from dealers, and pricing metrics and calculated yield measures based on valuation methodologies commonly employed in the market for such investments. Quoted prices are subject to our internal price verification procedures. We validate prices received using a variety of methods including, but not limited, to comparison to other pricing services or corroboration of pricing by reference to independent market data such as a secondary broker. There was no change in this methodology during any period reported.

Assets measured at fair value (in 000's) as of March 31, 2023 and December 31, 2022 were available-for-sale investment securities which are summarized below:

			Fair Value Measurements at Reporting Date Using
Description	March 31, 2023		Quoted Prices In Active Markets for Identical Assets (Level1)		Significant Other Observable Inputs (Level2)		Significant Unobservable Inputs (Level3)
Corporate securities	$	403	$	403	$	—	$	—
Obligations of states and political subdivisions	223,551		—		223,551		—
Total	$	223,954	$	403	$	223,551	$	—

			Fair Value Measurements at Reporting Date Using
Description	December 31, 2022		Quoted Prices In Active Markets for Identical Assets (Level1)		Significant Other Observable Inputs (Level2)		Significant Unobservable Inputs (Level3)
Corporate securities	$	380	$	380	$	—	$	—
Obligations of states and political subdivisions	219,648		—		219,648		—
Total	$	220,028	$	380	$	219,648	$	—

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Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

Leases

The Company's operations are carried on in locations which are occupied under operating lease agreements. These lease agreements are recorded as operating lease right-of-use (“ROU”) assets and operating lease liabilities. Actual lease payments were $2.4 million and $2.2 million for the periods ended March 31, 2023, 2022 respectively. The Company’s minimum aggregate future lease commitments at March 31, 2023 and 2022 are presented in the tables that follows.

ROU assets represent the Company’s right to use an underlying asset during the lease term and the operating lease liabilities represent the Company’s obligations for lease payments in accordance with the lease. Recognition of ROU assets and liabilities are recognized at the lease commitment date based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commitment date or the ASC Topic 842 adoption date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is recorded in occupancy expense in the condensed consolidated statement of income.

Remaining lease terms range from 1 to 10 years. The Company’s leases are not complex and do not contain residual value guarantees, variable lease payments, or significant assumptions or judgments made in applying the requirements of ASC Topic 842. Operating leases with a term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. Operating lease ROU assets and operating lease liabilities were $39.7 million and $40.6 million at March 31, 2023, respectively and $34.6 million and $35.3 million at March 31, 2022, respectively. At December 31, 2022 the operating lease ROU assets and operating liabilities were $38.2 million and $39.0 million, respectively.

The table below summarizes our lease expense and other information related to the Company’s operating leases with respect to ASC Topic 842:

	Three Months Ended March 31, 2023
Operating lease expense	$	2,037,653
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	2,012,876
Weighted-average remaining lease term – operating leases (in years)	7.14
Weighted-average discount rate – operating leases	5.02		%
Lease maturity schedule as of March 31, 2023:	Amount
Remainder of 2023	$	6,046,064
2024	7,518,396
2025	7,142,249
2026	6,564,468
2027	5,735,407
2028 and beyond	15,400,960
Total	48,407,544
Less: Discount	(7,781,461)
Present Value of Lease Liability	$	40,626,083

	Three Months Ended March 31, 2022
Operating lease expense	$	1,908,863
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	1,882,720
Weighted-average remaining lease term – operating leases (in years)	6.94
Weighted-average discount rate – operating leases	4.44		%
Lease maturity schedule as of March 31, 2022:	Amount
Remainder of 2022	$	5,522,567
2023	6,603,868
2024	5,799,836
2025	5,447,253
2026	4,898,186
2027 and beyond	12,566,743
Total	40,838,453
Less: Discount	(5,566,770)
Present Value of Lease Liability	$	35,271,683

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

We conduct our lending operations under the provisions of various federal and state laws, implementing regulations, and insurance regulations. Changes in the current regulatory environment, or the interpretation or application of current regulations, could impact our business.

The Company is subject to various legal proceedings, claims and administrative proceedings arising in the ordinary course of its business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable

outcome is probable the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss (whether on the merits or by virtue of the existence of collectible insurance) would not be material. Based on current expectations, such matters, both individually and in aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company.

As previously disclosed, the Company suffered a cyber-attack against certain systems within the Company's network environment on or about November 17, 2022. The attack temporarily affected operations and caused delays in originating and servicing loans and investments at some locations. During the incident, the attackers had access to personally identifiable information ("PII") of certain Company employees, customers, and investors. The incident which only affected systems, was limited to the Company's on-site file directory system, but not its off-site core operating system. Full lending and investing operations were restored within days of the incident, and the Company provided notifications to all potentially-affected individuals. As of May 15, 2023, the Company is named as a defendant in one consolidated consumer class action suit (originally began as five separate cases alleging harm from the cyber-attack). The Company maintains a cyber insurance policy that we expect indemnify the company for the majority of the costs of investigation, remediation, business interruption, and costs pertaining to the breach.

The Company incurred investigation and remediation costs totaling $2.8 million as of March 31, 2023. This amount is recognized in the Company's consolidated statements of financial position as receivable from the insurance company in miscellaneous assets. A recovery of $2.4 million from the cyber insurance policy was received in April 2023. Additional insurance recoveries from the cyber insurance policy are expected; however, the Company is currently unable to estimate the timing and amount of such recoveries.

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Income Taxes	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesThe Company has elected to be treated as an S corporation for income tax reporting purposes. The taxable income or loss of an S corporation is treated as income of and is reportable in the individual tax returns of the shareholders of the Company in an appropriate allocation. Accordingly, deferred income tax assets and liabilities have been eliminated and no provisions for current and deferred income taxes were made by the Company except for amounts attributable to state income taxes for certain states, which do not recognize S corporation status for income tax reporting purposes. Deferred income tax assets and liabilities will continue to be recognized and provisions for current and deferred income taxes will be made by the Company’s subsidiaries as they are not permitted to be treated as S Corporations. Effective income tax rate was -17% during the three-month period ended March 31, 2023 compared to 11% and during the three-month period ended March 31, 2022. The effective income tax rate differs from the statutory rate due to changes in the proportion of income earned by the Company's insurance subsidiaries.

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Credit Agreement	3 Months Ended
	Mar. 31, 2023
Line of Credit Facility [Abstract]
Credit Agreement	Credit AgreementThe Company is party to a credit agreement with Wells Fargo Bank, N.A. As amended to date, the credit agreement provides for borrowings and reborrrowings up to the lesser of $230.0 million or 70% of the Company’s net finance receivables (as defined in the credit agreement). Available borrowings under the credit agreement were $149.4 million and $162.5 million at March 31, 2023 and December 31, 2022, at an interest rate of 7.52% and 6.97%, respectively. Outstanding borrowings on the credit line were $80.6 million and $67.5 million at March 31, 2023 and December 31, 2022, respectively. The credit agreement contains covenants customary for financing transactions of this type. The credit agreement has a commitment termination date of February 28, 2025.

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Related Party Transactions

3 Months Ended

Mar. 31, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Related Party TransactionsThe Company leased a portion of its properties (see Note 8) for an aggregate of $160,800 per year from certain officers or stockholders.

The Company engages from time to time in transactions with related parties. The Company has an outstanding loan to a real estate development partnership of which David Cheek (son of Ben F. Cheek, III) who beneficially owns 24.24% of the Company’s voting stock, is a partner. The balance on this commercial loan (including principal and accrued interest) was $2.0 million at March 31, 2023.

The Company also has a loan for premium payments to a trust of an executive officer’s irrevocable life insurance policy. The principal balance on this loan at March 31, 2023 was $0.5 million. Please refer to the disclosure contained in Note 12 “Related Party Transactions” in the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2022 for additional information on related party transactions.

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Segment Financial Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Financial Information

Segment Financial Information

The Company discloses segment information in accordance with ASC Topic 280. ASC Topic 280 requires companies to determine segments based on how Management makes decisions about allocating resources to segments and measuring their performance.

The Company has nine divisions which comprise its operations. Each division consists of branch offices that are aggregated based on vice president responsibility and geographic location. Division I consists of offices located in South Carolina. Offices in North Georgia comprises Division II, Division III consists of offices in South Georgia and Division IX consists of offices in West Georgia. Division IV represents our Alabama offices, Division V represents our Mississippi offices, Division VI represents our Virginia offices, Division VII represents our Kentucky and Tennessee branch offices and Division VIII represents our Louisiana and Texas offices.

Accounting policies of each of the divisions are the same as those for the Company as a whole. Performance is measured based on objectives set at the beginning of each year and include various factors such as division profit, growth in earning assets and delinquency and loan loss management. All division revenues result from transactions with third parties. The Company does not allocate income taxes or corporate headquarter expenses to the divisions.

Below is a performance recap of each of the Company’s divisions for the three-month period ended March 31, 2023, and 2022, followed by a reconciliation to consolidated Company data.

	Division I				Division II		Division III		Division IV		Division V		Division VI		Division VII		Division VIII		Division IX		Total
	(in thousands)
Division Revenues:
3 Months Ended 03/31/2023	$	10,962			$	10,445	$	10,916	$	11,978	$	8,648	$	19	$	8,747	$	8,559	$	9,397	$	79,671
3 Months Ended 03/31/2022	$	10,509			$	10,207	$	10,838	$	11,955	$	8,303	$	—	$	7,464	$	7,828	$	9,032	$	76,136
Division Profit:
3 Months Ended 03/31/2023	$	1,466			$	2,754	$	3,647	$	1,930	$	1,263	$	(36)	$	449	$	439	$	1,908	$	13,820
3 Months Ended 03/31/2022	$	3,717			$	4,388	$	4,653	$	4,676	$	3,013	$	—	$	2,050	$	2,168	$	3,235	$	27,900
Division Assets:
03/31/2023	$	117,227			$	249,237	$	262,463	$	149,308	$	79,505	$	208	$	24,721	$	43,289	$	252,494	$	1,178,452
12/31/2022	$	117,867	$	—	$	250,526	$	263,495	$	150,290	$	80,822	$	244	$	25,861	$	45,287	$	253,630	$	1,188,022

	3 Months Ended 03/31/2023		3 Months Ended 03/31/2022
	(in 000’s)		(in 000’s)
Reconciliation of Revenues:
Total revenues from reportable divisions	$	79,671	$	76,136
Corporate finance charges earned, not allocated to divisions	41		22
Corporate investment income earned, not allocated to divisions	2,412		1,961
Timing difference of insurance income allocation to divisions	2,126		3,594
Other revenue not allocated to divisions	61		2
Consolidated Revenues (1)	$	84,311	$	81,715
	3 Months Ended 03/31/2023		3 Months Ended 03/31/2022
	(in 000’s)		(in 000’s)
Reconciliation of Profit:
Profit per division	$	13,820	$	27,900
Corporate earnings not allocated	4,640		5,579
Corporate expenses not allocated	(24,197)		(26,678)
Consolidated Income Before Income Taxes	$	(5,737)	$	6,801

(1) Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.

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Subsequent Event	3 Months Ended
	Mar. 31, 2023
Subsequent Events [Abstract]
Subsequent Event	Subsequent EventOn May 12, 2023, the Company, Wells Fargo Bank, N.A. and the other lenders party to the credit agreement entered into that certain fifth amendment to the loan and security agreement (“the Amendment”). The credit agreement was amended to reduce the required covenant ratio of earnings before interest, taxes, depreciation and amortization to interest expense and to waive identified failures to comply with such ratio prior to the date of amendment.

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Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements:

In March 2022 the Financial Accounting Standards Board ("FASB") issued an accounting update ("ASU No. 2022-02") eliminating the accounting for troubled debt restructurings (each, a "TDR") by creditors while enhancing the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendment also requires disclosure of gross credit losses by year of origination for finance receivables. The amendments in this update are effective for annual and interim period beginning after December 15, 2022. The elimination of TDR guidance may be adopted prospectively for loan modifications after adoption or on a modified retrospective basis, which would also apply to loans previously modified, resulting in a cumulative effect adjustment to retained earnings in the period of adoption for changes in the allowance for credit losses.

The Company adopted the new standard on January 1, 2023 and elected to apply the new measurement prospectively. Adoption did not have a material impact on the Company's consolidated financial statements.

Fair Value

Under ASC Topic 820, fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs used to determine the fair value of an asset or liability, with the highest priority given to Level 1, as these are the most transparent or reliable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurements.

Level 1 - Quoted prices for identical instruments in active markets.

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

The following methods and assumptions are used by the Company in estimating fair values of its financial instruments:

Cash and Cash Equivalents: Cash includes cash on hand and with banks. Cash equivalents are short-term highly liquid investments with original maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value due to the relatively short period of time between the origination of the instruments and their expected realization. Cash and cash equivalents are classified as a Level 1 financial asset.

Loans: The fair value of the Company's direct cash loans and sales finance contracts approximate the carrying value since the estimated life, assuming prepayments, is short-term in nature. The fair value of the Company's real estate loans approximates the carrying value since the interest rate charged by the Company approximates market rates. Loans are classified as a Level 3 financial asset.

Marketable Debt Securities: Management has designated the Company's investment securities held in the Company's investment portfolio at March 31, 2023 and December 31, 2022 as being available-for-sale. The investment portfolio is reported at fair value with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss) included in the consolidated statements of comprehensive income (loss). Gains and losses on sales of securities designated as available-for-sale are determined based on the specific identification method; therefore, Marketable Debt Securities are classified as a Level 2 financial asset.

Corporate Securities: The Company estimates the fair value of corporate securities with readily determinable fair values based on quoted prices observed in active markets; therefore, these investments are classified as a Level 1 financial asset.

Senior Debt Securities: The carrying value of the Company's senior debt securities approximates fair value due to the relatively short period of time between the origination of the instruments and their expected payment. Senior debt securities are classified as a Level 2 financial liability.

Subordinated Debt Securities: The carrying value of the Company's subordinated debt securities approximates fair value due to the re-pricing frequency of the securities. Subordinated debt securities are classified as a Level 2 financial liability.

The Company is responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. The Company performs due diligence to understand the inputs and how the

data was calculated or derived. The Company employs a market approach in the valuation of its obligations of states, political subdivisions and municipal revenue bonds that are available-for-sale. These investments are valued on the basis of current market quotations provided by independent pricing services selected by Management based on the advice of an investment manager. To determine the value of a particular investment, these independent pricing services may use certain information with respect to market transactions in such investment or comparable investments, various relationships observed in the market between investments, quotations from dealers, and pricing metrics and calculated yield measures based on valuation methodologies commonly employed in the market for such investments. Quoted prices are subject to our internal price verification procedures. We validate prices received using a variety of methods including, but not limited, to comparison to other pricing services or corroboration of pricing by reference to independent market data such as a secondary broker. There was no change in this methodology during any period reported.

Loans

Loans

The Company’s consumer loans are made to individuals, who may be new customers, existing customers (loan renewals), former customers or customers converting from a sales contract, in relatively small amounts for relatively short period of time. First and second mortgage loans on real estate are made in larger amounts and for longer periods of time. The Company also purchases sales finance contracts from various dealers. All loans and sales contracts are held for investment.

Cash, unearned finance charges, origination fees, discounts, premiums, deferred fees, and, in the instance of a loan renewal, the net payoff of the of the renewed loan are included in the loan origination amount. The cash component of the loan origination is included in the Statement of Cash Flows in the Cash Flows from Investing Activities as Loans Originated or Purchased.

Loan Renewals

Loan renewals are accounted for in accordance with the applicable guidance in ASC Topic 310-20 Nonrefundable Fees and Other Costs. Loan renewals are a product the Company offers to existing customers that allows them to borrow additional funds from the Company. In evaluating a loan for renewal, in addition to our standard underwriting requirements, we may take into consideration the customer’s prior payment performance with us, which we believe to be an indicator of the customer’s future credit performance. If the terms of the new loan resulting from a loan renewal are at least as favorable to us as the terms for comparable loans to other customers with similar collection risks who are not renewing a loan, the renewal is accounted for as a new loan. The criteria is met if the new loan's effective yield is at least equal to the effective yield for such comparable loans and the modification of the original loan is more than minor. A modification of a loan is more than minor if the present value of the cash flows under the terms of the renewal is at least 10 percent different from the present value of the remaining cash flows under the terms of the original loan. Accordingly, when a renewal is generated, the original loan(s) are extinguished along with the associated unearned finance charges and a new loan is originated. Substantially all renewals include a non-cash component that represents the exchange of the original principal balance for the new principal balance and a cash component for the net proceeds distributed to the customer for the additional amount borrowed. The cash component is presented as outflows from investing activities and the non-cash component is presented as a non-cash investing activity.

Cash, unearned finance charges, origination fees, discounts, premiums, deferred fees, and, in the instance of a loan renewal, the net payoff of the of the renewed loan are included in the loan origination amount. The cash component of the loan origination is included in the Statement of Cash Flows in the Cash Flows from Investing Activities as Loans Originated or Purchased.

Description of Loans

Loans outstanding on the Consolidated Statements of Financial Position (“Financial Gross Outstanding(s)”) include principal, origination fees, premiums, discounts, and in the case of interest-bearing loans, deferred fees, other fees receivable, and accrued interest receivable.

Loan performance reporting is generally based on a loan’s gross outstanding balance (“Gross Outstanding(s)”), (“Gross Balance”), ("Gross Amount"), or ("Gross Loan") that includes principal plus origination fees for interest-bearing loans and the total of payments for loans with pre-computed interest.

The allowance for credit losses is based on the underlying financial instrument’s amortized cost basis ("Amortized Cost Basis"), with the allowance representing the portion of Amortized Cost Basis the Company does not expect to recover due to credit losses. The following are included in the Company’s Amortized Cost Basis:

•For pre-computed loans: Principal Balance, net of unearned finance charges and unearned insurance1.

•For interest-bearing loans: Principal Balance, net of unearned insurance1.

1 The state of Louisiana classifies certain insurance products as non-refundable. Non-refundable products are not netted against the principal balance for calculation of the amortized cost basis.

Allowance for Credit Losses

The allowance for credit losses is based on Management's evaluation of the inherent risks and changes in the composition of the Company's loan portfolio. Management estimates and evaluates the allowance for credit losses utilizing an open pool loss rate method on collectively evaluated loans with similar risk characteristics in segments, whereby a historical loss rate is calculated and applied to the balance of loans outstanding in the portfolio at each reporting date. This historical loss rate then may be adjusted by macroeconomic forecast and other qualitative factors, as appropriate, to fully reflect the Company’s expected losses in its loan portfolio. The Company’s allowance for credit losses recorded in the balance sheet reflects Management’s best estimate of expected credit losses.

The Company calculates an expected credit loss by utilizing a snapshot of each specific loan segment at a point in history and tracing that segment’s performance until charge-offs were substantially exhausted for that particular segment. Charge-offs in subsequent period are aggregated to derive an unadjusted lifetime historical charge-off rate by segment. The receivables balance at the balance sheet date is reviewed and adjustments to the allowance for credit losses are made if Management determines the receivables balance warrants an adjustment. The Company performs a correlation analysis between macroeconomic factors and prior charge-offs for the following macroeconomic factors: Annual Unemployment Rates, Real Gross Domestic Product, Consumer Price Index (CPI), and US National Home Price Index (HPI). To evaluate the overall adequacy of the Company’s allowance for credit losses, Management considers the level of loan receivables, historical loss trends, loan delinquency trends, bankruptcy trends and overall economic conditions. Such allowance is, in the opinion of Management, adequate for expected losses in the current loan portfolio. As the estimates used in determining the loan loss reserve are influenced by outside factors, such as consumer payment patterns and general economic conditions, there is uncertainty inherent in these estimates. Actual results could vary based on future changes in significant assumptions.

Management disaggregates the Company’s loan portfolio by loan class when evaluating loan performance and estimating the allowance for credit losses. Although most loans are similar in nature, the Company concluded that based on variations in loss experience (severity and duration) driven by product type it is most relevant to segment the portfolio into classes by loan product consisting of five different classes: live check loans, premier loans, other consumer loans, real estate loans, and sales finance contracts.

The total classes are monitored for credit losses based on graded contractual delinquency and other economic conditions. The Company classifies delinquent accounts at the end of each month according to the Company’s graded delinquency rules which includes the number of installments past due at that time, based on the then-existing terms of the contract. Accounts are classified in delinquency categories of 30-59 days past due, 60-89 days past due, or 90 or more days past due based on the Company’s graded delinquency policy. When a loan meets the Company’s charge-off policy, the loan is charged off, unless Management directs that it be retained as an active loan. In making this charge-off evaluation, Management considers factors such as pending insurance, bankruptcy status and other indicators of collectability. The amount charged off is the unpaid balance less the unearned finance charges and the unearned insurance premiums, if applicable.

Management ceases accruing finance charges on loans that meet the Company’s non-accrual policy based on grade delinquency rules, generally when two payments remain unpaid on precomputed loans or when the interest paid-to-date on an interest-bearing loan is 60 days or more past due. Finance charges are then only

recognized to the extent there is a loan payment received or when the account qualifies for return to accrual status. Accounts qualify for return to accrual status when the graded delinquency on a precomputed loan is less than two payments and on when the interest paid-to-date on an interest-bearing loan is less than 60 days past due.

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Basis of Presentation (Tables)

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash (in 000's) reported in the condensed consolidated statements of cash flows:

	March 31, 2023		March 31, 2022
Cash and Cash Equivalents	$	54,175	$	42,179
Restricted Cash	$	16,344	$	13,523
Total Cash, Cash Equivalents and Restricted Cash	$	70,519	$	55,702

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Loans (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

Reconciliation of Gross Loans Originated / Acquired to Loans Originated or Purchased in Consolidated Statements of Cash Flows (in 000's):

		Three months ended March 31,
		2023		2022
Loans Originated / Acquired:		$	246,983	$	265,539
Less Non-Cash Reconciling items:
	Other Consumer renewed loans (live check and premier)	49,626		54,837
	Other non-cash activity: unearned finance charges, origination fees, discounts, premiums, and deferred fees	60,461		64,609
Loans originated or purchased per Consolidated Statements of Cash Flows:		$	136,896	$	146,094

The Company’s Gross Balances (in 000's) on non-accrual loans by loan class as of March 31, 2023 and December 31, 2022:

Gross Balance (in 000's) by Origination Year as of March 31, 2023:

Loan Class	2023(1)		2022		2021		2020		2019		Prior		Total
Live Check Loans	$	55,682	$	85,131	$	8,901	$	1,485	$	177	$	30	$	151,406
Premier Loans	6,592		56,213		23,131		5,470		1,546		465		93,417
Other Consumer Loans	143,138		366,281		100,086		18,780		6,126		2,147		636,558
Real Estate Loans	—		3,670		12,851		5,760		4,996		7,782		35,059
Sales Finance Contracts	24,760		73,894		31,677		15,826		2,890		428		149,475
Total	$	230,172	$	585,189	$	176,646	$	47,321	$	15,735	$	10,852	$	1,065,915

(1) Includes loans originated during the three-months ended March 31, 2023.

Gross Balance (in 000's) by Origination year as of December 31, 2022:

Loan Class	2022		2021		2020		2019		2018		Prior		Total
Live Check Loans	$	129,140	$	15,432	$	2,234	$	292	$	32	$	10	$	147,140
Premier Loans	68,166		29,236		7,155		2,101		528		82		107,268
Other Consumer Loans	482,667		136,511		24,941		8,134		2,333		526		655,112
Real Estate Loans	3,640		13,216		6,098		5,261		3,876		4,517		36,608
Sales Finance Contracts	85,001		37,060		19,145		3,817		585		68		145,676
Total	$	768,614	$	231,455	$	59,573	$	19,605	$	7,354	$	5,203	$	1,091,804

The Company’s Gross Balance (in 000's) on non-accrual loans by loan class as of March 31, 2023 and December 31, 2022 are as follows:

Loan Class	March 31, 2023		December 31, 2022
Live Check Loans	$	8,979	$	13,527
Premier Loans	3,464		4,738
Other Consumer Loans	26,782		41,240
Real Estate Loans	1,674		1,870
Sales Finance Contracts	4,921		5,656
Total	$	45,820	$	67,031

Financing Receivable, Past Due

Age analysis of Gross Balance (in 000's) on past due loans, segregated by loan class, as of March 31, 2023:

Loan Class	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due Loans
Live Check Loans	$	4,989	$	2,617	$	6,637	$	14,243
Premier Loans	1,506		1,042		2,171		4,719
Other Consumer Loans	17,176		9,641		22,299		49,116
Real Estate Loans	772		513		1,406		2,691
Sales Finance Contracts	2,727		1,570		3,540		7,837
Total	$	27,170	$	15,383	$	36,053	$	78,606

Age analysis of Gross Balance (in 000's) on past due loans, segregated by loan class, as of December 31, 2022:

Loan Class	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due Loans
Live Check Loans	$	6,217	$	4,524	$	8,232	$	18,973
Premier Loans	2,164		1,302		2,416		5,882
Other Consumer Loans	24,681		14,373		26,818		65,872
Real Estate Loans	894		436		1,380		2,710
Sales Finance Contracts	4,257		2,066		3,315		9,638
Total	$	38,213	$	22,701	$	42,161	$	103,075

Financing Receivable Credit Quality Indicators

The following table presents the Gross Outstanding in each segment of the portfolio as of March 31, 2023 based on year of origination:

Payment Performance by Origination Year (in thousands)
	2023(1)		2022		2021		2020		2019		Prior		Total Gross Balance Balance
Live Check Loans:
Performing	$	55,239	$	77,392	$	8,196	$	1,407	$	167	$	26	$	142,427
Nonperforming	443		7,739		705		78		10		4		8,979
	$	55,682	$	85,131	$	8,901	$	1,485	$	177	$	30	$	151,406
Premier Loans:
Performing	$	6,587	$	54,210	$	22,043	$	5,205	$	1,472	$	436	$	89,953
Nonperforming	5		2,003		1,088		265		74		29		3,464
	$	6,592	$	56,213	$	23,131	$	5,470	$	1,546	$	465	$	93,417
Other Consumer Loans:
Performing	$	142,772	$	348,751	$	93,018	$	17,575	$	5,689	$	1,972	$	609,777
Nonperforming	366		17,530		7,068		1,205		437		175		26,781
	$	143,138	$	366,281	$	100,086	$	18,780	$	6,126	$	2,147	$	636,558
Real Estate Loans:
Performing	$	—	$	3,575	$	12,046	$	5,576	$	4,696	$	7,492	$	33,385
Nonperforming	—		95		805		184		300		290		1,674
	$	—	$	3,670	$	12,851	$	5,760	$	4,996	$	7,782	$	35,059
Sales Finance Contracts:
Performing	$	24,757	$	71,625	$	30,091	$	14,984	$	2,705	$	392	$	144,554
Nonperforming	3		2,269		1,586		842		185		36		4,921
	$	24,760	$	73,894	$	31,677	$	15,826	$	2,890	$	428	$	149,475

(1)Includes loans originated during the three months ended March 31, 2023.

Gross charge offs by origination year during the three months ended March 31, 2023 (in 000's):

Loan Class	2023		2022		2021		2020		2019		Prior		Total
Live Check Loans	$	14	$	8,025	$	1,074	$	70	$	19	$	12	$	9,214
Premier Loans	—		1,066		799		153		61		15		2,094
Other Consumer Loans	4		11,281		6,041		856		307		173		18,662
Real Estate Loans	—		—		1		7		—		6		14
Sales Finance Contracts	—		1,012		754		518		89		21		2,394
Total	$	18	$	21,384	$	8,669	$	1,604	$	476	$	227	$	32,378

Financing Receivable, Troubled Debt Restructuring

The information relating to modifications made to borrowers experiencing financial difficulty (dollars in 000's) for the period indicated are as follows:

	As of and for the three months ended March 31, 2023 (in 000's)
Loan Class	Interest Rate Reduction				Term Extension				Principal Forgiveness				Combination - Term Extension and Principal Forgiveness				Combination - Term Extension and Interest Rate Reduction
Live Check Loans	$	1,224	0.8	%	$	670	0.4	%	$	663	0.4	%	$	890	0.6	%	$	317	0.2	%
Premier Loans	319		0.3	%	578		0.6	%	227		0.2	%	493		0.5	%	393		0.4	%
Other Consumer Loans	3,807		0.6	%	3,620		0.6	%	2,770		0.4	%	7,948		1.2	%	4,791		0.8	%
Real Estate Loans	47		0.1	%	—		—	%	5		—	%	—		—	%	—		—	%
Sales Finance Contracts	177		0.1	%	174		0.1	%	503		0.3	%	1,833		1.2	%	125		0.1	%
Total	$	5,574	0.5	%	$	5,042	0.5	%	$	4,168	0.4	%	$	11,165	1.0	%	$	5,626	0.5	%

The financial effects of the modifications made to borrowers experiencing financial difficulty in the three months ended March 31, 2023 are as follows:

Loan Modification	Loan Class	Financial Effect
Principal Forgiveness	Live Check Loans	Reduced the gross balance of the loans $0.7 million
	Premier Loans	Reduced the gross balance of the loans $0.2 million
	Other Consumer Loans	Reduced the gross balance of the loans $2.8 million
	Real Estate Loans	No Financial Effect
	Sales Finance Contracts	Reduced the gross balance of the loans $0.5 million
Interest Rate Reduction	Live Check Loans	Reduced the weighted-weighted average contractual interest rate from 26.7% to 16.5%
	Premier Loans	Reduced the weighted-weighted average contractual interest rate from 20.2% to 15.1%
	Other Consumer Loans	Reduced the weighted-weighted average contractual interest rate from 29.2% to 19.3%
	Real Estate Loans	Reduced the weighted-weighted average contractual interest rate from 17.9% to 6.0%
	Sales Finance Contracts	Reduced the weighted-weighted average contractual interest rate from 21.9% to 15.6%
Term Extension	Live Check Loans	Added a weighted average 14 months to the term
	Premier Loans	Added a weighted average 27 months to the term
	Other Consumer Loans	Added a weighted average 16 months to the term
	Real Estate Loans	No Financial Effect
	Sales Finance Contracts	Added a weighted average 18 months to the term

The aging for loans that were modified to borrowers experiencing financial difficulty in the past 12 months (in 000's):

	March 31, 2023
Loan Class	Current		30 - 89 Past Due		90+ Past Due		Total
Live Check Loans	$	4,171	$	887	$	1,617	$	6,674
Premier Loans	4,293		696		740		5,729
Other Consumer Loans	49,933		8,003		10,093		68,029
Real Estate Loans	127		10		152		290
Sales Finance Contracts	6,555		787		1,138		8,480
Total	$	65,079	$	10,382	$	13,741	$	89,202

TDRs that occurred during the twelve months ended March 31, 2022 and subsequently defaulted during the three months ended March 31, 2022 are listed below ($ in 000's):

Loan Class	Number Of Loans	Pre-Modification Gross Balance
Live Check Loans	361	$	663
Premier Loans	46	234
Other Consumer Loans	1,226	2,748
Real Estate Loans	—	—
Sales Finance Contracts	46	220
Total	1,679	$	3,865

Financing Receivable, Modified, Subsequent Default

Loans modified for borrowers experiencing financial difficulty during the prior 12 months that subsequently defaulted during the three month period ended March 31, 2023 (in 000's):

	March 31, 2023
Loan Class	Interest Rate Reduction		Term Extension		Principal Forgiveness		Combination- Term Extension and Principal Forgiveness		Combination - Term Extension and Interest Rate Reduction
Live Check Loans	$	864	$	105	$	369	$	144	$	81
Premier Loans	85		45		76		189		67
Other Consumer Loans	1,583		665		927		1,603		708
Real Estate Loans	3		—		5		—		—
Sales Finance Contracts	81		22		120		245		17
Total	$	2,616	$	837	$	1,497	$	2,181	$	873

The following table presents a summary of loans that were restructured during the three months ended March 31, 2022 ($ in 000's):

Loan Class	Number Of Loans	Pre-Modification Gross Balance		Post-Modification Gross Balance
Live Check Loans	1,072	$	2,037	$	1,990
Premier Loans	196	1,318		1,263
Other Consumer Loans	4,535	17,081		16,386
Real Estate Loans	7	87		87
Sales Finance Contracts	221	1,581		1,493
Total	6,031	$	22,104	$	21,219

Financing Receivable, Allowance for Credit Loss

Segmentation of the portfolio began with the adoption of ASC Topic 326 on January 1, 2020. The following table provides additional information on our allowance for credit losses (in 000's) based on a collective evaluation.

	Three Months Ended March 31, 2023
	Live Check Loans		Premier Loans		Other Consumer Loans		Real Estate Loans		Sales Finance Contracts		Total
Allowance for Credit Losses:
Balance as of 12/31/2022	$	14,896	$	6,108	$	46,412	$	143	$	7,651	$	75,210
Provision for Credit Losses	9,430		1,087		12,871		22		2,004		$	25,414
Charge-offs	(9,222)		(2,094)		(18,662)		(14)		(2,394)		$	(32,386)
Recoveries	1,231		309		4,195		2		507		$	6,244
Ending Balance 3/31/2023	$	16,335	$	5,410	$	44,816	$	153	$	7,768	$	74,482

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2023

Investments [Abstract]

Debt Securities, Available-for-Sale

Investment Securities available for sale are carried at estimated fair market value. The amortized cost and estimated fair values of these investment securities are as follows (in 000's):

	As of March 31, 2023				As of December 31, 2022
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Available-for-Sale
Obligations of states and political subdivisions	$	250,390	$	223,551	$	253,068	$	219,648
Corporate securities	$	403	$	403	$	380	$	380
	$	250,793	$	223,954	$	253,448	$	220,028

Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value

The following table provides an analysis of investment securities in an unrealized loss position (in 000's) for which an allowance for credit losses is unnecessary as of March 31, 2023 and December 31, 2022:

	Less than 12 Months				12 Months or Longer				Total
March 31, 2023	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale:
Obligations of states and political subdivisions	$	44,980	$	(978)	$	97,381	$	(27,613)	$	142,361	$	(28,591)

	Less than 12 Months				12 Months or Longer				Total
December 31, 2022	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale:
Obligations of states and political subdivisions	$	118,495	$	(9,327)	$	42,314	$	(25,126)	$	160,809	$	(34,454)

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

Assets measured at fair value (in 000's) as of March 31, 2023 and December 31, 2022 were available-for-sale investment securities which are summarized below:

			Fair Value Measurements at Reporting Date Using
Description	March 31, 2023		Quoted Prices In Active Markets for Identical Assets (Level1)		Significant Other Observable Inputs (Level2)		Significant Unobservable Inputs (Level3)
Corporate securities	$	403	$	403	$	—	$	—
Obligations of states and political subdivisions	223,551		—		223,551		—
Total	$	223,954	$	403	$	223,551	$	—

			Fair Value Measurements at Reporting Date Using
Description	December 31, 2022		Quoted Prices In Active Markets for Identical Assets (Level1)		Significant Other Observable Inputs (Level2)		Significant Unobservable Inputs (Level3)
Corporate securities	$	380	$	380	$	—	$	—
Obligations of states and political subdivisions	219,648		—		219,648		—
Total	$	220,028	$	380	$	219,648	$	—

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Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Lease, Cost

The table below summarizes our lease expense and other information related to the Company’s operating leases with respect to ASC Topic 842:

	Three Months Ended March 31, 2023
Operating lease expense	$	2,037,653
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	2,012,876
Weighted-average remaining lease term – operating leases (in years)	7.14
Weighted-average discount rate – operating leases	5.02		%
Lease maturity schedule as of March 31, 2023:	Amount
Remainder of 2023	$	6,046,064
2024	7,518,396
2025	7,142,249
2026	6,564,468
2027	5,735,407
2028 and beyond	15,400,960
Total	48,407,544
Less: Discount	(7,781,461)
Present Value of Lease Liability	$	40,626,083

	Three Months Ended March 31, 2022
Operating lease expense	$	1,908,863
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	1,882,720
Weighted-average remaining lease term – operating leases (in years)	6.94
Weighted-average discount rate – operating leases	4.44		%
Lease maturity schedule as of March 31, 2022:	Amount
Remainder of 2022	$	5,522,567
2023	6,603,868
2024	5,799,836
2025	5,447,253
2026	4,898,186
2027 and beyond	12,566,743
Total	40,838,453
Less: Discount	(5,566,770)
Present Value of Lease Liability	$	35,271,683

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Segment Financial Information (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Below is a performance recap of each of the Company’s divisions for the three-month period ended March 31, 2023, and 2022, followed by a reconciliation to consolidated Company data.

	Division I				Division II		Division III		Division IV		Division V		Division VI		Division VII		Division VIII		Division IX		Total
	(in thousands)
Division Revenues:
3 Months Ended 03/31/2023	$	10,962			$	10,445	$	10,916	$	11,978	$	8,648	$	19	$	8,747	$	8,559	$	9,397	$	79,671
3 Months Ended 03/31/2022	$	10,509			$	10,207	$	10,838	$	11,955	$	8,303	$	—	$	7,464	$	7,828	$	9,032	$	76,136
Division Profit:
3 Months Ended 03/31/2023	$	1,466			$	2,754	$	3,647	$	1,930	$	1,263	$	(36)	$	449	$	439	$	1,908	$	13,820
3 Months Ended 03/31/2022	$	3,717			$	4,388	$	4,653	$	4,676	$	3,013	$	—	$	2,050	$	2,168	$	3,235	$	27,900
Division Assets:
03/31/2023	$	117,227			$	249,237	$	262,463	$	149,308	$	79,505	$	208	$	24,721	$	43,289	$	252,494	$	1,178,452
12/31/2022	$	117,867	$	—	$	250,526	$	263,495	$	150,290	$	80,822	$	244	$	25,861	$	45,287	$	253,630	$	1,188,022

	3 Months Ended 03/31/2023		3 Months Ended 03/31/2022
	(in 000’s)		(in 000’s)
Reconciliation of Revenues:
Total revenues from reportable divisions	$	79,671	$	76,136
Corporate finance charges earned, not allocated to divisions	41		22
Corporate investment income earned, not allocated to divisions	2,412		1,961
Timing difference of insurance income allocation to divisions	2,126		3,594
Other revenue not allocated to divisions	61		2
Consolidated Revenues (1)	$	84,311	$	81,715
	3 Months Ended 03/31/2023		3 Months Ended 03/31/2022
	(in 000’s)		(in 000’s)
Reconciliation of Profit:
Profit per division	$	13,820	$	27,900
Corporate earnings not allocated	4,640		5,579
Corporate expenses not allocated	(24,197)		(26,678)
Consolidated Income Before Income Taxes	$	(5,737)	$	6,801

(1) Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.

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Basis of Presentation - Schedule of reconciliation of cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and Cash Equivalents	$ 54,175	$ 42,179
Restricted Cash	16,344	13,523
Total Cash, Cash Equivalents and Restricted Cash	$ 70,519	$ 55,702

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Basis of Presentation - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
INTEREST INCOME	$ 68,966,641	$ 66,133,832
Premiums and Commissions	13,773,450	14,103,952
OTHER REVENUE	$ 1,569,723	$ 1,476,848

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Loans - Reconciliation of Loans Acquired to Purchased (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Receivables [Abstract]
Loans Originated / Acquired:	$ 246,983,000	$ 265,539,000
Less Non-Cash Reconciling items:
Other Consumer renewed loans (live check and premier)	49,626,000	54,837,000
Other non-cash activity: unearned finance charges, origination fees, discounts, premiums, and deferred fees	60,461,000	64,609,000
Loans originated or purchased per Consolidated Statements of Cash Flows:	$ 136,896,019	$ 146,094,117

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Loans - Schedule of Principal Balances on Non Accrual Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2023		Dec. 31, 2022
2023	$ 230,172		$ 768,614
2022	585,189		231,455
2021	176,646		59,573
2020	47,321		19,605
2019	15,735		7,354
Prior	10,852		5,203
Total	1,065,915		1,091,804
Nonaccrual balances	45,820		67,031
Live Check Loans
2023	55,682	[1]	129,140
2022	85,131		15,432
2021	8,901		2,234
2020	1,485		292
2019	177		32
Prior	30		10
Total	151,406		147,140
Premier Loans
2023	6,592	[1]	68,166
2022	56,213		29,236
2021	23,131		7,155
2020	5,470		2,101
2019	1,546		528
Prior	465		82
Total	93,417		107,268
Other Consumer Loans
2023	143,138	[1]	482,667
2022	366,281		136,511
2021	100,086		24,941
2020	18,780		8,134
2019	6,126		2,333
Prior	2,147		526
Total	636,558		655,112
Nonaccrual balances	26,782		41,240
Real Estate Loan
2023	0	[1]	3,640
2022	3,670		13,216
2021	12,851		6,098
2020	5,760		5,261
2019	4,996		3,876
Prior	7,782		4,517
Total	35,059		36,608
Nonaccrual balances	1,674		1,870
Sales Finance Contracts
2023	24,760	[1]	85,001
2022	73,894		37,060
2021	31,677		19,145
2020	15,826		3,817
2019	2,890		585
Prior	428		68
Total	149,475		145,676
Nonaccrual balances	4,921		5,656
Live Check Consumer Loans
Nonaccrual balances	8,979		13,527
Premier Consumer Loans
Nonaccrual balances	$ 3,464		$ 4,738

[1] Includes loans originated during the three months ended March 31, 2023.

XML

Loans - Past Due Financing Receivables (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Total	$ 1,065,915	$ 1,091,804
Live Check Loans
Total	151,406	147,140
Premier Loans
Total	93,417	107,268
Other Consumer Loans
Total	636,558	655,112
Real Estate Loan
Total	35,059	36,608
Sales Finance Contracts
Total	149,475	145,676
30-59 Days Past Due
Total	27,170	38,213
30-59 Days Past Due | Live Check Loans
Total	4,989	6,217
30-59 Days Past Due | Premier Loans
Total	1,506	2,164
30-59 Days Past Due | Other Consumer Loans
Total	17,176	24,681
30-59 Days Past Due | Real Estate Loan
Total	772	894
30-59 Days Past Due | Sales Finance Contracts
Total	2,727	4,257
60-89 Days Past Due
Total	15,383	22,701
60-89 Days Past Due | Live Check Loans
Total	2,617	4,524
60-89 Days Past Due | Premier Loans
Total	1,042	1,302
60-89 Days Past Due | Other Consumer Loans
Total	9,641	14,373
60-89 Days Past Due | Real Estate Loan
Total	513	436
60-89 Days Past Due | Sales Finance Contracts
Total	1,570	2,066
90+ Past Due
Total	36,053	42,161
90+ Past Due | Live Check Loans
Total	6,637	8,232
90+ Past Due | Premier Loans
Total	2,171	2,416
90+ Past Due | Other Consumer Loans
Total	22,299	26,818
90+ Past Due | Real Estate Loan
Total	1,406	1,380
90+ Past Due | Sales Finance Contracts
Total	3,540	3,315
Total Past Due Loans
Total	78,606	103,075
Total Past Due Loans | Live Check Loans
Total	14,243	18,973
Total Past Due Loans | Premier Loans
Total	4,719	5,882
Total Past Due Loans | Other Consumer Loans
Total	49,116	65,872
Total Past Due Loans | Real Estate Loan
Total	2,691	2,710
Total Past Due Loans | Sales Finance Contracts
Total	$ 7,837	$ 9,638

XML

Loans - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 USD ($) qtr	Dec. 31, 2022 USD ($)
Financing Receivable, Allowance for Credit Loss [Line Items]
Ratio of bankrupt accounts to loan portfolio, percent	1.62%	1.56%
Increase (decrease) in allowance for credit loss	$ (700,000)
Allowance for Credit Losses	74,481,732	$ 75,210,063
Qualitative adjustment to allowance for credit loss	$ 7,600,000
Live Check Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Lookback period, number of quarters | qtr	5
Allowance for Credit Losses	$ 16,335,000	14,896,000
Other Consumer Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Lookback period, number of quarters | qtr	6
Allowance for Credit Losses	$ 44,816,000	46,412,000
Premier Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Lookback period, number of quarters | qtr	6
Allowance for Credit Losses	$ 5,410,000	6,108,000
Sales Finance Contracts
Financing Receivable, Allowance for Credit Loss [Line Items]
Lookback period, number of quarters | qtr	6
Allowance for Credit Losses	$ 7,768,000	7,651,000
Real Estate Loan
Financing Receivable, Allowance for Credit Loss [Line Items]
Lookback period	5 years
Allowance for Credit Losses	$ 153,000	$ 143,000

XML

Loans - Credit Quality Indicators (Details) - USD ($) $ in Thousands		Mar. 31, 2023		Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
2023		$ 230,172		$ 768,614
2022		585,189		231,455
2021		176,646		59,573
2020		47,321		19,605
2019		15,735		7,354
Prior		10,852		5,203
Total Gross Balance Balance		1,065,915		1,091,804
Live Check Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2023		55,682	[1]	129,140
2022		85,131		15,432
2021		8,901		2,234
2020		1,485		292
2019		177		32
Prior		30		10
Total Gross Balance Balance		151,406		147,140
Premier Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2023		6,592	[1]	68,166
2022		56,213		29,236
2021		23,131		7,155
2020		5,470		2,101
2019		1,546		528
Prior		465		82
Total Gross Balance Balance		93,417		107,268
Other Consumer Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2023		143,138	[1]	482,667
2022		366,281		136,511
2021		100,086		24,941
2020		18,780		8,134
2019		6,126		2,333
Prior		2,147		526
Total Gross Balance Balance		636,558		655,112
Real Estate Loan
Financing Receivable, Credit Quality Indicator [Line Items]
2023		0	[1]	3,640
2022		3,670		13,216
2021		12,851		6,098
2020		5,760		5,261
2019		4,996		3,876
Prior		7,782		4,517
Total Gross Balance Balance		35,059		36,608
Sales Finance Contracts
Financing Receivable, Credit Quality Indicator [Line Items]
2023		24,760	[1]	85,001
2022		73,894		37,060
2021		31,677		19,145
2020		15,826		3,817
2019		2,890		585
Prior		428		68
Total Gross Balance Balance		149,475		$ 145,676
Performing | Live Check Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2023	[1]	55,239
2022		77,392
2021		8,196
2020		1,407
2019		167
Prior		26
Total Gross Balance Balance		142,427
Performing | Premier Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2023	[1]	6,587
2022		54,210
2021		22,043
2020		5,205
2019		1,472
Prior		436
Total Gross Balance Balance		89,953
Performing | Other Consumer Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2023	[1]	142,772
2022		348,751
2021		93,018
2020		17,575
2019		5,689
Prior		1,972
Total Gross Balance Balance		609,777
Performing | Real Estate Loan
Financing Receivable, Credit Quality Indicator [Line Items]
2023	[1]	0
2022		3,575
2021		12,046
2020		5,576
2019		4,696
Prior		7,492
Total Gross Balance Balance		33,385
Performing | Sales Finance Contracts
Financing Receivable, Credit Quality Indicator [Line Items]
2023	[1]	24,757
2022		71,625
2021		30,091
2020		14,984
2019		2,705
Prior		392
Total Gross Balance Balance		144,554
Nonperforming | Live Check Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2023	[1]	443
2022		7,739
2021		705
2020		78
2019		10
Prior		4
Total Gross Balance Balance		8,979
Nonperforming | Premier Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2023	[1]	5
2022		2,003
2021		1,088
2020		265
2019		74
Prior		29
Total Gross Balance Balance		3,464
Nonperforming | Other Consumer Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2023	[1]	366
2022		17,530
2021		7,068
2020		1,205
2019		437
Prior		175
Total Gross Balance Balance		26,781
Nonperforming | Real Estate Loan
Financing Receivable, Credit Quality Indicator [Line Items]
2023	[1]	0
2022		95
2021		805
2020		184
2019		300
Prior		290
Total Gross Balance Balance		1,674
Nonperforming | Sales Finance Contracts
Financing Receivable, Credit Quality Indicator [Line Items]
2023	[1]	3
2022		2,269
2021		1,586
2020		842
2019		185
Prior		36
Total Gross Balance Balance		$ 4,921

[1] Includes loans originated during the three months ended March 31, 2023.

XML

Loans - Modifications to Loans for Borrowers Experiencing Financial Difficulty (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 5,574
Modification to total financing receivables, percent	0.50%
Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 5,042
Modification to total financing receivables, percent	0.50%
Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 4,168
Modification to total financing receivables, percent	0.40%
Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 11,165
Modification to total financing receivables, percent	1.00%
Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 5,626
Modification to total financing receivables, percent	0.50%
Live Check Loans | Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 1,224
Modification to total financing receivables, percent	0.80%
Live Check Loans | Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 670
Modification to total financing receivables, percent	0.40%
Live Check Loans | Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 663
Modification to total financing receivables, percent	0.40%
Live Check Loans | Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 890
Modification to total financing receivables, percent	0.60%
Live Check Loans | Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 317
Modification to total financing receivables, percent	0.20%
Premier Loans | Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 319
Modification to total financing receivables, percent	0.30%
Premier Loans | Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 578
Modification to total financing receivables, percent	0.60%
Premier Loans | Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 227
Modification to total financing receivables, percent	0.20%
Premier Loans | Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 493
Modification to total financing receivables, percent	0.50%
Premier Loans | Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 393
Modification to total financing receivables, percent	0.40%
Other Consumer Loans | Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 3,807
Modification to total financing receivables, percent	0.60%
Other Consumer Loans | Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 3,620
Modification to total financing receivables, percent	0.60%
Other Consumer Loans | Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 2,770
Modification to total financing receivables, percent	0.40%
Other Consumer Loans | Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 7,948
Modification to total financing receivables, percent	1.20%
Other Consumer Loans | Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 4,791
Modification to total financing receivables, percent	0.80%
Real Estate Loan | Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 47
Modification to total financing receivables, percent	0.10%
Real Estate Loan | Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 0
Modification to total financing receivables, percent	0.00%
Real Estate Loan | Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 5
Modification to total financing receivables, percent	0.00%
Real Estate Loan | Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 0
Modification to total financing receivables, percent	0.00%
Real Estate Loan | Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 0
Modification to total financing receivables, percent	0.00%
Sales Finance Contracts | Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 177
Modification to total financing receivables, percent	0.10%
Sales Finance Contracts | Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 174
Modification to total financing receivables, percent	0.10%
Sales Finance Contracts | Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 503
Modification to total financing receivables, percent	0.30%
Sales Finance Contracts | Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 1,833
Modification to total financing receivables, percent	1.20%
Sales Finance Contracts | Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, modified period	$ 125
Modification to total financing receivables, percent	0.10%

XML

Loans - Financial Effect of Loan Modification (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Principal Forgiveness | Live Check Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Decrease from modification	$ 0.7
Principal Forgiveness | Premier Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Decrease from modification	0.2
Principal Forgiveness | Other Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Decrease from modification	2.8
Principal Forgiveness | Sales Finance Contracts
Financing Receivable, Troubled Debt Restructuring [Line Items]
Decrease from modification	$ 0.5
Term Extension | Live Check Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted average years	14 months
Term Extension | Premier Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted average years	27 months
Term Extension | Other Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted average years	16 months
Term Extension | Sales Finance Contracts
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted average years	18 months
Minimum | Interest Rate Reduction | Live Check Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate	16.50%
Minimum | Interest Rate Reduction | Premier Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate	15.10%
Minimum | Interest Rate Reduction | Other Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate	19.30%
Minimum | Interest Rate Reduction | Real Estate Loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate	6.00%
Minimum | Interest Rate Reduction | Sales Finance Contracts
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate	15.60%
Maximum | Interest Rate Reduction | Live Check Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate	26.70%
Maximum | Interest Rate Reduction | Premier Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate	20.20%
Maximum | Interest Rate Reduction | Other Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate	29.20%
Maximum | Interest Rate Reduction | Real Estate Loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate	17.90%
Maximum | Interest Rate Reduction | Sales Finance Contracts
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate	21.90%

XML

Loans - Subsequent Default (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance		$ 3,865
Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	$ 2,616
Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	837
Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	1,497
Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	2,181
Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	873
Live Check Loans | Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	864
Live Check Loans | Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	105
Live Check Loans | Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	369
Live Check Loans | Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	144
Live Check Loans | Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	81
Premier Loans | Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	85
Premier Loans | Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	45
Premier Loans | Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	76
Premier Loans | Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	189
Premier Loans | Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	67
Other Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance		2,748
Other Consumer Loans | Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	1,583
Other Consumer Loans | Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	665
Other Consumer Loans | Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	927
Other Consumer Loans | Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	1,603
Other Consumer Loans | Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	708
Real Estate Loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance		0
Real Estate Loan | Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	3
Real Estate Loan | Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	0
Real Estate Loan | Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	5
Real Estate Loan | Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	0
Real Estate Loan | Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	0
Sales Finance Contracts
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance		$ 220
Sales Finance Contracts | Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	81
Sales Finance Contracts | Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	22
Sales Finance Contracts | Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	120
Sales Finance Contracts | Combination - Term Extension and Principal Forgiveness
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	245
Sales Finance Contracts | Combination - Term Extension and Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Pre-Modification Gross Balance	$ 17

XML

Loans - Aging Analysis (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	$ 89,202
Current
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	65,079
30 - 89 Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	10,382
90+ Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	13,741
Live Check Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	6,674
Live Check Loans | Current
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	4,171
Live Check Loans | 30 - 89 Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	887
Live Check Loans | 90+ Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	1,617
Premier Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	5,729
Premier Loans | Current
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	4,293
Premier Loans | 30 - 89 Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	696
Premier Loans | 90+ Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	740
Other Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	68,029
Other Consumer Loans | Current
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	49,933
Other Consumer Loans | 30 - 89 Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	8,003
Other Consumer Loans | 90+ Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	10,093
Real Estate Loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	290
Real Estate Loan | Current
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	127
Real Estate Loan | 30 - 89 Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	10
Real Estate Loan | 90+ Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	152
Sales Finance Contracts
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	8,480
Sales Finance Contracts | Current
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	6,555
Sales Finance Contracts | 30 - 89 Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	787
Sales Finance Contracts | 90+ Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total	$ 1,138

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Loans - Troubled Debt Restructurings on Financing Receivables (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) loan
Number Of Loans | loan	6,031
Pre-Modification Gross Balance	$ 22,104
Post-Modification Gross Balance	$ 21,219
Number Of Loans	1,679
Pre-Modification Gross Balance	$ 3,865
Live Check Consumer Loans
Number Of Loans | loan	1,072
Pre-Modification Gross Balance	$ 2,037
Post-Modification Gross Balance	$ 1,990
Number Of Loans	361
Pre-Modification Gross Balance	$ 663
Premier Consumer Loans
Number Of Loans | loan	196
Pre-Modification Gross Balance	$ 1,318
Post-Modification Gross Balance	$ 1,263
Number Of Loans	46
Pre-Modification Gross Balance	$ 234
Other Consumer Loans
Number Of Loans | loan	4,535
Pre-Modification Gross Balance	$ 17,081
Post-Modification Gross Balance	$ 16,386
Number Of Loans	1,226
Pre-Modification Gross Balance	$ 2,748
Real Estate Loan
Number Of Loans | loan	7
Pre-Modification Gross Balance	$ 87
Post-Modification Gross Balance	$ 87
Number Of Loans	0
Pre-Modification Gross Balance	$ 0
Sales Finance Contracts
Number Of Loans | loan	221
Pre-Modification Gross Balance	$ 1,581
Post-Modification Gross Balance	$ 1,493
Number Of Loans	46
Pre-Modification Gross Balance	$ 220

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Loans - Gross Charge-offs (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Financing Receivable, Troubled Debt Restructuring [Line Items]
2023	$ 18
2022	21,384
2021	8,669
2020	1,604
2019	476
Prior	227
Total	32,378
Live Check Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
2023	14
2022	8,025
2021	1,074
2020	70
2019	19
Prior	12
Total	9,214
Premier Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
2023	0
2022	1,066
2021	799
2020	153
2019	61
Prior	15
Total	2,094
Other Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
2023	4
2022	11,281
2021	6,041
2020	856
2019	307
Prior	173
Total	18,662
Real Estate Loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
2023	0
2022	0
2021	1
2020	7
2019	0
Prior	6
Total	14
Sales Finance Contracts
Financing Receivable, Troubled Debt Restructuring [Line Items]
2023	0
2022	1,012
2021	754
2020	518
2019	89
Prior	21
Total	$ 2,394

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Loans - Allowance for Credit Losses on Financing Receivables (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	$ 75,210,063
Provision for credit losses	25,414,420	$ 16,456,849
Charge-offs	(32,386,000)
Recoveries	6,244,000
Ending balance	74,481,732
Live Check Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	14,896,000
Provision for credit losses	9,430,000
Charge-offs	(9,222,000)
Recoveries	1,231,000
Ending balance	16,335,000
Premier Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	6,108,000
Provision for credit losses	1,087,000
Charge-offs	(2,094,000)
Recoveries	309,000
Ending balance	5,410,000
Other Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	46,412,000
Provision for credit losses	12,871,000
Charge-offs	(18,662,000)
Recoveries	4,195,000
Ending balance	44,816,000
Real Estate Loan
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	143,000
Provision for credit losses	22,000
Charge-offs	(14,000)
Recoveries	2,000
Ending balance	153,000
Sales Finance Contracts
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	7,651,000
Provision for credit losses	2,004,000
Charge-offs	(2,394,000)
Recoveries	507,000
Ending balance	$ 7,768,000

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Investment Securities - Schedule of amortized cost and estimated fair values of debt securities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Amortized Cost	$ 250,793	$ 253,448
Estimated Fair Value	223,954	220,028
Obligations of states and political subdivisions
Amortized Cost	250,390	253,068
Estimated Fair Value	223,551	219,648
Corporate securities
Amortized Cost	403	380
Estimated Fair Value	$ 403	$ 380

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Investment Securities - Narrative (Details) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2023 USD ($) security	Dec. 31, 2022 USD ($) security
Debt Securities, Available-for-Sale [Line Items]
Gross unrealized losses on investment securities	$ 28.6	$ 34.5
Number of securities | security	152	184
Proceeds from maturity of debt Securities	$ 5.4	$ 26.8
Gain on sale of investments	0.0	$ 0.6
Frandisco P&C
Debt Securities, Available-for-Sale [Line Items]
Debt securities, restricted	48.3
Frandisco Life
Debt Securities, Available-for-Sale [Line Items]
Debt securities, restricted	$ 27.7

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Investment Securities - Schedule of Investment Securities Fair Value and Unrealized Losses (Details) - Obligations of states and political subdivisions - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
AFS, Less than 12 months, Fair Value	$ 44,980	$ 118,495
AFS, Less than 12 months, Unrealized Loss	(978)	(9,327)
AFS, 12 months or longer, Fair Value	97,381	42,314
AFS, 12 months or longer, Unrealized Loss	(27,613)	(25,126)
AFS, Total Fair Value	142,361	160,809
AFS, Total Unrealized Loss	$ (28,591)	$ (34,454)

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Fair Value - Fair Value Measurements, by Fair Value hierarchy (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Estimated Fair Value	$ 223,954	$ 220,028
Corporate securities
Estimated Fair Value	403	380
Obligations of states and political subdivisions
Estimated Fair Value	223,551	219,648
Quoted Prices In Active Markets for Identical Assets (Level1)
Estimated Fair Value	403	380
Quoted Prices In Active Markets for Identical Assets (Level1) | Corporate securities
Estimated Fair Value	403	380
Quoted Prices In Active Markets for Identical Assets (Level1) | Obligations of states and political subdivisions
Estimated Fair Value	0	0
Significant Other Observable Inputs (Level2)
Estimated Fair Value	223,551	219,648
Significant Other Observable Inputs (Level2) | Corporate securities
Estimated Fair Value	0	0
Significant Other Observable Inputs (Level2) | Obligations of states and political subdivisions
Estimated Fair Value	223,551	219,648
Significant Unobservable Inputs (Level3)
Estimated Fair Value	0	0
Significant Unobservable Inputs (Level3) | Corporate securities
Estimated Fair Value	0	0
Significant Unobservable Inputs (Level3) | Obligations of states and political subdivisions
Estimated Fair Value	$ 0	$ 0

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Leases - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Lessee, Lease, Description [Line Items]
Lease expense	$ 2,400,000	$ 2,200,000
Lease ROU asset	39,735,335	34,600,000	$ 38,153,238
Present Value of Lease Liability	$ 40,626,083	$ 35,271,683	$ 39,019,208
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	10 years

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Leases - Schedule of Lease expense and other information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Leases [Abstract]
Operating lease expense	$ 2,037,653	$ 1,908,863
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 2,012,876	$ 1,882,720
Weighted-average remaining lease term – operating leases (in years)	7 years 1 month 20 days	6 years 11 months 8 days
Weighted-average discount rate – operating leases	5.02%	4.44%
Lease maturity schedule as of March 31, 2023:
Remainder of 2023	$ 6,046,064	$ 5,522,567
2024	7,518,396	6,603,868
2025	7,142,249	5,799,836
2026	6,564,468	5,447,253
2027	5,735,407	4,898,186
2028 and beyond	15,400,960	12,566,743
Total	48,407,544	40,838,453
Less: Discount	(7,781,461)	(5,566,770)
Present Value of Lease Liability	$ 40,626,083	$ 35,271,683	$ 39,019,208

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Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions	1 Months Ended
	Apr. 30, 2023	Mar. 31, 2023
Other Commitments [Line Items]
Insurance settlements receivable		$ 2.8
Subsequent Event
Other Commitments [Line Items]
Recovery from insurance settlement received	$ 2.4

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Income Taxes - Narrative (Details)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate reconciliation	(17.00%)	11.00%

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Credit Agreement - Narrative (Details) - Line of Credit - Wells Fargo Credit Facility - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Maximum borrowing capacity	$ 230.0
Maximum borrowing capacity, percentage of net finance receivables	70.00%
Remaining borrowing capacity	$ 149.4	$ 162.5
Interest rate at period end	7.52%	6.97%
Current borrowing capacity	$ 80.6	$ 67.5

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Related Party Transactions - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 USD ($)
Related Party Transaction [Line Items]
Balance on commercial loan (including principal and accrued interest)	$ 2,000,000
Balance on loan for premium payments (including principal and accrued interest)	$ 500,000
Beneficial Owner, David W. Cheek
Related Party Transaction [Line Items]
Percentage of voting interests	24.24%
Leased Properties | Affiliated Entity
Related Party Transaction [Line Items]
Annual amounts of transaction	$ 160,800

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Segment Financial Information - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 segment
Segment Reporting [Abstract]
Number of reportable segments	9

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Segment Financial Information - Schedule of Segment Reporting Information, by Segment (Details) - USD ($)		3 Months Ended
		Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Division Revenues:	[1]	$ 84,311,000	$ 81,715,000
Assets		1,152,822,434		$ 1,162,924,256
Reconciliation of Revenues:
Revenues	[1]	84,311,000	81,715,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		(5,736,934)	6,801,156
Operating Segments
Division Revenues:		79,671,000	76,136,000
Assets		1,178,452,000		1,188,022,000
Reconciliation of Revenues:
Revenues		79,671,000	76,136,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		13,820,000	27,900,000
Corporate, Non-Segment | Interest Income
Division Revenues:		41,000	22,000
Reconciliation of Revenues:
Revenues		41,000	22,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		(24,197,000)	(26,678,000)
Corporate, Non-Segment | Investment Income
Division Revenues:		2,412,000	1,961,000
Reconciliation of Revenues:
Revenues		2,412,000	1,961,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		4,640,000	5,579,000
Segment Reconciling Items | Timing Difference of Insurance Income Allocation
Division Revenues:		2,126,000	3,594,000
Reconciliation of Revenues:
Revenues		2,126,000	3,594,000
Segment Reconciling Items | Other Revenue Not Allocated
Division Revenues:		61,000	2,000
Reconciliation of Revenues:
Revenues		61,000	2,000
Division I | Operating Segments
Division Revenues:		10,962,000	10,509,000
Assets		117,227,000		117,867,000
Reconciliation of Revenues:
Revenues		10,962,000	10,509,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		1,466,000	3,717,000
Division II | Operating Segments
Division Revenues:		10,445,000	10,207,000
Assets		249,237,000		250,526,000
Reconciliation of Revenues:
Revenues		10,445,000	10,207,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		2,754,000	4,388,000
Division III | Operating Segments
Division Revenues:		10,916,000	10,838,000
Assets		262,463,000		263,495,000
Reconciliation of Revenues:
Revenues		10,916,000	10,838,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		3,647,000	4,653,000
Division IV | Operating Segments
Division Revenues:		11,978,000	11,955,000
Assets		149,308,000		150,290,000
Reconciliation of Revenues:
Revenues		11,978,000	11,955,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		1,930,000	4,676,000
Division V | Operating Segments
Division Revenues:		8,648,000	8,303,000
Assets		79,505,000		80,822,000
Reconciliation of Revenues:
Revenues		8,648,000	8,303,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		1,263,000	3,013,000
Division VI | Operating Segments
Division Revenues:		19,000	0
Assets		208,000		244,000
Reconciliation of Revenues:
Revenues		19,000	0
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		(36,000)	0
Division VII | Operating Segments
Division Revenues:		8,747,000	7,464,000
Assets		24,721,000		25,861,000
Reconciliation of Revenues:
Revenues		8,747,000	7,464,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		449,000	2,050,000
Division VIII | Operating Segments
Division Revenues:		8,559,000	7,828,000
Assets		43,289,000		45,287,000
Reconciliation of Revenues:
Revenues		8,559,000	7,828,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		439,000	2,168,000
Division IX | Operating Segments
Division Revenues:		9,397,000	9,032,000
Assets		252,494,000		$ 253,630,000
Reconciliation of Revenues:
Revenues		9,397,000	9,032,000
Reconciliation of Profit:
(LOSS) / INCOME BEFORE INCOME TAXES		$ 1,908,000	$ 3,235,000

[1] Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.