1st FRANKLIN FINANCIAL CORP Enters Loan Amendment Increasing Revolver to $430M

What Happened
1st FRANKLIN FINANCIAL CORP filed an 8-K (dated Sept 1, 2026) reporting that on August 26, 2026 it entered into a Second Amendment to its Loan and Security Agreement with BMO Bank N.A., as agent, and other lenders. The amendment increases the company’s revolving credit facility maximum principal to $430 million and extends the facility’s maturity to the earlier of August 27, 2029 or 152 days before the scheduled maturity of any Reinsurance Credit Facility. The filing also notes this amendment creates a direct financial obligation for the company.

Key Details

• Revolver increased to $430 million (Maximum Principal Amount); additional “Accordion” increases permitted subject to agent approval, with aggregate Accordion Increases capped at $270 million.
• Maturity extended to earlier of (i) August 27, 2029, or (ii) 152 days prior to scheduled maturity of any Reinsurance Credit Facility; amendment dated August 26, 2026.
• Financial covenants (monthly): Funded Debt to Adjusted Tangible Net Worth ratio ≤ 5.00:1; Collateral Performance Indicator < 25%.
• Amendments to restrictions: restricted payments basket allows payments (redemptions, repurchases, dividends, subordinated debt service, management fees) up to 25% of consolidated net income for the prior fiscal year; Bulk Purchase limit allows up to $50 million without prior written consent of the agent.

Why It Matters
This amendment strengthens the company’s liquidity by raising its committed revolving borrowing capacity and extending the maturity date, which can provide more flexibility for funding operations and managing debt maturities. The updated covenants and modified restricted-payment and bulk-purchase rules set clear limits on leverage, collateral performance, and distributions to shareholders or other parties—important constraints for investors to monitor, since breaches could affect the company’s access to the facility or trigger lender remedies.