# FIRST M
& F CORPORATION

# SECURITIES
AND EXCHANGE COMMISSION

# Washington,
D.C. 20459

# FORM 10-Q

# Quarterly Report Under Section 13 or 15 (d) of the

# Securities
Exchange Act of 1934

`For the quarter ended September 30, 2001          Commission File Number 0-9424

                               FIRST M & F CORPORATION
  ------------------------------------------------------
              (Exact name of registrant as specified in its charter)

                     Mississippi                         64-0636653
          -------------------------------           -------------------
          (State or other jurisdiction of            (I.R.S. Employer
          incorporation of organization)            Identification No.)

                  Registrant's telephone number:  (662) 289-5121

                                     No Change
---------------------------------------------------
                Former name, former address and former fiscal year,
                           if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for shorter period that the registrant was required to file such report),
and (2) has been subject to such filing requirements for the past 90 days.

                              Yes   X       No
                            -----        -----

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

            Class                              Outstanding at October 31, 2001
            -----                              -------------------------------

Common stock ($5.00 par value)                         4,614,784 shares`

# Page 1 of 20

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`FIRST M & F CORPORATION AND SUBSIDIARY

                                     FORM 10-Q

                                     CONTENTS
                                     --------

                                                                     Page
                                                                     ----

PART I:  FINANCIAL INFORMATION                                          3
  Item 1 - Financial Statements (unaudited):
             Consolidated Statements of Condition                       4
             Consolidated Statements of Income                        5-6
             Consolidated Statements of Comprehensive Income            7
             Consolidated Statements of Stockholders' Equity            8
             Consolidated Statements of Cash Flows                   9-10
             Notes to Consolidated Financial Statements                11
             Independent Accountants' Review Report                    12

  Item 2 - Management's Discussion and Analysis of
             Financial Condition and Results of Operations          13-16

  Item 3 - Quantitative and Qualitative Disclosures About
             Market Risk                                               17


PART II:  OTHER INFORMATION
  Item 1 - Legal Proceedings                                           18
  Item 2 - Changes in Securities                                       18
  Item 3 - Defaults upon Senior Securities                             18
  Item 4 - Submission of Matters to a Vote of Security
             Holders                                                   18
  Item 5 - Other Information                                           18
  Item 6 - Exhibits and Reports on Form 8-K                            18
  Exhibit 11 - Computation of Earnings Per Share                       19

SIGNATURE                                                              20`

# -2-

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`PART I:  FINANCIAL INFORMATION

                           Item 1 - Financial Statements`

# -3-

`FIRST M & F CORPORATION AND SUBSIDIARY

                         Consolidated Statements of Condition
                           (In Thousands, Except Share Data)


                                                     (Unaudited)
                                                     September 30,   December 31,
                   Assets                                2001           2000 (1)
                   ------                           -------------    ------------

Cash and due from banks                             $    26,390     $    31,484
Interest bearing bank balances                            9,179          26,525
Federal funds sold                                        8,500           2,400
Securities available for sale (cost of
  $276,673 and $263,729)                                257,606         264,634

Loans                                                   662,816         632,317
  Allowance for loan losses                              (8,143)         (8,510)
                                                      ---------       ---------
          Net loans                                     654,673         623,807
                                                      ---------       ---------

Bank premises and equipment                              20,936          19,279
Accrued interest receivable                               8,496           8,800
Other real estate                                           947             965
Intangible assets                                        17,343          18,311
Other assets                                             19,330          23,646
                                                      ---------       ---------

                                                    $ 1,023,400     $ 1,019,851
                                                      =========       =========


     Liabilities and Stockholders' Equity
     ------------------------------------

Liabilities:
  Deposits:
    Non-interest bearing                            $   100,752     $    88,316
    Interest bearing                                    708,437         700,043
                                                      ---------       ---------
          Total deposits                                809,189         788,359
                                                      ---------       ---------

  Federal funds and repurchase agreements                20,561          28,969
  Other borrowings                                       81,746          97,633
  Accrued interest payable                                3,920           3,990
  Other liabilities                                       6,180           3,957
                                                      ---------       ---------
          Total liabilities                             921,596         922,908
                                                      ---------       ---------

Stockholders' equity:
  Common stock of $5.00 par value.  15,000,000
    shares authorized; 4,614,784 shares issued
    and outstanding                                      23,074          23,074
  Additional paid-in capital                             33,876          33,876
  Retained earnings                                      41,054          39,422
  Net unrealized loss on securities available
    for sale                                              3,800             571
                                                      ---------       ---------
          Net stockholders' equity                      101,804          96,943
                                                      ---------       ---------

                                                    $ 1,023,400     $ 1,019,851
                                                      =========       =========




The accompanying notes are an integral part of these financial statements.

(1)  Derived from audited financial statements.`

# -4-

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`FIRST M & F CORPORATION AND SUBSIDIARY

                           Consolidated Statements of Income
                           (In Thousands, Except Share Data)
                                      (Unaudited)


                                       Three Months Ended             Nine Months Ended
                                          September 30,                 September 30,
                                  -----------------------       -----------------------
                                        2001           2000           2001           2000
                                        ----           ----           ----           ----
Interest income:
  Interest and fees on loans         $ 13,499       $ 13,975       $ 40,993       $ 40,581
  Taxable investments                   2,710          3,483          8,935         10,829
  Tax exempt investments                  700            704          2,090          2,122
  Federal funds sold                      146            264            646            572
  Interest bearing bank
    balances                              108            120            373            375
                                       ------         ------         ------         ------
          Total interest income        17,163         18,546         53,037         54,479
                                       ------         ------         ------         ------

Interest expense:
  Deposits                              7,932          8,843         25,017         24,909
  Short-term borrowings                   193             48            577            128
  Other borrowings                      1,107          1,943          3,925          5,471
                                       ------         ------         ------         ------
          Total interest expense        9,232         10,834         29,519         30,508
                                       ------         ------         ------         ------

          Net interest income           7,931          7,712         23,518         23,971
Provision for loan losses               1,200          1,150          3,215          2,650
                                       ------         ------         ------         ------
          Net interest income after
            provision for loan
            losses                      6,731          6,562         20,303         21,321
                                       ------         ------         ------         ------

Noninterest income:
  Service charges on deposits           1,770          1,728          5,187          4,780
  Credit insurance income                  47             95            155            258
  Mortgage banking income                 337            129            770            375
  Agency commission income                816            810          2,542          2,320
  Other fee income                        112            102            457            367
  Gains (losses) on AFS
    investments                            79              -            390            (55)
  Other income                            348            291            974            874
                                       ------         ------         ------         ------
          Total noninterest
            income                      3,509          3,155         10,475          8,919
                                       ------         ------         ------         ------
















                                                                               (Continued)
                                                                               -----------`

# -5-

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`FIRST M & F CORPORATION AND SUBSIDIARY

                           Consolidated Statements of Income
                           (In Thousands, Except Share Data)
                                      (Unaudited)


                                       Three Months Ended             Nine Months Ended
                                          September 30,                 September 30,
                                  -----------------------       -----------------------
                                        2001           2000           2001           2000
                                        ----           ----           ----           ----

Noninterest expenses:
  Salaries and employee benefits     $  4,336       $  3,997       $ 12,677       $ 11,689
  Net occupancy expense                   479            462          1,371          1,305
  Equipment and data processing
    expenses                              827            874          2,501          2,486
  Intangible asset amortization           342            342          1,028          1,028
  Other expenses                        2,038          1,934          5,995          5,460
                                       ------         ------         ------         ------
          Total noninterest
            expenses                    8,022          7,609         23,572         21,968
                                       ------         ------         ------         ------

          Income before income
            taxes                       2,218          2,108          7,206          8,272
Income taxes                              633            591          2,113          2,424
                                       ------         ------         ------         ------

          Net income                 $  1,585       $  1,517       $  5,093       $  5,848
                                       ======         ======         ======         ======


Earnings per share:
  Basic                                $ 0.34         $ 0.33         $ 1.10         $ 1.26
  Diluted                                0.34           0.33           1.10           1.26
                                         ====           ====           ====           ====




























The accompanying notes are an integral part of these financial statements.`

# -6-

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`FIRST M & F CORPORATION AND SUBSIDIARY

                       Consolidated Statements of Comprehensive Income
                              (In Thousands, Except Share Data)
                                         (Unaudited)


                                    Three Months Ended             Nine Months Ended
                                       September 30,                 September 30,
                                  ----------------------         ---------------------
                                    2001           2000            2001          2000
                                    ----           ----            ----          ----

Net income                        $ 1,585        $ 1,517         $ 5,093       $ 5,848
                                    -----          -----           -----         -----

Other comprehensive income (loss):
    Unrealized holding gains
      (losses) on securities,
       net of taxes of
       $1,338 and $1,182 for
       the three months ended
       September 30, and $2,067
       and $448 for the nine
       months ended September 30    2,249          1,987           3,474           753

    Plus (minus) reclassification
      adjustments for (gains)
      losses included in net
      income, net of taxes of
      $29 and $0 for the three
      months ended September 30
      and $145 and $21 for the
      nine months ended
      September 30                    (50)             -            (245)           34
                                    -----          -----           -----         -----

          Other comprehensive
            income                  2,199          1,987           3,229           787
                                    -----          -----           -----         -----

          Total comprehensive
            income                $ 3,784        $ 3,504         $ 8,322       $ 6,635
                                    =====          =====           =====         =====





















The accompanying notes are an integral part of these financial statements.`

# -7-

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`FIRST M & F CORPORATION AND SUBSIDIARY

                       Consolidated Statements of Stockholders' Equity
                           (In Thousands, Except Share Data)
                                       (Unaudited)


                                    Additional
                         Common      Paid-In      Retained    Unrealized
                         Stock       Capital      Earnings    Gain (Loss)     Total
                         ------     ----------    --------    -----------     -----

January 1, 2000         $ 23,363     $ 34,845     $ 36,969     $ (4,500)    $ 90,677

Net income                     -            -        5,848            -        5,848

Cash dividends ($.75
  per share)                   -            -       (3,473)           -       (3,473)

35,359 common shares
  issued in
  acquisition                177          774            -            -          951

93,237 common shares
  repurchased               (466)      (1,743)           -            -       (2,209)

Net change in
  unrealized gain
  (loss)                       -            -            -          787          787
                          ------       ------       ------        -----       ------

September 30, 2000      $ 23,074     $ 33,876     $ 39,344     $ (3,713)    $ 92,581
                          ======       ======       ======        =====       ======



January 1, 2001         $ 23,074     $ 33,876     $ 39,422     $    571    $  96,943

Net income                     -            -        5,093            -        5,093

Cash dividends ($.75
  per share)                   -            -       (3,461)           -       (3,461)

Net change in
  unrealized gain
  (loss)                       -            -            -        3,229        3,229
                          ------       ------       ------        -----      -------

September 30, 2001      $ 23,074     $ 33,876     $ 41,054     $  3,800    $ 101,804
                          ======       ======       ======        =====      =======














The accompanying notes are an integral part of these financial statements.`

# -8-

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`FIRST M & F CORPORATION AND SUBSIDIARY

                           Consolidated Statements of Cash Flows
                            (In Thousands, Except Share Data)
                                        (Unaudited)


                                                        Nine Months Ended
                                                          September 30,
                                                    ------------------------
                                                         2001             2000
                                                         ----             ----

Cash flows from operating activities:
  Net income                                           $  5,093        $  5,848
  Adjustments to reconcile net income to cash
    provided by operating activities:
    Depreciation and amortization                         2,326           2,386
    Provision for loan losses                             3,215           2,650
    Net investment amortization                             251             161
    (Gain) loss on sales of investments                    (390)             55
    Deferred income taxes                                 2,129            (592)
    (Increase) decrease in:
      Accrued interest receivable                           304            (501)
      Cash surrender value of bank owned life
        insurance                                          (494)           (425)
    Increase (decrease) in:
      Accrued interest payable                              (70)          2,204
      Income taxes payable                                  507           2,267
    Other, net                                               97            (163)
                                                         ------          ------

          Net cash provided by operating activities      12,968          13,890
                                                         ------          ------

Cash flows from investing activities:
  Purchases of securities available for sale            (43,707)         (2,024)
  Sales of securities available for sale                 14,447           3,800
  Maturities of securities available for sale            39,916          28,522
  Net (increase) decrease in:
    Interest bearing bank balances                       17,346          10,336
    Federal funds sold                                   (6,100)         (9,600)
    Loans                                               (35,108)        (38,207)
    Bank premises and equipment                          (2,952)         (1,028)
    Federal Home Loan Bank stock transactions             4,116               -
    Investment in joint venture                               -            (260)
    Proceeds from sales of other real estate
      and other repossessed assets                        1,182           1,056
    Net cash paid for current year acquisitions             (60)           (465)
    Net cash paid related to prior year acquisitions        (54)         (2,190)
                                                         ------          ------

          Net cash used in investing activities         (10,974)        (10,060)
                                                         ------          ------











                                                                   (Continued)
                                                                   -----------`

# -9-

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`FIRST M & F CORPORATION AND SUBSIDIARY

                           Consolidated Statements of Cash Flows
                             (In Thousands, Except Share Data)
                                       (Unaudited)


                                                           Nine Months Ended
                                                             September 30,
                                                       ------------------------
                                                          2001            2000
                                                          ----            ----

Cash flows from financing activities:
  Net increase (decrease) in:
    Non-interest bearing deposits                      $ 12,435        $  1,516
    Interest bearing deposits                             8,394           4,827
    Securities sold under agreements to
      repurchase and other short-term borrowings         (8,407)         (6,331)
  Proceeds from other borrowings                              -          20,656
  Repayments of other borrowings                        (16,048)        (33,236)
  Cash dividends                                         (3,462)         (3,473)
  Common shares repurchased                                   -          (2,209)
                                                         ------          ------

          Net used in financing activities               (7,088)        (18,250)
                                                         ------          ------

          Net decrease in cash and due from
            banks                                        (5,094)        (14,420)

Cash and due from banks at January 1                     31,484          42,497
                                                         ------          ------

Cash and due from banks at September 30                $ 26,390        $ 28,077
                                                         ======          ======





























The accompanying notes are an integral part of these financial statements.`

# -10-

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`FIRST M & F CORPORATION AND SUBSIDIARY

                    Notes to Consolidated Financial Statements
                        (In Thousands, Except Share Data)



Note 1:  Basis of Presentation
------------------------------

  The accompanying unaudited condensed consolidated financial statements have been
    prepared in accordance with generally accepted accounting principles for interim
    financial information and with the instructions to Form 10-Q and Article 10 of
    Regulation S-X.  Accordingly, they do not include all the information and
    footnotes required by generally accepted accounting principles for complete
    financial statements.  In the opinion of management, all adjustments (consisting
    of normal recurring accruals) considered necessary for a fair presentation have
    been included.  The consolidated financial statements of First M & F Corporation
    include the financial statements of Merchants & Farmers Bank, a wholly owned
    subsidiary, and the Bank's wholly owned subsidiaries, First M & F Insurance Co.,
    M & F Financial Services, Inc., M & F Bank Securities Corporation, Tyler, King
    & Ryder, Inc., Reynolds Insurance Agency, Inc. and Insurance Services, Inc.  For
    further information, refer to the consolidated financial statements and
    footnotes thereto included in the Company's annual report on Form 10-K for the
    year ended December 31, 2000.


Note 2:  Statements of Cash Flows
---------------------------------

  During the nine months ended September 30, 2001 and 2000, the Company had the
    following payments:

                                                     2001           2000
                                                     ----           ----

      Interest                                    $ 29,589       $ 28,304
      Income taxes paid                              1,711          2,450
      Income taxes refunded                              -          2,245
                                                    ======         ======`

# -11-

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# Independent
Accountants Review Report

## The Board of
DirectorsFirst M & F CorporationKosciusko, Mississippi

We have reviewed the
accompanying consolidated statement of condition of First M & F Corporation
and subsidiary as of September 30, 2001, and the related consolidated statements
of income and comprehensive income for the three-month and nine-month periods
ended September 30, 2001 and 2000, and the related consolidated statements of
stockholders equity and cash flows for the nine-month periods ended
September 30, 2001 and 2000. These financial statements are the responsibility
of the Companys management.

We conducted our reviews
in accordance with standards established by the American Institute of Certified
Public Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.

Based on our review, we
are not aware of any material modifications that should be made to the
accompanying consolidated financial statements for them to be in conformity with
generally accepted accounting principles.

We have previously
audited, in accordance with generally accepted auditing standards, the
consolidated statement of condition of First M & F Corporation and
subsidiary as of December 31, 2000, and the related consolidated statements of
income, comprehensive income, stockholders equity and cash flows for the
year then ended (not presented herein) and in our report dated February 9, 2001,
we expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying consolidated
statement of condition as of December 31, 2000 is fairly stated, in all material
respects, in relation to the consolidated statement of condition from which it
has been derived.

`Shearer, Taylor & Co., P.A.`

## Ridgeland,
MississippiNovember 3, 2001

# -12-

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# FIRST M
& F CORPORATION

`Item 2:  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
  of Operations
  -------------`

The following provides a
narrative discussion and analysis of significant changes in the Companys
results of operations and financial condition. This discussion should be read in
conjunction with the interim consolidated financial statements and supplemental
financial data presented elsewhere in this report.

Certain information
included in this discussion contains forward looking financial data and
information that is based upon managements belief as well as certain
assumptions made by, and information currently available to management.
Specifically, this discussion includes statements with respect to the adequacy
of the reserve for possible loan losses; the effect of legal proceedings on
the Companys financial condition, results of operations and liquidity; and
market risk disclosures. Should one or more of these risks materialize or the
assumptions prove to be significantly different, actual results may vary from
those estimated, anticipated, projected or expected.

## Financial
Summary

Net income for the first
nine months of 2001 was $5,093,674 or $1.10 per basic and diluted share as
compared to $5,848,071 or $1.26 per basic and diluted share for the same period
in 2000. The decrease in earnings per share is due primarily to more narrow net
interest margins in the first nine months of 2001 than in 2000. Also, loan loss
accruals were $565 thousand higher in 2001 than during 2000. Rising interest
rates in the last half of 2000 caused lower net interest margins in the first
half of 2001. Interest rates have fallen during 2001, allowing net interest
margins to increase in the third quarter. However, the net interest margin for
the first nine months was 3.58% for 2001 as compared to 3.61% for 2000. Return on assets for
the first nine months of 2001 was .67%, while the return on equity was 6.84%. In
the first nine months of 2000, the return on assets was .77%, with a return on
equity of 8.56%. Total assets at September 30, 2001 were $1.023 billion, as
compared to $1.013 billion at September 30, 2000.

Net income for the three
months ended September 30, 2001 was $1,585,569 or $.34 per share as compared to
$1,517,405 or $.33 per share for the same period in 2000.

## Asset/Liability
Management/Liquidity

Responsibility for
managing the Companys program for controlling and monitoring interest rate
risk and for maintaining income stability, given the Companys exposure to
changes in interest rates, is vested in the asset/liability committee.
Appropriate policy and guidelines, approved by the board of directors, govern
these actions. Monitoring is primarily accomplished through weekly reviews and
analysis of asset and liability repricing opportunities, market conditions and
expectations for the economy. Cash flow analyses are also used to project
short-term interest rate risks and liquidity risks. Management believes, at
September 30, 2001, there is adequate flexibility to alter the rate structure as
necessary to minimize the exposure to changes in interest rates, should they
occur.

The asset/liability
committee further establishes guidelines, approved by appropriate board action,
by which the current liquidity position of the Company is monitored to ensure
adequate funding capacity. Accessibility to local, regional and other funding
sources is also maintained in order to actively manage the funding structure
that supports the earning assets of the Company. These sources are primarily
correspondent banks, the Federal Home Loan Bank and the Federal Reserve.

# -13-

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# FIRST M
& F CORPORATION

## Net Interest
Income

Net interest income for
the first nine months of 2001 was $23.52 million, representing a tax-equivalent
net interest margin of 3.58% as compared to 3.61% in the first nine months of
2000. Tax-equivalent net interest margins in 2000 were 3.74% in the first
quarter, 3.62% in the second quarter and 3.46% in the third quarter.
Tax-equivalent net interest margins in 2001 were 3.49% in the first quarter,
3.64% in the second quarter and 3.61% in the third quarter. The decrease in the
net interest margin for the first nine months of 2001 as compared to 2000 was
primarily due to increased interest rates in general during the second half of
2000, combined with a deposit-sensitive repricing gap for the Company. As
deposits repriced more quickly than loans and investments, the net interest
margins decreased as a result of the rising deposit costs. Interest rates did
fall during the first nine months of 2001, and ended September, 2001 at levels
of approximately 300 basis points below September, 2000.

## Provision for
Loan Losses

The provision for loan losses
for the first nine months of 2001 was $3,215,165 as compared to $2,650,000 for
the first nine months of 2000. This increase is due mainly to the increased
accruals to cover a single customer loan loss of approximately $2,000,000 and to
the increased size of the loan portfolio. Nonaccrual loans and 90 days past due
accruing loans as a percentage of loans outstanding were .46% at September 30,
2001 as compared to .50% at December 31, 2000 and .53% at September 30, 2000.
Annualized net charge-offs as a percentage of average loans were .75% for the
first nine months of 2001, but only .33% excluding the extraordinary charge-off.
This compares to .32% annualized net charge-offs, excluding a $1 million
extraordinary charge-off as of September 30, 2000.

## Noninterest
Income

Noninterest income,
excluding securities transactions, for the first nine months of 2001 was 12.37%
higher than in the same period in 2000. The largest increases occurred in
deposit revenues and mortgage banking revenues. Mortgage banking has been
greatly helped by the lower interest rate environment. Other fee income was up
due to an increase in agency profit sharing commissions, which were
approximately $100,000 higher in 2001 than in 2000. Deposit income also
increased by 8.07% in the first nine months of 2001 as compared to the first
nine months of 2000. This increase was primarily due to higher insufficient
funds revenues, which were driven by increased check-writing volumes.

The Company also had
approximately $300,000 in securities gains brought about from the selling of
certain mortgage-backed securities and reinvesting the proceeds in securities to
be used as collateral to borrow $10,000,000 through a repurchase arrangement.
The proceeds were used to pay down FHLB borrowings and subsequently reduced the
Companys cost of borrowing. Another $90,000 in securities gains were taken
to reposition a portion of the investment portfolio.

# -14-

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# FIRST M
& F CORPORATION

## Noninterest
Expenses

Noninterest expenses increased
by 7.30% in the first nine months of 2001 as compared to the same period in
2000. Salary and benefit expenses were up due primarily to increased benefit
plan expenses. Other expenses were up by approximately $535,000 compared to the
first nine months of 2000 due to various professional and consulting engagements
in 2000 and early 2001, as well as higher legal expenses in 2001. Marketing
expenses were up by $177,000 in the first nine months of 2001 as compared to the
same period in 2000. Annualized non-interest expenses as a percentage of average
assets were 3.11% for the first nine months of 2001 as compared to 2.89% for the
first nine months of 2000. The Companys efficiency ratio was 66.69% for
the first nine months of 2001 as compared to 64.08% for the first nine months of
2000. Intangible asset amortization was $1,028,071 in 2001 as compared to
$1,028,277 in the first nine months of 2000.

## Income Taxes

Income taxes for 2001
were $2,112,245 as compared to $2,424,132 in the first nine months of 2000,
reflecting effective tax rates of 29.31% for the first nine months of 2001 and
29.30% for the first nine months of 2000. There were no unusual tax- related
items in the first nine months of 2001 as compared to 2000.

## Assets/Liabilities

Assets were up by .35%
from December 31, 2000 and by .94% from September 30, 2000. Loans grew by 4.82%
in the first nine months of 2001 and by 2.95% from September 30, 2000.
Investments were down by 2.70% in 2001 as those funds were used to fund loans
and to pay down debt. Loan demand weakened in the last half of 2000 and into
2001. Loans as a percentage of assets were 64.77% at September 30, 2001 as
compared to 62.00% at December 31, 2000 and 63.50% at September 30, 2000.

Maturities in the
mortgage-backed securities portfolio have been used to pay down approximately
$12 million in FHLB borrowings. Short-term funds and bank balances have been
used to pay down debt, fund loan growth and add to the investment portfolio.

Deposits grew by 2.64%
in the first nine months of 2001, with good third quarter growth after having a
second quarter decrease.

# -15-

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# FIRST M
& F CORPORATION

## Equity

The Companys regulatory
capital ratios at September 30, 2001, as shown below, are in excess of the
minimum requirements and qualify the institution as well capitalized
under the risk-based capital regulations.

`($ in Thousands)
                                                              ----------------

  Tier 1 capital                                                  $ 80,661
  Tier 2 capital                                                     8,181
                                                                    ------

            Total risk-based capital                              $ 88,842
                                                                    ======


  Risk weighted assets                                           $ 683,247
                                                                   =======


  Total risk-based capital ratio                                     13.00%
                                                                     =====


  Leverage ratio                                                      8.13%
                                                                      ====`

The dividend payout
ratio for the first nine months of 2001 was 68.18% based upon a quarterly
dividend of $.25 per share. The book value of the stock at September 30, 2001
was $22.06, with a traded market value of $22.13 per share.

# -16-

---

## Item 3 -
Quantitative and Qualitative Disclosures About Market Risk

Market risk reflects the
risk of economic loss resulting from changes in interest rates and market
prices. This risk of loss can be reflected in either reduced potential net
interest income in future periods or diminished market values of financial
assets.

The Companys
market risk arises primarily from interest rate risk, which the asset/liability
management committee monitors and manages on a monthly basis. The committee
manages the interest rate risks inherent in the loan, investment, deposit and
borrowing portfolios of the Company. The asset/liability management committee
determines the risk profile of the Company and determines strategies to maintain
interest rate sensitivity at a low level. As of September 30, the institution
was in a negative repricing gap position of approximately 6.4% of assets.

The Company has off
balance sheet risks to the extent that it has made lending or investment
purchase commitments. Total outstanding, unused loan commitments were $66.35
million with $25.59 million of these commitments maturing in over one (1) year.
The Company monitors these commitments with respect to credit quality as well as
funding-related risks.

In March, 2000, the
Company entered into a collar to protect certain equity investments in Fannie
Mae and Freddie Mac stocks. At December 31, 2000, the prices of both stocks were
above the collar. The collar was designed to lock in losses of approximately
$1.3 million on the stocks. The $1.3 million in losses, net of tax benefits of
$500 thousand were recognized through earnings in the fourth quarter of 2000.
The collars expired and the underlying stocks were sold in March, 2001 with no
effect on earnings.

# -16-

---

# FIRST M
& F CORPORATION

# PART II:
OTHER INFORMATION

## Item 1 - Legal
Proceedings

## Item 2 -
Changes in Securities

## None

## Item 3 - Defaults
Upon Senior Securities

## None

## Item 4 -
Submission of Matters to a Vote of Security Holders

## None

## Item 5 - Other
Information

## None

## Item 6 -
Exhibits and Reports on Form 8-K

## Exhibit 11 -
Statement of computation of earnings per share

# -18-

---

`FIRST M & F CORPORATION


Exhibit 11 - Computation of Earnings Per Share
----------------------------------------------



                                                     Three Months Ended
                                                         September 30,
                                           --------------------------
                                                      2001           2000
                                                      ----           ----

Net income                                        $ 1,585,569    $ 1,517,405
                                                    =========      =========


Weighted average shares outstanding                 4,614,784      4,616,056
Add dilutive effect of outstanding options                  -              -
                                                    ---------      ---------

          Adjusted dilutive shares outstanding      4,614,784      4,616,056
                                                    =========      =========


Earnings per share:
  Basic                                                 $ .34          $ .33
  Diluted                                                 .34            .33
                                                          ===            ===


                                                       Nine Months Ended
                                                          September 30,
                                            --------------------------
                                                      2001           2000
                                                      ----           ----

Net income                                        $ 5,093,674    $ 5,848,071
                                                    =========      =========


Weighted average shares outstanding                 4,614,784      4,640,849
Add dilutive effect of outstanding options                  -              -
                                                    ---------      ---------

          Adjusted dilutive shares outstanding      4,614,784      4,640,849
                                                    =========      =========


Earnings per share:
  Basic                                                $ 1.10         $ 1.26
  Diluted                                                1.10           1.26
                                                         ====           ====`

# -19-

---

# FIRST M
& F CORPORATION

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.

`FIRST M & F CORPORATION
-----------------------
     (Registrant)



DATE:  November 13, 2001                   /s/ Hugh S. Potts, Jr.
                                           ------------------------------------
                                           Hugh S. Potts, Jr.
                                           Chairman and Chief Executive Officer



DATE:  November 13, 2001                   /s/ Robert C. Thompson, III
                                           -------------------------------------
                                           Robert C. Thompson, III
                                           Executive Vice President and
                                             Chief Financial Officer`

# -20-

---