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 June 30, 1998               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: (601) 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 August 13, 1998
            -----                              ----------------------------
Common stock ($5.00 par value)                       3,394,656 shares



















                                                   Page 1 of 18


<PAGE>



                                      FIRST M & F CORPORATION AND SUBSIDIARY

                                                    FORM 10-Q

                                                     CONTENTS

                                                                    Page

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

  Item 2 - Management's Discussion and Analysis of
             Financial Condition and Results of Operations        10-15


PART II:  OTHER INFORMATION                                       
  Item 1 - Legal Proceedings                                        16
  Item 2 - Changes in Securities                                    16
  Item 3 - Defaults upon Senior Securities                          16
  Item 4 - Submission of Matters to a Vote of Security
             Holders                                                16
  Item 5 - Other Information                                        16
  Item 6 - Exhibits and Reports on Form 8-K                         16
  Exhibit 11 - Computation of Earnings Per Share                    17

SIGNATURE                                                           18
























                                             -2-


<PAGE>









                                          PART I: FINANCIAL INFORMATION

                                          Item 1 - Financial Statements

















































                                               -3-


<PAGE>

                 FIRST M & F CORPORATION AND SUBSIDIARY

             Condensed Consolidated Statements of Condition


                                                     (Unaudited)
                                                       June 30,     December 31,
           Assets                                        1998         1997 (1)
                                                     -----------    -----------
Cash and due from banks$                              22,792,398 $  24,719,193
Interest bearing bank balances                         9,741,093    10,801,934
Federal funds sold                                    19,500,000     2,000,000
Securities available for sale                        138,915,165   109,002,998
Investment securities, market value of
  $55,797,000 in 1998 and $59,696,000 in 1997          54,946,293   58,785,352

Loans                                                 372,478,977   360,192,125
  Reserve for possible loan losses                     (5,436,168)   (5,170,000)
                                                      ------------  ------------
          Net loans                                    367,042,809  355,022,125

Bank premises and equipment                             10,341,762    9,326,709
Accrued interest receivable                              5,814,625    5,492,942
Other real estate                                          733,755      842,786
Intangible assets                                        2,434,392    2,519,053
Other assets                                            12,649,250    2,387,422
                                                      ------------  ------------
                                                     $ 644,911,542 $580,900,514
                                                       ===========  ===========

     Liabilities and Stockholders' Equity

Liabilities:
  Deposits:
    Non-interest bearing$                               65,252,689  $60,577,750
    Interest bearing                                   516,240,216  449,205,012
                                                      ------------  ------------
          Total deposits                               581,492,905  509,782,762
                                                      ------------  ------------
  Borrowings                                             2,559,330   12,860,760
  Accrued interest payable                               2,584,359    2,563,911
  Other liabilities                                      1,766,688    1,487,359
                                                      ------------  ------------
          Total liabilities                            588,403,282  526,694,792
                                                      ------------  ------------

Stockholders' equity:
  Common stock, $5.00 par value, 15,000,000 shares
    authorized, 3,394,656 issued and outstanding        16,973,280   16,973,280
  Additional paid-in capital                            10,698,388   10,698,388
  Retained earnings                                     28,289,293   26,013,973
  Net unrealized gain on securities available for
    sale, net of income taxes                              547,299      520,081
                                                      ------------  ------------
          Net stockholders' equity                      56,508,260   54,205,722
                                                      ------------  ------------
                                                     $ 644,911,542$ 580,900,514
                                                       ===========  ===========


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

(1)  Derived from audited financial statements.

                                       -4-




<PAGE>
<TABLE>
<CAPTION>



                                      FIRST M & F CORPORATION AND SUBSIDIARY

                                   Condensed Consolidated Statements of Income
                                                   (Unaudited)



                                    Three Months Ended June 30,    Six Months Ended June 30, 
                                    ---------------------------    -------------------------
                                         1998           1997           1998           1997
                                         ----           ----           ----           ----
<S>                                 <C>            <C>             <C>            <C>         
Interest income:
  Interest and fees on loans        $  8,785,728   $  8,378,678    $ 17,453,923   $ 16,594,456
  Interest bearing bank
    balances                             119,656         40,484         260,704         91,070
  Taxable investments                  2,002,558      1,840,654       3,871,329      3,403,233
  Tax exempt investments                 656,785        521,745       1,243,609      1,018,924
  Federal funds sold                     188,660        148,418         460,064        336,163
                                      ----------     ----------      ----------     ----------
          Total interest income       11,753,387     10,929,979      23,289,628     21,443,846
                                      ----------     ----------      ----------     ----------

Interest expense:
  Deposits                             5,703,773      5,029,762      11,077,169      9,828,563
  Securities sold under agreements
    to repurchase                              -          3,465               -          3,465
  Other borrowings                        37,299         62,331         220,682        147,641
                                      ----------     ----------      ----------     ----------

          Total interest expense       5,741,072      5,095,558      11,297,851      9,979,669
                                      ----------     ----------      ----------     ----------

          Net interest income          6,012,315      5,834,421      11,991,777     11,464,177
Provision for possible loan losses       478,874        397,502         938,346        791,288
                                      ----------     ----------      ----------     ----------
          Net interest income after
            provision for possible
            loan losses                5,533,441      5,436,919      11,053,431     10,672,889
                                      ----------     ----------      ----------     ----------
Other operating income:
  Service charges on deposits            873,856        841,004       1,727,304      1,659,346
  Credit insurance income                 93,832         98,011         198,492        190,115
  Gains (losses) on AFS investments       (1,086)         7,007          (7,713)         6,712
  Other income                           267,721        167,783         484,224        363,986
                                      ----------     ----------      ----------     ----------
          Total other operating
            income                     1,234,323      1,113,805       2,402,307      2,220,159
                                      ----------     ----------      ----------     ----------
Other operating expenses:
  Salaries and employee benefits       2,229,399      2,079,564       4,441,483      4,091,727
  Net occupancy expense                  271,801        230,500         510,394        474,534
  Equipment and data processing
    expenses                             481,657        442,382         908,871        888,626
  Other expenses                       1,203,160      1,048,847       2,335,014      2,043,607
                                      ----------     ----------      ----------     ----------
          Total other operating
            expenses                   4,186,017      3,801,293       8,195,762      7,498,494
                                      ----------     ----------      ----------     ----------
          Income before income
            taxes                      2,581,747      2,749,431       5,259,976      5,394,554
Income taxes                             584,111        793,534       1,355,222      1,544,064
                                      ----------     ----------      ----------     ----------
          Net income                $  1,997,636   $  1,955,897    $  3,904,754   $  3,850,490
                                      ==========     ==========      ==========     ==========

Earnings per share:
  Basic                                   $ 0.59         $ 0.58          $ 1.15         $ 1.13
                                            ====           ====            ====           ====
<FN>

The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

                                                  -5-


<PAGE>



                                FIRST M & F CORPORATION AND SUBSIDIARY

                      Condensed Consolidated Statements of Comprehensive Income
                                             (Unaudited)






                         Three Months Ended June 30,    Six Month Ended June 30,
                         ---------------------------    ------------------------
                                   1998         1997        1998        1997
                                   ----         ----        ----        ----
Net income                     $ 1,997,636  $ 1,955,953 $ 3,904,754 $ 3,850,490
                                 ---------    ---------   ---------   ---------
Other comprehensive income:
  Unrealized holding gains
    (losses) on securities,
       net                          (6,196)     371,904      22,382    (170,609)
  Plus (minus) reclassification
     adjustments for losses
     (gains) included in net
      income                           681       (4,393)      4,836      (4,208)
                                 ---------    ---------   ---------   ---------

          Other comprehensive
            income                  (5,515)     367,511      27,218    (174,817)
                                 ---------    ---------   ---------   ---------

          Total comprehensive
            income             $ 1,992,121  $ 2,323,464 $ 3,931,972 $ 3,675,673
                                 =========    =========   =========   =========































                                                                         -6-


<PAGE>
<TABLE>
<CAPTION>


                            FIRST M & F CORPORATION AND SUBSIDIARY

                  Condensed Consolidated Statements of Stockholders' Equity
                                         (Unaudited)






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

<S>          <C>           <C>           <C>             <C>        <C>           <C>         
January 1,
  1997       $ 16,973,280  $ 10,698,388  $ 21,087,077    $    -     $  329,835    $ 49,088,580

Net income              -             -     3,850,490         -              -       3,850,490

Cash
  dividends
  paid ($.42
  per share)            -             -    (1,425,755)        -              -      (1,425,755)

Net change in
  unrealized
  gain                  -             -             -         -       (174,817)       (174,817)
               ----------    ----------    ----------      -----       -------      -----------
June 30,
  1997       $ 16,973,280  $ 10,698,388  $ 23,511,812    $    -     $  155,018    $ 51,338,498
               ==========    ==========    ==========      =====       =======      ==========


January 1,
  1998       $ 16,973,280  $ 10,698,388  $ 26,013,973    $    -     $  520,081    $ 54,205,722

Net income              -             -     3,904,754         -              -       3,904,754

Cash
  dividends
  paid ($.48
  per share)            -             -    (1,629,434)        -              -      (1,629,434)

Net change in
  unrealized
  gain                  -             -             -         -         27,218          27,218
               ----------    ----------    ----------      -----       -------      -----------
June 30,
  1998       $ 16,973,280  $ 10,698,388  $ 28,289,293    $    -     $  547,299    $ 56,508,260
               ==========    ==========    ==========      =====       =======      ==========









<FN>

The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>


                                                             -7-


<PAGE>

                         FIRST M & F CORPORATION AND SUBSIDIARY

                  Condensed Consolidated Statements of Cash Flows
                                     (Unaudited)


                                                      Six Months Ended June 30, 
                                                          1998          1997
                                                     
Cash flows from operating activities:
  Net income                                         $  3,904,754  $  3,850,490
  Adjustments to reconcile net income to cash
    provided by operating activities:
    Depreciation and amortization                         610,192       606,147
    Provision for possible loan losses                    938,346       791,288
    Increase in interest receivable                      (321,683)     (515,953)
    Increase in interest payable                           20,448       362,288
    Other, net                                          1,126,530       995,414
                                                       ----------     ----------
          Net cash provided by operating activities     6,278,587     6,089,674
                                                       ----------     ----------

Cash flows from investing activities:
  Net (increase) decrease in:
    Interest bearing bank balances                      1,060,841      (965,187)
    Federal funds sold                                (17,500,000)   (2,550,000)
    Investment securities-purchases                    (8,375,283)   (5,239,698)
    Investment securities-maturities and calls         12,214,342     4,395,319
    Securities available for sale-purchases           (52,000,808)  (34,255,604)
    Securities available for sale-maturities
      and calls                                        21,115,859    12,200,107
    Loans                                             (12,959,030)     (929,713)
    Bank premises and equipment                        (1,540,582)     (750,446)
    Investment in bank owned life insurance           (10,000,000)            -
                                                       ----------     ----------

          Net cash used in investing activities       (67,984,661)  (28,095,222)
                                                       ----------     ----------
Cash flows from financing activities:
  Net increase (decrease) in:
    Deposits                                           71,710,143    36,684,527
    Other borrowings                                  (10,301,430)   (3,082,755)
  Cash dividends                                       (1,629,434)   (1,425,755)
                                                       ----------     ----------
          Net cash provided by financing activities    59,779,279    32,176,017
                                                       ----------     ----------
          Net increase (decrease) in cash and
            due from banks                             (1,926,795)   10,170,469

Cash and due from banks at January 1                   24,719,193    20,213,398
                                                       ----------     ----------
Cash and due from banks at June 30                   $ 22,792,398  $ 30,383,867
                                                       ==========    ==========




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


                                                       -8-


<PAGE>






                       FIRST M & F CORPORATION AND SUBSIDIARY

                Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


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  condensed
     consolidated  financial  statements of First M & F Corporation  include the
     financial   statements   of  Merchants  &  Farmers  Bank,  a  wholly  owned
     subsidiary, and its wholly owned subsidiaries, First M & F Insurance Co., M
     & F Financial  Services,  Inc. and M & F Bank Securities  Corporation.  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, 1997.

Note 2:  Statements of Cash Flows
---------------------------------
During the six months ended June 30, 1998 and 1997, the Company had the 
following payments:

                                               1998                1997
                                         
      Income taxes                       $  1,579,000         $ 1,400,000
      Interest on deposit liabilities      11,066,000           9,461,000
      Interest on other borrowings            214,000             154,000
                                           ==========           =========

Note 3:  Comprehensive Income
-----------------------------
  On January  1,  1998,  First  M&F  Corp  adopted  SFAS  No.  130,   "Reporting
     Comprehensive  Income"  which  establishes  standards for the reporting and
     display of  comprehensive  income and its components,  net income and other
     comprehensive  income,  in  a  full  set  of  financial  statements.  Other
     comprehensive income consists of revenues,  expenses, gains and losses that
     are excluded from earnings under current accounting standards.

Note 4:  Bank Owned Life Insurance
----------------------------------
  In March, 1998,  Merchants and Farmers Bank invested  $10,000,000 in corporate
     owned life insurance  policies covering  approximately  160 employees.  The
     policies  are  designed  to generate  earnings  through  increases  in cash
     surrender  value,  thus covering  costs of current and  potential  employee
     benefit plans.  The cash  surrender  value of the policies at June 30, 1998
     was $10,159,726.





                                                       -9-




<PAGE>

                                             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 analyses 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 of the 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 against
the Company's  financial  condition,  results of operations and liquidity;  year
2000 compliance issues; 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
-----------------
For the six month period ended June 30, 1998, the Company's net income increased
to $3,904,754 as compared to $3,840,490  for the same period of 1997.  Basic and
diluted  earnings  per share  was  $1.15 for 1998 and $1.13 for 1997.  Quarterly
earnings for the two periods  reflect $.59 per share for the quarter ending June
30,  1998 and $.58 per share for the same  quarter of 1997.  Net income for 1998
reflects  several  factors  which  have  contributed  to the  Company's  overall
flatness in earnings. These include a lack of anticipated loan growth during the
period;  higher than  anticipated  interest  bearing deposit  growth;  increased
operating  expenses  associated with new branch  locations;  and added personnel
costs at both the administrative and operating levels.

Total  assets at June 30,  1998,  increased  11.9%  over year end 1997 to $644.9
million,  while  stockholders'  equity  increased  4.25%  over year end 1997 and
equaled $56.5  million.  The return on average  assets for the period ended June
30, 1998, was 1.28% as compared to the same period of 1997 of 1.42%;  the return
on average  equity in 1998 was 14.13% as contrasted to 15.51% for 1997.  Both of
these  declines  reflect a percentage  growth in total assets during the quarter
that exceeded the percentage growth in net income.
















                                                       -10-


<PAGE>



                                             FIRST M & F CORPORATION


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/liability market conditions.  These include
rate shocked scenarios of up and down 100, 200 and 300 basis points; yield curve
scenarios; and prepayment risk scenarios.  Additionally,  static gap analysis is
used to highlight short-term repricing volumes. Management believes, at June 30,
1998, 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 both the asset and liability  sides of the balance  sheet.  These funding
requirements and the Company's ability to maintain liquidity is also enhanced by
the Company's consistent earning capacity and adequate capital.

Net Interest Income
-------------------
Net interest income (NII) is income produced by interest  earning assets reduced
by the interest expense associated with the funding of those assets.  Changes in
the mix of these interest  earning assets and interest  bearing  liabilities and
their  yields  and rates  contribute  to the levels of NII  realized  and have a
significant impact on earnings.

During the period ended June 30, 1998,  the level of NII  increased  $527,600 or
4.60% over the comparable  period of 1997.  NII for 1997  increased  $941,248 or
8.94% over 1996's period.  Average  earning assets for the period ended June 30,
1998, was $575.6 million as contrasted to $506.6 for 1997's period, reflecting a
$69.0 million or 13.6% increase.

For the 1998 period,  this increase in average  earning assets  compared to same
period of 1997 was  driven by a $12.2  million or 3.4%  increase  in loans and a
$26.1  million or 16% increase in the  investment  portfolio.  Average  interest
bearing  liabilities  increased $61.8 million or 14.4%.  As a result,  there was
only a slight  improvement in NII, 1998's quarter versus 1997's quarter,  as the
cost of funding the increase in funding  sources  almost equaled the earnings of
the higher volume of interest earning assets.











                                                       -11-


<PAGE>



                                             FIRST M & F CORPORATION


Provision for Loan Losses
-------------------------
During the six month period ending June 30, 1998,  the  Company's  provision for
loan losses was  $938,346  contrasted  to $791,288  for the same period of 1997.
This provision reflects  management's  assessment of the adequacy of the reserve
for  possible  loan  losses to absorb  potential  losses in the loan  portfolio.
Factors  considered  involve  an  assessment  of growth and  composition  of the
portfolio;  historical credit loss experience;  current and anticipated economic
conditions;  and changes in the borrower's financial condition.  Net charge offs
for the first six months of 1998 were  $672,178 as compared to $396,211  for the
same period in 1997.

Non Interest Income
-------------------
One of the Company's key long-term strategies is to continue to boost its growth
in non  interest  income.  For the six month period  ending June 30,  1998,  non
interest  income was  $2,402,307  as compared to  $2,220,159  for 1997.  Service
charges on deposits and credit insurance income reflected an approximate $76,000
or 4.1%  increase for 1998.  Other income  reflects an  approximate  $120,300 or
33.1%  increase  primarily  in the area of fee income on  non-deposit  products.
Management continues to emphasize the non interest income area through increased
focus and budget/incentive processes.

Non Interest Expense
--------------------

Another  strategy of the Company is to contain non interest  expenses  within an
overall growth discipline.  At June 30, 1998, the Company's efficiency ratio, an
indicator of control of non interest  expenses,  was 57% and compared  favorably
with peer groups. Improvements continue to be made in the overall monitoring and
control of expense through the budgeting and review process.

Salaries and benefits  comprise the largest portion of non interest  expense and
increased 8.5% when compared to the same period of 1997. Additional staffing has
been required in several locations as a result of volume and increased demand.

Other expense reflects an increase of approximately $291,000 in 1998 compared to
1997.  Other expense for 1997 increased  $53,000 over 1996.  Both are considered
normal increases given the overall growth of the Company.

Income Taxes
------------
For the six months ended June 30, 1998,  the  Company's  effective  tax rate was
25.7% as  compared  to 28.8%  for the same  period  of 1997.  This  decrease  in
effective  rate  is the  result  of the  increase  in the  level  of  tax-exempt
investment income and other tax advantaged strategies.










                                                 -12-


<PAGE>



                                             FIRST M & F CORPORATION


Assets/Liabilities
------------------
Loans, net of unearned  discount,  increased to $372.0 million at June 30, 1998,
as  compared  to  $360.2  million  at the end of 1997.  This  approximate  $12.3
million, or 3.4% increase in loans since December 31, 1997, generally reflects a
lack of consumer and commercial loan volumes. The commercial real estate lending
sector has remained  fairly strong,  showing 4.7% growth in the first six months
of 1998.

The current level of the reserve for possible loan losses  approximates 1.46% of
total loans outstanding.  The Company's  nonperforming loans past due 90 days or
more remain well  controlled  and continue to compare  favorably to peer levels.
The adequacy of the reserve is reviewed  quarterly  using  criteria and guidance
provided by the appropriate regulatory agencies and is presented to the Board of
Directors for subsequent review and approval. Management will continue to take a
prudent approach in the evaluation of the reserve for loan losses.

The securities portfolio is utilized to provide quality investment  alternatives
for available  funds and a stable source of interest  income.  At June 30, 1998,
the total  securities  portfolio was  approximately  $194  million,  up from the
December 31, 1997 level by  approximately  $26 million.  Yield for the portfolio
was at 5.75% for the six months  ended June 30, 1998 and is  comparable  to peer
groups. There were no sales of held to maturity securities during the period.

Deposits  originating from the various communities served by the Company provide
the primary source of its funds.  Total  deposits  increased  approximately  $72
million or 14.1%  during the six month  period  ended  June 30,  1998,  ahead of
growth plans for the year.

Other  borrowings  of $2,559,330  represent  advances from the Federal Home Loan
Bank of  Dallas  and are  primarily  funding  sources  tied to  specific  loans.
Approximately $10 million of advances were repaid prior to quarter-end March 31,
1998.






















                                                       -13-


<PAGE>



                                             FIRST M & F CORPORATION


Equity
------
The Company's  regulatory capital ratios at June 30, 1998, as shown below are in
excess  of the  minimum  requirements  and  qualify  the  institution  as  "well
capitalized" under the definition of such.
                                                     ($ in Thousands)

  Tier 1 capital                                              $  53,527
  Tier 2 capital element                                          4,988
                                                                 ------
            Total qualifying capital                          $  58,515
                                                                 ======

  Risk weighted assets                                        $ 399,038
                                                                =======

  Total qualifying capital/risk weighted assets                   14.66%
                                                                  ======

  Leverage ratio                                                   8.51%
                                                                   =====

The  dividend  payout  ratio for the six months ended June 30, 1998 was 41.7% of
net income reflecting total dividends of $.48 per share. Book value per share at
June 30, 1998 was $16.64 compared to a $43.00 per share market price.




























                                                       -14-


<PAGE>



                                             FIRST M & F CORPORATION

Year 2000 Compliance
--------------------
The Company has  established a task-force  to review all computer  based systems
and  applications  to ensure proper  functioning  in the year 2000. The plan has
been  approved  by  the  Board  of  Directors,   and  management  believes  that
implementation  will not materially effect operations in the future.  Management
does not  expect  costs of  achieving  year 2000  compliance  to have a material
adverse effect on the Company's consolidated financial statements.















































                                                                      -15-


<PAGE>



                     FIRST M & F CORPORATION


                    PART II: OTHER INFORMATION
                    --------------------------
Item 1 - Legal Proceedings
--------------------------
No new legal proceedings occurred in the second quarter of 1998.


Item 2 - Changes in Securities
------------------------------
None


Item 3 - Defaults Upon Senior Securities
----------------------------------------

None


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

The annual  stockholders'  meeting was held on April 8, 1998. The only matter of
business  was the  election of  directors  as outlined  in the  Company's  proxy
statement.

Item 5 - Other Information
--------------------------
None


Item 6 - Exhibits and Reports on Form 8-K
-----------------------------------------
Exhibit 11 - Statement of computation of earnings per share
























                                                       -16-


<PAGE>



                                             FIRST M & F CORPORATION






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



                                             Three Months Ended June 30,
                                             1998                 1997

Net income                                $ 1,997,636          $ 1,955,897
                                            =========            =========

Weighted average shares outstanding       $ 3,394,656          $ 3,394,656
                                            =========            =========


Earnings per share:
  Basic                                         $ .59                $ .58
                                                  ===                  ===


                                             Six Months Ended June 30, 
                                              1998                 1997

Net income                                $ 3,904,754          $ 3,840,490
                                            =========            =========


Weighted average shares outstanding       $ 3,394,656          $ 3,394,656
                                            =========            =========


Earnings per share:
  Basic                                        $ 1.15               $ 1.13
                                                 ====                 ====




















                                                     -17-


<PAGE>



                                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:  August 13, 1998                     /s/ Hugh S. Potts, Jr.
                                           Chairman and Chief Executive Officer



DATE:  August 13, 1998                     /s/ Robert C. Thompson, III
                                           Executive Vice President and
                                             Treasurer


































                                                       -18-