`FIRST M & F CORPORATION

                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C.  20459

                                     FORM 10-Q


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

                        For the quarter ended June 30, 2004
                                         or

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

                For the transition period from ____________ to _____________

Commission file number 000-09424

                               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.)

             134 West Washington Street
              Kosciusko, Mississippi                      39090
       --------------------------------------          -------------
       Address of Principal Executive Offices             Zip Code

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

                                    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 by check mark whether the registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange Act).

                              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 July 31, 2004
            -----                             ----------------------------

Common stock ($5.00 par value)                       4,537,859 shares`

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`FIRST M & F CORPORATION AND SUBSIDIARY

                                     FORM 10-Q

                                       INDEX

                                                                Page
                                                                ----

PART I:  FINANCIAL INFORMATION

  Item 1 - Financial Statements (unaudited):                      3
             Consolidated Statements of Condition                 4
             Consolidated Statements of Income                    5
             Consolidated Statements of Comprehensive Income      6
             Consolidated Statements of Stockholders' Equity      7
             Consolidated Statements of Cash Flows                8
             Notes to Consolidated Financial Statements          10
             Independent Accountants' Review Report              14

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

  Item 3 - Quantitative and Qualitative Disclosures About
              Market Risk                                        27

  Item 4 - Controls and Procedures                               27


PART II:  OTHER INFORMATION

  Item 1 - Legal Proceedings                                     28

  Item 2 - Changes in Securities, Use of Proceeds and Issuer
              Purchases of Equity Securities                     29

  Item 3 - Defaults upon Senior Securities                       29

  Item 4 - Submission of Matters to a Vote of Security
             Holders                                             29

  Item 5 - Other Information                                     29

  Item 6 - Exhibits and Reports on Form 8-K                      30

SIGNATURES                                                       31

EXHIBIT INDEX

CERTIFICATIONS`

# -2-

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`FIRST M & F CORPORATION

                                        PART I:  FINANCIAL INFORMATION

Item 1 - Financial Statements (Unaudited)`

---

`FIRST M & F CORPORATION AND SUBSIDIARY

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

                                                                                      June 30                   December 31
                                                                                      --------                   -----------
Assets                                                                        2004                2003               2003
------                                                                        ----                ----               ----
Cash and due from banks                                                  $   33,464          $  38,552           $  39,849
Interest bearing bank balances                                                4,132              2,707               2,554
Federal funds sold                                                            2,000             14,150                 950
Securities available for sale, amortized cost
   of $192,338, $204,843 and $181,375                                       194,608            213,846             187,577
Mortgage loans held for sale                                                  1,262              6,724               2,141

Loans, net of unearned income                                               789,441            726,389             779,180
   Allowance for loan losses                                                (11,792)           (10,422)            (10,891)
                                                                         --------------     --------------    ----------------
      Net loans                                                             777,649            715,967             768,289
                                                                         --------------     --------------    ----------------

Bank premises and equipment                                                  24,973             21,424              24,214
Accrued interest receivable                                                   7,402              6,973               7,330
Other real estate                                                             2,171              1,116                 802
Goodwill                                                                     16,348             16,348              16,348
Other intangible assets                                                         441                536                 489
Bank owned life insurance                                                    13,562             13,028              13,269
Other assets                                                                 15,951             10,611              14,486
                                                                         --------------     --------------    ----------------
                                                                         $1,093,963         $1,061,982          $1,078,298
                                                                         ==============     ==============    ================
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing deposits                                             $  127,156         $  120,671          $  123,191
Interest-bearing deposits                                                   723,260            731,635             697,035
                                                                         --------------     --------------    ----------------
     Total deposits                                                         850,416            852,306             820,226
                                                                         --------------     --------------    ----------------
Short-term borrowings                                                        17,639             14,612              15,205
Other borrowings                                                            105,964             73,420             122,033
Accrued interest payable                                                      1,452              1,570               1,379
Other liabilities                                                             8,270              8,440               7,732
                                                                         --------------     --------------    ----------------
      Total liabilities                                                     983,741            950,348             966,575
                                                                         --------------     --------------    ----------------
Noncontrolling joint venture interest                                            (2)               848               1,045
                                                                         --------------     --------------    ----------------

Stockholders' equity:
Preferred stock:
   Class A; 1,000,000 shares authorized                                           -                  -                   -
   Class B; 1,000,000 shares authorized                                           -                  -                   -
Common stock of $5.00 par value; 15,000,000 shares
   authorized: 4,542,859, 4,611,464 and
   4,565,038 shares issued                                                   22,714             23,057              22,825
Additional paid-in capital                                                   30,668             33,047              31,624
Retained earnings                                                            56,950             50,560              53,873
Accumulated other comprehensive income                                         (108)             4,122               2,356
                                                                         --------------     --------------    ----------------
      Total stockholders' equity                                            110,224            110,786             110,678
                                                                         --------------     --------------    ----------------
                                                                         $1,093,963         $1,061,982          $1,078,298
                                                                         ==============     ==============    ================

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

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`FIRST M & F CORPORATION AND SUBSIDIARY

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


                                                  Three Months Ended     Six Months Ended
                                                  ------------------     ----------------
                                                        June 30              June 30
                                                        -------              -------
Interest income:                                    2004        2003      2004      2003
                                                    ----        ----      ----      ----
Interest and fees on loans                      $  12,108     $11,804   $24,334   $23,512
Taxable investments                                 1,366       1,778     2,758     3,711
Tax-exempt investments                                559         595     1,120     1,191
Federal funds sold                                     29          76        98       183
Interest bearing bank balances                         23          37        52        79
                                                ----------    -------   --------  ----------
      Total interest income                        14,085      14,290    28,362    28,676
                                                ----------    -------   --------  ----------
Interest expense:
Deposits                                            2,857       3,620     5,675     7,547
Short-term borrowings                                 135         135       282       302
Other borrowings                                    1,114         758     2,185     1,526
                                                ----------    -------   --------  ----------
      Total interest expense                        4,106       4,513     8,142     9,375
                                                ----------    -------   --------  ----------
      Net interest income                           9,979       9,777    20,220    19,301
Provision for loan losses                             999         962     3,459     1,882
                                                ----------    -------   --------  ----------
      Net interest income after
      provision for loan losses                     8,980       8,815    16,761    17,419
                                                ----------    -------   --------  ----------
Noninterest income:
Service charges on deposit accounts                 1,932       1,893     3,753     3,653
Mortgage banking income                               295         300       495       472
Agency commission income                              932         943     1,797     1,780
Trust and brokerage income                            125          75       235       120
Bank owned life insurance income                      144         142       293       291
Securities gains (losses), net                        (17)        (19)       53       (20)
Other income                                          310         285     1,101       699
                                                ----------    -------   --------  ----------
      Total noninterest income                      3,721       3,619     7,727     6,995
                                                ----------    -------   --------  ----------
Noninterest expenses:
Salaries and employee benefits                      4,961       4,614     9,907     8,934
Net occupancy expenses                                552         532     1,124     1,050
Equipment expenses                                    635         615     1,288     1,269
Software and processing expenses                      309         336       647       652
Telecommunication expenses                            199         228       411       447
Marketing and business development expenses           332         258       639       411
Intangible asset amortization                          17          34        49        68
Noncontrolling interest in joint venture
    earnings (loss)                                  (155)         96    (1,048)      192
Other expenses                                      1,886       1,968     3,803     3,914
                                                ----------    -------   --------  ----------
      Total noninterest expenses                    8,736       8,681    16,820    16,937
                                                ----------    -------   --------  ----------
      Income before income taxes                    3,965       3,753     7,668     7,477
Income taxes                                        1,212       1,115     2,314     2,185
                                                ----------    -------   --------  ----------
      Net income                                 $  2,753     $ 2,638   $ 5,354   $ 5,292
                                                ==========    =======   ========  ==========
Earnings per share:
   Basic                                         $    .60     $   .57   $  1.17   $  1.14
   Diluted                                       $    .60     $   .57   $  1.17   $  1.14
                                                ==========    =======   ========  ==========

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

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`FIRST M & F CORPORATION AND SUBSIDIARY

                                  Consolidated Statements of Comprehensive Income
                                                    (Unaudited)
                                                  (In Thousands)

                                                               Three Months Ended June 30           Six Months Ended June 30
                                                              ---------------------------          ---------------------------
                                                                  2004             2003              2004              2003
                                                                  ----             ----              ----              ----
Net income                                                     $   2,753        $   2,638           $  5,354         $  5,292

Other comprehensive income:
Change in unrealized gains (losses) on securities
   available for sale, net of tax of $1,447 and $53 for
   the three months ended June 30, and $1,446 and $190
   for the six months ended June 30                               (2,434)              89             (2,431)            (320)
Reclassification adjustment for (gains) losses on securities
   available for sale included in net income, net of
   tax of $6 and $8 for the three months ended June 30
   and $20 and $8 for the six months ended June 30                    11               12                (33)              12

Minimum pension liability adjustment, net of tax                       -                -                  -                -
                                                              --------------    ---------------    -------------    ---------------

      Other comprehensive income                                  (2,423)             101             (2,464)            (308)
                                                              --------------    ---------------    -------------    ---------------

      Total comprehensive income                               $     330         $  2,739           $  2,890         $  4,984
                                                              ==============    ===============    =============    ===============

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

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`FIRST M & F CORPORATION AND SUBSIDIARY

                                  Consolidated Statements of Stockholders' Equity
                                      Six Months Ended June 30, 2004 and 2003
                                                    (Unaudited)
                                         (In Thousands, Except Share Data)

                                                                                             Accumulated
                                                       Additional                               Other
                                        Common           Paid-in           Retained         Comprehensive
                                        Stock            Capital           Earnings             Income              Total
                                     -------------    --------------     -------------     -----------------    ---------------
January 1, 2003                       $    22,935       $    33,260       $    47,585          $   4,430         $   108,210
Net income                                      -                 -             5,292                  -               5,292
Cash dividends ($.50 per share)                 -                 -            (2,317)                 -              (2,317)
146,772 common shares issued
 in exercise of stock options                 734             3,229                 -                  -               3,963
122,354 common shares
 repurchased                                 (612)           (3,442)                -                  -              (4,054)
Net change                                      -                 -                 -               (308)               (308)
                                     -------------    --------------     -------------     -----------------    ---------------
June 30, 2003                         $    23,057       $    33,047       $    50,560          $   4,122         $   110,786
                                     =============    ==============     =============     =================    ===============

January 1, 2004                       $    22,825       $    31,624       $    53,873          $   2,356         $   110,678
Net income                                      -                 -             5,354                  -               5,354
Cash dividends ($.50 per share)                 -                 -            (2,277)                 -              (2,277)
34,321 common shares issued
 in exercise of stock options                 172               741                 -                  -                 913
56,500 common shares
 repurchased                                 (283)           (1,697)                -                  -              (1,980)
Net change                                      -                 -                 -             (2,464)             (2,464)
                                     -------------    --------------     -------------     -----------------    ---------------

June 30, 2004                         $    22,714       $    30,668       $    56,950          $    (108)        $   110,224
                                     =============    ==============     =============     =================    ===============


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

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`FIRST M & F CORPORATION AND SUBSIDIARY

                                       Consolidated Statements of Cash Flows
                                                    (Unaudited)
                                                  (In Thousands)

                                                                                 Six Months Ended June 30
                                                                                ---------------------------
                                                                                  2004                2003
                                                                                  ----                ----
Cash flows from operating activities:
Net income                                                                      $  5,354            $   5,292
Adjustments to reconcile net income
  to net cash provided by operating activities:
  Depreciation and amortization                                                      960                  987
  Provision for loan losses                                                        3,459                1,882
  Net investment amortization                                                        411                  541
  (Gain) loss on securities available for sale                                       (53)                  20
  Other asset sale (gains)/losses                                                   (125)                 (32)
  Earnings (loss) of noncontrolling joint venture interest                        (1,048)                 192
  Deferred income taxes                                                             (184)                (220)
  (Increase) decrease in:
     Accrued interest receivable                                                     (73)                 152
     Cash surrender value of bank owned life insurance                              (293)                (291)
     Mortgages held for sale                                                         878               (4,553)
     Other assets                                                                   (151)                (741)
  Increase (decrease) in:
     Accrued interest payable                                                         73                 (350)
     Other liabilities                                                               864                  899
                                                                                --------------      ---------------

          Net cash provided by operating activities                               10,072                3,778
                                                                                --------------      ---------------
Cash flows from investing activities:
Purchases of securities available for sale                                       (37,550)             (26,573)
Sales of securities available for sale                                            13,783                2,063
Maturities of securities available for sale                                       12,509               45,963
Net (increase) decrease in:
     Interest bearing bank balances                                               (1,579)               9,903
     Federal funds sold                                                           (1,050)              (6,450)
     Loans                                                                       (14,599)             (52,437)
     Bank premises and equipment                                                  (1,656)                (818)
Proceeds from sales of other real estate and other repossessed assets                581                  737
                                                                                --------------      ---------------
          Net cash used in investing activities                                  (29,561)             (27,612)
                                                                                --------------      ---------------


                                                                                                                (Continued)`

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`FIRST M & F CORPORATION AND SUBSIDIARY

                                       Consolidated Statements of Cash Flows
                                                    (Unaudited)
                                                  (In Thousands)

                                                                       Six Months Ended June 30
                                                                       ---------------------------
                                                                         2004                2003
                                                                         ----                ----
Cash flows from financing activities:
Net increase in deposits                                              $  30,190            $  28,282
Net increase (decrease) in short-term borrowings                          2,434               (8,987)
Proceeds from other borrowings                                           13,400               18,800
Repayments of other borrowings                                          (29,576)             (16,630)
Cash dividends                                                           (2,277)              (2,317)
Common shares issued                                                        913                3,963
Common shares repurchased                                                (1,980)              (4,054)
                                                                       ------------        -------------

          Net cash provided by financing activities                      13,104               19,057
                                                                       ------------        -------------
          Net decrease in cash and due from banks                        (6,385)              (4,777)

Cash and due from banks at January 1                                     39,849               43,329
                                                                       ------------        -------------
Cash and due from banks at June 30                                     $ 33,464             $ 38,552
                                                                       ============        =============

Total interest paid                                                    $  8,070             $  9,725
Total income taxes paid                                                   2,072                2,363

Transfers of loans to foreclosed property                                 1,794                  754
                                                                       ============        =============


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

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`FIRST M & F CORPORATION AND SUBSIDIARY

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

The accompanying unaudited
condensed consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
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 accounting principles generally accepted
in the United States of America 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 and Farmers Bank, wholly owned subsidiary, and
the Banks wholly owned subsidiaries, First M & F Insurance Company,
Inc., M & F Financial Services, Inc., M & F Bank Securities Corporation,
M & F Insurance Agency, Inc., M & F Insurance Group, Inc., M & F
Business Credit, Inc., and the Banks 51% ownership in Merchants Financial
Services, LLC, an accounts receivable financing joint venture. 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, 2003.

The Company accounts for
its stock-based employee compensation plans based on the intrinsic value
method provided in Accounting Principles Board Opinion (APB) No. 25,
Accounting for Stock Issued to Employees, and related
interpretations. Because the exercise price of the Companys employee stock
options equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized on option plans.

Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for Stock-Based
Compensation, as amended by SFAS No. 148, requires pro forma disclosures
for net income and earnings per share for companies not adopting its fair value
accounting method for stock-based employee compensation. The pro forma
disclosures below use the fair value method of SFAS No. 123 to measure
compensation expense for stock-based employee compensation plans.

`Three Months Ended June 30               Six Months Ended June 30
                                                          --------------------------              -------------------------
                                                           2004                2003               2004                2003
                                                           ----                ----               ----                ----
Net income, as reported                                 $   2,753           $    2,638        $    5,354         $    5,292
Less: Total stock-based employee compensation
    expense determined under fair value method
    for all awards, net of related tax effects                  2                   21                24                 42
                                                      ---------------     ---------------     --------------    -----------------

Pro forma net income                                    $   2,751           $    2,617        $    5,330         $    5,250
                                                      ===============     ===============     ==============    =================

Earnings per share:
  Basic - as reported                                   $     .60           $      .57        $     1.17         $     1.14
  Basic - pro forma                                           .60                  .56              1.17               1.13

  Diluted - as reported                                       .60                  .57              1.17               1.14
  Diluted - pro forma                                         .60                  .56              1.16               1.13
                                                      ===============     ===============     ==============    =================`

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`FIRST M & F CORPORATION AND SUBSIDIARY

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

The fair value of stock
options granted was estimated at the date of grant using the Black-Scholes
option pricing model.

The following table is a
summary of outstanding options and weighted average exercises.

`Six Months Ended June 30
                                                 ------------------------
                                        2004                                  2003
                                        ----                                  ----
                              Number             Price              Number             Price
                              ------             -----              ------             -----
January 1                     174,406         $  29.55             319,752          $  28.31
Exercised                     (34,321)           26.60            (146,772)            27.00
Expired                       (10,000)           35.75                   -                 -
Granted                         2,500            34.73               2,500             38.00
                           --------------     ------------       ------------       ------------
June 30                       132,585         $  29.97             175,480          $  29.54
                           ==============     ============       ============       ============`

The following table is a summary
of the activity in the Allowance for Loan Losses for the first six months of
2004 and 2003.

`Six Months Ended June 30
                                                                    ------------------------
                                                                 2004                      2003
                                                                 ----                      ----
Balance at January 1                                         $  10,891                 $  10,258

Loans charged off                                               (3,027)                   (1,992)
Recoveries                                                         469                       274
                                                            --------------            --------------
    Net charge-offs                                             (2,558)                   (1,718)
                                                            --------------            --------------
Provision for loan losses                                        3,459                     1,882
                                                            --------------            --------------
Balance at June 30                                           $  11,792                 $  10,422
                                                            ==============            ==============


Note 4:  Earnings Per Share

                                               Three Months Ended June 30              Six Months Ended June 30
                                               --------------------------              ------------------------
                                                 2004              2003                 2004               2003
                                                 ----              ----                 ----               ----
Net income                                   $   2,753         $    2,638            $    5,354         $    5,292
                                            ===========       ============         ============        ============
Weighted average shares outstanding           4,556,375         4,639,631             4,560,800          4,632,908
Add dilutive effect of outstanding options       14,345            31,069                17,034             22,005
                                            -----------       ------------         ------------        ------------
    Adjusted dilutive shares outstanding      4,570,720         4,670,700             4,577,834          4,654,913
                                            ===========       ============         ============        ============

Earnings per share:
    Basic                                    $      .60        $      .57           $     1.17          $     1.14
    Diluted                                         .60               .57                 1.17                1.14
                                            ===========       ============         ============        ============

Stock options not included in adjusted
    shares due to anti-dilutive effect              403               153                  302                 326`

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`FIRST M & F CORPORATION AND SUBSIDIARY

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

Following is a summary of
intangible assets, net of accumulated amortization, included in the Consolidated
Statements of Condition:

`Customer
                                                                               Core            Renewal           Noncompete
                                                          Goodwill           Deposits           Lists            Agreements
                                                       ------------      -------------      -------------      -------------
Balance at December 31, 2002                           $    16,348            $    81           $    317           $   206
Amortization expense                                             -                (40)               (14)              (14)
                                                       ------------      -------------      -------------      -------------
Balance at June 30, 2003                               $    16,348            $    41           $    303           $   192
                                                       ============      =============      =============      =============
Balance at December 31, 2003                           $    16,348            $    21           $    289           $   179
Amortization expense                                             -                (21)               (14)              (14)
                                                       ------------      -------------      -------------      -------------

Balance at June 30, 2004                               $    16,348            $     -           $    275           $   165
                                                       ============      =============      =============      =============`

Amortization expense
related to intangible assets is expected to be $27 thousand for the remainder of
2004. Amortization expense is expected to be $55 thousand per year for the years
2005 through 2009.

As discussed in Note 10 to
the December 31, 2003 financial statements, the Bank has a defined benefit
pension plan covering substantially all full time employees of the Bank and its
subsidiaries. The following is a summary of the components of net periodic
benefit costs for the three and six month periods ended June 30, 2004 and 2003:

`Three Months Ended June 30               Six Months Ended June 30
                                                      -------------------------------      ----------------------------------
                                                          2004              2003               2004                 2003
                                                          ----              ----               ----                 ----
Service cost                                           $      -         $       -           $      -              $     -
Interest cost                                               117               122                234                  244
Expected return on plan assets                             (125)             (105)              (249)                (210)
Amortization of transition asset                             (2)               (2)                (4)                  (4)
Amortization of prior service costs                          (9)               (9)               (18)                 (18)
Recognized actuarial (gain) loss                             56                53                110                  105
                                                      -------------     --------------     --------------        ------------
Net pension cost                                       $     37         $      59           $     73              $   117
                                                      =============     ==============     ==============        ============`

The Company disclosed in
Note 10 to the December 31, 2003 financial statements that it expected to make
$400 thousand in contributions in 2004. The Company did not make any
contributions to the pension plan during the first six months of 2004. The
Company does expect to make $400 thousand in contributions into the plan during
the remainder of 2004.

Other liabilities on the
Consolidated Statements of Condition include an accrued benefit liability of
$2.918 million at December 31, 2003 and June 30, 2004 and for $2.899 million at
June 30, 2003 related to the deficit funded status of the Companys defined
benefit pension plan.

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`FIRST M & F CORPORATION AND SUBSIDIARY

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

The following is a summary
of other borrowings at June 30, 2004 and 2003:

`2004               2003
                                                                                ----               ----
Company's line of credit in the amount of $15,000,000, renewable
annually; secured by approximately 29% of the Bank's common
stock; interest payable annually at .75% below the lender's base rate       $    6,292          $   7,592

Bank's advances from Federal Home Loan Bank of Dallas, net of
unamortized purchase accounting adjustments of $107 and $735                    99,672             65,828
                                                                            --------------     --------------
                                                                            $  105,964          $  73,420
                                                                            ==============     ==============`

The Bank has advances from the
Federal Home Loan Bank of Dallas (FHLB) under Blanket Agreements for Advances
and Security Agreements. These agreements allow the Bank to borrow funds from
the FHLB to fund mortgage loan programs and to satisfy certain other funding
needs. The value of mortgage-backed securities and mortgage loans pledged under
these agreements must be maintained at not less than 115% and 150%,
respectively, of the advances outstanding.

---

We have reviewed the
accompanying consolidated statements of condition of First M & F Corporation
and subsidiary as of June 30, 2004 and 2003, and the related consolidated
statements of income and comprehensive income for the three-month and six-month
periods ended June 30, 2004 and 2003, and the related consolidated statements of
stockholders equity and cash flows for the six-month periods ended June
30, 2004 and 2003. These financial statements are the responsibility of the
Companys management.

We conducted our reviews in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). 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 the standards of the
Public Company Accounting Oversight Board, 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
interim consolidated financial statements for them to be in conformity with U.
S. generally accepted accounting principles.

We have previously audited,
in accordance with the standards of the Public Company Accounting Oversight
Board, the consolidated statement of condition of First M & F Corporation
and subsidiary as of December 31, 2003, 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 January 30,
2004, 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, 2003 is fairly stated, in
all material respects, in relation to the consolidated statement of condition
from which it has been derived.

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

Ridgeland, Mississippi
July 21, 2004`

---

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 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 allowance for loan losses, the effect of legal proceedings against 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. For instance, if the
economy deteriorated and real estate values became depressed, the approximately
77% of the Companys loan portfolio that is secured by real estate could
come under stress, thus possibly requiring additional loan loss accruals. The
Company may not be able to dispose of its foreclosed real estate at prices above
the properties carrying values, thus causing additional losses. The
Company may sustain additional losses if collateral and receivables foreclosed
on by its majority-owned factoring venture cannot be recovered at their carrying
values. Unfavorable judgments in excess of accrued liabilities related to
ongoing litigation may result in additional expenses. Unanticipated catastrophic
loss claims could occur that would reduce or eliminate the profit sharing
revenues of the insurance agencies. Such claims may also affect the availability
of insurance products for certain classes of customers, thereby reducing
commission revenues available to the agencies. A severe slowing of the economy may
affect the ability of the Companys customers to make timely loan payments,
or may cause customers to use up deposit balances, thereby causing a strain on
the Companys liquidity. A much steeper than anticipated increase in
interest rates could cause the Companys net interest margins to decrease,
thereby decreasing net interest revenues. Mortgage originations, and therefore
mortgage revenues, would be hurt by steeply rising interest rates. A poor stock
market could reduce brokerage transactions, therefore reducing investment
brokerage revenues. An unanticipated increase in inflation could cause the
Companys operating costs related to salaries, technology, supplies and
property taxes to increase. Unforeseen new competition from outside the
traditional financial services industry could constrain the Companys
ability to price its products profitably. Investments in the portfolio of the
Companys pension plan may not provide adequate returns to fund the
accumulated and projected plan obligations, thus causing higher annual plan
expenses and requiring additional contributions by the Company. These examples
are not intended to be exhaustive, and describe events, circumstances and
contingencies that may never materialize. Nevertheless, the reader is cautioned
that such types of occurrences, usually outside of the control of the Company,
may cause financial results to be different than the reader or the
Companys management had originally estimated.

Net income for the second
quarter of 2004 was $2.753 million, or $.60 basic and diluted per share as
compared to $2.638 million, or $.57 per share for the same period in 2003. The
results for the year-to-date periods ended June 30, 2004 and 2003 showed the
same trend as basic and diluted earnings per share increased to $1.17 in 2004
from $1.14 in 2003. The major factor behind the increases was the loan growth
that occurred throughout 2003 and the resulting increase in net interest income.
Although the net interest margin for the second quarter of 2004 was 4.19% as
compared to 4.26% for the second quarter of 2003, the Company earned
more net interest income in the second quarter of 2004 than in the second
quarter of 2003 because of the higher loan balances. Another positive factor in
the earnings per share growth was the Companys stock buy-back program in
2003 and again in 2004.

---

`FIRST M & F CORPORATION

Highlights for the first two quarters of 2003 and 2004 are as follows:

        Opened a loan production office in a rented location in Olive Branch in February, 2003, expanding to
         full service branch capabilities in June, 2003
        Loans outstanding in Desoto County increased from $37.553 million at December 31, 2002 to $73.900
         million at December 31, 2003
        Currently building an additional branch location in Southaven
        Currently building a new branch location in Olive Branch to replace the rented office space
        Opened M & F Business Credit, Inc., a wholly owned asset-based lending subsidiary, in Memphis, Tennessee
         in April, 2003
        M & F Business Credit, Inc. had loans outstanding of $6.815 million at December 31, 2003 and $5.633
         million at June 30, 2004
        Opened a fourth branch near the North Mississippi Regional Medical Center in Tupelo in July, 2003
        Opened a fourth branch in Rankin County at Flowood in February, 2004
        Plan to add another Rankin County branch and an additional branch in Ridgeland within the next 12 months
        Leased office space in Jackson in July, 2004 and have filed an application to establish a full-service
         branch
        Plan to add a new location which will house a branch facility and several fee-generating services in
         Madison within the next 12 months
        Started a Treasury Services department in June, 2003 to provide focused electronic banking, lockbox, and
         other cash management services to our business customers
        Replaced the electronic banking product in May, 2004 with a flexible, technologically superior product
        Nonperforming loans were down by $3.422 million in the second quarter of 2004 from the first quarter of
         2004.


The following table shows the quarterly net loan, non-interest bearing deposit, and interest bearing
deposit growth for 2003 and 2004.

(Net change, in thousands)
                                                     Non-Interest                          Interest
      Quarter               Loans                  Bearing Deposits                    Bearing Deposits
--------------------- ------------------        ------------------------           -------------------------
1st Qtr 2003             $  21,228                  $     2,084                        $    33,597
2nd Qtr 2003                28,586                       16,672                            (24,071)
3rd Qtr 2003                45,891                       (8,894)                           (34,761)
4th Qtr 2003                 6,900                       11,414                                161
1st Qtr 2004                   (93)                      (7,296)                            39,059
2nd Qtr 2004                10,354                       11,261                            (12,834)


The following table shows the quarterly net interest income, loan loss accruals, non-interest income and
non-interest expense amounts for 2003 and 2004.

(Net amount, in thousands)
                                                                        Adjusted              Adjusted
                           Net Interest           Loan Loss           Non-Interest          Non-Interest
       Quarter                Income               Accruals            Income (1)            Expense (2)
----------------------- -------------------     ---------------     -----------------     ------------------
1st Qtr 2003               $   9,524              $     920            $    3,377            $     8,160
2nd Qtr 2003                   9,777                    962                 3,638                  8,585
3rd Qtr 2003                  10,339                    960                 3,808                  9,136
4th Qtr 2003                  10,421                    960                 3,527                  8,851
1st Qtr 2004                  10,241                  2,460                 3,936                  8,977
2nd Qtr 2004                   9,979                    999                 3,738                  8,891

(1)   Non-interest income excluding securities gains (losses) of $(1) in 1 Qtr 2003, $(19) in 2 Qtr 2003, $1 in
      3 Qtr 2003, $26 in 4 Qtr 2003, $70 in 1 Qtr 2004 and $(17) in 2 Qtr 2004.
(2)   Non-interest expenses excluding noncontrolling interest in joint venture earnings (loss) of $96 in 1 Qtr
      2003, $96 in 2 Qtr, 2003, $78 in 3 Qtr 2003, $119 in 4 Qtr 2003, $(893) in 1 Qtr 2004 and
      $(155) in 2 Qtr 2004.`

---

`FIRST M & F CORPORATION

The following table shows the components of diluted earnings per share for the first two quarters of
2004 and 2003:

                                     2nd Quarter 2004        1st Quarter 2004       2nd Quarter 2003         1st Quarter, 2003
                                    --------------------    -------------------    --------------------     ---------------------
Net interest income                   $         2.19          $         2.24         $         2.10           $         2.05
Loan loss expense                                .22                     .54                    .21                      .20
Noninterest income                               .81                     .87                    .77                      .73
Noninterest expense                             1.91                    1.76                   1.86                     1.78
                                    --------------------    -------------------    --------------------     ---------------------
Net income before taxes                          .87                     .81                    .80                      .80
Income taxes                                     .27                     .24                    .23                      .23
                                    --------------------    -------------------    --------------------     ---------------------
Net income                            $          .60          $          .57         $          .57           $          .57


The following table shows performance ratios for the first two quarters of 2004 and 2003:

                                     2nd Quarter 2004        1st Quarter 2004       2nd Quarter 2003         1st Quarter, 2003
                                    --------------------    -------------------    --------------------     ---------------------
Net interest margin                             4.19%                   4.24%                  4.26%                    4.12%
Efficiency ratio                               62.16                   55.36                  63.02                    62.17
Return on assets                                1.01                     .94                   1.00                     1.00
Return on equity                                9.87                    9.29                   9.45                     9.63
Noninterest income to avg. assets               1.36                    1.45                   1.37                     1.28
Noninterest income
 to revenues (1)                               27.16                   28.12                  27.00                    26.17
Noninterest expense to avg assets               3.20                    2.93                   3.29                     3.12
Salaries and benefits to total
  noninterest expense                          56.39                   61.18                  53.15                    52.33
Nonperforming loans to loans                     .66                    1.11                    .62                      .78
Annualized net charge offs as a
  percent of average loans                       .08                    1.23                    .53                      .46

(1) Revenues equal net interest income before loan loss expense, plus noninterest income.


The following table shows revenue related performance statistics for the first two quarters of 2004 and
2003:

(Amounts in thousands)
                                     2nd Quarter 2004        1st Quarter 2004       2nd Quarter 2003         1st Quarter, 2003
                                    --------------------    -------------------    --------------------     ---------------------
Mortgage originations                   $     21,942             $    14,987            $    17,445              $    11,091
Commissions from annuity sales                   130                      63                     75                       66
Trust revenues                                    66                      69                     56                       32
Retail investment revenues                        59                      41                     19                       13
Revenues per FTE employee                         30                      32                     32                       31
Agency commissions per agency
  FTE employee (1)                                18                      18                     20                       18

(1) Agency commissions are property, casualty, life and health commissions produced by the insurance
agency personnel.


The following table shows additional statistics for the Company at the end of the first two quarters of
2004 and 2003:

                                     2nd Quarter 2004        1st Quarter 2004       2nd Quarter 2003         1st Quarter, 2003
                                    --------------------    -------------------    --------------------     ---------------------
Full-time equivalent employees                   460                     445                    428                      413
Number of noninterest-bearing
  deposit accounts                            30,410                  30,014                 29,379                   28,942`

---

Net interest income before
loan loss expenses for the second quarter of 2004 was $9.979 million as compared
to $9.777 million for the same period in 2003. Net interest income for the first
half of 2004 was $20.220 million as compared to $19.301 million for the same
period in 2003. Earning asset yields decreased from the second quarter of 2003
through 2004. However, liability costs also decreased by 24 basis points from
the second quarter of 2003 to the second quarter of 2004. This decrease was not
enough to offset the decrease in earning asset yields, thus producing a 5 basis
point decrease in interest spreads from the second quarter of 2003 to the same
quarter in 2004. Average earning assets grew significantly from the second
quarter of 2003 to the second quarter of 2004, dominated by loan portfolio
growth. Average borrowings were much higher in the second quarter of 2004 than
in the second quarter of 2003, although borrowing costs decreased over the
period.

The Company produced
excellent loan growth year-over-year, especially in the Tupelo and Desoto County
markets. Although loan yields have fallen through 2003 and 2004, the increased
loan volumes have helped to support net interest margins and increase net
interest income. Also, the Company used borrowings during 2003 as a lower cost
alternative to funding loans with maturities extending to five (5) years and
beyond. During 2004, Management refinanced certain of the borrowings to lock in
funding costs, which increased costs currently. However, if interest rates
increase over the next 12 months, these borrowings will provide an economic
benefit. The Company also increased average noninterest-bearing deposit balances
from the second quarter of 2003 to the second quarter of 2004. Incentive
programs were used internally during the fourth quarter of 2003 and again in the
first quarter of 2004 to build noninterest-bearing deposits, as Management sees
these as critical funding sources for future balance sheet growth. The Company
also used special certificate of deposit campaigns during 2003 and through the
first half of 2004 to build time deposits that had moved due to rate
competition. During the latter half of 2002 and much of 2003 the Company
maintained a very conservative pricing strategy with respect to certificates of
deposit, offering rates that were generally lower than the median of rates
offered in its markets. This strategy helped to grow the net interest margins
through 2002 and supported margins during 2003 and 2004 as earning asset yields
fell. However, the strategy naturally displaced certificates of deposit,
requiring the Company to use borrowed funds and investment securities cash flows
to support its loan growth. Management began in 2003 to focus on deposit growth
as its primary source of funding, with borrowings being a secondary source, in a
strategic effort to provide stable, core deposit relationships and to add
customers who would use other bank services.

Management believes that
interest rates will increase over the next twelve months. Therefore, net
interest margins may decrease over time. However, as loan growth
continues in its economically stronger markets, the Company plans to produce
loan volumes sufficient to grow net interest income and take advantage of the repricing
opportunities that higher interest rates would provide.

The following table shows
the components of the net interest margin for the first two quarters of 2004 and
2003:

`Yields/Costs                                    Yields/Costs
                                                     ------------                                    ------------
                                       2nd Quarter, 2004       1st Quarter, 2004       2nd Quarter, 2003      1st Quarter, 2003
                                      --------------------     ------------------     --------------------    -------------------
Interest bearing bank balances                1.40%                    1.13%                  1.60%                   1.23%
Federal funds sold                             .93                      .88                   1.15                    1.11
Taxable investments                           4.08                     4.34                   4.40                    4.49
Tax-exempt investments                        6.60                     6.64                   6.96                    7.07
Loans held for investment                     6.23                     6.31                   6.74                    6.87
                                      --------------------     ------------------     --------------------    -------------------
  Earning asset yield                         5.86                     5.85                   6.15                    6.14

NOW & MMDA                                     .66                      .66                   1.09                    1.31
Savings                                       1.28                     1.28                   1.68                    1.83
Certificates of deposit                       2.36                     2.33                   2.74                    2.87
Short-term borrowings                         3.55                     3.26                   3.53                    3.19
Other borrowings                              4.19                     3.69                   4.76                    4.49
                                      --------------------     ------------------     --------------------    -------------------
  Cost of interest-bearing liabilities        1.94                     1.86                   2.18                    2.32
                                      --------------------     ------------------     --------------------    -------------------

Net interest spread                           3.92                     3.99                   3.97                    3.83
Effect of non-interest bearing deposits        .24                      .21                    .24                     .24
Effect of leverage                             .03                      .03                    .05                     .05
                                      --------------------     ------------------     --------------------    -------------------
  Net interest margin, tax-equivalent         4.19                     4.24                   4.26                    4.12
  Less: Tax equivalent adjustments:
       Investments                             .13                      .14                    .15                     .15
       Loans                                   .01                      .01                    .01                     .01
                                      --------------------     ------------------     --------------------    -------------------
  Reported book net interest margin           4.05%                    4.09%                  4.10%                   3.96%`

---

`FIRST M & F CORPORATION

The following table shows average balance sheets for the first two quarters of 2004 and 2003:

(Amounts in thousands)

                                       2nd Quarter, 2004       1st Quarter, 2004       2nd Quarter, 2003      1st Quarter, 2003
                                      --------------------     ------------------     --------------------    -------------------
Interest bearing bank balances            $      6,385            $     10,290          $       9,197           $     13,680
Federal funds sold                              12,724                  31,348                 26,672                 38,257
Taxable investments                            133,843                 128,433                161,740                172,054
Tax-exempt investments                          53,985                  53,973                 54,500                 53,778
Loans held for investment                      779,171                 776,637                702,409                683,674
                                      --------------------     ------------------     --------------------    -------------------
  Earning assets                               986,108               1,000,681                954,518                961,443
Other assets                                   104,726                 103,950                100,087                 95,371
                                      --------------------     ------------------     --------------------    -------------------
  Total assets                            $  1,090,834            $  1,104,631          $   1,054,605           $  1,056,814

NOW & MMDA deposits                            281,508                 295,986                310,604                309,185
Savings deposits                                86,969                  87,687                 90,902                 92,947
Certificates of deposit                        358,633                 351,722                348,725                347,653
Short-term borrowings                           15,283                  18,005                 15,329                 20,953
Other borrowings                               106,464                 116,096                 63,746                 68,341
                                      --------------------     ------------------     --------------------    -------------------
  Interest-bearing liabilities                 848,857                 869,496                829,306                839,079
                                      --------------------     ------------------     --------------------    -------------------
Noninterest-bearing deposits                   121,844                 113,517                104,840                 98,598
Other liabilities                                8,591                   9,668                  8,798                  8,889
Stockholders' equity                           111,542                 111,950                111,661                110,248
                                      --------------------     ------------------     --------------------    -------------------
  Liabilities and stockholders' equity    $  1,090,834            $  1,104,631          $   1,054,605           $  1,056,814

Loans to earning assets                          79.01%                  77.61%                 73.59%                 71.11%
Loans to assets                                  71.43%                  70.31%                 66.60%                 64.69%
Earning assets to assets                         90.40%                  90.59%                 90.51%                 90.98%
Noninterest-bearing deposits to assets           11.17%                  10.28%                  9.94%                  9.33%
Equity to assets                                 10.23%                  10.13%                 10.59%                 10.43%


The following table shows average market interest rates during the first two quarters of 2004 and 2003:


                                       2nd Quarter, 2004       1st Quarter, 2004       2nd Quarter, 2003      1st Quarter, 2003
                                      --------------------     ------------------     --------------------    -------------------
3 month Treasury                              1.10%                     .93%                  1.06%                   1.18%
1 year Treasury                               1.78                     1.22                   1.15                    1.30
5 year Treasury                               3.72                     2.99                   2.57                    2.91
10 year Treasury                              4.60                     4.02                   3.62                    3.92
Prime                                         4.00                     4.00                   4.24                    4.25
10-year minus 3 month spread                  3.50                     3.09                   2.56                    2.74
                                      --------------------     ------------------     --------------------    -------------------

The following are prime rate changes
  since November, 2002:                  Changed from:            Changed to:
                                         -------------            -----------
November 7, 2002                            4.75%                    4.25%
June 27, 2003                               4.25%                    4.00%
July 1, 2004                                4.00%                    4.25%`

The above interest rates
were derived from the Federal Reserves FRED® economic database.
The Treasury rates are all constant maturity calculations.

The Federal Reserve changed
its targeted Fed funds rate from 1.00% to 1.25% on June 30, 2004, thus
indicating that it was prepared to increase interest rates with improvements in
economic conditions as a brake on inflationary pressures. The increase in the
prime rate should initially improve earning asset yields during 2004. However,
higher short-term rates will put increasing pressure on deposit pricing, thus
potentially increasing the Companys cost of funds over time.

---

The provision for loan
losses for the second quarter of 2004 was $999 thousand as compared to $962
thousand for the second quarter of 2003. The provision for the first half of
2004 was $3.459 million as compared to $1.882 million in the second quarter of
2003. The provision includes $1.5 million of additional accruals related to a
$2.0 million loan loss incurred in a 51% owned accounts receivable factoring
company. The factoring company experienced a significant deterioration in one
account with a balance of approximately $3.5 million. The factoring company
charged off $2.0 million of the account balance in the first quarter and placed
the remaining $1.5 million on nonaccrual status. The remaining balance at June
30 was approximately $1.0 million, which the factoring company expects to
collect. Bank personnel are monitoring the collection of the receivables and
other collateral in an effort to protect the Company from any further potential
losses. The allowance for loan losses as a percentage of loans was 1.49% at June
30, 2004, 1.40% at December 31, 2003, and 1.42% at June 30, 2003. Net
charge-offs were $165 thousand for the second quarter of 2004 as compared to
$934 thousand for the second quarter of 2003.

Nonperforming loans as a
percentage of loans declined to .66% at June 30, 2004 from 1.11% at March 31,
2004. Management believes that the positive trend in loan quality is
sustainable, given a stable economy. Management stratifies and reviews certain
sectors of the portfolio to detect if there are weaknesses related to economic,
environmental or other customer-specific factors. The Companys loan review
personnel also monitor portfolios by geographic sector to address local credit
issues expeditiously.

Management has decided to
reduce the quarterly provision for loan losses starting in the third quarter by
approximately $210 thousand based on the following factors. First, the net
charge off percentage was .08% for the second quarter of 2004, indicating a
positive trend. Second, excluding the nonaccrual loan in the factoring joint
venture, nonperforming loans as a percentage of loans at June 30, 2004 was .54%.
This is the lowest nonperforming loan percentage since the third quarter of
2002. Management believes that the joint venture credit will be ultimately
collected, but the venture has also established an allowance that adequately
covers any possible losses if the full amount of the remaining credit is not
collectible. Given managements assessment of the present quality of loans,
its expectations for loan performance in the foreseeable future, and the
magnitude of the allowance for loan losses, a reduction of the ongoing provision
to a more reasonable estimate is warranted.

Noninterest income,
excluding securities transactions, for the second quarter of 2004 was $3.738
million as compared to $3.638 million for the same period in 2003. Noninterest
income, excluding securities transactions, for the first half of 2004 was $7.674
million as compared to $7.015 million for the first half of 2003. Deposit income
was up due primarily to fees generated from debit card transactions. Service
charges on deposit accounts remained flat, even though the number of noninterest
bearing deposit accounts increased by over one thousand accounts from June 30,
2003 to June 30, 2004. The Company has promoted its free checking product during
2003 and 2004, contributing to the lack of service charges. Although the free
checking accounts generally produce overdraft fee income, this component of
revenues has remained relatively flat comparing the first half of 2004 to the
first half of 2003. Mortgage income has improved in spite of an unfavorable
interest rate environment due to the addition of mortgage lending personnel in
new markets in Desoto and Rankin counties. Agency commission income has
flattened out as pricing has become more competitive for property and casualty
products. The Company has embarked upon a strategy to place more insurance
agents in Bank locations to provide convenience for customers, and
increase production. Improved retail brokerage and trust capabilities have
resulted in revenue increases in the second quarter of 2004 and the first half
of 2004 over comparable periods. The Company is committed to building these
services as customers become more financially sophisticated. The retail
brokerage function assumed the management of the Banks annuity sales
program in the second half of 2003, focusing sales efforts and resulting in
annuity sales that exceeded $6.5 million in the first half of 2004. The Company
had $6.1 million in annuity sales for the entire year of 2003. Treasury and
electronic banking services are becoming an important part of the commercial
customer relationship as these revenues grew by over 50% from the first half of
2003 to the first half of 2004. Although treasury services revenues are still at a low, start-up
level, the Company has committed personnel to the long-term growth of this area.
Other income was up in 2004 primarily due to contingency income received by the
property and casualty insurance business. Contingency revenues, based upon new
business and claims experience, were $276 thousand in 2004 as compared to $122
thousand for the first half of 2003.

Securities gains of
approximately $70 thousand were incurred to restructure part of the investment
portfolio. Approximately $6.7 million of mortgage-backed securities were sold
and replaced with corporate securities. This was done to
match the investments more closely with their funding sources.

The Company has a strategy
to increase noninterest revenues as a proportion of total revenues
over time. Increased noninterest revenues would contribute to a more stable
revenue base, mitigating the income statement effects of changing interest rates.

---

Non-interest expenses,
excluding noncontrolling joint venture interests, were up by 3.56% in the second
quarter of 2004 as compared to 2003, and up by 6.71% for the first half of 2004
as compared to the same period in 2003. Salary and benefit expenses produced the
largest increases with a 7.52% increase in the second quarter over last year and
a 10.89% increase in the first half of 2004 over the comparable period in 2003.
The Company added four (4) commercial lending positions, 18 other branch staff,
and nine (9) non-branch retail and commercial positions between June, 2003 and
June, 2004. The increases occurred (1) in Rankin County, where a new branch was
opened in Flowood in March of 2004, (2) in Tupelo, where a new branch was opened
in July of 2003, (3) in the addition of mortgage producers in 2003 and 2004, (4)
in the treasury services area which was started in the first quarter of 2003,
and in various other branch lending and sales positions.

Marketing and business
development expenses were up in the second quarter and first half of 2004 as
compared to the related periods in 2003 due to three factors. During the first
quarter of 2004, expenses were up due to spending on a deposit campaign as well
as an image campaign. Spending was also up due to grand opening and other branch
promotion expenses in the first half of 2004. Finally, the Bank paid for several
sponsorships in 2004 that offered advertising opportunities related to community
events and programs.

The $1.048 million negative
balance in noncontrolling joint venture losses is the amount of losses,
primarily the result of a $2.0 million loan loss, attributable to the other
minority owner in the factoring venture. Excluding the additional loan loss
accruals, the joint venture contributed approximately $122 thousand in earnings
for each partner for the first half of 2004.

As the Company continues to
expand in strong economic markets, higher personnel costs will result. However,
the Company will expand in those areas and into businesses that will provide a
return in excess of its hurdle rate of return on capital.

Income taxes for the first
half of 2004 increased by 5.90% over the first half of 2003, due primarily to an
increase in taxable earnings. The effective tax rates for 2004 and 2003 were
30.18% and 29.22% respectively. The increasing trend is due to the higher
percentage of taxable revenues to total revenues over time as the Company
continues to build the loan portfolio as a percentage of total earning assets.
The Company recently concluded an examination of the final return filed by
Community Federal Bancorp prior to its acquisition by the Company. Based upon
the proposed adjustments, management estimates that taxes of approximately $160
thousand will be due.

Assets were up by 1.45% in
the first six months of 2004 as compared to 2.40% in the first six months of
2003. Total assets were up by 3.01% from June 30, 2003. Investments increased by
3.75% in the first six months of 2004 and declined by 9.43% during the first six
months of 2003. The Company increased investments during the first quarter of
2004 in corporate securities by $5.3 million, while
increasing agency securities and mortgage-backed securities by approximately
$2.0 million each. During the second quarter of 2004 the Company increased
investments in municipal securities by $1.4 million as an investment in the
communities that it serves, and to add quality, tax-exempt investments to the
portfolio. The Company also increased mortgage-backed securities during the
second quarter by $2.6 million to provide better current yields and liquidity.
Deposits grew by 3.87% in the first quarter of 2004 and remained flat for the
second quarter. Low loan demand during the first quarter of 2004 and much of the
second quarter created the liquidity that allowed the Company to increase the
investment portfolio. Strong loan growth during the first two quarters of 2003
required the use of cash flows from the investment portfolio as well as from
deposit sources. Loans began to grow toward the last half of June, providing an
increase for the second quarter of 2004 after decreasing during the first
quarter. For the first half of 2004, loan growth was strong in DeSoto, Lee,
Lafayette and Bolivar counties. Growth was weak in Madison, Rankin and Holmes
counties. Loans as a percent of total assets were 72.16% at June 30, 2004 as
compared to 72.26% at December 31, 2003 and 68.40% at June 30, 2003. Management
believes that one of the keys to the Companys future success will be to
expand into markets that are vital economically and can provide high loan
demand. Much of the Companys loan growth over the past year has been
achieved in the commercial and real estate sectors. Management expects that
trend to continue.

---

The following table shows
loans held for investment by type as of June 30, 2004, December 31, 2003, and
June 30, 2003.

`June 30, 2004                     December 31, 2003                June 30, 2003
                                    ------------------               -----------------------           -----------------
Commercial real estate                 $   380,743                           $   370,559                    $   323,949
Residential real estate                    228,030                               232,437                        230,674
Other commercial                           119,222                               108,612                         97,599
Consumer                                    57,622                                63,740                         69,455
Other loans                                  3,824                                 3,832                          4,712
                                    ------------------               -----------------------           -----------------
  Total                                $   789,441                           $   779,180                    $   726,389`

Deposits increased by 3.68%
in the first half of 2004 as compared to 3.43% during the first half of 2003.
Deposits grew by $31.763 million in the first quarter of 2004 and then decreased
by $1.573 million during the second quarter. Municipality deposits grew by
$27.626 million in the first quarter of 2004 and decreased by $6.055 million
during the second quarter. Much of the retail growth in the first quarter of 2004
occurred in money market
deposits and certificates of deposit. Deposits grew by $35.681 million in the
first quarter of 2003, followed by a decrease of $7.399 million in the second
quarter. Municipality deposits accounted for over 80% of the deposit
growth during the first half of 2003. The large growth in municipality deposits
is a natural trend that occurs during the early months of the year as tax
receipts are collected. The funds generally move out during the summer months as
spending occurs. Managements strategic initiative is to build the core
customer deposit base and rely less on borrowed funds for meeting loan demand
and other cash flow requirements going forward. However, when borrowed funds are
less costly than time deposits, the Company will still look to those sources to
help maintain the spread between the yield on earning assets and the cost of
funds.

The following table shows
the deposit mix as of June 30, 2004, December 31, 2003, and June 30, 2003.

`June 30, 2004                     December 31, 2003                June 30, 2003
                                    -------------------               -----------------------           -----------------
Noninterest-bearing demand             $   127,156                          $   123,191                     $   120,671
NOW deposits                               155,386                              131,430                         152,638
Money market deposits                      121,463                              135,067                         146,355
Savings deposits                            86,490                               86,794                          89,937
Certificates of deposit                    359,921                              343,744                         342,705
                                    -------------------               -----------------------           -----------------
  Total                                $   850,416                          $   820,226                     $   852,306


The following table shows the mix of municipality deposits as of June 30, 2004, December 31, 2003, and
June 30, 2003.

                                      June 30, 2004                     December 31, 2003                June 30, 2003
                                    -------------------               -----------------------           -----------------
Noninterest-bearing demand             $     4,837                          $     4,594                     $    4,020
NOW deposits                                71,021                               41,665                         69,560
Money market deposits                        8,325                               20,149                         26,692
Savings deposits                               296                                  557                            538
Certificates of deposit                     62,524                               58,467                         43,892
                                    -------------------               -----------------------           -----------------
  Total                                $   147,003                          $   125,432                     $  144,702`

Other borrowings decreased
by $16.069 million during the first half of 2004 after increasing by $50.891
million over the course of 2003. The increased borrowings in 2003 were used to
fund part of the $102.605 million in loan growth that occurred last year. Other
borrowings consist of Federal Home Loan Bank (FHLB) borrowings, most of which
were originated to fund loan growth. During the first half of 2004, the Company
refinanced $13.000 million of FHLB borrowings to lock in funding costs in
anticipation of a possible increase in interest rates. The Company also has debt
of $6.292 million which was used primarily to repurchase stock, beginning in
1999. Although the Company has repurchased additional shares during 2004, it
expects to reduce the borrowings to approximately $5.6 million by the end of
2004.

---

The Companys and
Banks regulatory capital ratios at June 30, 2004, as shown below are in
excess of the minimum requirements and qualify the institution as well
capitalized under the risk-based capital regulations.

`First M & F Corporation                 M & F Bank
                                               -----------------------                 ----------
                                                 Amount        Ratio             Amount          Ratio
                                                 ------        -----             ------          -----
Actual:
Total capital                               $   110,224        12.29%         $  112,621         12.90%
Tier 1 capital                                   92,005        11.04%             96,713         11.65%
Leverage                                         92,005         8.57%             96,713          9.01%

For Capital Adequacy Purposes:
Total capital                                    66,698>        8.00%             66,509>         8.00%
Tier 1 capital                                   33,349>        4.00%             33,211>         4.00%
Leverage                                         42,962>        4.00%             42,919>         4.00%

To Be Well Capitalized Under Prompt
    Corrective Action Provisions:
Total capital                                    83,373>       10.00%             83,029>        10.00%
Tier 1 capital                                   50,024>        6.00%             49,817>         6.00%
Leverage                                         53,702>        5.00%             53,649>         5.00%`

The Company repurchased
122,354 shares during the first six months of 2003 at an average price of $33.14
per share. The Company also issued 146,772 shares related to the exercise of
stock options during the first six months of 2003 at an average exercise price
of $27.00 per share. The Company repurchased 56,500 shares during the first six
months of 2004 at an average price of $35.05 per share. The Company also issued
34,321 shares related to the exercise of stock options during the first six
months of 2004 at an average exercise price of $26.60 per share. The Company
expects to continue to repurchase shares during 2004.

Responsibility for managing
the Companys program for controlling and monitoring interest rate risk and
liquidity 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
monthly 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 June 30, 2004, there is adequate flexibility to alter the current
rate and maturity structures as necessary to minimize the exposure to changes in
interest rates, should they occur. The Company is currently in a positive gap
position for assets and liabilities repricing within the next year. This
generally means that for assets and liabilities maturing and repricing within
the next 12 months, the Company is positioned for more assets to mature and
reprice than it has in liabilities maturing and repricing.

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.

---

The Company measures and
monitors credit quality on an ongoing basis through credit committees and the
loan review process. Credit standards are approved by the Board with their
adherence monitored during the lending process as well as through subsequent
loan reviews. The Company strives to minimize risk through the diversification
of the portfolio geographically within Mississippi as well as by loan purpose
and collateral.

The Banks credit
standards are enforced within the Bank as well as within all of its wholly-owned
subsidiaries. As of March, 2004, management began to enforce the Banks
credit standards on the Banks partially-owned joint venture as well.
Management will enforce its credit standards as well as other quality and
internal control standards on future business ventures in which it is a partner.

The adequacy of the
allowance for loan losses is monitored quarterly with provision accruals
approved by the Board. Allowance adequacy is dependent on loan classifications
by external examiners as well as by internal loan review personnel, past due
loans, loan growth and loss history. The allowance as a percentage of loans at
June 30, 2004 is comparable to other peer banks.

The following table shows
non-performing loans and other assets of the Company:

`June 30               December 31               June 30
                                                 2004                     2003                    2003
                                                 ----                     ----                    ----
Nonaccrual loans                              $  4,074                $   4,517               $  2,663
Past due 90 days or more and still
  accruing interest                              1,170                    1,531                  1,808
                                             ----------------        ---------------        ----------------
Total non-performing loans                       5,244                    6,048                  4,471
Other real estate                                2,171                      802                  1,116
                                             ----------------        ---------------        ----------------

Total non-performing assets                   $  7,415                $   6,850               $  5,587
                                             ================        ===============        ================

Ratios:
Non-performing loans to loans                     .66%                     .78%                   .62%
Non-performing assets to assets                   .68%                     .64%                   .53%
                                             ================        ===============        ================`

The Companys primary
off-balance sheet arrangements are in the form of loan commitments and operating
lease commitments. At June 30, 2004 the Company had $107.883 million in unused
loan commitments outstanding. Of these commitments, $67.804 million mature in
one year or less. Lines of credit are established using the credit policy of the
Company concerning the lending of money.

Letters of credit are used
to facilitate the borrowers business and are usually related to the
acquisition of inventory or of assets to be used in the customers
business. Letters of credit are generally secured and are underwritten using the
same standards as traditional commercial loans. Most standby letters of credit
expire without being presented for payment. However, the presentment of a
standby letter of credit would create a loan receivable from the Banks
loan customer. The Banks asset-based lending subsidiary uses commercial
letters of credit to facilitate the purchase of inventory items by its
customers. There were no commercial letters of credit outstanding at the end of
the second quarter. At June 30, 2004 the Company had $11.889 million in
financial standby letters of credit issued and outstanding.

A liability of $82 thousand
is recognized in Other Liabilities related to the obligation to stand ready to
perform related to standby letters of credit.

---

In the ordinary course of
business the Company enters into rental and lease agreements to secure office
space and equipment. The Company has a variety of lease agreements in place, all
of which are operating leases. The largest lease obligations are for office
equipment and mainframe computer systems.

The Company does not have
any variable interest entities or other off-balance sheet vehicles as of June 30, 2004.

The following table
summarizes the obligations of the Company:

`Payments Due by Period
                                                                                ----------------------
                                                                         Less                                           More
                                                                        Than 1          1 - 3          3 - 5           Than 5
Contractual Obligations                                  Total           Year           Years          Years            Years
-----------------------                                  -----           ----           -----          -----            -----
Long-term debt                                        $  91,673      $  12,951       $  35,250      $  19,238        $  24,234
Capital lease obligations                                     -              -               -              -               -
Operating leases                                          2,799            809           1,352            605              33
Purchase obligations                                        290            290               -              -               -
Other long-term liabilities                                   -              -               -              -               -
                                                      -----------    -----------     -----------    -----------    --------------
  Total                                               $  94,762      $  14,050       $  36,602      $  19,843        $ 24,267
                                                      ===========    ===========     ===========    ===========    ==============`

The preparation of the
Companys financial statements requires management to make certain
assumptions and critical estimates that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosures of contingent assets
and obligations. Management believes that the following critical accounting
policies affect the more significant judgments and estimates used in the
preparation of the Companys consolidated financial statements.

The Companys policy
is to maintain the allowance for loan losses at a level that is sufficient to
absorb estimated probable losses in the loan portfolio. Accounting standards
require that loan losses be recorded when management determines it is probable
that a loss has been incurred and the amount of the loss can be reasonably
estimated. Managements estimate is reflected in the balance of the
allowance for loan losses. Changes in this estimate can materially affect the
provision for loan losses, and thus net income.

Management of the Company
evaluates many factors in determining the estimate for the allowance for loan
losses. Historical loan losses by loan type and loan grade are a significant
factor in estimating future losses. Management reviews loan quality on an
ongoing basis to determine the collectibility of individual loans and reflects
that collectibility by assigning loan grades to individual credits. The grades
will generally determine how closely a loan will be monitored on an ongoing
basis. A customers payment history, financial statements, cash flow
patterns and collateral, among other factors, are reviewed to determine if the
loan has potential losses. Concentrations of credit by loan type and collateral
type are reviewed to determine exposures and risks of loss. General economic
factors as well as economic factors of individual industries or factors that
would affect certain types of loan collateral are reviewed to determine the
exposure of loans to economic fluctuations. The Company also has a loan review
department that audits types of loans as well as geographical segments to
determine credit problems and loan policy violations that require the attention
of management. All of these factors are used to determine the adequacy of the
allowance for loan losses and adjust its balance accordingly.

The allowance for loan
losses is increased by the amount of the provision for loan losses and
recoveries of previously charged-off loans. It is decreased by loan charge-offs
as they occur when principal is deemed to be uncollectible.

---

The policy of the Company
is to assess goodwill for impairment at the reporting unit level on an annual
basis. Impairment is the condition that exists when the carrying amount of
goodwill exceeds its implied fair value. Accounting standards require management
to estimate the fair value of each reporting unit in making an annual assessment
of impairment. Management performs this assessment as of January 1 of each year.

Impairment of goodwill is
recognized by a charge against earnings and is to be shown as a separate line
item in the noninterest expense section of the consolidated statement of income.

The estimate of fair value
is dependent on such assumptions as: (1) future cash flows determined from the
budget, strategic plan, and forecasts of growth, and (2) discount rates and
earnings multiples used to determine the present value of those cash flows.
Management uses a model similar to those used to evaluate potential mergers and
acquisitions. Testing of the goodwill asset in the first quarters of 2003 and
2004 resulted in no impairment charges.

Accounting standards
require that a liability be recorded if management determines that it is
probable that a loss has occurred and the loss can be reasonably estimated.
Management must estimate the probability of occurrence and estimate the
potential exposure of a variety of contingencies such as health claims, legal
claims, tax liabilities and other potential claims against the Companys
assets or requirements to perform services in the future.

Managements estimates
are based upon their judgment concerning future events and their potential
exposures. However, there can be no assurance that future events, such as
changes in a regulators position or court cases will not differ from
managements assessments. When management, based upon current facts and
expert advice, believes that an event is probable and reasonably estimable, it
accrues a liability in the consolidated financial statements. That liability is
adjusted as facts and circumstances change and subsequent assessments produce a
different estimate.

In March, 2004, The SEC
issued Staff Accounting Bulletin No. 105 (SAB 105). SAB 105 provides guidance
for accounting related to loan commitments accounted for as derivative
instruments. Generally, interest-rate locks on loans that are to be held for
sale are considered derivatives, and therefore accounted for under the
guidelines of Statement of Financial Accounting Standards (SFAS) No. 133 and
subsequent amendments. SAB 105 specifically prohibits the incorporation of the
expected future cash flows related to servicing of the future loan to be
considered in the valuation of the rate-lock commitment. The adoption of this
statement did not have a material effect on the financial statements.

In March, 2004, the
Financial Accounting Standards Board (FASB) approved certain additional
provisions of EITF Issue No. 03-1, The Meaning of Other-Than-Temporary
Impairment and Its Applications to Certain Investments. These revisions
require disclosures for cost method investments similar to those previously
presented in fiscal 2003 financial statements for investments accounted for
under SFAS No. 115. These revisions also clarify the appropriate timing and
methodology for evaluating whether an other-than-temporary
impairment has occurred. The new impairment evaluation and recognition guidance
is effective for reporting periods beginning after June 15, 2004.

In October, 2003, the FASB
approved the AICPAs issuance of SOP 03-3, Accounting for Loans or
Certain Debt Securities Acquired in a Transfer, which modifies the
accounting for certain loans that are acquired with evidence of deterioration in
credit quality since origination. SOP 03-3 does not allow the excess of
contractual cash flows over cash flows expected to be collected to be recognized
as a yield adjustment, valuation allowance, or other loss accrual. Therefore,
the yield that may be accreted is limited to the excess of cash flows expected
to be collected over the acquirers initial investment in the loan or
security. SOP 03-3 is effective for years beginning after December 15, 2004.

---

In March, 2004, the FASB
issued an exposure draft entitled Share-Based Payment, and Amendment of
FASB Statements No. 123 and 95. This proposed statement would eliminate
the ability to account for stock-based compensation using APB No. 25 and require
such transactions to be recognized as compensation expense based on their fair
values at the date of grant. Companies transitioning to this standard will use
the modified prospective method whereby the company must recognize
share-based compensation expense from the beginning of the year in which the
statement is adopted. Companies will recognize the expense that they would have
recognized if they had used the fair value method since the effective date of
FASB Statement No. 123, which was December 31, 1994. As written, the standard
would take effect in 2005. However, the controversy surrounding stock-based
compensation accounting, primarily the ability to determine fair values for
employee stock options, and the actions of the U. S. House of Representatives to
negate the potential standard, make the issuance of a final standard this year
very uncertain.

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 institution. 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 June 30, 2004, the
institution was in a positive repricing gap position of approximately 19.03% of
assets.

Interest rate shock
analysis shows that the Company will experience a 10 basis point decrease over
12 months in its net interest margin with an immediate and sustained 100 basis
point decrease in interest rates. An immediate and sustained increase in rates
of 100 basis points will result in a 6 basis point increase in the net interest
margin. The sensitivity of loan yields and a lack of sustainable deposit cost
decreases are the primary drivers behind these simulation results.

An analysis of the change
in market value of equity shows how an interest rate shock will affect the
difference between the market value of assets and the market value of
liabilities. With all financial instruments being stated at market value, the
market value of equity will increase by .32% with an immediate and sustained
decrease in interest rates of 100 basis points. The market value of equity will
decrease by 2.59% with an immediate and sustained increase in interest rates of
100 basis points.

The Company had no hedging
instruments or other derivative contracts in place at June 30, 2004.

As defined by the
Securities and Exchange Commission in Exchange Act Rules 13a-15(e), a
companys disclosure controls and procedures means controls and
other procedures of an issuer that are designed to ensure that information
required to be disclosed by the issuer in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commissions rules and forms.

As of June 30, 2004 (the
Evaluation Date), the Companys Chief Executive Officer and
Chief Financial Officer have evaluated the effectiveness of the Companys
disclosure controls and procedures as defined in the Exchange Act Rules. Based
on their evaluation, the Companys Chief Executive Officer and Chief
Financial Officer have concluded that the Companys disclosure controls and
procedures are sufficiently effective to ensure that material information
relating to the Company and required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the
Commissions rules and forms.

Subsequent to the
Evaluation Date, there have been no significant changes in the Companys
internal controls or in other factors that could significantly affect these
controls.

---

There has been a trend
toward increased litigation against financial services companies arising out of
consumer lending and other consumer financial transactions, especially in
Mississippi. Some of these actions have resulted in large settlements or
substantial damage awards.

The Bank and one of its
subsidiaries are subject to similar cases that seek substantial damages for
claims arising out of transactions that involve relatively small amounts of
money. While the allegations vary from case to case, in general they allege that
loans were originated or renewed in a way that the borrowers were improperly
sold insurance products, such as credit life insurance. The Company has denied
these allegations and will vigorously defend the claims.

In total, there are cases
involving approximately 300 plaintiffs that have been filed over a three year
period. Some suits have been filed in Holmes County. Depositions have occurred
in one suit, and a trial date has been tentatively set for October, 2004 in
another suit. It is not possible at this time to determine the potential
exposure related to possible damages in connection with these suits. Future
legislation and court decisions may limit the amount of damages that can be
recovered in legal proceedings such as these. However, management cannot predict
at this time whether such legislation or court decisions will occur or the
effect they may have on these cases.

The Banks insurance
agency subsidiary was involved in a suit filed in Holmes County in August, 2003
by 13 plaintiffs alleging damages in connection with the sale and purchase of
insurance products.  The case has been settled at no cost to the Company.

Additionally, the Company
and its subsidiaries are defendants in various other lawsuits arising out of the
normal course of business. In the opinion of management, the ultimate resolution
of this category of claims should not have a material adverse effect on the
Companys consolidated financial position or results of operations.

---

`FIRST M & F CORPORATION

Item 2 - Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

The following table summarizes repurchases of common stock for the program in place during the second
quarter of 2004:

                                                                                                              Maximum Number
                                                                                    Total Number              (or Approximate
                                                                                      of Shares                Dollar Value)
                                                                                (or Units) Purchased       of Shares (or Units)
                                  Total Number                                       As Part of               That May Yet Be
                                 of Shares (or          Average Price Paid       Publicly Announced         Purchased Under the
          Period                units) Purchased       Per Share (or Unit)        Plans or Programs          Plans or Programs
          ------                ----------------       -------------------        -----------------          -----------------
04/01/04 - 04/30/04 (1)                  -               $          -                        -                     120,000
05/01/04 - 05/31/04                 10,000                      33.97                   10,000                     110,000
06/01/04 - 06/30/04                 10,000                      33.78                   10,000                     100,000

(1)   On April 14, 2004, the Board authorized a program to repurchase up to 120,000 shares of common stock in
      the open market over a twelve month period beginning on May 1, 2004 and ending on April 30,
      2005. The authorization limits the number of shares that may be repurchased in any calendar
      month to no more than 10,000.


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 14, 2004. The stockholders elected eleven directors
to serve terms of from one to three years as summarized below:

Directors Elected                                      Votes For           Votes Withheld
-----------------                                      ---------           --------------

Term to Expire in April, 2007
Barbara K. Hammond                                     3,563,758                    8,627
Charles Imbler, Sr.                                    3,565,321                    7,064
R. Dale McBride                                        3,564,821                    7,564
Michael L. Nelson                                      3,564,269                    8,116
Hugh S. Potts, Jr.                                     3,563,769                    8,616
W. C. Shoemaker                                        3,564,810                    7,575
Michael W. Sanders                                     3,564,810                    7,575
Scott M. Wiggers                                       3,564,821                    7,564

Term to Expire in April, 2006
Jeffrey A. Camp                                        3,554,824                   17,561
Larry D. Terrell                                       3,564,269                    8,116

Term to Expire in April, 2005
Hollis C. Cheek                                        3,565,321                    7,064

There were 4,561,169 shares entitled to vote on the proposals, with 3,572,385 shares, or 78.32% actually
being voted.

Item 5 - Other Information

None`

---

`FIRST M & F CORPORATION

Item 6 - Exhibits and Reports on Form 8-K

Item 6(a) - Exhibits

     Exhibit 3(A) - Articles of Incorporation, as amended. Filed as Exhibit 3 to the Company's Form S-1 (File No. 33-08751)
     September 15, 1986, incorporated herein by reference.

     Exhibit 3(B) - By-Laws, as amended. Filed as Exhibit 3-b to the Company's Form S-1 (File No. 33-08751) September 15,
     1986, incorporated herein by reference.

     Exhibit 11 - Computation of Earnings Per Share - See note 4 to the consolidated financial statements included in this report.

     Exhibit 31 - Rule 13a-14(a)/15d-14(a) Certifications.

     Exhibit 32 - Section 1350 Certifications.

Item 6(b) - Reports on Form 8-K - The following reports on Form 8-K were filed during the quarter ended
June 30, 2004:

   (1)  Report on Form 8-K filed on April 19, 2004. Item 5 disclosure and Item 7 press release related to a
        stock repurchase plan to commence on May 1, 2004 and end on April 30, 2005.

   (2)  Report on Form 8-K filed on April 19, 2004. Item 7 press release with pro forma disclosures and Item 12
        financial statements related to the first quarter earnings announcement.

   (3)  Report on Form 8-K filed on April 30, 2004. Item 5 related to the presentation of information at the
        Gulf South Bank Conference on April 28, 2004.

   (4)  Report on Form 8-K filed on May 13, 2004. Item 5 disclosure and Item 7 press release announcing John G.
        Copeland named as EVP and Chief Financial Officer.`

---

`FIRST M & F CORPORATION


                                                SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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


Date : August 6, 2004


BY:   /s/ Hugh S. Potts, Jr.                                   BY: /s/ John G. Copeland
    ---------------------------------                             -------------------------------
     Hugh S. Potts, Jr.                                            John G. Copeland
     Chairman of the Board and                                     Executive Vice President and
     Chief Executive Officer                                       Chief Financial Officer`

---

`FIRST M & F CORPORATION


                                                   EXHIBIT INDEX


3 (A)   Articles of Incorporation, as amended. Filed as Exhibit 3 to the Company's Form S-1 (File No. 33-08751)
September 15, 1986, incorporated herein by reference.

3 (B)   Bylaws, as amended. Filed as Exhibit 3-b to the Company's Form S-1 (File No. 33-08751) September 15,
1986, incorporated herein by reference.

11      Computation of Earnings Per Share - Filed herewith as note 4 to the consolidated financial statements.

31      Rule 13a-14(a) Certification of Hugh S. Potts, Jr., Chief Executive Officer and Rule 13a-14(a)Certification of
        John G. Copeland, Chief Financial Officer

32      Section 1350 Certification of Hugh S. Potts, Jr., Chief Executive Officer and Section 1350 Certification of
        John G. Copeland, Chief Financial Officer`