---

# UNITED STATES
                                                             SECURITIES AND EXCHANGE COMMISSION
                                                                   WASHINGTON, D.C. 20549

# FORM 10-K

# For the fiscal year ended December 31, 2000

# or

`FIRST M&F CORPORATION
                                        ----------------------------------------------------------------------------
                                                       (Name of Small Business Issuer in Its Charter)

                        MISSISSIPPI                                                                      64-0636653
  -----------------------------------------------------------------      ---------------------------------------------------------
            (State or Other Jurisdiction of                                            (I.R.S. Employer Identification Number)
            Incorporation or Organization)

 221 East Washington Street, Kosciusko, Mississippi                                                           39090
-----------------------------------------------------------------       -----------------------------------------------------------
       (Address of principal executive offices)                                                             (Zip Code)

Issuer's Telephone Number:                               662-289-5121
                                             ------------------------------------------`

# Securities registered under Section 12(b) of the Exchange Act:

`Name of Each Exchange on
                Title of Each Class                                                                   Which Registered
                -------------------                                                                   ----------------
                        None                                                                                 None


Securities registered pursuant to section 12(g) of the Act:

                                                                                                   Name of Each Exchange on
                Title of Each Class                                                                     Which Registered
                -------------------                                                                     ----------------
            Common Stock, $5 par value                                                                        None
------------------------------------------------------------                                 ------------------------------------`

---

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

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

Based on bid price for shares on January 31, 2001, the
aggregate market value of the voting stock held by nonaffiliates of the
Registrant was $66,653,440.00.

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 January 31, 2001
               -----                                                                      --------------------------------
Common stock ($5.00 par value)                                                                     4,614,784  Shares`

# DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference to Parts III of the
Form 10-K report:
Proxy Statement dated March 9, 2001.


CROSS REFERENCE INDEX

                                                                                                        Page
PART I

Item 1      Business...................................................................................II-2
Item 2      Properties.................................................................................II-8
Item 3      Legal Proceedings..........................................................................II-9
Item 4      Submission of Matters to a Vote of Security Holders........................................II-9

PART II

Item 5      Market for the Registrant's Common Equity and Related Stockholder Matters..................II-9
Item 6      Selected Financial Data....................................................................II-11
Item 7      Management's Discussion and Analysis of Financial Condition and Results of
                Operations.............................................................................II-12
Item 8      Financial Statements and Supplementary Data................................................II-18
Item 9      Changes In and Disagreements with Accountants on Accounting and
              Financial Disclosure.....................................................................II-51

PART III

Item 10     Directors and Executive Officers of the Registrant.........................................II-51
Item 11     Executive Compensation.....................................................................II-51
Item 12     Security Ownership of Certain Beneficial Owners and Management.............................II-51
Item 13     Certain Relationships and Related Transactions.............................................II-51

Part IV

Item 14     Exhibits, Financial Statement Schedules, and Reports on Form 8-K...........................II-52

* Information called for by Part III (Items 10 through 13) is incorporated by reference to the Registrant's
Proxy Statement dated March 9, 2001.

BUSINESS

General

First
M & F Corporation (the Company) is a one-bank holding company chartered and
organized under Mississippi laws in 1979. The Company engages exclusively in the
banking business through its wholly-owned subsidiary, Merchants and Farmers Bank
of Kosciusko (the Bank).

The
Bank was chartered and organized under the laws of the State of Mississippi in
1890, and accounts for substantially all of the total assets and revenues of the
Company. The Bank is the sixth largest bank in the state, having total assets of
approximately $1.02 billion at December 31, 2000. The Bank offers a complete
range of commercial and consumer services its main office and two branches in
Kosciusko and its branches within central Mississippi, including Ackerman,
Bruce, Brandon, Canton, Cleveland, Clinton, Durant, Grenada, Lena, Madison,
Oxford, Pearl, Philadelphia, Ridgeland, Southaven, Starkville, Tupelo, and Weir,
Mississippi.

         The Bank has eight wholly-owned subsidiaries, M & F Financial
Services, Inc., which operates one finance company office, First M & F Insurance Company, Inc., a credit  life insurance company,
M & F  Insurance Agency, Inc., a general insurance agency, Tyler, King & Ryder, Inc., a general insurance
agency, Reynolds Insurance & Real Estate Agency, Inc., a general insurance agency, Insurance Services,
Inc., a general insurance agency, and Merchants and Farmers Bank Securities Corporation, a real estate
property management company.

The
Companys primary means of growth over the past several years has been an
aggressive lending program funded by exceptional deposit growth. Additionally,
the Company acquired the deposits of several locations from the Resolution Trust
Corporation from 1990 to 1994. Effective with the close of business on December
31, 1995, the Company merged with Farmers and Merchants Bank of Bruce,
Mississippi. This merger involved the exchange of 450,000 shares of the
Companys common stock for all of the issued and outstanding shares of
Farmers and Merchants Bank and has been accounted for as a pooling of
interests. Farmers and Merchants had total assets of $32 million at December 31,
1995. Effective with the close of business on December 31, 1998, the Company
merged with First Bolivar Corporation of Cleveland, Mississippi. This merger
involved the exchange of 243,214 shares of the Companys common stock for
all of the issued and outstanding shares of First Bolivar and has been accounted
for as a pooling of interests. First Bolivars banking subsidiary, First
National Bank of Bolivar County, was also merged with the Bank. First Bolivar
and subsidiary had total consolidated assets of $46 million at December 31,
1998. Effective with the close of business on November 19, 1999, the Company
merged with Community Federal Bancorp, Inc. of Tupelo, Mississippi. This merger
involved the exchange of 1,217,567 shares of the Companys common stock and
approximately $37,750,000 in cash for all of the issued and outstanding shares
of Community Federal Bancorp and has been accounted for as a purchase
transaction. Community Federal Bancorps banking subsidiary, Community
Federal Bank, was also merged with the Bank.

The
banking system offers a variety of deposit, investment and credit products to
customers. The Bank provides these services to middle market and professional
businesses, ranging from payroll checking, business checking, corporate savings
and secured and unsecured lines of credit. Additional services include direct
deposit payroll, sweep accounts and letters of credit. The Bank also offers
credit card services to its customers, to include check debit cards and
automated teller machine cards through several networks. Trust services are also
offered in the Kosciusko main office.

                                                    II-2

As of January 31, 2001, the Company and its subsidiary employed 412
full-time equivalent employees.

Competition

The
Company competes generally with other banking institutions, savings
associations, credit unions, mortgage banking firms, consumer finance companies,
mutual funds, insurance companies, securities brokerage firms, and other finance
related institutions; many of which have greater resources than those available
to the Company. The competition is primarily related to areas of interest rates,
the availability and quality of services and products, and the pricing of those
services and products.

Supervision and Regulation

As
a bank holding company, First M & F Corporation is subject to regulation
under the Bank Holding Company Act of 1956, as amended, (the BHCA)
and the examination and reporting requirements of the Board of Governors of the
Federal Reserve System (the Federal Reserve Board). Under the BHCA,
a bank holding company may not directly or indirectly acquire ownership or
control of more than 5% of the voting shares or substantially all of the assets
of any bank or merge or consolidate with another bank holding company without
the prior approval of the Federal Reserve Board. The BHCA also generally limits
the activities of a bank holding company to that of banking, managing or
controlling banks, or any other activity which is determined to be so closely
related to banking or managing or controlling banks that an exception is allowed
for those activities.

As
a state-chartered commercial bank, Merchants and Farmers Bank, First M & F
Corporations banking subsidiary, is subject to regulation, supervision and
examination by the Mississippi Department of Banking and Consumer Finance.
Merchants and Farmers Bank (the Bank) is also subject to regulation,
supervision and examination by the Federal Deposit Insurance Corporation (the
FDIC). State and Federal law also govern the activities in which the
Bank engages, the investments it makes and the aggregate amount of loans that
may be granted to one borrower. The insurance company subsidiary of the Bank is
also regulated and examined by the Insurance Department of the State of
Mississippi.

The
earnings of the Bank and its subsidiaries are affected by general economic
condition, management policies, changes in state and Federal legislation and
actions of various regulatory authorities, including those referred to above.
The following description summarizes the significant state and Federal laws to
which the Company, the Bank and subsidiaries are subject.

Capital

The
Company and the Bank are required to comply with the capital adequacy standards
established by the Federal Reserve Board and the FDIC. There are two basic
measures of capital adequacy for bank holding companies and their banking
subsidiaries; a risk-based measure and a leverage measure.

The
risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profile among depository
institutions and bank holding companies, to account for off-balance sheet
exposure, and to minimize disincentives for holding liquid assets. Assets and
off-balance sheet items are assigned to broad risk categories, each with
appropriate weights. The

                                                    II-3

resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance
sheet items.

The
minimum guideline for the total capital to risk-weighted assets, including
certain off-balance sheet items such as standby letters of credit (total
capital ratio) is 8.0 percent. At least half of total capital must be
composed of common equity, undivided profits, minority interests in the equity
accounts of consolidated subsidiaries, noncumulative perpetual preferred stock,
and a limited amount of cumulative perpetual preferred stock, less goodwill and
certain other intangible assets (Tier 1 capital). The remainder may
consist of subordinated debt, other preferred stock, a limited amount of loan
loss reserves, and unrealized gains on equity securities subject to limitations
(Tier 2 capital). At December 31, 2000, the Company and the Bank
were in compliance with the total capital ratio and the Tier 1 capital ratio
requirements. Note 18 of the Notes to Consolidated Financial Statements presents
the Companys and the Banks capital ratios.

Deposit Insurance Assessments

The
deposits of the Bank are insured by the FDIC up to the limits set forth under
applicable law. A majority of the deposits of the Bank are subject to the
deposit insurance assessments of the Bank Insurance Fund (BIF) of
the FDIC. However, a portion of the Banks deposits, relating to a savings
association acquisition, are subject to assessments imposed by the Savings
Association Insurance Fund (SAIF) of the FDIC. The FDIC equalized
the assessment rates for BIF-insured and SAIF-insured deposits effective January
1, 1997. The assessments imposed on all FDIC deposits for deposit insurance have
an effective rate ranging from 0 to 27 basis points per $100 of insured
deposits, depending on the institutions capital position and other
supervisory factors. Legislation was enacted in 1996 requiring both SAIF-insured
and BIF-insured deposits to pay a pro rata portion of the interest due on the
obligations issued by the Financing Corporation (FICO). The FDIC is
currently assessing, effective for the first quarter of 2001, BIF- and
SAIF-insured deposits totaling an additional 1.96 basis points per $100 of
deposits.

                                           STATISTICAL DISCLOSURE

        The statistical disclosures for the Company are contained in
Tables 1 through 12.
Table 1 - Comparative Average Balances/Yields


                                                2000                                1999                                1998
                               ------------------------------------   ------------------------------- -----------------------------
                                    Average              Yield/         Average              Yield/    Average             Yield/
                                    Balance   Interest    Cost          Balance    Interest    Cost     Balance  Interest    Cost
                               ------------------------------------   ------------------------------- -----------------------------
Interest bearing bank balances      6,609        476      7.20%         4,407        237     5.39%      3,378        192      5.68%
Federal funds sold                 10,753        645      6.00%         5,969        297     4.98%     11,245        626      5.57%
Taxable investments               228,380     14,316      6.27%       167,945     10,197     6.07%    135,230      8,419      6.23%
Tax-exempt investments             59,187      4,519      7.64%        63,541      4,816     7.58%     44,458      3,401      7.65%
Loans                             630,683     55,064      8.73%       457,023     40,337     8.83%    365,252     35,163      9.63%
                              ---------------------------------  ---------------------------------   ------------------------------
   Total earning assets           935,614     75,020      8.02%       698,885     55,885     8.00%    559,562     47,801      8.54%
Nonearning assets                  73,697                              60,698                          43,572
                              -----------                        ------------                        --------
   Total average assets         1,009,311                             759,584                         603,133

NOW, MMDA & Savings               275,496      9,044      3.28%       293,491      9,299     3.17%    218,428      7,897      3.62%
                                                              II-4

Certificates of deposit                       432,036    24,809    5.74%     283,821  14,391   5.07%   254,820     13,764   5.40%
Short-term borrowings                          13,590     1,063    7.82%       3,606     165   4.57%       264         17   6.44%
Other borrowings                              102,621     6,315    6.15%      25,109   1,355   5.40%     7,302        507   6.94%
                                             ---------------------------  --------------------------  ---------------------------
   Total interest bearing liabilities         823,742    41,230    5.01%     606,027  25,210   4.16%   480,814     22,185   4.61%
Noninterest bearing deposits                   84,295                         78,335                    60,689
Noninterest bearing liabilities                 9,283                          8,219                     6,623
Capital                                        91,991                         67,003                    55,008
                                             --------                     ----------                ----------
   Total average liabilities and
   equity                                   1,009,311                        759,584                   603,133
Net interest margin                                      33,790    3.61%              30,675   4.39%               25,616   4.58%
Less tax equivalent adjustment
   Investments                                            1,686                        1,796                        1,156
   Loans                                                    168                          224                          195
                                                       --------                      -------                     --------
Reported net interest margin                             31,937    3.41%              28,655    .10%               24,265   4.34%

Tax equivalent adjustments were made using a blended Federal/State rate of 37.3%.


Table 2 - Rate/Volume Variances


                                                2000 Compared To 1999                             1999 Compared To 1998
                                              Increase (Decrease) Due To                       Increase (Decrease) Due To
                                      -----------------------------------------     -------------------------------------------
                                                          Yield/                                           Yield/
                                             Volume        Cost          Net                  Volume        Cost         Net
                                      -----------------------------------------     ------------------------------ ------------
Interest earned on:
Interest bearing bank balances                  143            96           239                   55           (9)           46
Federal funds sold                              277            70           348                (269)          (60)        (329)
Taxable investments                           3,779           340         4,119                1,981         (202)        1,778
Tax-exempt investments                        (333)            36         (297)                1,446          (31)        1,415
Loans                                        15,157         (430)        14,727                7,736       (2,562)        5,174
                                      -----------------------------------------     -------------------------------------------
   Total earning assets                      19,023           113        19,135               10,949       (2,865)        8,084

Interest paid on:
NOW, MMDA & Savings                           (620)           366         (255)                2,190         (788)        1,402
Certificates of deposit                       8,309         2,108        10,417                1,359         (731)          627
Short-term borrowings                           714           183           898                  151           (3)          148
Other borrowings                              4,744           215         4,960                  934          (85)          848
                                      -----------------------------------------     -------------------------------------------
   Total interest bearing liabilities        13,148         2,872        16,020                4,633       (1,608)        3,025
   Change in net interest income
     on a tax-equivalent basis                5,875       (2,759)         3,115                6,316       (1,257)        5,059


Table 3 - Securities Available for Sale and Securities Held to Maturity


                                                                             Amortized Cost of Securities
                                                                                      December 31
                                                                       2000              1999              1998
                                                                 -----------------------------------------------------
Securities Available For Sale
U.S. Treasury                                                          3,018             9,037            17,541
Government agencies                                                   32,058            27,541            25,412
Mortgage-backed securities                                           151,853           176,211            91,154
Obligations of states and political subdivisions                      61,347            63,746            68,665
                                                              II-5

Other securities                                                            23,530            30,182             5,022
                                                                 -----------------------------------------------------
Total securities available for sale                                        271,806           306,717           207,794

Securities Held To Maturity
U.S. Treasury                                                                    0                 0                 0
Government agencies                                                              0                 0                 0
Mortgage backed securities                                                       0                 0                 0
Obligations of states and political subdivisions                                 0                 0                 0
Other securities                                                                 0                 0                 0
                                                                 -----------------------------------------------------
Total securities available for sale                                              0                 0                 0


Table 4 - Maturity Distribution and Yields of Securities Available for Sale and Securities Held to
Maturity


                                                           After One
                                     Within                But Within              After Five           Over
                                       One                    Five                 But Within            Ten
                                      Year       Yield       Years       Yield     Ten Years   Yield    Years       Yield    Total
----------------------------------------------------------------------------------------------------------------------------------
Securities Available For Sale
------------------------------------
U.S. Treasury                           1,000     5.58%     2,018       5.57%             0    0.00%        0      0.00%     3,018
Government agencies                    23,016     6.48%     7,538       5.80%         1,503    6.21%        0      0.00%    32,058
Mortgage-backed securities             23,691     6.81%    72,488       6.69%        25,615    6.62%   30,058      7.30%   151,853
Obligations of states and political     8,096     7.97%    29,366       7.85%        23,540    7.26%      345      9.08%    61,347
subdivisions
Other debt securities                     500     5.79%     1,436       6.53%         1,055    7.10%        0      0.00%     2,991
                                  ------------------------------------------------------------------------------------------------
Total securities available for
   sale                                56,304     6.81%   112,846       6.91%        51,714    6.91%   30,403      7.32%   251,266
Equity securities                                                                                                           20,539
                                                                                                                     -------------
                                                                                                                           271,805

Tax equivalent adjustments were made using a blended Federal/State rate of 37.3%.  Non mortgage backed securities are
categorized in the earlier of their maturity dates or their call dates.  Mortgage backed securities are distributed based upon
their estimated average lives.


Table 5 - Composition of the Loan Portfolio


                                               2000            1999            1998            1997            1996          1995
                                        ------------------------------------------------------------------------------------------
Commercial, financial and agricultural        75,942          68,521          55,177          54,044          47,861        41,050
Residential real estate                      249,745         250,875         121,885         106,439          94,187        81,704
Non-residential real estate                  202,619         172,982         142,027         124,369         116,337       100,204
Consumer loans                               103,960         116,543          95,040          91,035         100,117        84,907
Lease financing                                   51              29              55              19             137           271
                                        ------------------------------------------------------------------------------------------
   Total loans                               632,317         608,950         414,184         375,906         358,639       308,136


Table 6 - Loan Maturities and Sensitivity to Changes in Interest Rates


Maturity distribution of loans at December 31, 2000
---------------------------------------------------

                                                   Within         One to Five         After Five
                                                  One Year           Years              Years             Total
                                             -------------------------------------------------------------------------
Commercial and real estate loans                   158,919           261,481            106,573           526,972
Consumer loans                                      46,685            53,473              3,802           103,960
                                             -------------------------------------------------------------------------
   Total loans                                     205,604           314,953            110,375           630,932
                                                               II-6

Rate sensitivity of loans at December 31, 2000
----------------------------------------------

                                                      One to Five        After Five
                                                         Years             Years              Total
                                             -------------------------------------------------------
Fixed rate loans                                        280,681            59,169            339,850
Floating rate loans                                      34,272            51,206             85,479
                                             -------------------------------------------------------
                                                        314,953           110,375            425,328


Table 7 - Nonperforming Assets and Past Due Loans


                                                               2000           1999          1998          1997          1996
                                                      -----------------------------------------------------------------------
Nonaccrual loans                                               1,385          2,072           852           328           206
Restructured loans                                                 0              0             0             0             0
                                                      -----------------------------------------------------------------------
   Total nonperforming loans                                   1,385          2,072           852           328           206
Other real estate owned                                          965          1,150         1,123           843           724
                                                      -----------------------------------------------------------------------
   Total nonperforming assets                                  2,350          3,222         1,975         1,171           930
Accruing loans past due 90 days or more                        1,806          1,069         1,155         1,149           968
                                                      -----------------------------------------------------------------------
   Total nonperforming assets and loans                        4,156          4,291         3,130         2,320         1,898


Table 8 - Analysis of the Allowance for Loan Losses


                                                                     2000          1999          1998          1997           1996
                                                            -----------------------------------------------------------------------
Balance at beginning of year                                         7,629         5,835         5,315         4,610          4,373
Adjustment for sale of finance company office                            0             0             0          (77)              0
Adjustment for purchase acquisition                                      0           866
Charge offs
     Commercial, financial and agricultural                        (1,897)         (134)         (188)         (365)          (235)
     Real estate                                                     (340)         (347)         (451)         (185)          (174)
     Consumer                                                      (1,989)       (1,612)       (1,380)         (914)          (743)
                                                            -----------------------------------------------------------------------
        Total                                                      (4,226)       (2,093)       (2,019)       (1,464)        (1,152)
Recoveries
     Commercial, financial and agricultural                             70            46            52            23             13
     Real estate                                                        83            51            93            23             14
     Consumer                                                          655           540           429           138            129
                                                            -----------------------------------------------------------------------
        Total                                                          808           637           574           184            156
                                                            -----------------------------------------------------------------------
Net charge offs                                                    (3,418)       (1,456)       (1,445)       (1,280)          (996)
Provision for loan losses                                            4,299         2,384         1,965         2,062          1,233
                                                            -----------------------------------------------------------------------
Balance at end of year                                               8,510         7,629         5,835         5,315          4,610


Table 9 - Allocation of the Allowance for Loan Losses


General reserves for past due and other classified loans                                4,049
General reserves of finance company portfolio                                               0
Year 2000 risk reserve                                                                      0
Other general reserves                                                                  4,461
                                                                         --------------------
     Total reserve for loan losses                                                      8,510


Table 10 - Time Deposits of $100,000 or More
                                                    II-7

The table below shows maturities of outstanding time deposits of $100,000 or more at December
31, 2000 (in thousands):


Three months or less                                            $41,381
Over three months through twelve months                          71,057
Over one year through three years                                39,831
Over three years                                                  3,037
                                                         --------------
   Total                                                        155,306


Table 11 - Selected Ratios

          The following table reflects ratios for the Company for the last three years:


                                                         2000           1999          1998
                                                   --------------------------------------------
Return on average assets                                 0.70%         1.08%          1.17%
Return on average equity                                 7.70%        12.19%         12.93%
Dividend payout ratio                                   65.36%        46.30%         44.44%
Equity to assets ratio                                   9.11%         8.82%          9.02%


Table 12 - Short-Term Borrowings

         The table below presents certain information regarding the Company's short-term borrowings for
each of the last three years (in thousands of dollars):


                                                     2000                1999               1998
                                             ---------------------------------------------------------
Outstanding at end of period                       28,969              12,298               829
Maximum outstanding at any
  month-end during the period
                                                   31,626              21,096             2,384
Average outstanding during
  the period
                                                    3,941               3,306               534
Interest paid                                         250                 165                22
Weighted average rate during
  each period
                                                    6.34%               4.99%             4.12%
                                                PROPERTIES

The
Banks main office, located at 221 East Jefferson Street, Kosciusko,
Mississippi, is a two story, brick building with drive-up facilities. The Bank
is constructing a new headquarters building in Kosciusko. Construction began in
late 2000 and completion is expected in the early fall of 2001. The building,
which will be located adjacent to the current operations center in downtown
Kosciusko, will have approximately 40,000 square feet of office and storage
space. The current main office building will continue to house the primary
Kosciusko banking facility on the first floor, with administrative departments
occupying the second floor.

The
Bank owns its main office building and 28 of its branch facilities. The
remaining facilities are occupied under lease agreements, the terms of which
range from month to month to five years. It is anticipated that all leases will
be renewed.

                                                   II-8

LEGAL PROCEEDING

The
Bank is involved in various legal matters and claims which are being defended
and handled in the ordinary course of business. In the opinion of Management,
none of these matters are expected to have a material adverse effect on the
financial position or results of operations of the Bank or the Company.

                           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No
matters were submitted to a shareholder vote during the fourth quarter of 2000.

                                  MARKET FOR THE REGISTRANT'S COMMON STOCK
                                      AND RELATED STOCKHOLDER MATTERS

Effective
September 1, 1996, the Companys common stock was listed with the National
Association of Securities Dealers, Inc. Automated Quotation National Market
System (NASDAQ) and became subject to trading and reporting over the counter
with most securities dealers.

At
January 31, 2001, there were 1,381 shareholders of record of the Companys
common stock. On January 31, 2001, the Companys stock closed at $19.38 per
share.

                                       STOCK AND DIVIDEND PERFORMANCE

Investment Data


                                                                                    December 31, 2000
-------------------------------------------------------------------------------------------------------
52-Week range                                                                         $16.00 - $29.13
Closing stock price                                                                            $16.88
Earnings per share (basic)                                                                      $1.53
Book value per share                                                                           $21.01
Shares outstanding                                                                          4,614,784
Stock appreciation since 12/95                                                                 (5.2%)

                                       Stock and Dividend Performance


                                                2000           1999           1998            1997           1996
-------------------------------------------------------------------------------------------------------------------

Price/earnings ratio                           11.03x          13.89x         16.67x         17.86x          13.81x

Price/book value ratio                           .80x           1.55x          2.06x          2.52x           2.02x
Book value/share                               $21.01          $19.41         $17.45         $15.85          $14.35
Dividend payout ratio                           65.4%           46.3%          44.4%          39.3%           35.7%
Historical dividend yield                        3.3%            2.8%           2.4%           2.4%            2.8%
                                                    II-9

Value Added


                                        2000          1999           1998           1997           1996
------------------------------------------------------------------------------------------------------------
Invested capital                          $96,943       $90,677        $61,722        $57,070        $51,911
Market value of capital                    77,874       140,180        131,032        145,515        105,498
                                   -------------------------------------------------------------------------
  Excess market value                   ($19,069)       $49,503        $69,310        $88,445        $53,587
Increase (decrease) in value            ($68,572)     ($19,807)      ($19,135)        $34,858

                                       Quarterly Closing Common Stock
                                      Price Ranges and Dividends Paid


                                    First                Second                Third                Fourth
-----------------------------------------------------------------------------------------------------------
2000:
High                                $29.13                $23.00               $21.75                $18.13
Low                                  20.25                 17.88                16.88                 16.00
Close                                23.00                 20.63                18.00                 16.88
Dividend                               .25                   .25                  .25                   .25

-----------------------------------------------------------------------------------------------------------
1999:
High                                $39.00                $33.50               $36.00                $32.31
Low                                  31.75                 29.38                30.00                 28.75
Close                                32.00                 30.25                31.69                 30.00
Dividend                               .25                   .25                  .25                   .25

         During 1999, the Company completed two unregistered offerings of
securities, each of which involved an exchange of the Company's common stock in return for common stock of the company which
was being acquired.  Each offering was exempt from registration with the Securities and Exchange
Commission pursuant to Regulation D.  On September 21, 1999, the Company issued 69,997 shares of
common stock in return for all of the outstanding stock of Tyler, King & Ryder, Inc. to Wayne E.
Heilbronner, James A. Tyler, Charles D. King, Daniel N. Ryder, and Calvin E. Robertson.  On December
20, 1999, the Company issued 18,970 shares of common stock in return for all of the outstanding stock of
Reynolds Insurance & Real Estate, Inc. to William L. Polk.

During
2000, the Company completed one unregistered offering of securities which
involved an exchange of the Companys common stock in return for common
stock of the company which was being acquired. The offering was exempt from
registration with the Securities and Exchange Commission pursuant to Regulation
D. On January 3, 2000, the Company issued 35,359 shares of common stock in
return for all of the outstanding stock of Insurance Services, Inc. to Richard
Porter.

SELECTED FINANCIAL DATA


(Thousands, except per share data)             2000            1999              1998              1997              1996
---------------------------------------------------------------------------------------------------------------------------

EARNINGS

Interest income                               $73,164         $53,865            $49,299           $46,450          $44,037
Interest expense                               41,227          25,210             24,391            22,185           21,007
                                     --------------------------------------------------------------------------------------
                                                              II-10

Net interest income                               31,937          28,655             24,908            24,265           23,030
Provision for loan losses                          4,299           2,384              1,965             2,062            1,233
Noninterest income                                10,480           8,243              6,212             5,651            4,765
Noninterest expense                               29,517          23,343             18,718            16,416           16,063
Income taxes                                       1,522           3,005              2,595             3,292            2,876
                                          ------------------------------------------------------------------------------------
Net income                                        $7,079          $8,166             $7,842            $8,146           $7,623
                                          ------------------------------------------------------------------------------------
Net interest income, taxable equivalent          $33,790         $30,675            $26,904           $25,616          $24,278
                                          ------------------------------------------------------------------------------------
Cash dividends paid                               $4,626          $3,920             $3,259            $2,987           $2,545

PER COMMON SHARE

Net income                                         $1.53           $2.16              $2.16             $2.24            $2.10
Cash dividends paid                                 1.00            1.00                .96               .88              .75
Book value                                         21.01           19.41              17.45             15.85            14.35
Closing stock price                                16.88           30.00              36.00             40.00            29.00

SELECTED AVERAGE BALANCES

Assets                                        $1,009,311        $759,584           $672,051          $603,133         $566,276
Earning assets                                   928,181         697,667            623,025           560,380          527,822
Loans                                            630,683         457,023            393,894           365,252          331,969
Investments                                      280,135         230,268            206,617           179,598          176,980
Total deposits                                   791,826         655,647            596,495           533,937          481,672
Equity                                            91,991          67,003             60,640            55,008           49,783

SELECTED YEAR-END BALANCES

Assets                                        $1,019,851      $1,023,037           $702,006          $621,458         $563,677
Earning assets                                   933,953         925,995            650,165           576,715          525,067
Loans                                            632,317         608,950            414,184           375,906          358,639
Investments                                      272,711         299,534            210,646           186,507          165,778
Core deposits                                    632,848         659,178            561,003           484,159          440,963
Total deposits                                   788,359         789,941            625,398           543,006          496,793
Equity                                            96,943          90,677             63,512            57,646           52,211

SELECTED RATIOS

Return on average assets                            .70%           1.08%              1.17%             1.35%            1.35%
Return on average equity                           7.70%          12.19%             12.93%            14.81%           15.31%
Average equity to average assets                   9.11%           8.82%              9.02%             9.12%            8.79%
Dividend payout ratio                             65.36%          46.30%             44.44%            39.29%           35.71%
Price to earnings (x)                             11.03x          13.89x             16.67x            17.86x           13.81x
Price to book (x)                                   .80x           1.55x              2.06x             2.52x            2.02x

                                                  II-11

MANAGEMENT'S DISCUSSION AND ANALYSIS
                              OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition

The
purpose of this discussion is to focus on significant changes in financial
condition and results of operations of the Company and its banking subsidiary
during the past three years. The discussion and analysis is intended to
supplement and highlight information contained in the accompanying consolidated
financial statements and selected financial data presented elsewhere in this
report and in the enclosed Financial Summary  First M & F Corporation
and Subsidiary.



Summary

Net
income for 2000 was $7,078,910, or $1.53 per share as compared to $8,165,767, or
$2.16 per share in 1999. Net income for 1999 was up by 4.1% from net income in
1998 of $7,842,267, with both years at $2.16 per share. Income tax expense
decreased by $1.5 million in 2000 due to lower earnings and a tax credit of $847
thousand related to prior year acquisitions.

In
2000, two insurance agencies in Tupelo were acquired. Insurance Services, Inc.
was acquired in January, while House of Insurance was acquired at the end of the
first quarter. This was a continuation of a strategy to build a stream of
insurance product revenues. A much enhanced internet web site, designed to
provide corporate and individual services, was introduced in 2000. Construction
of a new headquarters building in Kosciusko was begun in late 2000, with
completion expected in the early fall of 2001. A wide area network was put into
place in 2000, providing the infrastructure for customer service enhancing
technologies.

During
1999, the Company added a new office building in Madison. This building houses
trust, brokerage, insurance agency, mortgage and commercial lending operations.
The acquisition of Community Federal Bancorp in Tupelo added 3 locations in
Tupelo and approximately $294 million in assets to the Company. This acquisition
brought an increase of approximately $142 million in loans and deposits. The
Tyler, King & Ryder insurance agency in Kosciusko was acquired in September,
1999. This brought 4 insurance agency locations into the First M&F
operations. A de nova agency office was established in the new Madison building
in November, 1999. In December, 1999, the Reynolds Insurance and Real Estate
Agency and Starkville Insurance, Inc., both of Starkville, were acquired.

Total
assets fell by .3% in 2000 to end the year at $1.020 billion. Total assets grew
by 45.7% in 1999 to end the year at $1.023 billion. Total assets grew by 45.7%
in 1999 and by 13.0% in 1998. The compounded annual growth rate for total assets
for the last five (5) years was 13.4%, while the compounded growth rate for
deposits was 12.5%. Net income was down in 2000 after growing at an annual
compounded rate of 10.9% over the five years ending in 1999.

Earning Assets

The
average earning asset mix for 2000 was 67.9% in loans, 30.2% in investments, and
1.9% in short-term funds. The average earning asset mix for 1999 was 65.4% in
loans, 33.1% in investments, and 1.5% in short-term funds. The average earning
asset mix for 1998 was 63.2% in loans, 33.2% in investments, and 3.6% in
short-term funds. Loan growth exceeded deposit growth in 1999 and 2000, with
deposits actually decreasing in 2000. The following table shows the volume
changes in loans and deposits over the last four years, excluding the effect of
the Community Federal acquisition.

2000          1999          1998          1997
                                                  -----------------------------------------------------
Net increase in loans                                 $23,367       $52,299       $38,278       $17,267
Net increase in deposits                              (1,582)        22,832        82,392        46,793
Ratio of loan growth to deposit growth                  3/4          229.1%         46.5%         36.9%
Deposit
growth remained strong through 1998. The weak growth in 1999 and 2000 was due to
a much more competitive environment and to some disintermediation, as rates
began to increase and

                                                  II-12

deposits moved to annuity
products and mutual funds. Loan growth was weak in 2000, but was strong in 1999.
Loans grew by 3.8% in 2000 as compared to 47.0% (12.7% excluding the Community
Federal acquisition) in 1999 and 10.2% in 1998. The Companys strategy for
loan growth remains twofold: (1) continue steady growth at reasonable interest
rates in current markets and (2) enter into new markets to provide for
additional growth opportunities. Although the short-term effect of de novo
expansion on earnings is negative, management believes that this strategy
creates long-term shareholder value.

Investment Securities

The
Companys investment portfolio decreased by 8.9% in 2000. The portfolio
grew by 42.2% in 1999 as compared to 12.9% in 1998. The decrease was primarily
used to pay out high costing deposits and company debt, as well as to increase
the loan portfolio. The 1999 increase was attributable to the Community Federal
acquisition, which brought an $88 million leverage portfolio of mortgage-backed
securities, funded by Federal Home Loan Bank borrowings. The Company transferred
all held-to- maturity securities into the available-for-sale category on October
1, 1998. This was done in order to provide more flexibility in managing the
portfolio. In 1999 and 2000 the Company did not change its mix of Government,
municipal, and mortgage-backed securities. However, the 1999 Community Federal
acquisition did bring $88 million in mortgage-backed securities and $27 million
in FNMA and FHLMC equity securities. The increase in mortgage-backed securities
has lengthened the average life of the investment portfolio and will increase
the amount of revenues subject to income taxes. As of December 31, 2000,
municipal securities represented 22.6% of the investment portfolio as compared
to 20.9% at December 31, 1999 and 33.6% at December 31, 1998.

Deposits and Borrowings

Deposits
decreased by .2% in 2000 after increasing by 3.6% in 1999, excluding
acquisitions. The largest increase in 2000 and 1999 was in the certificate of
deposit category where bonus-rate promotional programs were used to generate
funds. Higher certificate of deposit rates and an extremely competitive
environment made it difficult to maintain deposit growth in 2000. Rate increases
during the latter half of 1999 caused a shift in funds flows toward certificates
of deposit and other alternative liquid investments.

Long
term debt decreased by $23.6 million from 1999 to 2000 as debt related to an
investment leverage program was reduced as investments matured. Funding for loan
growth was provided through investment maturities and short-term funds.
Borrowings in 1999 increased from 1998 levels due to the strong loan growth and
slower than expected deposit growth. The Company uses wholesale funding sources
such as the Federal Home Loan Bank to provide the liquidity needed for loan
growth. However, the long-term strategy of the Company is to primarily fund loan
growth through deposit growth first, with borrowings used when deposit funding
is uneconomical.

Liquidity and Interest Rate Sensitivity Management

Liquidity
is the ability of a bank to convert assets into cash and cash equivalents
without significant loss and to raise additional funds by increasing
liabilities. Liquidity management involves maintaining the Companys
ability to meet day-to-day cash flow requirements of customers, whether they
wish to withdraw funds or to borrow funds to meet their capital needs. The
Company was sufficiently liquid throughout the year to fund loan growth without
additional borrowings. The increases in core deposits for 1996 through 1999 also
provided much liquidity to the Company. During 1999 the Company retained more
cash than normal due to contingencies and uncertainties related to the Year 2000
computer

                                                  II-13

issue. Therefore, at the
end of 1999 the Company was in an extremely liquid position. The Company has
sufficient lines available through the Federal Home Loan Bank and correspondent
banks to meet all anticipated liquidity needs.

Cash
to pay for the 1999 Community Federal acquisition was raised by selling
securities rather than by borrowing funds. Therefore, the acquisition did not
have any negative effect on liquidity.

The
Company instituted a stock repurchase program for up to 482 thousand shares in
the third quarter of 1999 related to the Community Federal acquisition. As of
December 31, 2000, the Company had repurchased 367 thousand shares at an average
price of $29.23 per share. The Company used borrowings of approximately $9.5
million against its lines of credit at other commercial banks. The resulting
debt from the program is expected to be paid off through dividends received by
the Company from Merchants and Farmers Bank. The repurchase program is not
expected to have a negative effect on liquidity.

Interest
rate sensitivity is a function of the repricing characteristics of the
Companys portfolio of assets and liabilities. Interest rate sensitivity
management focuses on repricing relationships of these assets and liabilities
during periods of changing market interest rates. Management seeks to minimize
the effect of interest rate movements on net interest income. The
asset-liability management committee monitors the interest-sensitivity gap on a
monthly basis. In 2000, the one year repricing gap was maintained at
approximately  6%. In 1999, the interest-sensitivity gap was maintained at
a neutral to slightly negative position. Due to the longer-term nature of assets
acquired in the Community Federal transaction, management increased its one year
repricing gap target to between +7.5% and -7.5% from its historical targets of
between +5% and -5% of total assets.

Capital Resources

Capital
adequacy is continuously monitored by the Company to promote depositor and
investor confidence and provide a solid foundation for future growth of the
organization. The Company has continued to increase its dividend payout ratio,
and ended 2000 with a ratio of 65.4%. The high payout percentage was due to the
lower earnings per share, as the Company maintained a $1.00 annual dividend rate
for 1999 and 2000. The ratio of capital to assets stood at 9.5% at December 31,
2000, with risk-based capital ratios well in excess of the regulatory
requirements. The lack of growth in 2000 was a contributing factor to the
improvement of the capital ratio from 8.9% at December 31, 1999. The Company
issued approximately 1.2 million shares along with the $37.7 million in cash for
Community Federal Bancorp in November, 1999. The use of the equity securities
allowed the Company to maintain a strong capital position even while recording
$15 million in intangible assets from the acquisition. The Company also has
sufficient lines of credit at commercial banks to raise additional funds if
needed. The Companys stock is publicly traded on NASDAQ, also providing an
avenue for additional capital if it is needed.

Results of Operations
Net Interest Income

Net
interest income is the largest component of the Companys net income and
represents income from interest earning assets less the cost of interest bearing
liabilities. Net interest income was $31.9 in 2000 compared to $28.7 million in
1999 and $24.9 million in 1998. The 11.5% growth in 2000 was due

                                                   II-14

to the volumes brought
about by the late 1999 merger. The 15.3% increase in 1999 was due primarily to
solid loan growth, stable investment yields, and lower average deposit costs
than in 1998. The 3.8% increase for 1998 was attributable to increases in
volumes of earning assets. Loan yields decreased in 1999 and 2000 due to
competitive pressures. During 1998 earning asset yields decreased more than
liability costs, and 1999, liability costs decreased more than earning asset
yields.

During
1999 the Company experienced a change in earning asset mix with loans becoming a
larger percentage of total earning assets. In 1998, loans as a percent of
earning assets decreased from 1997. Due to the 1999 merger, mortgages became a
large component of the loan portfolio, as approximately $130 million of
mortgages were acquired. During 2000, these mortgages paid down at a rate of
approximately $1 million per month. Management will continue to try to grow the
commercial and consumer loan components of earning assets as long as prudent
opportunities are available.

Provision for Loan Losses

During
2000 the Companys provision increased to $4.3 million from $2.4 million in
1999 and $2.0 million in 1998. The 2000 increase was due primarily to additional
accruals that were needed for a $1 million charge-off in September. The
remaining increase in reserves was due to the increased size of the portfolio.
The 1999 increase was due primarily to loan growth. Net charge-offs were $3.4
million in 2000 as compared to $1.5 million in 1999. Net charge-offs as a
percentage of average loans were .54% in 2000 as compared to .32% in 1999.
Nonaccrual loans as a percentage of total loans increased to .22% at the end of
2000 from .34% at the end of 1999. Management has a conservative approach to
classifying loans internally for purposes of determining needed reserves. The
percentage of reserves to total loans increased to 1.35% at December 31, 2000
from 1.25% at December 31, 1999.

Noninterest Income

Noninterest
income for 2000 was $10.5 million as compared to $8.2 million in 1999 and $6.2
million in 1998. The increase in 2000 was due to increased deposit revenues and
increased insurance agency revenues. The increased deposit revenues were due
mainly to increased transactions. The agency revenue increases were due to
agency acquisitions in December, 1999 and January, 2000. The Company purchased
two (2) independent insurance agencies in 2000. The increase for 1999 came
primarily from insurance agency activities as the Company purchased three (3)
independent insurance agencies during the year. The acquired agencies sell
personal and commercial property, casualty, life and health insurance products.
The Company believes that these new sources of revenues will strengthen the
long-term earnings over different economic cycles. The agency earnings for 1999
also include $174 thousand in commissions on annuity sales through an agency
that the Company started in 1998. In 1998 the Company began selling fixed
annuities, and generated approximately $107,000 in commission income. Included
in other noninterest income for 2000 is approximately $569 thousand and for 1999
was approximately $480 thousand in increases in cash surrender value of
insurance policies purchased by the Company in 1998. The Company recognized $1.4
million in losses in 2000 on equity securities that were marked to market at the
end of the year. In 1998 the Company also had increased gains on the sale of
investments as the interest rate environment provided certain opportunities to
realize gains on Treasury and Agency securities and redeploy the proceeds into
other investments.

Noninterest Expense



                                                   II-15

Noninterest
expense increased to $29.5 million in 2000 from $23.3 million in 1999 and $18.7
million in 1998.This increase was due mainly to the acquisition of Community
Federal in November, 1999. The 2000 expenses included an increase of $1 million
in goodwill amortization. The 1999 increase was due to the Companys
addition of an office building in Madison, the building of a new branch in
Ackerman, expansion of the operations center in Kosciusko and acquisitions of
Community Federal Bancorp and the three insurance agencies. The 1998 increases
were due primarily to expansion efforts in Clinton, Grenada and Southaven. The
addition of senior-level administrative positions, commercial lenders and
business development personnel in the more urban markets and the expansion of
technological and internet banking capabilities put pressure on noninterest
expenses in 1999 and 1998. However, management expects these additions to be
positive for the Company as it continues to grow and expand. The Company also
invested in additional mainframe computer equipment in 1998 and again in 2000 as
systems were evaluated and upgraded to allow for greater processing speed and
capacity.

Noninterest
expenses as a percentage of average assets were 2.9% in 2000 as compared to 3.1%
in 1999. The Companys efficiency ratio was 64.7% in 2000 as compared to
60.0% for 1999 and 56.5% for 1998.

Income Taxes

The
Companys effective tax rate was 17.7% in 2000, 26.9% in 1999, and 24.9% in
1998. The 2000 decrease was due to an $850 thousand tax refund resulting from
the filing of the final tax returns for Community Federal. The 1999 increase was
due to the decrease in earnings from tax-exempt sources as a percentage of total
revenues. The decrease in 1998 was due to increased investments in tax-exempt
municipal securities as well as the increase in cash surrender value of
insurance policies, which are not taxable.

Statement of Management Responsibility
Management
of First M&F Corporation and its subsidiary has prepared the summary
consolidated financial statements and other information in the annual report in
accordance with generally accepted accounting principles and is responsible for
its accuracy. The financial statements necessarily include amounts that are
based on managements best estimates and judgments.

In
meeting its responsibility, management relies on internal accounting and related
control systems. The internal control systems are designed to ensure that
transactions are properly authorized and recorded in the corporations
financial records and to safeguard the corporations assets from material
loss or misuse. Such assurance cannot be absolute because of inherent
limitations in any internal control system. The corporations bank
subsidiary maintains an internal audit staff which monitors compliance with the
corporations and subsidiarys systems of internal controls and
reports to management and to the Audit Committee of the Board of Directors.

         The Audit Committee of First M & F's Board of Directors consists
entirely of outside directors. The Audit Committee meets periodically with the internal auditor and the independent accountants to
discuss audit, internal control, financial reporting and related matters. Shearer, Taylor & Co., P.A. and
the internal audit staff have direct access to the Audit Committee.
Hugh S. Potts, Jr.                                                        Robert C. Thompson, III
Chairman and                                                              Executive Vice President and
Chief Executive Officer                                                   Chief Financial Officer
                                                   II-16

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Report of Independent Certified Public Accountants





The Board of Directors and Shareholders
First M & F Corporation
Kosciusko, MississippiWe have audited the accompanying consolidated statements of condition of First
M & F Corporation and subsidiary as of December 31, 2000 and 1999, and the
related consolidated statements of income, comprehensive income, stockholders'
equity and cash flows for each of the years in the three-year period ended
December 31, 2000.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of First
M & F Corporation and subsidiary as of December 31, 2000 and 1999, the results
of their consolidated operations and their consolidated cash flows for each of
the years in the three-year period ended December 31, 2000, in conformity with
generally accepted accounting principles.





Ridgeland, Mississippi
February 9, 2001II-17

FIRST M & F CORPORATION AND SUBSIDIARY
                                                      Consolidated Statements of Condition
                                                     December 31, 2000, 1999, and 1998
                                                      (In Thousands, Except Share Data)






               Assets                                                 2000                            1999
               ------                                                 ----                            ----

Cash and due from banks                                          $    31,484                   $    42,497
Interest bearing bank balances                                        26,525                        13,611
Federal funds sold                                                     2,400                         3,900
Securities available for sale, amortized
  cost of $271,806 and $306,717                                      272,711                       299,534

Loans, net of unearned income                                        632,317                       608,950
  Allowance for possible loan losses                                  (8,510)                       (7,629)
                                                                  -----------                   -----------
          Net loans                                                  623,807                       601,321
                                                                  -----------                   -----------
Bank premises and equipment                                           19,279                        18,781
Accrued interest receivable                                            8,800                         7,855
Other assets                                                          34,845                        35,538

                                                                 $ 1,019,851                   $ 1,023,037
                                                                 ===========                   ============

     Liabilities and Stockholders' Equity

Liabilities:
  Deposits                                                       $   788,359                   $   789,941
  Short-term borrowings                                               28,969                        12,298
  Other borrowings                                                    97,633                       121,251
  Accrued interest payable                                             3,990                         3,956
  Other liabilities                                                    3,957                         4,914
                                                                  -----------                   -----------
          Total liabilities                                          922,908                       932,360
                                                                  -----------                   -----------
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; 4,614,784 and 4,672,662
    shares issued                                                     23,074                        23,363
  Additional paid-in capital                                          33,876                        34,845
  Retained earnings                                                   39,422                        36,969
  Accumulated other comprehensive income - net
    unrealized gain (loss) on securities
    available for sale                                                   571                        (4,500)
                                                                  -----------                   -----------
          Net stockholders' equity                                    96,943                        90,677
                                                                  -----------                   -----------
                                                                 $ 1,019,851                   $ 1,023,037
                                                                 ===========                   ============







The accompanying notes are an integral part of these financial statements.
                               II-18

FIRST M & F CORPORATION AND SUBSIDIARY

                                                                          Consolidated Statements of Income
                                                                    Years Ended December 31, 2000, 1999, and 1998
                                                                          (In Thousands, Except Share Data)


                                                            2000                         1999                           1998

Interest income:
  Interest and fees on loans                            $ 54,897                      $ 40,113                      $ 36,528
  Taxable investments                                     14,316                        10,197                         8,582
  Tax-exempt investments                                   2,833                         3,020                         2,915
  Federal funds sold                                         645                           297                           871
  Interest bearing bank balances                             473                           238                           403
                                                        --------                       -------                      ---------
          Total interest income                           73,164                        53,865                        49,299
                                                        --------                       -------                      ---------
Interest expense:
  Deposits                                                33,849                        23,690                        23,803
  Short-term borrowings                                      250                           165                            22
  Other borrowings                                         7,128                         1,355                           566
                                                        --------                       -------                      ---------
          Total interest expense                          41,227                        25,210                        24,391
                                                        --------                       -------                      ---------
          Net interest income                             31,937                        28,655                        24,908
Provision for possible loan losses                         4,299                         2,384                         1,965
                                                        --------                       -------                      ---------
          Net interest income after
            provision for possible loan
            losses                                        27,638                        26,271                        22,943
                                                        --------                       -------                      ---------
Noninterest income:
  Service charges on deposit accounts                      6,530                         4,412                         3,789
  Mortgage banking income                                    474                           601                           746
  Agency commission income                                 2,974                         1,582                           107
  Credit insurance income                                    281                           385                           493
  Other fee income                                           629                           427                           341
  Gain (loss) on securities available for
    sale                                                  (1,381)                           26                           135
  Other income                                               973                           810                           601
                                                        --------                       -------                      ---------
          Total noninterest income                        10,480                         8,243                         6,212
                                                        --------                       -------                      ---------

Noninterest expenses:
  Salaries and employee benefits                          15,530                        12,690                         9,859
  Net occupancy expenses                                   1,747                         1,334                         1,183
  Equipment and data processing expenses                   3,350                         2,742                         2,154
  Other                                                    8,890                         6,577                         5,522
                                                        --------                       -------                      ---------
          Total noninterest expenses                      29,517                        23,343                        18,718
                                                        --------                       -------                      ---------
          Income before income taxes                       8,601                        11,171                        10,437

Income taxes                                               1,522                         3,005                         2,595
                                                        --------                       -------                      ---------
          Net income                                    $  7,079                      $  8,166                      $  7,842
                                                        ========                       =======                      =========
Earnings per share:
  Basic                                                   $ 1.53                        $ 2.16                        $ 2.16
  Diluted                                                   1.53                          2.15                          2.16
                                                        ========                       =======                      =========


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

                               II-19

FIRST M & F CORPORATION AND SUBSIDIARY

                                    Consolidated Statements of Comprehensive Income
                                     Years Ended December 31, 2000, 1999, and 1998
                                                     (In Thousands)






                                                   2000     1999        1998

Net income                                       $ 7,079    $ 8,166     $ 7,842

Other comprehensive income, net of
  tax:
  Change in unrealized gains (losses)
    on securities available for sale               4,205     (6,272)      1,298
  Reclassification adjustment for
    gains (losses) on securities
    available for sale included in
    net income                                       866        (17)        (85)
                                                  ------     ------       -----
          Other comprehensive income               5,071     (6,289)      1,213
                                                  ------     ------       -----
          Total comprehensive income             $12,150    $ 1,877     $ 9,055
                                                  ======      =====       =====




















The accompanying notes are an integral part of these financial statements.
                               II-20

FIRST M & F CORPORATION AND SUBSIDIARY

                                                       Consolidated Statements of Stockholders' Equity
                                                        Years Ended December 31, 2000, 1999, and 1998
                                                              (In Thousands, Except Share Data)

                                                     Additional
                                          Common      Paid-in       Retained      Unrealized
                                          Stock       Capital       Earnings      Gain (Loss)        Net

January 1, 1998                         $ 18,189      $ 10,741      $ 28,140        $   576       $ 57,646

Net income                                     -             -         7,842              -          7,842
Cash dividends ($0.96 per share)               -             -        (3,259)             -         (3,259)
1,909 common shares issued to acquire
  minority interest of merged bank            10            59             -              -             69
Net change in unrealized gain (loss)           -             -             -          1,213          1,213
                                          ------        ------        ------          -----         ------
December 31, 1998                         18,199        10,800        32,723          1,789         63,511
                                          ------        ------        ------          -----         ------
Net income                                     -             -         8,166              -          8,166
Cash dividends ($1.00 per share)               -             -        (3,920)             -         (3,920)
1,306,535 common shares issued in
  acquisitions                             6,532        31,191             -              -         37,723
273,651 common shares repurchased         (1,368)       (7,146)            -              -         (8,514)
Net change in unrealized gain (loss)           -             -             -         (6,289)        (6,289)
                                          ------        ------        ------          -----         ------
December 31, 1999                         23,363        34,845        36,969         (4,500)        90,677
                                          ------        ------        ------          -----         ------
Net income                                     -             -         7,079              -          7,079
Cash dividends ($1.00 per share)               -             -        (4,626)             -         (4,626)
35,359 common shares issued in
  acquisition                                177           774             -              -            951
93,237 common shares repurchased            (466)       (1,743)            -              -         (2,209)
Net change in unrealized gain (loss)           -             -             -          5,071          5,071

December 31, 2000                       $ 23,074      $ 33,876      $ 39,422        $   571       $ 96,943
                                          ======        ======        ======          =====         ======




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

                               II-21

FIRST M & F CORPORATION AND SUBSIDIARY

                                                 Consolidated Statements of Cash Flows
                                             Years Ended December 31, 2000, 1999, and 1998
                                                             (In Thousands)


                                                          2000                          1999                           1998

Cash flows from operating activities:
  Net income                                               7,079                      $  8,166                    $   7,842
  Adjustments to reconcile net income
    to net cash provided by operating
    activities:
    Depreciation and amortization                          3,189                         1,736                        1,548
    Provision for possible loan losses                     4,299                         2,384                        1,965
    Federal Home Loan Bank stock
      dividends                                             (591)                         (204)                        (104)
    Net investment amortization                              207                           525                          731
    Gain (loss) on investments                             1,381                           (26)                        (135)
    Deferred income taxes                                   (530)                         (181)                        (293)
    (Increase) decrease in:
      Accrued interest receivable                           (945)                          (79)                        (634)
      Cash surrender value of bank
        owned life insurance                                (569)                         (480)                        (402)
      Income taxes receivable                              1,129                           (86)                         (31)
    Increase (decrease) in:
      Accrued interest payable                                34                           (80)                         (77)
      Income taxes payable                                     -                             -                         (410)
    Other, net                                              (561)                         (202)                        (169)
                                                          ------                       -------                       -------
          Net cash provided by operating
            activities                                    14,122                        11,473                        9,831
                                                          ------                       -------                       -------
Cash flows from investing activities:
  Purchases of securities available for
    sale                                                 (10,212)                      (62,049)                    (115,074)
  Sales of securities available for sale                   8,111                        46,544                       25,975
  Maturities of securities available
    for sale                                              36,014                        55,531                       61,060
  Maturities of investment securities                          -                             -                        5,344
  Net (increase) decrease in:
    Interest bearing bank balances                       (12,914)                       (7,125)                       4,316
    Federal funds sold                                     1,500                        14,950                      (15,350)
    Loans                                                (28,716)                      (56,824)                     (41,366)
    Bank premises and equipment                           (2,319)                       (4,160)                      (2,829)
  Investment in bank owned life insurance                      -                             -                      (10,000)
  Proceeds from sales of other real estate
    and other repossessed assets                           1,886                         1,823                        1,190
  Investment in joint venture                               (260)                            -                            -
  Net cash used for current and prior
    year acquisitions                                     (2,691)                      (24,740)                           -
                                                          ------                       -------                       -------
          Net cash used in investing
            activities                                    (9,601)                      (36,050)                     (86,734)
                                                          ------                       -------                       -------



                                                                                                  (Continued)

                               II-22

FIRST M & F CORPORATION AND SUBSIDIARY

                                                              Consolidated Statements of Cash Flows
                                                               Years Ended December 31, 2000, 1999, and 1998
                                                                              (In Thousands)





                                                       2000                           1999                       1998

Cash flows from financing activities:
  Net increase (decrease) in:
    Non-interest bearing deposits                    $    938                      $  8,886                    $  12,886
    Money market, NOW and savings
      deposits                                        (23,979)                      (16,960)                      71,655
    Certificates of deposit                            21,459                        27,847                       (2,149)
    Short-term borrowings                              16,671                        11,469                          829
    Other borrowings                                  (23,788)                       25,459                       (7,847)
  Cash dividends                                       (4,626)                       (3,920)                      (3,259)
  Common shares repurchased                            (2,209)                       (8,514)                           -
                                                      -------                        ------                     ---------
          Net cash provided by (used in)
            financing activities                      (15,534)                       44,267                       72,115

          Net increase (decrease) in cash
            and due from banks                        (11,013)                       19,690                       (4,788)

Cash and due from banks at January 1                   42,497                        22,807                       27,595
                                                      -------                        ------                     ---------
Cash and due from banks at December 31               $ 31,484                      $ 42,497                    $  22,807
                                                      =======                       ======                     =========


















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

                               II-23

FIRST M & F CORPORATION AND SUBSIDIARY
                                      Notes to Consolidated Financial Statements
                                        (In Thousands, Except Share Data)




Note 1:  Summary of Significant Accounting and Reporting Policies
-----------------------------------------------------------------
   The accounting and reporting policies of First M & F Corporation (the Company)
        which materially affect the determination of financial position and results
        of operations conform to generally accepted accounting principles and
        general practices within the banking industry.  A summary of these
        significant accounting and reporting policies is presented below.

  Organization and Operations
  ---------------------------

  The Company is a one-bank holding company that owns 100% of the common stock
        of Merchants and Farmers Bank (the Bank) of Kosciusko, Mississippi.  The
        Bank is a commercial bank and provides a full range of banking services
        through its offices in central Mississippi.  As a state chartered commercial
        bank, the Bank is subject to the regulations of certain Federal and state
        agencies and undergoes periodic examinations by those regulatory
        authorities.

  Principles of Consolidation
  ---------------------------

  The consolidated financial statements of First M & F Corporation include the
        accounts of the Company and its wholly owned subsidiary, Merchants and
        Farmers Bank, and the accounts of the Bank's wholly owned finance
        subsidiary, credit insurance subsidiary, general insurance agency
        subsidiaries and real estate subsidiary.  All significant intercompany
        balances and transactions have been eliminated in consolidation.

    Use of Estimates
    ----------------

  The preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that affect the reported amounts of assets and liabilities at the date of
        the financial statements and the reported amounts revenues and expenses
        during the reporting period.  Actual results could differ from those
        estimates.

    Comprehensive Income
    --------------------

  Comprehensive income includes net income reported in the statements of income
        and changes in unrealized gain (loss) on securities available for sale
        reported as a component of stockholders' equity.  Unrealized gain (loss) on
        securities available for sale, net of deferred income taxes, is the only
        component of accumulated comprehensive income for the Company.





                                                                             (Continued)
                                                                             -----------
                                                                                                                    (Continued)
                               II-24

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 1:  (Continued)

  Investments
  -----------

  Securities, which are available to be sold prior to maturity are classified as
        securities available for sale and are recorded at market value.  Unrealized
        holding gains and losses are reported net of deferred income taxes as a
        separate component of stockholders' equity.  Investment securities
        (securities held to maturity) are those securities which the Company has the
        ability and intent to hold until maturity and are recorded at amortized
        cost.

  Premiums and discounts are amortized or accreted over the life of the related
        security using the interest method.  Interest income is recognized when
        earned.  Realized gains and losses on securities available for sale are
        included in earnings and are determined using the specific amortized cost of
        the securities sold.

  Loans
  -----

  Loans are stated at the principal amount outstanding, net of unearned income
        and an allowance for possible loan losses.  Unearned income on installment
        loans is recognized as income principally using the interest method.
        Interest on all other loans is calculated by using the simple interest
        method on daily balances of the principal amount outstanding.

  The Bank discontinues the accrual of interest on loans and recognizes income
        only as received when, in the judgment of management, the collection of
        interest, but not necessarily principal, is doubtful.  Nonaccrual loans, and
        the related effect on income, are not material.

  A loan is considered impaired when, based on current information and events,
        it is probable that the Bank will be unable to collect all amounts due
        according to the contractual terms of the loan agreement.  The Bank measures
        impaired and restructured loans at the present value of expected future cash
        flows, discounted at the loan's effective interest rate, or the fair value
        of collateral if the loan is collateral dependent.  The balance of impaired
        loans was not material at December 31, 2000 and 1999.

  Allowance for Possible Loan Losses
  ----------------------------------

  The Bank provides for loan losses through an allowance for possible loan losses
        established through a provision charged to expense.   Accordingly, all loan
        losses are charged to the allowance for possible loan losses and all
        recoveries are credited to it.  The allowance for possible loan losses is
        based on the evaluation of the collectibility of loans, past loan loss
        experience and other factors which, in management's judgment, deserve
        consideration in estimating possible loan losses.  Such other factors
        considered by management include changes in the nature and volume of the
        loan portfolio, current economic conditions that may affect a borrower's
        ability to pay, review of specific problem loans, and the relationship of
        the allowance to outstanding loans.

                                                                                                                         (Continued)
                                                                             (Continued)
                                                                             -----------
                               II-25

FIRST M & F CORPORATION AND SUBSIDIARY

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



Note 1:  (Continued)
--------------------

  Bank Premises and Equipment
  ---------------------------

  Bank premises and equipment are stated at cost less accumulated depreciation
        and amortization.  Provisions for depreciation and amortization are computed
        principally using the straight-line method and charged to operating expenses
        over the estimated useful lives of the assets.  Costs of major additions and
        improvements are capitalized.  Expenditures for maintenance and repairs are
        charged to expense as incurred.

  Other Real Estate
  -----------------

  Other real estate acquired through partial or total satisfaction of loans is
        carried at the lower of market value or the recorded loan balance at date of
        acquisition (foreclosure).  Any loss incurred at the date of acquisition is
        charged to the allowance for possible loan losses.  Gains or losses incurred
        subsequent to the date of acquisition are reported in current operations.
        Related operating income and expenses are reported in current operations.

    Investment in Joint Venture
    ---------------------------

  The Bank's 51% investment in The Merchants Financial Services Group, L.L.C.
        (Merchants) is recorded using the equity method of accounting.  Merchants
        operates as a partnership for income tax purposes and was formed in 2000 to
        provide accounts receivable financing to business customers.

  Intangible Assets
  -----------------

  The Company's costs in excess of net bank assets acquired are being amortized
        on a straight-line basis over forty years.  Other intangible assets,
        consisting of premiums paid on purchased deposits and goodwill, are being
        amortized on a straight-line basis over periods ranging from 5 to 15 years.

  Income Taxes
  ------------

  The Company, the Bank and the Bank's finance, general insurance agency and real
        estate subsidiaries file consolidated Federal and state income tax returns.
        Deferred income taxes reflect the net tax effect of temporary differences
        between the carrying amounts of assets and liabilities for financial
        reporting and income tax purposes.  Deferred income tax expense (benefit) is
        the result of changes in deferred tax assets and liabilities between
        reporting periods.





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


                               II-26

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 1:  (Continued)
--------------------

  Statements of Cash Flows
  ------------------------

  In the accompanying  consolidated  statements of cash flows, the Company and
        subsidiary have defined cash equivalents as those amounts included in the
        statement of condition caption "Cash and Due from Banks."  The following
        supplemental disclosures are made related to the consolidated statements of
        cash flows:

                                            2000        1999         1998

      Interest paid                      $ 41,193    $ 25,291     $ 24,468
      Federal and state income
        taxes paid                          3,466       3,272        3,346
          Federal and state income
            tax refunds                     2,543           -            -
      Other real estate and
        repossessions acquired in
        noncash foreclosures                1,931       1,890          932
      Common stock used in
        acquisitions                          951      37,723            -
                                           ======      ======        =====

    Reclassifications
    -----------------

  Certain reclassifications  have been  made to  the 1999 and 1998 financial
        statements to be consistent with 2000 presentation.


Note 2:  Acquisitions
---------------------

  The Company acquired Community Federal Bancorp, Inc. (Community) of Tupelo,
        Mississippi, on November 19, 1999, for 1,217,568 shares of the Company's
        common stock and $37,750 cash.  At the time of this acquisition, Community's
        subsidiary, Community Federal Bank, was merged with the Bank.  The Company
        acquired consolidated assets of $299,176 and assumed consolidated
        liabilities of $238,230 in this transaction which was accounted for using
        the purchase method of accounting.  The acquisition of Community was
        included in the consolidated financial statements from the date of
        acquisition.

  On December 31, 1998,  First Bolivar Corporation  (Bolivar) of Cleveland,
        Mississippi was merged with the Company and Bolivar's banking subsidiary was
        merged with the Bank.  The stockholders of Bolivar received 243,214 shares
        of the Company's common stock in exchange for all of the issued and
        outstanding common shares of Bolivar.  All financial data of the Company was
        restated to reflect the business combination using the pooling of interests
        method of accounting.



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

                                                                                                                       (Continued)
                               II-27

FIRST M & F CORPORATION AND SUBSIDIARY

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



Note 2:  (Continued)
--------------------

  The Company has acquired various general insurance agencies in Mississippi in
        transactions that were immaterial to the Company.  The following table
        provides information concerning these insurance agency acquisitions
        completed during the three years ended December 31, 2000:

                                                           Common     Method
                                                           Shares       of
           Acquisition            Location       Date      Issued   Accounting

    Tyler, King & Ryder, Inc.     Kosciusko    09/17/99    69,997    Pooling
    Reynolds Insurance and
      Real Estate Agency, Inc.    Starkville   12/31/99    18,970    Purchase
    Insurance Services, Inc.      Tupelo       01/14/00    35,359    Purchase
    House of Insurance, Inc.      Tupelo       04/01/00         -    Purchase


Note 3:  Investments
--------------------

  The following is a summary of the amortized cost and market value (book value)
        of securities available for sale at December 31, 2000 and 1999:

                                  Amortized     Gross Unrealized         Market
                                                ----------------
                                    Cost         Gain       Loss         Value
                                  ---------      ----       ----         -----

December 31, 2000:
  U. S. Treasury securities      $   3,018     $     5    $     -     $   3,023
  U. S. Government agencies
    and corporations                32,058         190        169        32,079
  Mortgage-backed investments      151,853         958        937       151,874
  Obligations of states and
    political subdivisions          61,347         843        149        62,041
  Other                              2,991          45         12         3,024
  Equity securities                 20,539         131          -        20,670
                                  --------       -----      -----       -------
                                 $ 271,806     $ 2,172    $ 1,267     $ 272,711
                                  ========       =====      =====       =======














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

                                                                                                                     (Continued)
                               II-28

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 3: (Continued)
------------------

                                  Amortized     Gross Unrealized         Market
                                                ----------------
                                    Cost         Gain        Loss        Value
                                  ---------      ----        ----        -----

December 31, 1999:
  U. S. Treasury securities      $   9,037       $  12    $    44      $   9,005
  U. S. Government agencies
    and corporations                27,541         104        747         26,898
  Mortgage-backed investments      176,211         263      4,089        172,385
  Obligations of states and
    political subdivisions          63,746         394      1,502         62,638
  Other                              2,966           -         50          2,916
  Equity securities                 27,216         105      1,629         25,692
                                    ------         ---      -----         ------

                                 $ 306,717       $ 878    $ 8,061      $ 299,534
                                   =======         ===      =====        =======


  The amortized cost and market values of debt securities available for sale at
        December 31, 2000, by contractual maturity, are shown below.  Actual
        maturities may differ from contractual maturities because borrowers may have
        the right to call or prepay certain obligations with, or without, call or
        prepayment penalties.

                                                      Amortized        Market
                                                        Cost           Value
                                                      ---------        -----


  One year or less                                    $  32,570       $  32,585
  After one through five years                           40,402          40,832
  After five through ten years                           26,097          26,429
  After ten years                                           345             321
                                                        -------         -------
                                                         99,414         100,167
  Mortgage-backed investments                           151,853         151,874

                                                      $ 251,267       $ 252,041
                                                        =======         =======

  The following is a summary of the amortized cost and market value of securities
        available for sale which were pledged to secure public deposits, short-term
        borrowings and for other purposes required or permitted by law.

                                                 Amortized              Market
                                                   Cost                 Value
                                                 ---------              ------
    December 31, 2000                            $ 158,974            $ 158,933
                                                   =======              =======

    December 31, 1999                            $ 147,729            $ 143,504
                                                   =======              =======





                                                                             (Continued)
                                                                             -----------
                               II-29

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 3:  (Continued)
--------------------

  The following is a summary of gains and losses on securities available for
        sale:
                                          2000         1999           1998
                                          ----         ----           ----

         Gross realized gains          $     54        $ 62           $ 165
         Gross realized losses              (55)        (36)            (30)
                                          -----          --             ----

                                             (1)         26             135

         Writedowns                      (1,380)          -               -
                                          -----          --             ----
                                       $ (1,381)       $ 26           $ 135


  The Bank entered into a hedge collar transaction related to FNMA stock and
        FHLMC stock in 2000.  This stock was written down to the collar value at
        December 31, 2000.


Note 4:  Loans
--------------
  The Bank's loan portfolio includes commercial, consumer, agribusiness and
        residential loans throughout the State of Mississippi, but primarily in its
        market area in Central Mississippi.  The following is a summary of the
        Bank's loan  portfolio,  net  of unearned  income of  $3,945 and  $6,419 at
        December 31, 2000 and 1999:
                                            2000              1999

      Commercial, financial and
        agricultural                    $  75,993         $  68,550
      Residential real estate             249,745           250,875
      Non-residential real estate         202,619           172,982
      Consumer loans                      103,960           116,543
                                          -------           -------
                                        $ 632,317         $ 608,950
                                          =======           =======

  The Bank has made, and expects in the future to continue to make, in the
        ordinary course of business, loans to directors and executive officers of
        the Company and the Bank and to affiliates of these directors and officers.
        In the opinion of management, these transactions were made on substantially
        the same terms as those prevailing at the time for comparable transactions
        with other persons and did not involve more than normal risk of
        collectibility or contain any other unfavorable features.  A summary of such
        outstanding loans follows:

                                                         2000          1999
                                                         ----          ----

      Loans outstanding at January 1                   $ 2,501      $ 2,769
      New loans                                          1,536        1,451
      Repayments                                        (1,782)      (1,719)
      ----------                                         -----        -----

      Loans outstanding at December 31                 $ 2,255      $ 2,501
                                                         =====        =====

                                                                             (Continued)
                                                                             -----------
                               II-30

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 5:  Allowance for Possible Loan Losses
-------------------------------------------
  Transactions in the allowance for possible loan losses are summarized as
        follows:

                                                2000         1999         1998
                                                ----         ----         ----

    Balance at January 1                        $ 7,629     $ 5,835     $ 5,315

    Loans charged-off                            (4,226)     (2,093)     (2,019)
    Recoveries                                      808         637         574
                                                  -----       -----       -----
          Net charge-offs                        (3,418)     (1,456)     (1,445)
                                                  -----       -----       -----
    Provision for possible loan
         losses                                   4,299       2,384       1,965

    Allowance from acquisition                     --           866        --
                                                  -----       -----       -----
    Balance at December 31                      $ 8,510     $ 7,629     $ 5,835
                                                  =====       =====       =====

Note 6:  Bank Premises and Equipment
------------------------------------
  The following is a summary of bank premises and equipment at December 31, 2000
        and 1999:

                                                          2000            1999

Land                                                     $ 4,786         $ 4,654
Buildings                                                 15,116          15,523
Furniture, fixtures and equipment                         13,291          11,674
Leasehold improvements                                       396             396
Construction in progress                                   1,341              49
                                                          ------          ------
                                                          34,930          32,296
Less accumulated depreciation and
  amortization                                            15,651          13,515
                                                          ------          ------
                                                         $19,279         $18,781
                                                          ======          ======

  Amounts charged to operating expenses for depreciation and amortization of bank
        premises and equipment were $1,821 in 2000, $1,380 in 1999 and $1,311 in
        1998.  The estimated costs to complete construction in progress were $2,421
        at December 31, 2000.



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





                               II-31

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 7:  Other Assets
---------------------
  The following is a summary of other assets at December 31, 2000 and 1999:

                                                           2000            1999
                                                           ----            ----

Intangible assets, less accumulated
  amortization of $4,677 and $3,309                       $18,311        $17,966
Cash surrender value of bank owned
  life insurance                                           11,451         10,882
Other real estate, net                                        965          1,150
Deferred income tax                                          --            1,189
Other                                                       4,118          4,351
                                                           ------         ------
                                                          $34,845        $35,538
                                                           ======         ======

  The following is a summary  of intangible assets,  net of accumulated
        amortization:
                                                        Bank and
                                          Company     Subsidiaries         Total

January 1, 1998                        $  2,812        $    622        $  3,434
Acquisitions                                 44            --                44
Amortization                               (124)           (113)           (237)
                                          -----          ------          ------
December 31, 1998                         2,732             509           3,241
                                          -----          ------          ------
Acquisitions                               --            15,081          15,081
Amortization                               (151)           (205)           (356)
                                          -----          ------          ------
December 31, 1999                         2,581          15,385          17,966
                                          -----          ------          ------
Acquisitions                               --             1,713           1,713
Amortization                               (141)         (1,227)         (1,368)
                                          -----          ------          ------

December 31, 2000                      $  2,440        $ 15,871        $ 18,311
                                          =====          ======          ======

  The Bank's investment in the Merchants joint venture was $499 at December 31,
        2000.  Merchants had loans receivable of $6,610 and a note payable to the
        Bank of $5,718 at December 31, 2000.  The Bank recognized income of $239 on
        this investment in 2000.







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



                               II-32

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 8:  Deposits
-----------------
    The following is a summary of deposits at December 31, 2000 and 1999:

                                              2000         1999

Non-interest bearing                        $ 88,316   $ 87,378

Interest bearing:
  Money market, NOW and savings
    accounts                                 261,354    285,333
  Certificates of deposit of $100,000
    or more                                  155,306    130,243
  Other certificates of deposit              283,383    286,987
                                             -------    -------
          Total interest bearing             700,043    702,563
                                             -------    -------
          Total deposits                    $788,359   $789,941
                                             =======    =======

Interest expense on certificates of deposit of $100,000 or more amounted to
        $8,472 in 2000, $4,132 in 1999 and $3,408 in 1998.

  At December 31, 2000, the scheduled maturities of certificates of deposit are
        as follows:

      2001                                                   $ 289,227
      2002                                                     119,997
      2003                                                      21,482
      2004                                                       2,247
      2005                                                       5,697
      After 2005                                                    39
                                                               -------
                                                             $ 438,689
                                                               =======

Note 9:  Short-Term Borrowings

    The following is a summary of information related to short-term borrowings:

                                                                  Weighted
                              Balance Outstanding              Average Rate
                        --------------------------------     ----------------
                         Maximum     Average       At        During     At
                        Month End     Daily     Year End      Year   Year End
                        ---------     -----     --------      ----   --------

2000:
  Federal funds
    purchased           $ 25,000     $   861    $ 25,000      6.91%    6.80%
  Securities sold
    under agreements
    to repurchase          6,626       3,080       3,969      6.19%    6.12%
                          ------       -----      ------      -----    -----

                        $ 31,626     $ 3,941    $ 28,969
                          ======       =====      ======


                                                                             (Continued)
                                                                             -----------
                                                                                                                                  (Continued)
                               II-33

FIRST M & F CORPORATION AND SUBSIDIARY

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



Note 9:  (Continued)
-------------------
                                                                  Weighted
                              Balance Outstanding              Average Rate
                       ---------------------------------     ----------------
                         Maximum     Average       At        During     At
                        Month End     Daily     Year End      Year   Year End
                        ---------     -----     --------      ----   --------

1999:
  Federal funds
    purchased           $ 13,200     $ 2,242    $ 10,000      5.08%    5.10%
  Securities sold
    under agreements
    to repurchase          7,896       1,064       2,298      4.80%    5.61%
                          ------       -----      ------      -----    -----

                        $ 21,096     $ 3,306    $ 12,298
                          ======       =====      ======
1998:
  Federal funds
    purchased            $     -       $  82      $    -      5.50%       -%
  Securities sold
    under agreements
    to repurchase          2,384         452         829      3.88%    4.07%
                           -----         ---         ---      -----    -----

                         $ 2,384       $ 534       $ 829
                         =======       =====       =====


  Federal  funds purchased  represent primarily overnight borrowings through
        relationships with correspondent banks.  Securities sold under agreements to
        repurchase generally have maturities of less than 30 days and are secured by
        U. S. Treasury securities and U. S. Government agency securities.


Note 10:  Other Borrowings

    The following is a summary of other borrowings at December 31, 2000 and 1999:

                                                         2000                  1999
                                                         ----                  ----

Company's line of credit in the amount
  of $10,000,000, renewable annually;
  secured by approximately 29% of the
  Bank's common stock; interest payable
  quarterly at the lender's base rate                 $  9,592               $  9,342

Bank's advances from Federal Home Loan
  Bank of Dallas                                        87,800                111,739

Other borrowings by Insurance Agencies                     241                    170
                                                        ------               ---------
                                                      $ 97,633               $121,251
                                                        ======                =======



                                                                                                                                  (Continued)
                                                                             (Continued)
                                                                             -----------
                                                                                                                                  (Continued)
                               II-34

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 10:  (Continued)
---------------------
  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.  The following is a summary of these advances, exclusive of
        purchase accounting adjustments, at December 31, 2000 and 1999:

                                                   2000                         1999
                                                   ----                         ----

Single payment advances maturing
  within 12 months at year end:
  Balance                                      $    52,411               $    74,020
  Range of rates                                 5.49%-8.16%               5.36%-5.98%

Single payment advances maturing
  after 12 months:
  Balance                                      $    20,278               $    20,324
  Range of rates                                 5.16%-8.48%               4.88%-8.16%
  Range of maturities                             2002-2010                 2001-2010

                                                   2000                      1999
                                                   ----                      ----

Monthly payment advances:
  Balance                                      $    16,384               $    18,884
  Monthly payment amount                               295                       295
  Range of rates                                  4.65%-7.83%               4.65%-7.83%
  Range of maturities                              2002-2013                 2002-2013


  Scheduled principal payments on FHLB advances, exclusive of purchase accounting
        adjustments at December 31, 2000, are as follows:

      2001                                      $ 55,070
      2002                                         7,830
      2003                                         2,697
      2004                                         1,208
      2005                                         1,012
      After 2005                                  21,256
                                                  ------
                                                $ 89,073
                                                  ======




                                                                             (Continued)
                                                                             -----------
                               II-35

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 11:  Employee Benefit Plans
--------------------------------
  The Bank has a defined benefit pension plan covering substantially all full
        time employees of the Bank and subsidiaries.  Benefits under this plan are
        based on years of service and average annual compensation for a five year
        period.  The Bank's funding policy for the plan is to contribute annually in
        an amount not exceeding the allowable Federal income tax deduction.

    Net pension cost (benefit) included the following components:

                                                 2000                 1999                 1998

Service cost                                    $ 215                $ 184                $ 173
Interest cost                                     458                  264                  238
Actual return on plan assets                     (218)                (487)                 (73)
Amortization of transition
  asset                                           (44)                 (35)                 (35)
    Amortization of prior service
      cost                                        (37)                --                   --
Amortization of (gain) loss                         4                   36                   21
Unrecognized gain (loss) on
  assets                                         (264)                 244                 (165)
                                                  ---                  ---                  ---
    Net pension cost                            $ 114                $ 206                $ 159
                                                  ===                  ===                  ===

  The following is a summary of the plan's funded status and amounts recorded in
        the consolidated statements of condition:

                                                               2000                        1999
                                                               ----                        ----

Change in benefit obligation:
  Projected benefit obligation
    at beginning of year                                    $ 6,252                     $ 3,580
  Service cost                                                  215                         184
  Interest cost                                                 458                         264
  Actuarial (gain) loss                                          35                          85
  Benefit payments                                             (307)                       (143)
  Acquisition                                                  --                         2,282
  Projected benefit obligation                                -----                       -----
    at end of year                                            6,653                       6,252
                                                              -----                       -----
Change in plan assets:
  Fair value of plan assets
    at beginning of year                                      6,138                       3,093
  Actual return on plan assets                                  218                         487
  Employer contributions                                        325                          60
  Benefit payments                                             (307)                       (143)
  Expenses                                                      (55)                        (38)
  Acquisition                                                  --                         2,679
  Fair value of plan assets at                                -----                       -----
    end of year                                               6,319                       6,138
                                                              -----                       -----

                                                                             (Continued)
                                                                             -----------
                                                                                                                                (Continued)
                               II-36

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 11:  (Continued)
---------------------
                                                      2000                      1999
                                                      ----                      ----

Funded status                                      $  (334)                    $(114)
Unrecognized net actuarial
  loss                                               1,043                       678
Unrecognized transition asset                         (117)                     (160)
Unrecognized prior service cost                       (404)                     (441)
                                                     -----                       ---
Prepaid (accrued) pension cost                     $   188                     $ (37)
                                                     =====                      ====

    The following is a summary of weighted average assumptions:

                                           2000                  1999                  1998
                                           ----                  ----                  ----

Discount rate                              8.0%                  7.5%                  7.5%
Expected return on plan
  assets                                   8.0%                  8.0%                  8.0%
Rate of compensation
  increase                                 4.0%                  4.0%                  4.0%
                                           ===                   ===                   ===

  The Bank has a profit and savings plan, which includes features such as an
        Employee Stock Option Plan and a 401(k) plan which provides for certain
        salary deferrals, covering substantially all full time employees of the Bank
        and subsidiaries.  The Bank matches employee 401(k) contributions equal to
        50% of an employee's first 6% of salary deferral.  Total matching
        contributions accrued for this plan were $116 in 2000, $125 in 1999 and $88
        in 1998.  Additional contributions to the plan are at the discretion of the
        Board of Directors.  Discretionary contributions accrued for this plan were
        $25 in 2000, $25 in 1999 and $25 in 1998.

  At December 31, 2000, the profit and savings plan owned 101,200 shares of the
        Company's common stock and the pension plan owned 9,318 shares of the
        Company's common stock.


Note 12:  Stock Option Plan
---------------------------
  The Company implemented a stockholder approved Stock Option Plan, effective
        January 1, 1999, authorizing the grant of incentive stock options (ISO's) to
        key employees and nonstatutory stock options (NSO's) to members of the
        Board.  The purpose of the plan is to provide incentives to key officers and
        directors by permitting them to purchase stock in the Company under the
        provisions of this plan.  The maximum number of shares of stock that may be
        optioned or sold under the plan is 500,000 shares.





                                                                                                                                  (Continued)
                                                                             (Continued)
                                                                             -----------
                               II-37

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 12: (Continued)
--------------------
  Under the provisions of the plan, the Company and the participating employees
        and directors will execute agreements, upon the grant of options, providing
        each participant with an option to purchase stock within ten years of the
        date of the grant.  The Company granted 2,500 NSO's in 2000 and 50,000 ISO's
        and 35,000 NSO's in 1999.

  Under the terms of the agreement to acquire Community, as approved by the
        Company's shareholders, Community's Stock Option Plan continued after the
        acquisition.  The Community Stock Option Plan was amended to provide that
        each option to purchase Community shares was converted into options (185,013
        ISO's and 79,289 NSO's) to purchase Company shares.  Each option granted
        under the Community plan became fully vested at the acquisition date.

    The following is a summary of stock option activity:

                                                                         Weighted
                                                                          Average
                                                Outstanding              Exercise
                                                  Options                   Price
                                                -----------             ----------
January 1, 1999                                      --                 $ --
Options granted                                    85,000                   32.86
Acquisition                                       264,302                   26.98
                                                  -------                   -----
December 31, 1999                                 349,302                   28.41
                                                  -------                   -----
Options granted                                     2,500                   20.13
Options exercised                                    --                   --
Options expired                                      --                   --
                                                  -------                   -----
December 31, 2000                                 351,802               $   28.36
                                                  =======                   =====

    The following is a summary of stock options outstanding at December 31, 2000:

                                  Weighted     Weighted                  Weighted
                                   Average     Average                   Average
                                  Remaining    Exercise                  Exercise
                                 Contractual    Price-                    Price-
      Exercise        Options       Life        Options      Options      Options
     Price Range    Outstanding    (Years)    Outstanding  Exercisable  Exercisable
     -----------    -----------    -------    -----------  -----------  -----------

 $ 20.13 - $ 20.13      2,500       9.33        $ 20.13            -      $     -
   25.39 -   28.68    264,302       6.56          26.98      264,302        26.98
   31.75 -   35.75     85,000       8.16          32.86            -            -
   =======   =====    =======       ====          =====      =======       ======






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

                               II-38

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 12:  (Continued)
---------------------
  The Company accounts for stock plans under APB Opinion No. 25, "Accounting for
        Stock Issued to Employees", under which no compensation cost has been
        recognized.  Had compensation cost for the Company's stock option plan been
        determined based upon the fair value at the grant date for awards under the
        methodology prescribed under SFAS No. 123, "Accounting for Stock-Based
        Compensation, the Company's 2000 and 1999 net income and earnings per share
        would have been reduced as shown in the table below.  The fair value of each
        option grant is estimated on the date of grant using the Black-Scholes
        option-pricing model with the following assumptions in 2000 and 1999:
        expected dividend yield of 5.00% and 3.33%; expected volatility of 24.11%
        and 21.63%; risk-free interest rate of 6.50%; and an expected life of 8.09
        years.

                                                     2000                      1999
                                                     ----                      ----

Net income, as reported                           $   7,079               $   8,166
Net income, proforma                                  6,887                   7,943
                                                      =====                   =====
Earnings per share, as reported:
  Basic                                        $       1.49            $       2.16
  Diluted                                              1.49                    2.15
                                                       ====                    ====
Earnings per share, proforma:
  Basic                                        $       1.49            $       2.10
  Diluted                                              1.49                    2.09
                                                       ====                    ====


Note 13:  Other Expenses

    Significant components of other expenses are summarized as follows:

                                          2000                 1999                 1998
                                          ----                 ----                 ----

Advertising and promotion               $  768               $  710               $  462
Communications                             822                  789                  603
Postage and carriers                       774                  713                  597
Professional fees                        1,075                  531                  528
Stationery and supplies                    776                  728                  564
    Amortization                         1,368                  356                  237
Other                                    3,307                2,750                2,531
                                         -----                -----                -----

                                        $8,890               $6,577               $5,522
                                         =====                =====                =====



                                                                            (Continued)
                                                                             -----------
                               II-39

FIRST M & F CORPORATION AND SUBSIDIARY

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


Note 14:  Income Taxes
----------------------
  The components of income tax expense (benefit) are as follows:

                                                 Federal      State       Total
                                                 -------      -----       -----


    2000:
      Current                                    $ 1,878      $ 174      $ 2,052
      Deferred                                      (458)       (72)        (530)
                                                   ------       ----       ------


              Total                              $ 1,420      $ 102      $ 1,522
                                                  =======       ===        =====

    1999:
      Current                                    $ 2,838      $ 348      $ 3,186
      Deferred                                      (143)       (38)        (181)
                                                  -------       ---         -----
              Total                              $ 2,695      $ 310      $ 3,005
                                                  ======        ===        =====

    1998:
      Current                                    $ 2,637      $ 251      $ 2,888
      Deferred                                      (260)       (33)        (293)
                                                  -------                   -----
              Total                              $ 2,377      $ 218      $ 2,595
                                                  ======        ===        =====

The differences between actual income tax expense and expected income tax
        expense are summarized as follows:

                                                 2000          1999        1998

Amount computed using the
  Federal statutory rates on
  income before income taxes                   $ 2,924      $ 3,798      $ 3,549
Increase (decrease) resulting
  from:
  Tax exempt income, net of
    disallowed interest
    deduction                                     (886)        (992)        (975)
  State income tax expense,
    net of Federal effect                           67          205          144
  Increase in cash value                          (193)        (155)        (137)
  Nondeductible amortization                       427           76           42
      Prior year amended returns                  (847)        --           --
  Other, net                                        30           73          (28)
                                                   ---        -----        -----
                                               $ 1,522      $ 3,005      $ 2,595
                                                 =====        =====        =====




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


                               II-40

FIRST M & F CORPORATION AND SUBSIDIARY
                                     Notes to Consolidated Financial Statements
                                        (In Thousands, Except Share Data)





Note 14:  (Continued)
---------------------
  The change in the net deferred taxes is a result of current period deferred tax
        expense (benefit), the change in unrealized gain (loss) on securities
        available for sale, the addition of deferred taxes of acquired companies and
        the recording of deferred taxes related to purchase accounting adjustments.
        The components of the recorded net deferred tax asset (liability) at
        December 31, 2000 and 1999, consist of the following:

                                                      2000                  1999
                                                      ----                  ----

Allowance for possible loan losses                 $ 3,001                $ 2,659
Intangible assets                                      107                     91
Other real estate                                       50                     72
    Investment writedown                               515                   --
Unrealized loss on securities
  available for sale                                  --                    2,683
Other                                                  100                    232
                                                     -----                 ------
      Total deferred tax assets                      3,773                  5,737

Fixed assets and depreciation                         (504)                  (270)
Federal Home Loan Bank stock
  dividends                                           (755)                  (532)
Purchase accounting adjustments                     (3,313)                (3,598)
Unrealized gain on securities
  available for sale                                  (334)                  --
Other                                                 (238)                  (148)
                                                     -----                 ------
      Total deferred tax liabilities                (5,144)                (4,548)

                                                   $(1,371)               $ 1,189
                                                     =====                  =====

  The following is a summary of the gross amounts of other comprehensive income
        (net unrealized gain (loss) on securities available for sale) and the
        related income tax effects:

                                            Gross                Tax Expense               Net
                                            Amount               (Benefit)                Amount
                                            ------               ---------                ------

January 1, 1998                           $   916                $   340                $   576

Change in unrealized gain
  (loss)                                    2,070                    772                  1,298
Reclassification adjustment                  (135)                   (50)                   (85)
                                            -----                  -----                  -----
    Total for year                          1,935                    722                  1,213
                                            -----                  -----                  -----
December 31, 1998                           2,851                  1,062                  1,789
                                            -----                  -----                  -----





                                                                             (Continued)
                                                                             -----------
                                                                                                                                  (Continued)
                               II-41

FIRST M & F CORPORATION AND SUBSIDIARY
                                    Notes to Consolidated Financial Statements
                                          (In Thousands, Except Share Data)





Note 14:  (Continued)
---------------------
                                                   Gross                Tax Expense               Net
                                                  Amount                (Benefit)                Amount
                                                  ------                ---------                ------

      Change in unrealized gain
        (loss)                                   (10,008)                (3,736)                (6,272)
      Reclassification adjustment                    (26)                    (9)                   (17)
                                                  ------                  -----                  -----
          Total for year                         (10,034)                (3,745)                (6,289)
                                                  ------                  -----                  -----
      December 31, 1999                           (7,183)                (2,683)                (4,500)
                                                  ------                  -----                  -----
      Change in unrealized gain
        (loss)                                     6,707                  2,502                  4,205
      Reclassification adjustment                  1,381                    515                    866
                                                  ------                  -----                  -----
          Total for year                           8,088                  3,017                  5,071
                                                  ------                  -----                  -----
      December 31, 2000                         $    905                $   334                $   571
                                                  ======                  =====                  =====


Note 15:  Earnings Per Share

  The following table shows a reconciliation of earnings per share to diluted
        earnings per share:

                                               2000                      1999                      1998
                                               ----                      ----                      ----

      Basic earnings per share:
  Net income                              $    7,079               $    8,166               $    7,842
                                               =====                    =====                    =====
  Weighted average shares
    outstanding                            4,634,297                3,785,317                3,637,875
                                           =========                =========                =========

Basic earnings per share                  $     1.53               $     2.16               $     2.16
                                                ====                     ====                     ====

Diluted earnings per share:
  Net income                              $    7,079               $    8,166               $    7,842
                                               =====                    =====                    =====
  Weighted average shares
    outstanding                            4,634,297                3,785,317                3,637,875
  Dilutive effect of stock
    options                                     --                      5,490                     --
                                           ---------                ---------                ----------
                                           4,634,297                3,790,807                3,637,875
                                           =========                =========                =========

Diluted earnings per share                $     1.53               $     2.15               $     2.16
                                                ====                     ====                     ====

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

                               II-42

FIRST M & F CORPORATION AND SUBSIDIARY
                                    Notes to Consolidated Financial Statements
                                       (In Thousands, Except Share Data)





Note 16:  Stockholders' Equity
------------------------------

    Preferred Stock
    ---------------
  The Company is authorized to issue 1,000,000 shares of cumulative Class A
        voting preferred stock of no par value and 1,000,000 shares of cumulative
        Class B non-voting preferred stock of no par value.   Dividend rates,
        redemption terms and conversion terms may be set by the Board of Directors.

    Dividend Reinvestment and Stock Purchase Plan
    ---------------------------------------------
  The Dividend Reinvestment and Stock Purchase Plan authorizes the sale of up to
        100,000 shares of the Company's common stock from authorized, but unissued,
        share or from shares acquired on the open market to shareholders who choose
        to invest all or a portion of their cash dividends and make optional cash
        payments of $50.00 to $5,000.00 per quarter.  All shares for this plan have
        been purchased on the open market.  The price of shares purchased on the
        open market is the average price paid for all shares purchased for all
        participants.


Note 17:  Commitments and Contingencies
---------------------------------------
  The Company and Bank, in the normal course of business, are defendants in
        certain legal claims.  In the opinion of management, and based on the advice
        of legal counsel, the ultimate resolution of these matters is not
        anticipated to have a material effect on the Company's consolidated
        financial position.

  The consolidated financial statements do not reflect various commitments and
        contingent liabilities which arise in the normal course of business and
        which involve elements of credit risk, interest rate risk and liquidity
        risk.  The Bank makes commitments to extend credit and issues standby and
        commercial letters of credit in the normal course of business to fulfill the
        financing needs of its customers.

  Commitments to extend credit are agreements to lend money to customers pursuant
        to certain specified conditions and generally have fixed expiration dates or
        other termination clauses.  Since many of these commitments are expected to
        expire without being drawn upon, the total commitment amounts do not
        necessarily represent future cash requirements.  When making these
        commitments, the Bank applies the same credit policies and standards as it
        does in the normal lending process.  Collateral is obtained based upon the
        Bank's assessment of a customer's credit worthiness.








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

                                                                                                                                  (Continued)

                               II-43

FIRST M & F CORPORATION AND SUBSIDIARY

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



Note 17:  (Continued)
---------------------
  Standby and commercial letters of credit are conditional commitments issued by
        the Bank to guarantee the performance of a customer to a third party.  When
        issuing letters of credit, the Bank applies the same credit policies and
        standards as it does in the normal lending process.  Collateral is obtained
        based upon the Bank's assessment of a customer's credit worthiness.

  The maximum credit exposure in the event of nonperformance for loan commitments
        and standby letters of credit is represented by the contract amount of the
        instruments.

  A summary of commitments and contingent liabilities at December 31, 2000, is
        as follows:

      Commitments to extend credit                        $ 57,089
      Standby letters of credit                              2,525
                                                            ------
                                                          $ 59,614
                                                            ======

Note 18:  Regulatory Matters
----------------------------
  Federal banking  regulations require that the Bank  maintain certain cash
        reserves based on a percent of deposits.  This requirement was $4,155 at
        December 31, 2000.

  The Company and its subsidiary bank are subject to various regulatory capital
        requirements administered by Federal banking agencies.  Failure to meet
        minimum capital requirements can initiate certain mandatory, and possibly
        additional discretionary actions by regulators that, if undertaken, could
        have a direct material effect on the financial statements.  Under capital
        adequacy guidelines and the regulatory framework for prompt corrective
        action, specific capital guidelines that involve quantitative measures of
        assets, liabilities and certain off-balance-sheet items are calculated under
        regulatory accounting practices must be met.  The capital amounts and
        classification are also subject to qualitative judgments by the regulators
        about components, risk weightings and other factors.

  Quantitative measures established by regulation to ensure capital adequacy
        require the maintenance of minimum amounts and ratios (set forth in the
        table below) of Total Capital and Tier I Capital (as defined in the
        regulations) to risk-weighted assets (as defined), and of Tier I Capital (as
        defined) to average assets (as defined).  Management believes, as of
        December 31, 2000, that all capital adequacy requirements have been met.

  As of December 31, 2000, the most recent notification by the Federal Deposit
        Insurance Corporation categorized the Bank as well capitalized under the
        regulatory framework for prompt corrective action.  To be categorized as
        well capitalized the Bank must maintain minimum total risk-based, Tier I
        risk-based, Tier I leverage ratios as set forth in the table.  There are no
        conditions or events since that notification that management believes have
        changed the Bank's category.

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

                               II-44

FIRST M & F CORPORATION AND SUBSIDIARY
                                   Notes to Consolidated Financial Statements
                                         (In Thousands, Except Share Data)





Note 18:  (Continued)
---------------------
    The Company's and Bank's actual capital amounts and ratios as of December 31,
        2000 and 1999, are also presented in the table:

                                                              To Be Well
                                                           Capitalized Under
                                         For Capital       Prompt Corrective
                      Actual          Adequacy Purposes    Action Provisions
                   --------------     -----------------    -----------------
                   Amount   Ratio       Amount    Ratio      Amount    Ratio
                   ------   -----       ------    -----      ------    -----

December 31, 2000 (Company):
  Total capital
    (to risk
    weighted
    assets)      $ 86,183   13.4%     $ 51,570     8.0%      Not applicable

  Tier I capital
    (to risk
    weighted
    assets)        78,060   12.1%       25,785     4.0%      Not applicable

  Tier I capital
    (to average
    assets)        78,060    7.9%       39,305     4.0%      Not applicable
                   ======   ====        ======     ===

December 31, 2000 (Bank):
  Total capital
    (to risk
    weighted
    assets)      $ 93,658   14.6%     $ 51,269     8.0%    $ 64,086   10.0%

  Tier I capital
    (to risk
    weighted
    assets)        85,582   13.4%       25,634     4.0%      38,451    6.0%

  Tier I capital
    (to average
    assets)        85,582    8.7%       39,256     4.0%      49,070    5.0%
                   ======   ====        ======     ===       ======    ===











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

                               II-45

FIRST M & F CORPORATION AND SUBSIDIARY

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




Note 18:  (Continued)
--------------------
                                                              To Be Well
                                                           Capitalized Under
                                         For Capital       Prompt Corrective
                      Actual          Adequacy Purposes    Action Provisions
                   --------------     -----------------    -----------------
                   Amount   Ratio       Amount    Ratio      Amount    Ratio
                   ------   -----       ------    -----      ------    -----

December 31, 1999 (Company):
  Total capital
    (to risk
    weighted
    assets)      $ 83,317   13.3%     $ 49,818     8.0%      Not applicable

  Tier I capital
    (to risk
    weighted
    assets)        75,688   12.1%       24,909     4.0%      Not applicable

  Tier I capital
    (to average
    assets)        75,688    8.9%       34,043     4.0%      Not applicable
                   ======   ====        ======     ===

December 31, 1999 (Bank):
  Total capital
    (to risk
    weighted
    assets)      $ 89,121   14.3%     $ 49,818     8.0%     $ 62,272   10.0%

  Tier I capital
    (to risk
    weighted
    assets)        81,492   13.1%       24,909     4.0%       37,363    6.0%

  Tier I capital
    (to average
    assets)        81,492    9.6%       34,043     4.0%       42,554    5.0%
                   ======   ====        ======     ===        ======    ===

  Dividends paid by the Bank are the primary source of funds available to the
        Company for payment of dividends to its shareholders and other cash needs.
        Applicable Federal and state statutes and regulations impose restrictions on
        the amounts of dividends that may be declared by the Bank.  In addition to
        the formal statutes and regulations, regulatory authorities also consider
        the adequacy of the Bank's total capital in relation to its assets, deposits
        and other such items and, as a result, capital adequacy considerations could
        further limit the availability of dividends from the Bank.  These
        restrictions are not anticipated to have a material effect on the ability of
        the Bank to pay dividends to the Company.


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

                               II-46

FIRST M & F CORPORATION AND SUBSIDIARY
                                   Notes to Consolidated Financial Statements
                                     (In Thousands, Except Share Data)





Note 19:  Fair Value of Financial Instruments
---------------------------------------------
  Statement of Financial Accounting Standards No. 107 (SFAS 107), "Disclosures
        about Fair Value of Financial Instruments" requires that the Company
        disclose estimated fair value for its financial instruments.  However, such
        disclosures may be deemed not to be practicable for certain classes of
        financial instruments.

  Fair value estimates are made at a specific point in time and are based on
        relevant market information which is continuously changing.  Because no
        quoted market prices exist for a significant portion of the Company's
        financial instruments, fair values for such instruments are based on
        management's assumptions with respect to future economic conditions,
        estimated discount rates, estimates of the amount and timing of future cash
        flows, expected loss experience, and other factors.  These estimates are
        subjective in nature involving uncertainties and matters of significant
        judgment; therefore, they cannot be determined with precision.  Changes in
        the assumptions could significantly affect the estimates.  In addition, the
        tax ramifications related to the realization of the unrealized gains and
        losses can have a significant effect on fair value estimates and have not
        been considered in the estimates.  As a result, the SFAS 107 fair value
        disclosures should not be considered an indication of the fair value of the
        Company taken as a whole.  A summary of financial instruments and related
        fair value disclosures follows:

    Cash and due from banks, interest bearing deposits with banks and Federal
            funds sold - The net book value of these financial instruments
            approximates fair value due to the immediate availability or short
            maturity of these investments.

    Investments - Fair value of these financial instruments is considered to be
            their quoted market value as disclosed in note 3.

    Loans - The fair value of variable rate loans that reprice frequently, and
            with no significant changes in credit risk, are based on carrying values.
            The fair value of fixed rate loans is estimated by discounting the future
            cash flows, using the current rates at which these loans would currently
            be made to borrowers with similar credit ratings and similar maturities.
            The carrying value of loans, net of the allowance for possible loan
            losses, is $623,807 and $601,321 and the estimated net fair value of loans
            is $614,728 and $590,508 at December 31, 2000 and 1999.

    Deposits - The  fair value  of demand deposits, NOW accounts, money market
            accounts and savings deposits is the carrying amount at the reporting
            date.  The fair value of certificates of deposit is estimated by
            discounting the future cash flows, using current market rates for deposits
            of similar maturities.  The carrying value of deposits is $788,359 and
            $789,941 and the  estimated  net fair  value of  deposits is  $790,481 and
            $790,977 at December 31, 2000 and 1999.



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

                                                                                                                      (Continued)

                               II-47

FIRST M & F CORPORATION AND SUBSIDIARY

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



Note 19:  (Continued)
---------------------
    Short-term and other borrowings - The net book value of the majority of these
            financial instruments approximates fair value due to the short term nature
            of these items or their applicable interest rates and repricing and
            repayment terms.  The fair values of long term FHLB advances in estimated
            by discounting the future cash flows, using current market rates for
            borrowings of similar terms and maturities.  The fair value of short-term
            and other borrowings is not materially different from their recorded book
            value at December 31, 2000 and 1999.

    Commitments to extend credit - Fair values for such commitments are typically
            based on fees currently charged to enter into similar agreements, taking
            into account the remaining terms of the agreements and the parties' credit
            standing.  The fair value of commitments to extend credit is not material.


Note 20:  Summarized Financial Information of First M & F Corporation
---------------------------------------------------------------------
  Summarized financial information of First M & F Corporation (parent company
        only) is as follow:
                                                                        STATEMENTS OF CONDITION

                 Assets                                          2000                          1999
                 ------                                          ----                          ----


      Cash                                                  $   1,008                     $   4,926
      Investment in subsidiary                                104,464                        96,482
      Other assets                                              1,724                         1,305
                                                              -------                       -------
                                                            $ 107,196                     $ 102,713
                                                              =======                       =======


      Liabilities and Stockholders' Equity

      Notes payable                                         $   9,592                     $   9,342
      Other liabilities                                           661                         2,694
      Stockholders' equity                                     96,943                        90,677
                                                              -------                       -------
                                                            $ 107,196                     $ 102,713
                                                              =======                       =======









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




                                                                                                                                  (Continued)

                               II-48

FIRST M & F CORPORATION AND SUBSIDIARY

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



Note 20:  (Continued)
---------------------
                                                                         STATEMENTS OF INCOME

                                               2000                1999                 1998
                                               ----                ----                 ----

Income:
  Dividends received from
    current earnings of
    subsidiary                                $5,800               $8,513               $3,649
  Equity in undistributed
    current earnings of
    subsidiary                                 2,101                 --                  4,468
  Other income                                    33                   60                    6
                                               -----                -----                -----
          Total income                         7,934                8,573                8,123
                                               -----                -----                -----
Expenses:
  Interest                                       812                  100                   39
  Other expenses                                 448                  382                  300
                                               -----                -----                -----
          Total expenses                       1,260                  482                  339
                                               -----                -----                -----
          Income before
            income taxes                       6,674                8,091                7,784

Income tax benefit                               405                   75                   58
                                               -----                -----                -----
          Net income                          $7,079               $8,166               $7,842
                                               =====                =====                =====

                                                                       STATEMENTS OF CASH FLOWS

                                                2000                 1999                  1998
                                                ----                 ----                  ----

Cash flows from operating
  activities:
Net income                                   $ 7,079              $ 8,166                $ 7,842
Adjustments to reconcile net
  income to net cash provided
  by operating activities:
  Equity in undistributed
    earnings of subsidiary                    (2,101)                --                   (4,468)
  Other, net                                     (85)                 (80)                   125
                                               -----                -----                  -----
        Net cash provided by
          operating activities                 4,893                8,086                  3,499
                                               -----                -----                  -----








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

                               II-49

FIRST M & F CORPORATION AND SUBSIDIARY

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



Note 20:  (Continued)
---------------------
                                                                STATEMENTS OF CASH FLOWS - (CONTINUED)

                                                   2000                    1999                  1998
                                                   ----                    ----                  ----

Cash flows from investing
  activities:
    Cash paid related to prior
      year acquisitions                         $(2,226)               $   --                  $  --
  Net cash used in acquisitions                    --                   (32,309)                  --
  Dividends from prior earnings
    of banking subsidiary                          --                    32,074                   --
  Purchases of securities
    available for sale                             --                      (462)                  --
  Sale of securities available
    for sale                                       --                       833                   --
                                                  -----                  ------                ------
          Net cash provided by
            (used in) investing
                   activities                    (2,226)                    136                   --
                                                  -----                  ------                ------
Cash flows from financing
  activities:
  Increase (decrease) in notes
      payable                                       250                   9,015                   (369)
  Cash dividends                                 (4,626)                 (3,920)                (3,259)
  Common shares repurchased                      (2,209)                 (8,514)                  --
                                                  -----                  ------                 ------
          Net cash used in
            financing activities                 (6,585)                 (3,419)                (3,628)
                                                  -----                  ------                 ------
          Net increase (decrease)
            in cash                              (3,918)                  4,803                   (129)

Cash at January 1                                 4,926                     123                    252
                                                  -----                  ------                 ------
Cash at December 31                             $ 1,008                $  4,926                $   123
                                                  =====                  ======                 ======

                                                                             (Continued)
                                                                             -----------
                               II-50

WITH ACCOUNTANTS
                                   ON ACCOUNTING AND FINANCIAL DISCLOSURE

There
has been no change in accountants within the two year period ended December 31,
2000.

                            DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information
concerning directors and executive officers of the registrant is incorporated by
reference and contained in the Proxy material on [Page I-2] and following.

                                           EXECUTIVE COMPENSATION

         Information concerning executive compensation is incorporated by
reference and contained in the Proxy material on [Page I-6].

                              SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                                               AND MANAGEMENT

Information
concerning security ownership of owners and management is incorporated by
reference and contained in the Proxy material on [Page I-3] and following.

                               CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information
concerning certain relationships and related transactions is incorporated by
reference and contained in the Proxy material on [Pages I-11].

                                                   II-51

EXHIBITS, FINANCIAL STATEMENT SCHEDULES
                                          AND REPORTS ON FORM 8-K
Financial Statements and Exhibits

         The following financial statements included under the heading "Financial Statements and
Supplementary Data" are included in this report:

         (a)     Independent Auditors' Report
         (b)     Consolidated Statements of Condition - December 31, 2000 and 1999
         (c)     Consolidated Statements of Income - Years Ended December 31, 2000, 1999 and 1998
         (d)     Consolidated Statements of Comprehensive Income - Years Ended December 31, 2000,
                 1999 and 1998
         (e)     Consolidated Statements of Stockholders' Equity - Years Ended December 31, 2000,
                 1999, and 1998
         (f)     Consolidated Statements of Cash Flows - Years Ended December 31, 2000, 1999 and
                 1998
         (g)     Notes to Consolidated Financial Statements


         The following exhibits have been filed with the Securities and Exchange Commission and are
available upon written request:

         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.

Reports on Form 8-K

         None.
                                                   II-52

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



BY:-------------------------------                           BY: ------------------------------------
        Hugh S. Potts, Jr.                                          Robert C. Thompson, III
        Chairman of the Board and                                   Treasurer
        Chief Executive Officer
                                                   II-53

SIGNATURES

Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed
by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated:

/s/ Hugh S. Potts, Jr.
DATE: ---------------------------------                 ---------------------------------
                                                        Hugh S. Potts, Jr., Director

                                                        /s/ Scott M. Wiggers
DATE: ---------------------------------                 ---------------------------------
                                                        Scott M. Wiggers, Director

                                                        /s/ Fred A. Bell, Jr.
DATE: ---------------------------------                 ---------------------------------
                                                        Fred A. Bell, Jr., Director

                                                        /s/ Jon A. Crocker
DATE: ---------------------------------                 ---------------------------------
                                                        Jon A. Crocker, Director

                                                        /s/ Charles T. England
DATE: ---------------------------------                 ---------------------------------
                                                        Charles T. England, Director

                                                        /s/ Toxey Hall, III
DATE: ---------------------------------                 ---------------------------------
                                                        Toxey Hall, III, Director

                                                        /s/ Barbara K. Hammond
DATE: ---------------------------------                 ---------------------------------
                                                        Barbara K. Hammond, Director

                                                        /s/ Charles V. Imbler, Sr.
DATE: ---------------------------------                 ---------------------------------
                                                        Charles V. Imbler, Sr., Director

                                                        /s/ James F. Ingram
DATE: ---------------------------------                 ----------------------------------
                                                        James F. Ingram, Director

                                                        /s/ J. Marlin Ivey
DATE: ---------------------------------                 ----------------------------------
                                                        J. Marlin Ivey, Director
                                                  II-54

/s/ Joe Ivey
DATE: ---------------------------------                 ---------------------------------
                                                        Joe Ivey, Director

                                                        /s/ R. Dale McBride
DATE: ---------------------------------                 ---------------------------------
                                                        R. Dale McBride, Director

                                                        /s/ susan P. McCaffery
DATE: ---------------------------------                 ---------------------------------
                                                        Susan P. McCaffery, Director

                                                        /s/ Otho E. Pettit, Jr.
DATE: ---------------------------------                 ---------------------------------
                                                        Otho E. Pettit, Jr., Director

                                                        /s/ Charles w. Ritter, Jr.
DATE: ---------------------------------                 ---------------------------------
                                                        Charles W. Ritter, Jr., Director

                                                        /s/ L. F. Sams, Jr.
DATE: ---------------------------------                 ---------------------------------
                                                        L. F. Sams, Jr., Director

                                                        /s/ Michael W. Sanders
DATE: ---------------------------------                 ---------------------------------
                                                        Michael W. Sanders, Director

                                                        /s/ W. C. Shoemaker
DATE: ---------------------------------                 ---------------------------------
                                                        W. C. Shoemaker, Director

                                                        /s/ James I. Tims
DATE: ---------------------------------                 ---------------------------------
                                                        James I. Tims, Director

                                                        /s/ Edward G. Woodard
DATE: ---------------------------------                 ---------------------------------
                                                        Edward G. Woodard, Director
                                                   II-55

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.
                                                   II-56

DIRECTORS AND OFFICERS
First M & F Corporation
And Merchants and Farmers Bank


Fred A. Bell, Jr.                     Joe Ivey                                Michael W. Sanders
Partner                               President & CEO                         President
Clean Kut Outdoor Equipment           Encompass Services Corp.                Jimmy Sanders, Inc.
Kosciusko, MS                         Houston, TX                             Cleveland, MS

Jon A. Crocker                        R. Dale McBride                         W. C. Shoemaker
Director                              President                               Consultant
Canton, MS                            Merchants & Farmers Bank                IMC Webb Graphics
                                      Durant, MS                              Kosciusko, MS
Charles T England
Retired                               Susan P. McCaffrey                      James I. Tims
Kosciusko, MS                         Retired                                 President
                                      Kosciusko, MS                           LT Corporation
Toxey Hall, III                                                               Cleveland, MS
Investor                              Otho E. Pettit, Jr.
Canton, MS                            Partner                                 Scott M. Wiggers
                                      Thornton, Guyton, Dorrill & Pettit      President
Barbara K. Hammond                    Kosciusko, MS                           First M & F Corp. and
Retired                                                                       Merchants & Farmers Bank
Jackson, MS                           Hugh S. Potts, Jr.                      Kosciusko, MS
                                      Chairman & CEO
Charles V. Imbler                     First M & F Corp. and                   Edward G. Woodard
President and CEO                     Merchants & Farmers Bank                President
Truck Center, Inc                     Kosciusko, MS                           K. M. Distributing Company
Tupelo, MS                                                                    Kosciusko, MS
                                      Charles W. Ritter, Jr.
Jim Ingram                            Retired
Consultant                            Kosciusko, MS
Tupelo, MS                                                                    Emeritus Directors
                                      L. F. Sams, Jr.
J. Marlin Ivey                        Partner                                   William J. Hammond
President                             Mitchell, McNutt, Threadgill,             William M. Myers, DDS
Ivey National Corp.                   Smith & Sams                              Hugh S. Potts
Kosciusko, MS                         Tupelo, MS                                O. K. Power

                               II-57

SENIOR MANAGEMENT TEAM

Hugh S. Potts, Jr.                                   Christopher M. Burgess
Chairman of the Board                                Executive Vice President and
Chief Executive Officer                              Divisional sales Manager

Scott M. Wiggers                                     Jeffrey A. Camp
President                                            Executive Vice President and
                                                     Senior Credit Officer
Robert K. Autry, Jr.
Executive Vice President and                         Robert C. Thompson, III
Divisional Sales Manager                             Executive Vice President and
                                                     Chief Financial Officer
                                        RETAIL ADMINISTRATION

Northern Sales Division                              Southern Sales Division
Robert K. Autry, Jr.                                 Christopher M. Burgess
Executive Vice President and                         Executive Vice President and
Divisional Sales Manager                             Divisional Sales Manager

Mary Parrish                                         Timothy L. Alford
Manager                                              President
Ackerman, MS                                         Clinton, MS

G. C. Kinney, III                                    Michael E. Crandall
President                                            President
Oxford, MS                                           Madison/Ridgeland, MS

Harry L. Lott, Jr.                                   Donald G. Griffin
President                                            President
Grenada, MS                                          Brandon/Pearl, MS

Thomas A. McKelroy                                   Jeffrey B. Lacey
President                                            President
Bruce, MS                                            Kosciusko, MS

Dwayne K. Myers                                      R. Dale McBride
President                                            President
Starkville, MS                                       Durant, MS

V. Doug Springer                                     Frank S. Street
President                                            President
Cleveland, MS                                        Canton, MS

Richard A. Taylor                                    Richard D. Wilson
President                                            President
Southaven, MS                                        Philadelphia, MS

H. Lewis Whitfield
President
Tupelo, MS
                                  CORPORATE AND INVESTOR INFORMATION

First M & F Corporation                              STOCK LISTING
Merchants and Farmers Bank                           First M &F's common stock is traded on the
221 East Washington Street                           NASDAQ National Market System under
P. O. Box 520                                        The symbol FMFC.
Kosciusko, MS  39090
(601) 289-5121                                       STOCK TRANSFER AGENT
www.mfbank.com                                       Registrar and Transfer Company
                                                     10 Commerce Drive
ANNUAL MEETING                                       Cranford, NJ  07016-3572
First M & F Corporation's Annual Meeting of      1-800-368-5948
Shareholders will be held at 1:30 p.m.,
Wednesday April 11, 2001 in the auditorium of
the Mary Ricks Thornton Cultural Center in
Kosciusko, MS.

FINANCIAL INFORMATION                                FINANCIAL PUBLICATIONS
Analysts and investors seeking financial             Additional copies of the corporation's Annual
information about First M & F Corp may               Report, Form 10-K, quarterly reports and other
contact Robert C. Thompson, III, Chief               corporate publications are available on request
Financial Officer                                    by contacting the Chief Financial Officer

                                                     INDEPENDENT AUDITORS
                                                     Shearer, Taylor & Co., P.A.
                                                     605 Renaissance Way
                                                     Ridgeland, MS  39157
                                                     (601) 605-0099
                               II-58