UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D. C. 20549
                                      FORM 10-K

         (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
                                         or
       ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                                EXCHANGE ACT OF 1934
                           Commission file number 0-09424

                               FIRST M & F CORPORATION
               (exact name of Registrant as specified in its charter)

        MISSISSIPPI                                    64-0636653
(State or other jurisdiction of                     (I.R.S.  Employer
 incorporation of organization)                   Identification Number )

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

             Registrants telephone number, including area code: (601) 289-5121
             Securities registered pursuant to section 12(b) of the Act: 

                                                    NAME OF EACH EXCHANGE ON
                TITLE OF CLASS                         WHICH REGISTERED

                   NONE                                      NONE

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

                            Common Stock $5.00 par value

         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 if
1934  during the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES ( X ) NO ( )

          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.  Yes(   ) No (   )   

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

                  Class                           Outstanding at March 3, 1998
Common stock  ( $5.00 par value )                         3,394,656    Shares

         Based on bid price for shares on March 3, 1998,  the  aggregate  market
value  of  the  voting  stock  held  by  nonaffiliates  of  the  Registrant  was
$92,521,040.

                      DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference to Part I, II,
III and IV of the  Form  10-K  report:  (1)  Registrant's  1997  Annual  Report 
to Shareholders  (containing selected and summary financial information) (Parts 
II and IV), and (2) Registrant's Combined  1997  Annual Report and Proxy 
Statement dated March 18, 1998, for Registrant's  Annual Meeting of Shareholders
to be held April 8, 1998 (which contains Consolidated Financial Statements and 
Management's Discussion and Analysis of Financial Condition), (Parts II, III
and IV).
                                                      1 of 20


<PAGE>



                                              FIRST M & F CORPORATION
                                                     FORM 10-K
                                                       INDEX

Part I

Item 1.           Business                                             3
Item 2.           Properties                                          14
Item 3.           Legal Proceedings                                   14
Item 4.           Submission of Matters to a Vote of
                     Security Holders                                 14

Part II

Item 5.           Market for the Registrant's Common Stock
                     and Related Stockholder Matters                  14
Item 6.           Selected Financial Data                             14
Item 7.           Management's Discussion and Analysis of
                     Financial Condition and Results of Operations    15
Item 8.           Financial Statements and Supplementary Data         15
Item 9.           Changes in and Disagreements with Accountants
                     on Accounting and Financial Disclosure           15


Part III

Item 10.          Directors and Executive Officers of the
                     Registrant                                       15
Item 11.          Executive Compensation                              16
Item 12.          Security Ownership of Certain Beneficial
                    Owners and Management                             16
Item 13.          Certain Relationships and Related Transactions      16


Part IV

Item 14.          Exhibits, Financial Statement Schedules, and
                  Reports on Form 8-K                                 16

SIGNATURES                                                         18-19

EXHIBIT INDEX                                                         20

                                                2



<PAGE>



                               FIRST M & F CORPORATION
                                      FORM 10-K

                                        PART I
ITEM 1.           BUSINESS

GENERAL

          First M & F  Corporation  ( 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 seventh  largest  bank in the state,
having total assets of approximately $580 million at December 31, 1997. The Bank
offers a complete  range of commercial  and consumer  services  through its main
office and two branches in Kosciusko and its branches in fourteen  other markets
within central  Mississippi.  These markets include  Ackerman,  Bruce,  Brandon,
Canton, Clinton,  Durant, Lena, Madison, Oxford, Pearl,  Philidelphia,  Puckett,
Ridgeland, Starkville, Grenada and Weir, Mississippi.

         The Bank has three wholly-owned subsidiary operations,  M & F Financial
Services,  Inc.,  which  operates two finance  company  operations;  First M & F
Insurance  Company,  Inc., a credit life  insurance  company;  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 in 1994.  Effective with the close of business on
December 31, 1995,  the Company also 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 at December 31, 1995, of $32 million.

         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.

                                                         3


<PAGE>




As of January 31, 1998,  the Company and its  subsidiary  employed 259 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

         The Company is a registered bank holding company under the Bank Holding
Act of 1956,  as  amended.  As such,  the  Company is required to file an annual
report and such  other  information  as the Board of  Governors  of the  Federal
Reserve System may require. The Bank Holding Company Act generally prohibits the
Company  from  engaging  in  activities   other  than  banking  or  managing  or
controlling  banks  or  other  permissible  subsidiaries  or from  acquiring  or
obtaining  direct or indirect  control of any company  engaged in activities not
closely related to banking. The Board of Governors has by regulation  determined
that a number of activities are closely related to banking within the meaning of
the Act.  In  addition,  the  Company is subject to  regulation  by the State of
Mississippi under its laws of incorporation.

         The Bank is  subject  to  various  requirements  of  federal  and state
banking authorities  including the Federal Deposit Insurance  Corporation (FDIC)
and the Mississippi  Department of Banking.  Areas subject to regulation include
loans,  reserves,  investments,  establishment of branches,  loans to directors,
executive officers and their related interests, relationships with correspondent
banks, consumer and depositor protection,  and others. In addition,  state banks
such as the Bank are subject to state  approval  of the amount of earnings  that
may be paid as dividends to shareholders.

         In December 1991, the Federal Deposit Insurance Corporation Improvement
Act of 1991  (FDICIA) was enacted.  This Act  substantially  revised the funding
provisions of the Federal Deposit Insurance Act and required  regulators to take
prompt corrective action whenever financial  institutions failed to meet minimum
capital requirements. Also the Act created restrictions on capital distributions
that would leave a depository institution undercapitalized.

         In May 1993, the FDIC adopted the final rule  implementing  Section 112
of FDICIA. This regulation and new requirements mandated new audit and reporting
procedures,  as well as required  certain  documentation  on  existing  internal
controls.  This  regulation  became  effective  for fiscal  years  ending  after
December 31, 1992.

                                                         4


<PAGE>



EXECUTIVE OFFICERS OF THE REGISTRANT

         The executive officers of the Registrant including their positions with
the  Registrant,  their ages and their  principal  occupations for the last five
years are as follows:

         Hugh S.  Potts,  Jr.,  52,  Director,  Chairman  of the Board and Chief
         Executive  Officer,  First M & F Corporation  and Merchants and Farmers
         Bank, since 1994.
         Vice Chairman, First M & F Corporation, prior to 1994

         Scott M. Wiggers, 53, Director,  President, First M & F Corporation and
         Merchants and Farmers Bank of Kosciusko, since 1990.

STATISTICAL DISCLOSURES

         The  statistical  disclosures for the Company are contained in Tables 1
through 13.





























                                                         5


<PAGE>



FIRST M & F CORPORATION
STATISTICAL DISCLOSURES

TABLE 1 - COMPARATIVE AVERAGE BALANCES - YIELDS AND RATES

The table below shows the average  balances for all assets and  liabilities  for
the Company at each  year-end for the past three years,  the interest  income or
expense  associated with these assets and liabilities and the computed yields or
rates for each.
<TABLE>

                                                                    DECEMBER 31ST
                                           1997                                  1996                           1995
                                           ----                                  ----                           ----
                                  AVERAGE                 YIELD/    AVERAGE               YIELD/    AVERAGE                YIELD/
                                    BAL     INTEREST      RATE        BAL      INTEREST    RATE       BAL      INTEREST    RATE
<S>                              <C>        <C>           <C>      <C>         <C>         <C>      <C>        <C>          <C>
Average assets
------------------
Federal funds sold               $ 10,782   $    567      5.26     $ 12,839    $    685    5.34%    $  9,846   $    596     6.05%
Loans, net                        349,684     34,279      9.80%     317,013      31,346    9.89%     275,422     27,310     9.92%
Bank balances                       3,378        190      5.62%       3,934         205    5.21%       2,790        165     5.91%
Taxable securities                117,064      7,280      6.22%     120,356       7,394    6.14%     121,291      7,300     6.02%
Tax-exempt securities              41,941      3,215      7.67%      38,324       2,988    7.80%      40,472      3,221     7.96%
                                 ------------------------------------------------------------------------------------------------
Total int. earnings               522,849     45,531      8.71%     492,466      42,618    8.65%     449,821     38,592     8.58%
Noninterest assets                 39,888                            34,535                           30,800
                                 ------------------------------------------------------------------------------------------------
Total average assets              562,737     45,531      8.09%     527,001      42,618    8.09%     480,621     38,592     8.03%
                                 ------------------------------------------------------------------------------------------------
Liabilities & capital
---------------------
DDA and savings                   207,098      7,560      3.65%     175,383       6,140    3.50%     144,970      4,578     3.16%
Time deposits                     237,123     12,889      5.44%     220,038      12,082    5.49%     191,290     10,186     5.32%
Short-term funds                       64          4      6.25%      19,330         965    4.99%      45,850      2,551     5.56%
FHLB advances                       3,628        240      6.62%       5,937         354    5.96%       3,482        195     5.60%
                                  -----------------------------------------------------------------------------------------------
Total interest bearing 447,913     20,693                 4.62%     420,688      19,541    4.65%     385,592     17,510     4.54%
Noninterest bearing
   and capital                    114,824                           106,313                           95,029
                                  -----------------------------------------------------------------------------------------------
Total average
Liabilities & Capital             562,737     20,693      3.68%     527,001      19,541    3.71      480,621     17,510     3.64%
                                  -----------------------------------------------------------------------------------------------
Net interest margin                           24,838      4.75%                  23,077    4.69%                 21,082     4.69%
Less tax equiv adj
    Investments                                1,093                              1,016                           1,095
    Loans                                        222                                106                              80
                                  -----------------------------------------------------------------------------------------------
Net interest margin
    Per annual report                       $ 23,523                           $ 21,955                      $   19,907
                                 ------------------------------------------------------------------------------------------------
</TABLE>

Nonaccruing  loans have been  included in the average loan balances and interest
collected  prior to these loans being placed on nonaccrual  has been included in
interest income.  Yield and rates have been calculated on a fully tax equivalent
basis using a tax rate of 34% for all years.








                                                         6


<PAGE>



FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)

TABLE 2 - VOLUME AND YIELD/RATE VARIANCE ANALYSIS

The Volume and  Yield/Rate  Table shown below  reflects  the change from year to
year for  each  component  of the net  interest  margin  classified  into  those
occurring as a result of changes in volume and those  resulting from  yield/rate
changes. (Tax Equivalent Basis - $ in thousands)
<TABLE>

                                         1997 COMPARED TO 1996          1996 COMPARED TO 1995
                                     INCREASE (DECREASE) DUE TO:     INCREASE (DECREASE) DUE TO:
                                  ---------------------------------------------------------------
                                               YIELD/                            YIELD/
                                    VOLUME     RATE       NET       VOLUME       RATE      NET
                                  ---------------------------------------------------------------
<S>                               <C>        <C>        <C>        <C>        <C>        <C>    
Interest earned on:
Fed funds sold                    $  (110)   $    (8)   $  (118)   $   181    $   (92)   $    89
Loans, net                          3,230       (297)     2,933      4,124        (88)     4,036
Bank balances                         (29)        14        (15)        68        (28)        40
Taxable securities                   (202)        88       (114)       (56)       157        101
Tax-exempt securities                 282        (55)       227       (171)       (62)      (233)
                                  ---------------------------------------------------------------
  Total interest-earning assets     3,171       (258)     2,913      4,146       (113)     4,033

Interest paid on:
Demand deposits & savings           1,110        310      1,420        960        602      1,562
Time deposits                         938       (131)       807      1,531        365      1,896
Short-term funds                     (962)         1       (961)    (1,476)      (103)    (1,579)
FHLB advances                        (138)        24       (114)       138         21        159
                                  ---------------------------------------------------------------
  Total interest-bearing liab         948        204      1,152      1,153        885      2,038
                                  ---------------------------------------------------------------
  Change in net income on a
     tax equivalent basis         $ 2,223    $  (462)   $ 1,761    $ 2,993    $  (998)   $ 1,995
                                  ---------------------------------------------------------------

</TABLE>

Tax-exempt  income has been adjusted to a tax equivalent  basis using a tax rate
of 34%. The balances of nonaccrual loans and related income recognized have been
included for purposes of these computations.










                                                         7


<PAGE>



FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)

TABLE 3 - SECURITIES AVAILABLE FOR SALE AND SECURITIES HELD TO MATURITY

The  table  below  indicates  amortized  cost or  carrying  value of  securities
available  for sale and those held to maturity  by type at year-end  for each of
the last three years. ($ in thousands)
<TABLE>
                                                                            December 31,
                                                                  ------------------------------
                                                                      1997       1996       1995
                                                                  --------   --------   --------
<S>                                                               <C>        <C>        <C>
Securities available for sale
U.S. Treasury                                                     $ 23,656   $ 21,682   $ 38,440
Government agencies                                                 21,732     15,922     39,028
Obligations of states and political subdivisions                    15,571     18,230     24,331
Other securities                                                    48,044     30,610     26,391
                                                                  ------------------------------
Total securities available for sale                               $109,003   $ 86,444   $128,190
                                                                  ------------------------------

                                                                            December 31,
                                                                  ------------------------------
                                                                      1997       1996       1995
                                                                  --------   --------   --------
Securities held to maturity
U.S. Treasury                                                     $  1,050   $  1,050   $  1,051
Government agencies                                                 11,018     13,980     14,152
Obligations of states and political subdivisions                    33,623     24,235     18,321
Other securities                                                    13,094     17,888     19,290
                                                                  ------------------------------
Total securities held to maturity                                 $ 58,785   $ 57,153   $ 52,814
                                                                  ------------------------------
</TABLE>


TABLE 4 - MATURITY DISTRIBUTION AND YIELDS OF SECURITIES AVAILABLE FOR SALE AND
SECURITIES HELD TO MATURITY

The following  table details the maturities and weighted  average yield for each
range of maturities of securities  December 31, 1997. (tax equivalent  yield - $
in thousands)

<TABLE>
                                                  After One               After Five
                                                  But Within              But Within               After
                                One Year   Yield Five Year     Yield      Ten Years    Yield     Ten Years    Yield
                                --------------------------------------------------------------------------------------------
<S>                             <C>       <C>   <C>            <C>       <C>                 <C>   <C>       <C>   <C>     
Securities available for sale
U.S. Treasury                   $ 6,088   5.63% $ 17,567       6.22%                                               $ 23,655
Government agencies              10,589   5.56%    9,641       6.23%      $ 1,502            7.28%                   21,732
Obligations of states and
    political subdivisi ons       4,694   7.19%    8,071       7.86%        3,051            8.97%                   15,816
Other securities                 14,395   6.87%   23,068       6.75%        2,932            6.81%  7,405    6.73%   47,800
                                --------------------------------------------------------------------------------------------
         Total                  $35,766   6.31% $ 58,347       6.65%     $  7,485            7.78% $7,405    6.73% $109,003
                                --------------------------------------------------------------------------------------------
Securities held to maturit
U.S. Treasury                   $ 1,050   6.08%                                                                    $  1,050
Government agencies               5,669   7.01% $  3,637       6.92%      $ 1,713            6.98%                   11,019
Obligations of states and
    political subdivisions        2,566   6.92%   16,806       7.11%       12,905            7.29%  1,245    9.09%   33,522
Other securities                  3,140   6.76%    4,319       6.61%        4,139            6.14%  1,596    6.34%   13,194
                                --------------------------------------------------------------------------------------------
         Total                  $12,425   6.84% $ 24,762       6.99%      $18,757            7.01% $2,841    7.54% $ 58,785
                                --------------------------------------------------------------------------------------------
</TABLE>

At  December  31,  1997,  the  Company  had  securities  issued  by the State of
Mississippi and its political subdivisions and agencies with a carrying value of
$37,134 and a market value of $38,166.



                                                         8


<PAGE>



FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)

TABLE 5 - COMPOSITION OF THE LOAN PORTFOLIO

The table below shows the carrying value of the loan portfolio at the end of 
each year for the last five years.   ($ in thousands)
<TABLE>

                                                                  December 31,
                                         ------------------------------------------------------

                                               1997       1996       1995       1994       1993
                                           --------   --------   --------   --------   --------
<S>                                       <C>         <C>        <C>        <C>        <C>     
Commercial, financial and agricultural    $ 122,635   $113,909   $ 94,906   $ 89,316   $ 75,685
Real estate-construction                     32,520     26,356     27,194     18,749      8,328
Real estate-mortgage                        116,395    106,198     85,497     77,568     67,092
Consumer loans                               88,623     98,638     84,134     76,174     56,950
Lease financing                                  19        137        271        247        492
                                         -------------------------------------------------------
                                          $ 360,192   $345,238   $292,002   $262,054   $208,547
                                         -------------------------------------------------------

</TABLE>


TABLE 6 - LOAN MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST
RATES

The table below shows the amounts of loans in several categories at December 31,
1997,  along  with the  schedule  of  repayments  of  principal  in the  periods
indicated. ($ in thousands)
<TABLE>

                                                        Maturing
                                      -------------------------------------------------

                                          Within      One/Five   After Five
                                         One Year      Years        Years       Total
                                      -------------------------------------------------
<S>                                   <C>            <C>        <C>          <C>      
Commercial and real estate            $    137,306   $ 103,378  $ 30,885     $ 271,569
Installment loans to individuals            20,709      65,314     2,600        88,623
                                      -------------------------------------------------
                                      $    158,015   $ 168,692  $ 33,48      $ 360,192
                                     --------------------------------------------------
</TABLE>

The following table shows all loans due after one year according to their 
sensitivity to changes in interest rates.   ($ in thousands)

                                                         Maturing
                                              -------------------------------
                                              One/Five   After Five
                                                 Years      Years      Total
                                              -------------------------------
Above loans due after one year which have:
         Predetermined interest rates          $167,754   $ 33,184   $200,938
         Floating interest rates                    938          0        938
                                               -------------------------------
                  Total                        $168,692   $ 33,184   $201,876
                                               ------------------------------

                                                         9



<PAGE>



FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)

TABLE 7 - NONPERFORMING ASSETS AND PAST DUE LOANS

The table below shows the Company's nonperforming assets and past due loans at 
the end of each of the last five years.  ($ in thousands)
<TABLE>

                                                              December 31,
                                               ----------------------------------------------------
                                                  1997       1996       1995       1994        1993
                                                 -----      -----       ----       -----       ----

<S>                                            <C>         <C>         <C>        <C>        <C>   
Loans accounted for on a nonaccrual basis      $   328     $  206      $  84      $  253     $  519
Restructured loans                                   0          0          0           0          0
                                               ----------------------------------------------------
         Total nonperforming loans                 328        206          84        253        519
Other real estate owned                            843        724         148        869      1,061
                                               ----------------------------------------------------
         Total nonperforming assets               1,171       930         232      1,122      1,580
Accruing loans past due 90 days or more           1,149       968         707        394        788
                                               ----------------------------------------------------
         Total nonperforming assets and loans  $ 2,320    $ 1,898      $  939     $1,516    $ 2,368
                                               ----------------------------------------------------
</TABLE>

Interest  which  would have been  accrued on  nonaccrual  loans had they been in
compliance with their original terms and conditions is immaterial.

At  December  31,  1997,  the Company  did not have any  concentration  of loans
greater than ten percent of total loans except those shown in Table 5.

It is the  Company's  policy that  interest not be accrued on any loan for which
payment in full of interest and principal is not expected,  on any loan which is
seriously  delinquent  unless the  obligation  is both well  secured  and in the
process of  collection,  or on any loan that is maintained  on a cash basis.  At
December 31, 1997,  the Company had no loans about which  Management had serious
doubts as to their collectibility other than those disclosed above.















                                                        10


<PAGE>




FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)

TABLE 8 - ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

The table below summarizes the Company's loan loss experience for each of the 
last five years. ($ in thousand)
<TABLE>

                                                                             Year Ended December 31,
                                                       ----------------------------------------------------
                                                          1997       1996       1995      1994       1993
                                                       ----------------------------------------------------

<S>                                                    <C>        <C>        <C>        <C>        <C>    
Amount of loan loss reserve at beginning of period     $ 4,475    $ 4,250    $ 3,374    $ 2,866    $ 2,451
Adjustment for sale of finance company branch              (77)
Loans charged off
         Commercial, financial and agricultural           (365)      (235)      (117)       (22)       (95)
         Real estate                                      (185)      (174)       (53)      (124)      (391)
         Consumer                                         (897)      (738)      (707)      (478)      (458)
                                                       ----------------------------------------------------
                  Total                                 (1,447)    (1,147)      (877)      (624)      (944)
                                                       ----------------------------------------------------
Recoveries
         Commercial, financial and agricultural             23          8         14         12         31
         Real estate                                        23         14        106         40         44
         Consumer                                          126        129        124        198        214
                                                       ----------------------------------------------------
                  Total                                    169        151        244        250        289
Net charge offs                                         (1,278)      (996)      (633)      (374)      (655)
Provision for loan losses charged to expense             2,050      1,221      1,509        882      1,070
                                                       ----------------------------------------------------
Amount of loan loss reserve at end of period           $ 5,170    $ 4,475    $ 4,250    $ 3,374    $ 2,866
                                                       ----------------------------------------------------

</TABLE>

The  allowance  for loan losses is  established  through a provision  charged to
expense.  Loans are charged against the allowance when Management  believes that
the  collection of the  principal is unlikely.  The allowance for loan losses is
maintained at a level which Management and the Board of Directors  believe to be
adequate  to absorb  estimated  losses  inherent in the loan  portfolio,  and is
reviewed  quarterly using specific criteria required by regulatory  authority as
well  as  various  analytical   devices  which   incorporates   historical  loss
experience, trends and current economic conditions.







                                                        11


<PAGE>



FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)

TABLE 9 - ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

The table below is a summary of the  allocation  categories  used by the Company
for its  allowance  for loan loss at December 31, 1997.  These  allocations  are
determined by internal  formulas  based upon an analysis of the various types of
risk associated with the loan portfolio. ($ in thousands)


                  Allocation for pools of
                     risk-rated loans             $   4,186
                  Additional allocation for
                     risk-rated consumer loans          107
                  Discretionary-unallocated             877
                                                  ---------
                                                  $   5,170
                                                  ---------


The Company  maintains the allowance at a level considered by Management and the
Board of Directors to be sufficient to absorb potential losses. Loss percentages
were  uniformly  applied to the various pools of risk that exist within the loan
portfolio  based  upon  accepted   analysis   procedures  and  current  economic
conditions.  Additional  allocations  were made for particular  areas based upon
recommendations of lending and asset review personnel.

The remaining $877 is discretionary  and serves as added protection in the event
that any of the above specific  components are determined to be inadequate.  Due
to the  imprecision in most estimates,  Management  continues to take a prudent,
yet conservative approach to the evaluation of the adequacy of the allowance.















                                                        12



<PAGE>



FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)

TABLE 10 - TIME DEPOSITS OF $100,000 OR MORE

The table below shows maturities of outstanding time deposits of $100,000 or 
more at December 31, 1997.  ($ in thousands)

                                                Certificates
                                                of deposits

         Three months or less                      $ 17,051
         Over three months through six months         4,797
         Over six months through twelve month        14,552
         Over twelve months                          13,921
                                                   --------
                  Total                            $ 50,321
                                                   --------



TABLE 11 - SELECTED RATIOS

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

                                        1997      1996       1995
                                      --------  -------     -----

         Return on average assets     1.41%      1.40%       1.30%
         Return on average equity    15.28%     15.80%      15.79%
         Dividend payout ratio       37.77%     34.40%      32.63%
         Equity to assets ratio       9.20%      8.87%       8.24%



TABLE 12 - SHORT-TERM BORROWING

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

                                                      1997     1996       1995
                                                    -------  --------  ---------
         Outstanding at end of period               $    0   $    70     48,294
         Maximum outstanding at any month-end
            during the period                            0    51,236     58,482
         Average outstanding during the period          66    19,576     46,785
         Interest paid                                   4       939      2,551
         Weighted average rate during each period     5.69%     4.80%      5.45%

                                                        13


<PAGE>



ITEM 2.           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
owns its main  office  building  and  nineteen  of its  branch  facilities.  The
remaining  facilities are occupied under lease agreements,  terms of which range
from month to month to five  years.  It is  anticipated  that all leases will be
renewed.

ITEM 3.           LEGAL PROCEEDINGS

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

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         There were no matters  submitted to the Company's  shareholders  during
the fourth quarter of 1997.

PART II

ITEM 5.           MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS

         At  March 4,  1998,  there  were  565  shareholders  of  record  of the
Company's common stock.  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.  Prior to the date of
registration  with  NASDAQ,  the  stock was  traded  on a  limited  basis and no
securities  firm was acting as a market maker.  

                                  First   Second    Third    Fourth
                                 -------  -------  -------  --------
Quarterly Closing Common
Stock Price Ranges and
Dividends Paid

1997:
High                             $ 28.00  $ 29.25  $ 30.00  $ 44.00
Low                                25.00    26.50    27.50    30.50
Close                              27.00    28.00    30.00    40.00
Dividend                             .20      .22      .22      .24
-------------------------------------------------------------------
1996:
High                             $ 24.00  $ 26.00  $ 27.00  $ 29.00
Low                                22.00    24.00    25.00    29.00
Close                              24.00    25.00    26.00    29.00
Dividend                             .17      .19      .19      .20



ITEM 6.           SELECTED FINANCIAL DATA

The  information  required  by this  item can be found  in the  table  captioned
"Selected Financial Data" in the Registrant's 1997 Annual Report to Shareholders
and is incorporated herein by reference. (page 14)





                                                        14


<PAGE>



ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

         The  information  required  by this item can be found in  "Management's
Discussion  and  Analysis of  Financial  Condition  and  Results of  Operations"
included in the  Registrant's  Combined 1997 Annual Report and Proxy Statement 
to  Shareholders  dated March 18, 1998, and is incorporated herein by reference.
(pages 40-45) In June, 1997, the Financial  Accounting  Standards Board issued 
Statements of Financial Accounting Standards Nos 130 and 131 regarding  the 
reporting of  comprehensive  income and disclosures about segments of business 
enterprises. The Company will be required to adopt both  standards  during  
1998,  however,  such will not have a material impact on the consolidated 
financial statements.

          During 1997, and continuing  into the next few years is the discussion
of the year 2000 and the technical  issues  relating to computer  software.  The
Company  primarily uses third-party  vendors for its mainframe  software banking
applications.  The  vendor  has been 2000  compliant  since  1995.  The  Company
continues  to monitor  and study its  relationships  with all vendors and majors
customers.  The cost of assuring  year 2000  compliance  will not be material to
financial statements of the Company.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The  consolidated  financial  statements  of  the  Registrant  and  the
accompanying  notes to the  financial  statements  along  with the report of the
independent public accountants are contained in the Registrant's Combined 1997 
Annual Report and Proxy Statement to Shareholders dated March 18, 1998, and are 
incorporated  herein by reference. (Pages 14-39)  The Selected Quarterly 
Financial Data is contained in the Registrant's 1997 Annual Report to 
Shareholders  (Page 16) under the caption "Quarterly Financial Trends."

ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE

                  There has been no change in  accountants  within  the two year
period ended December 31, 1997.

PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information  on the directors of the Registrant can be found on pages 5
- 7, "Election of Directors," and page 9, "Director  Compensation," contained in
the Combined 1997 Annual Report and Proxy  Statement to  Shareholders  dated 
March 18, 1998, and is incorporated herein by  reference.  Information  on the  
Registrant's  executive  officers  is included on pages 8-9, "Executive 
Compensation," in the Combined 1997 Annual Report and Proxy Statement and in 
Part I, Item 1 Business, page 5 of this Annual Report on Form 10-K. 

                                                        15



<PAGE>



ITEM 11.  EXECUTIVE COMPENSATION

         Information required by this item can be found on pages 8-9, "Executive
Compensation," and page 9, "Director Compensation," of the Combined 1997 Annual 
Report and Proxy Statement dated March 18, 1998, and is incorporated herein by 
reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
               MANAGEMENT

         Information  regarding  security ownership of certain beneficial owners
and  Management  can  be  found  on  page  7,  "Beneficial  Ownership  Reporting
Compliance,"  and page 7,  "Principal  Shareholder,"  in the Combined 1997 
Annual Report and Proxy  Statement to Shareholders dated March 18, 1998, and is 
incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information  regarding certain  relationships and related  transactions
can be found on page 12 under the caption "Transactions with Management," in the
Combined 1997 Annual Report and Proxy Statement to Shareholders dated March 18, 
1998, and is incorporated herein by reference.

ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON

FORM 8-K

A-1.     Financial Statements

The  report of  Shearer,  Taylor & Co.,  P. A.,  independent  auditors,  and the
following  consolidated  financial  statements  of First M & F  Corporation  and
Subsidiary are included in the  Registrant's  Combined 1997 Annual Report and 
Proxy  Statement to  Shareholders, dated  March 18,  1998,  and are  
incorporated  into Part II,  Item 8, herein by reference.

         Report of Independent Certified  Public Accountants PAGE 14
         Consolidated Statements of Condition as of December 31, 1997, and 1996
          PAGE 15
         Consolidated Statements of Income for the Years ended
                  December 31, 1997, 1996, and 1995 PAGE 16
         Consolidated  Statements of Stockholders' Equity  for the Years ended
                  December 31, 1997, 1996, and 1995  PAGE 17
         Consolidated Statements of Cash Flows for the Years ended
                  December 31, 1997, 1996, and 1995  PAGE 18
         Notes to the Consolidated Financial Statements PAGE 20
         The Selected Financial Data and the Selected Quarterly Financial Data 
                  are included in the Registrant's 1997 Annual Report to 
                  Shareholders on pages 14 and 16, respectively


                                                        16


<PAGE>




A-2.     Financial Statement Schedules

         The schedules to the  consolidated  financial  statements  set forth by
Article 9 of Regulation S-X are not required under the related  instructions  or
are inapplicable and therefore have been omitted.


A-3.     Exhibits

         The  exhibits  listed  in the  Exhibit  Index  are  filed  herewith  or
incorporated herein by reference.

B.       Reports on Form 8-K

         None




























                                                        17


<PAGE>



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: /S/ HUGH S. POTTS, JR.                  BY: /S/ SCOTT M. WIGGERS
    ------------------------------              ------------------------

        HUGH S. POTTS, JR                        SCOTT M. WIGGERS
        CHAIRMAN OF THE BOARD AND                PRESIDENT
        CHIEF EXECUTIVE OFFICER

        DATE: MARCH 17, 1998                     DATE:  MARCH 17, 1998





























                                                        18


<PAGE>



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:


DATE:       March 17, 1998         BY:      /S/ Hugh S. Potts, Jr.
                                            --------------------------------
                                              HUGH S. POTTS, JR., DIRECTOR

DATE:       March 17, 1998         BY:      /S/ Scott M. Wiggers
                                            --------------------------------
                                              SCOTT M. WIGGERS, DIRECTOR

DATE:       March 17, 1998         BY:      /S/ Fred A. Bell, Jr.
                                            --------------------------------
                                              FRED A. BELL, JR., DIRECTOR

DATE:       March 17, 1998         BY:      /S/ Jon A. Crocker
                                            --------------------------------
                                              JON A. CROCKER, DIRECTOR

DATE:       March 17, 1998         BY:      /S/ Charles T. England
                                            --------------------------------
                                              CHARLES T. ENGLAND, DIRECTOR

DATE:       March 17, 1998         BY:      /S/ Toxey Hall, III
                                            --------------------------------
                                            TOXEY HALL III, DIRECTOR

DATE:       March 17, 1998         BY:      /S/ Barbara K. Hammond
                                            --------------------------------
                                            BARBARA K. HAMMOND, DIRECTOR

DATE:       March 17, 1998         BY:      /S/ J. Marlin Ivey
                                            --------------------------------
                                            J. MARLIN IVEY, DIRECTOR

DATE:       March 17, 1998         BY:      /S/ Joe Ivey
                                            --------------------------------
                                            JOE IVEY, DIRECTOR

DATE:       March 17, 1998         BY:      /S/ R. Dale McBride
                                            --------------------------------
                                            R. DALE McBRIDE, DIRECTOR

DATE:       March 17, 1998         BY:      /S/ Susan P. McCaffery
                                            --------------------------------
                                            SUSAN P. McCAFFERY, DIRECTOR

DATE:       March 17, 1998         BY:      /S/ William M. Myers
                                            --------------------------------
                                            WILLIAM M. MYERS, DIRECTOR

DATE:       March 17, 1998         BY:      /S/ Otho E. Petit, Jr.
                                            --------------------------------
                                            OTHO E. PETIT, JR., DIRECTOR

DATE:       March 17, 1998         BY:      /S/ Charles W. Ritter, Jr.
                                            --------------------------------
                                            CHARLES W. RITTER, JR., DIRECTOR

DATE:       March 17, 1998         BY:      /S/ W.C. Shoemaker
                                            --------------------------------
                                            W. C. SHOEMAKER, DIRECTOR

DATE:       March 17, 1998         BY:      /S/ Edward G. Woodard
                                            --------------------------------
                                            EDWARD G. WOODARD, DIRECTOR





                                                     19


<PAGE>


EXHIBIT INDEX

2        Agreement and Plan of Reorganization dated September 1, 1995 among 
First M&F Corporation, Merchants & Farmers Bank and Farmers & Merchants Bank 
filed as Exhibit 2 to the Registrant's Form S-4, Registration Number 33-63919, 
dated November 2, 1995 incorporated herein by reference.

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.

13.1    Only  pages 14 and 16 of the  Registrant's  Annual  Report  to  
Shareholders expressly  incorporated  by  reference  herein are included in 
this exhibit and, therefore, are filed as a part of this report of Form 10-K.

13.2    First M&F Corporation's Combined 1997 Annual Report and Proxy 
Statement dated March 18, 1998.

27       Financial Data Schedule.  All other exhibits are omitted as they are 
inapplicable or not required by the related instructions.































                                                        20