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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2001

                          Commission file number 027307

                                M&F BANCORP, INC.
                            ------------------------
             (Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<S>                                                  <C>
            North Carolina                                       56-1980549
            ---------------                                      ----------
    (State or Other Jurisdiction of                  (I.R.S. Employer Identification No.)
     Incorporation or Organization)

       2634 Chapel Hill Blvd.
       Durham, North Carolina                                   27707-2800
       -----------------------                                  ----------
(Address of Principal Executive Offices)                        (Zip Code)
</TABLE>

                                 (919) 683-1521
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

     Securities to be Registered Pursuant to Section 12(b) of the Act: None

        Securities to be Registered Pursuant to Section 12(g) of the Act:

                           Common Stock, no par value
                   ------------------------------------------
                                (Title of class)

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 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 in response 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-KSB. [X]

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the common equity was sold, or the
average bid and asked prices of such common equity, as of a specified date
within 60 days prior to the date of filing. $9,877,872 based on the closing
                                            -------------------------------
price of such common stock on March 15, 2002, which was $12.00 per share.
------------------------------------------------------------------------

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. 853,725 shares of common stock,
                                                 ------------------------------
outstanding at March 15, 2002.
-----------------------------

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                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report of M&F Bancorp, Inc. for the year ended December
31, 2001 (the "Annual Report") are incorporated by reference into Part I, Part
II and Part IV.

Portions of the Proxy Statement for the 2002 Annual Meeting of Stockholders of
M&F Bancorp, Inc. to be held on April 30, 2002 (the "Proxy Statement"), are
incorporated by reference into Part III.

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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

General

     M&F Bancorp, Inc. (the "Company") was formed in 1999 to serve as the
holding company for Mechanics and Farmers Bank (the "Bank"). The Company is a
bank holding company registered with the Board of Governors of the Federal
Reserve System (the "Federal Reserve") under the Bank Holding Company Act of
1956, as amended (the "BHCA"). The Company's sole activity consists of owning
the Bank. The Company's principal source of income is any dividends which are
declared and paid by the Bank on its capital stock.

     The Bank is a North Carolina-chartered bank and began operations in 1908.
It is engaged primarily in the business of attracting deposits from the general
public and using such deposits, together with other funds, to make consumer and
commercial loans. The Bank makes secured personal, automobile, home improvement,
residential mortgage, commercial real estate, construction and commercial loans.
The Bank also makes some unsecured consumer loans. The Bank's primary source of
revenue is interest income from its lending activities. The Bank's other major
sources of revenue are interest and dividend income from investments, interest
income from its interest-bearing investments with other depository institutions
and fee income from its lending and deposit activities. The major expenses of
the Bank are interest on deposits and general and administrative expenses such
as salaries, employee benefits, federal deposit insurance premiums and branch
occupancy and related expenses.

     As a North Carolina-chartered bank, the Bank is subject to examination and
regulation by the Federal Deposit Insurance Corporation (the "FDIC") and the
Commissioner of Banks, North Carolina Department of Commerce (the
"Commissioner"). The Bank is further subject to certain regulations of the
Federal Reserve governing reserves required to be maintained against deposits
and other matters. The business and regulation of the Company and the Bank are
also subject to legislative changes from time to time. See "SUPERVISION AND
REGULATION."

     The Company has no operations and conducts no business of its own other
than owning the Bank. Accordingly, the discussion of the business which follows
concerns the business conducted by the Bank, unless otherwise indicated.

Market Area

     The Bank has three offices in Durham, North Carolina, two offices in
Raleigh, North Carolina, two offices in Charlotte, North Carolina, and one
office in Winston-Salem, North Carolina. All offices are located in metropolitan
areas with employment spread primarily among service, manufacturing and
governmental activities. All offices are located in areas of high competition
among financial service providers. As of June 30, 2001, Durham had 11 commercial
banks, and the Bank ranked seventh in deposit size. Raleigh had 21 commercial
banks, and the Bank ranked 15th in deposit size. The Bank ranked 15th in deposit
size out of 19 commercial banks in Charlotte. There were 13 commercial banks in
Winston-Salem, and the Bank ranked 12th in deposit size.

Lending Activities

     General. The Bank's primary source of revenue is interest and fee income
from its lending activities, consisting primarily of automobile, home equity,
home improvement, personal, residential mortgage, commercial real estate,
construction and commercial loans. The Bank also offers both personal and
commercial overdraft protection in connection with its checking accounts. As of
December 31, 2001, approximately 85.9% of the Bank's loan portfolio was secured
by real property, 12.4% was secured by personal property, and 1.7% was
unsecured. On December 31, 2001, the largest amount the Bank had outstanding to
any one borrower and its affiliates was approximately $2.6 million. In addition
to interest earned on loans, the Bank receives fees in connection with loan
originations, loan modifications, late payments, loan assumptions and other
miscellaneous services.

                                       3

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     Loan Portfolio Composition. The Bank's consolidated gross loan portfolio
totaled approximately $122.3 million at December 31, 2001 representing 72.8% of
the Bank's total assets. At December 31, 2001, approximately 16.1% of the Bank's
gross loan portfolio was composed of adjustable rate loans, and approximately
83.9% of the Bank's gross loan portfolio was composed of fixed rate loans. At
December 31, 2001, approximately $7.4 million, or 6.1%, of the Bank's gross loan
portfolio was composed of consumer loans. On such date, approximately $71.6
million, or 58.5%, of the Bank's gross loan portfolio was composed of commercial
loans and approximately $43.3 million, or 35.4%, consisted of real estate loans.

     Origination, Purchase and Sale of Loans. Residential mortgage loans
generally are now being originated in conformity with purchase requirements of
the Federal National Mortgage Association. Accordingly, the Bank believes such
loans are saleable in the secondary market. However, the Bank did not purchase
or sell any loans in fiscal 2001 or 2000.

     Asset Classification. Applicable regulations require each insured
institution to "classify" its own assets on a regular basis. In addition, in
connection with examinations of financial institutions, regulatory examiners
have authority to identify problem assets and, if appropriate, classify them.
Problem assets are classified as "substandard," "doubtful" or "loss," depending
on the presence of certain characteristics as discussed below.

     An asset is considered "substandard" if not adequately protected by the
current net worth and paying capacity of the obligor or the collateral pledged,
if any. "Substandard" assets include those characterized by the "distinct
possibility" that the insured institution will sustain "some loss" if the
deficiencies are not corrected. Assets classified as "doubtful" have all of the
weaknesses inherent in those classified "substandard" with the added
characteristic that the weaknesses present make "collection or liquidation in
full," on the basis of currently existing facts, conditions, and values, "highly
questionable and improbable." Assets classified "loss" are those considered
"uncollectible" and of such little value that their continuance as assets
without the establishment of a loss reserve is not warranted.

     As of December 31, 2001, the Bank had approximately $2.3 million of loans
classified as "substandard," $160,000 of loans classified as "doubtful," and
$45,500 loans classified as "loss." Total classified assets as of December 31,
2001 and 2000 were approximately $2.5 million and $4.9 million, respectively.

     In connection with the filing of periodic reports with regulatory agencies,
the Bank reports any assets which possess credit deficiencies or potential
weaknesses deserving close attention by management. These assets may be
considered "special mention" assets and do not yet warrant adverse
classification. At December 31, 2001, the Bank had approximately $2.0 million of
loans in the "special mention" category.

     When an insured institution classifies problem assets as either substandard
or doubtful, it is required to establish general allowances for loan losses in
an amount deemed prudent by management. These allowances represent loss
allowances which have been established to recognize the inherent risks
associated with lending activities and the risks associated with particular
problem assets. When an insured institution classifies problem assets as "loss,"
it charges off the balance of the asset. The Bank's determination as to the
classification of its assets and the amount of its valuation allowances is
subject to review by the FDIC and the Commissioner which can order the
establishment of additional loss allowances.

     Allowance for Loan Losses. In originating loans, the Bank recognizes that
credit losses will be experienced and that the risk of loss will vary with,
among other things, the type of loan being made, the creditworthiness of the
borrower over the term of the loan and, in the case of a secured loan, the
quality of the security for the loan as well as general economic conditions. It
is management's policy to maintain an adequate allowance for loan losses based
on, among other things, the Bank's historical loan loss experience, evaluation
of economic conditions and regular review of delinquencies and loan portfolio
quality. Specific allowances are provided for individual loans when ultimate
collection is considered questionable by management after reviewing the current
status of loans which are contractually past due and considering the net
realizable value of the security for the loans.

                                       4

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     Management actively monitors the Bank's asset quality, charges off loans
against the allowance for loan losses when appropriate and provides specific
loss reserves when necessary. Although management believes it uses the best
information available to make determinations with respect to the allowance for
loan losses, future adjustments may be necessary if economic conditions differ
substantially from the economic conditions in the assumptions used in making the
initial determinations.

Investments

     Interest income from investment securities generally provides a significant
source of income to the Bank. In addition, the Bank receives interest income
from interest on federal funds invested overnight with other financial
institutions.

     On December 31, 2001, the Bank's investment securities portfolio totaled
approximately $30.3 million and consisted of U.S. Treasury and U.S. Government
agency securities, corporate bonds, obligations of states and political
subdivisions and equity securities.

     The Bank's investment strategy is intended, among other things, to (i)
provide and maintain liquidity, (ii) maintain a balance of high quality,
diversified investments to minimize risk, (iii) maximize returns, and (iv)
manage interest rate risk. In terms of priorities, safety is considered more
important than liquidity or return on investment. The Bank does not engage in
hedging activities.

Deposits and Borrowings

     General. Deposits are the primary source of the Bank's funds for lending
and other investment purposes. In addition to deposits, the Bank derives funds
from loan principal repayments, interest payments, investment income, interest
from its Fed funds deposits, and otherwise from its operations. Loan repayments
are a relatively stable source of funds while deposit inflows and outflows may
be significantly influenced by general interest rates and money market
conditions. Borrowings may be used on a short-term basis to compensate for
reductions in the availability of funds from other sources. They may also be
used on a longer term basis for general business purposes.

     Deposits. In recent years, the Bank has experienced consistent deposit
growth. On December 31, 2001 and 2000, the Bank's deposits totaled approximately
$135.4 million and $135.1 million, respectively.

     The Bank attracts both short-term and long-term deposits from the general
public by offering a variety of accounts and rates. The Bank offers savings
accounts, interest-bearing and noninterest-bearing checking accounts, and fixed
interest rate certificates with varying maturities. All deposit flows are
greatly influenced by economic conditions, the general level of interest rates,
competition and other factors. The Bank's deposits traditionally have been
obtained primarily from its market areas. The Bank utilizes traditional
marketing methods to attract new customers and deposits, including print media
advertising and direct mailings. The Bank does not advertise for deposits
outside of its local market area and it has no brokered deposits.

Subsidiaries

     The Bank's wholly-owned subsidiary, Realty Services, Inc. ("Realty
Services") was dissolved in May 2001, and all assets were transferred to the
Bank. Realty Services, a North Carolina corporation, acquired and managed
commercial properties for use as branch offices of the Bank. During the fiscal
years ended December 31, 2001 and 2000, Realty Services had net losses of $169
and $9,432, respectively. The financial statements of Realty Services were
consolidated with those of the Bank.

Competition

     The Bank faces strong competition both in attracting deposits and making
loans. Its most direct competition for deposits has historically come from
savings institutions, credit unions and other commercial banks located in its

                                       5

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primary market area, including large financial institutions which have greater
financial and marketing resources available to them. The Bank has also faced
additional significant competition for investors' funds from short-term money
market securities and other corporate and government securities. The ability of
the Bank to attract and retain deposits depends on its ability to generally
provide a rate of return, liquidity and risk comparable to that offered by
competing investment opportunities. As of June 30, 2001, the Bank's market share
of the deposits in Durham, North Carolina was approximately 2.38%, and less than
one percent in Raleigh, Charlotte and Winston-Salem, North Carolina.

Employees

     As of December 31, 2001, the Bank had 85 full-time equivalent employees.

Supervision and Regulation

     Bank holding companies and commercial banks are extensively regulated under
both federal and state law. The following is a brief summary of certain statutes
and rules and regulations that affect or will affect the Company, the Bank and
any subsidiaries. This summary is qualified in its entirety by reference to the
particular statute and regulatory provisions referred to below and is not
intended to be an exhaustive description of the statutes or regulations
applicable to the business of the Company and the Bank. Supervision, regulation
and examination of the Company and the Bank by the regulatory agencies are
intended primarily for the protection of depositors rather than shareholders of
the Company. Statutes and regulations which contain wide-ranging proposals for
altering the structures, regulations and competitive relationship of financial
institutions are introduced regularly. The Company cannot predict whether or in
what form any proposed statute or regulation will be adopted or the extent to
which the business of the Company and the Bank may be affected by such statute
or regulation.

     General. There are a number of obligations and restrictions imposed on bank
holding companies and their depository institution subsidiaries by law and
regulatory policy that are designed to minimize potential loss to the depositors
of such depository institutions and the FDIC insurance funds in the event the
depository institution becomes in danger of default or in default. For example,
to avoid receivership of an insured depository institution subsidiary, a bank
holding company is required to guarantee the compliance of any insured
depository institution subsidiary that may become "undercapitalized" with the
terms of any capital restoration plan filed by such subsidiary with its
appropriate federal banking agency up to the lesser of (i) an amount equal to 5%
of the bank's total assets at the time the bank became undercapitalized or (ii)
the amount which is necessary (or would have been necessary) to bring the bank
into compliance with all acceptable capital standards as of the time the bank
fails to comply with such capital restoration plan. The Company, as a registered
bank holding company, is subject to the regulation of the Federal Reserve. Under
a policy of the Federal Reserve with respect to bank holding company operations,
a bank holding company is required to serve as a source of financial strength to
its subsidiary depository institutions and to commit resources to support such
institutions in circumstances where it might not do so absent such policy. The
Federal Reserve under the BHCA also has the authority to require a bank holding
company to terminate any activity or to relinquish control of a nonbank
subsidiary (other than a nonbank subsidiary of a bank) upon the Federal
Reserve's determination that such activity or control constitutes a serious risk
to the financial soundness and stability of any bank subsidiary of the bank
holding company.

     In addition, insured depository institutions under common control are
required to reimburse the FDIC for any loss suffered by its deposit insurance
funds as a result of the default of a commonly controlled insured depository
institution or for any assistance provided by the FDIC to a commonly controlled
insured depository institution in danger of default. The FDIC may decline to
enforce the cross-guarantee provisions if it determines that a waiver is in the
best interest of the deposit insurance funds. The FDIC's claim for damages is
superior to claims of stockholders of the insured depository institution or its
holding company but is subordinate to claims of depositors, secured creditors
and holders of subordinated debt (other than affiliates) of the commonly
controlled insured depository institutions.

                                       6

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     As a result of the Company's ownership of the Bank, the Company is also
registered under the bank holding company laws of North Carolina. Accordingly,
the Company is also subject to regulation and supervision by the Commissioner.

     Capital Adequacy Guidelines for Holding Companies. The Federal Reserve has
adopted capital adequacy guidelines for bank holding companies and banks that
are members of the Federal Reserve system and have consolidated assets of $150
million or more. Bank holding companies subject to the Federal Reserve's capital
adequacy guidelines are required to comply with the Federal Reserve's risk-based
capital guidelines. Under these regulations, the minimum ratio of total capital
to risk-weighted assets is 8%. At least half of the total capital is required to
be "Tier I capital," principally consisting of common stockholders' equity,
noncumulative perpetual preferred stock, and a limited amount of cumulative
perpetual preferred stock, less certain goodwill items. The remainder ("Tier II
capital") may consist of a limited amount of subordinated debt, certain hybrid
capital instruments and other debt securities, perpetual preferred stock, and a
limited amount of the general loan loss allowance. In addition to the risk-based
capital guidelines, the Federal Reserve has adopted a minimum Tier I capital
(leverage) ratio, under which a bank holding company must maintain a minimum
level of Tier I capital to average total consolidated assets of at least 3% in
the case of a bank holding company which has the highest regulatory examination
rating and is not contemplating significant growth or expansion. All other bank
holding companies are expected to maintain a Tier I capital (leverage) ratio of
at least 1% to 2% above the stated minimum.

     Capital Requirements for the Bank. The Bank, as a North Carolina commercial
bank, is required to maintain a surplus account equal to 50% or more of its
paid-in capital stock. As a North Carolina chartered, FDIC-insured commercial
bank which is not a member of the Federal Reserve System, the Bank is also
subject to capital requirements imposed by the FDIC. Under the FDIC's
regulations, state nonmember banks that (a) receive the highest rating during
the examination process and (b) are not anticipating or experiencing any
significant growth, are required to maintain a minimum leverage ratio of 3% of
total consolidated assets; all other banks are required to maintain a minimum
ratio of 1% or 2% above the stated minimum, with a minimum leverage ratio of not
less than 4%. The Bank exceeded all applicable capital requirements as of
December 31, 2001.

     Dividend and Repurchase Limitations. The Company must obtain Federal
Reserve approval prior to repurchasing Common Stock for in excess of 10% of its
net worth during any twelve-month period unless the Company (i) both before and
after the redemption satisfies capital requirements for "well capitalized" state
member banks; (ii) received a one or two rating in its last examination; and
(iii) is not the subject of any unresolved supervisory issues.

     Although the payment of dividends and repurchase of stock by the Company
are subject to certain requirements and limitations of North Carolina corporate
law, except as set forth in this paragraph, neither the Commissioner nor the
FDIC have promulgated any regulations specifically limiting the right of the
Company to pay dividends and repurchase shares. However, the ability of the
Company to pay dividends or repurchase shares may be dependent upon the
Company's receipt of dividends from the Bank.

     North Carolina commercial banks, such as the Bank, are subject to legal
limitations on the amounts of dividends they are permitted to pay. Dividends may
be paid by the Bank from undivided profits, which are determined by deducting
and charging certain items against actual profits, including any contributions
to surplus required by North Carolina law. Also, an insured depository
institution, such as the Bank, is prohibited from making capital distributions,
including the payment of dividends, if, after making such distribution, the
institution would become "undercapitalized" (as such term is defined in the
applicable law and regulations).

     Deposit Insurance Assessments. The Bank is subject to insurance assessments
imposed by the FDIC. Under current law, the insurance assessment to be paid by
members of the Bank Insurance Fund, such as the Bank, shall be as specified in a
schedule required to be issued by the FDIC. FDIC assessments for deposit
insurance range from 0 to 31 basis points per $100 of insured deposits,
depending on the institution's capital position and other supervisory factors.

                                       7

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     Federal Home Loan Bank System. The FHLB system provides a central credit
facility for member institutions. As a member of the FHLB of Atlanta, the Bank
is required to own capital stock in the FHLB of Atlanta in an amount at least
equal to the greater of 1% of the aggregate principal amount of its unpaid
residential mortgage loans, home purchase contracts and similar obligations at
the end of each calendar year, or 5% of its outstanding advances (borrowings)
from the FHLB of Atlanta. On December 31, 2001, the Bank was in compliance with
this requirement.

     Community Reinvestment. Under the Community Reinvestment Act ("CRA"), as
implemented by regulations of the FDIC, an insured institution has a continuing
and affirmative obligation consistent with its safe and sound operation to help
meet the credit needs of its entire community, including low and moderate income
neighborhoods. The CRA does not establish specific lending requirements or
programs for financial institutions, nor does it limit an institution's
discretion to develop, consistent with the CRA, the types of products and
services that it believes are best suited to its particular community. The CRA
requires the federal banking regulators, in connection with their examinations
of insured institutions, to assess the institutions' records of meeting the
credit needs of their communities, using the ratings of "outstanding,"
"satisfactory," "needs to improve," or "substantial noncompliance," and to take
that record into account in its evaluation of certain applications by those
institutions. All institutions are required to make public disclosure of their
CRA performance ratings. The Bank received a "outstanding" rating in its last
CRA examination which was conducted during December 1997.

     Prompt Corrective Action. The FDIC has broad powers to take corrective
action to resolve the problems of insured depository institutions. The extent of
these powers will depend upon whether the institution in question is "well
capitalized," "adequately capitalized," "undercapitalized," "significantly
undercapitalized," or "critically undercapitalized." Under the regulations, an
institution is considered "well capitalized" if it has (i) a total risk-based
capital ratio of 10% or greater, (ii) a Tier I risk-based capital ratio of 6% or
greater, (iii) a leverage ratio of 5% or greater and (iv) is not subject to any
order or written directive to meet and maintain a specific capital level for any
capital measure. An "adequately capitalized" institution is defined as one that
has (i) a total risk-based capital ratio of 8% or greater, (ii) a Tier I
risk-based capital ratio of 4% or greater and (iii) a leverage ratio of 4% or
greater (or 3% or greater in the case of an institution with the highest
examination rating). An institution is considered (A) "undercapitalized" if it
has (i) a total risk-based capital ratio of less than 8%, (ii) a Tier I
risk-based capital ratio of less than 4% or (iii) a leverage ratio of less than
4% (or 3% in the case of an institution with the highest examination rating);
(B) "significantly undercapitalized" if the institution has (i) a total
risk-based capital ratio of less than 6%, or (ii) a Tier I risk-based capital
ratio of less than 3% or (iii) a leverage ratio of less than 3% and (C))
"critically undercapitalized" if the institution has a ratio of tangible equity
to total assets equal to or less than 2%.

     Changes in Control. The BHCA prohibits the Company from acquiring direct or
indirect control of more than 5% of the outstanding voting stock or
substantially all of the assets of any bank or savings bank or merging or
consolidating with another bank holding company or savings bank holding company
without prior approval of the Federal Reserve. Similarly, Federal Reserve
approval (or, in certain cases, non-disapproval) must be obtained prior to any
person acquiring control of the Company. Control is conclusively presumed to
exist if, among other things, a person acquires more than 25% of any class of
voting stock of the Company or controls in any manner the election of a majority
of the directors of the Company. Control is presumed to exist if a person
acquires more than 10% of any class of voting stock and the stock is registered
under Section 12 of the Securities Exchange Act of 1934 or the acquiror will be
the largest shareholder after the acquisition.

     Federal Securities Law. The Company has registered its Common Stock with
the SEC pursuant to Section 12(g) of the Securities Exchange Act of 1934. As a
result of such registration, the proxy and tender offer rules, insider trading
reporting requirements, annual and periodic reporting and other requirements of
the Exchange Act are applicable to the Company.

     Transactions with Affiliates. Under current federal law, depository
institutions are subject to the restrictions contained in Section 22(h) of the
Federal Reserve Act with respect to loans to directors, executive officers and
principal shareholders. Under Section 22(h), loans to directors, executive
officers and shareholders who own more than 10% of a depository institution (18%
in the case of institutions located in an area with less than 30,000 in
population), and

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certain affiliated entities of any of the foregoing, may not exceed, together
with all other outstanding loans to such person and affiliated entities, the
institution's loans-to-one-borrower limit (as discussed below). Section 22(h)
also prohibits loans above amounts prescribed by the appropriate federal banking
agency to directors, executive officers and shareholders who own more than 10%
of an institution, and their respective affiliates, unless such loans are
approved in advance by a majority of the board of directors of the institution.
Any "interested" director may not participate in the voting. The FDIC has
prescribed the loan amount (which includes all other outstanding loans to such
person), as to which such prior board of director approval is required, as being
the greater of $25,000 or 5% of capital and surplus (up to $500,000). Further,
pursuant to Section 22(h), the Federal Reserve requires that loans to directors,
executive officers, and principal shareholders be made on terms substantially
the same as offered in comparable transactions with non-executive employees of
the Bank. The FDIC has imposed additional limits on the amount a bank can loan
to an executive officer.

     Loans to One Borrower. The Bank is subject to the Commissioner's loans to
one borrower limits which are substantially the same as those applicable to
national banks. Under these limits, no loans and extensions of credit to any
borrower outstanding at one time and not fully secured by readily marketable
collateral shall exceed 15% of the unimpaired capital and unimpaired surplus of
the bank. Loans and extensions of credit fully secured by readily marketable
collateral may comprise an additional 10% of unimpaired capital and unimpaired
surplus.

     The Gramm-Leach-Bliley Act. The Gramm-Leach-Bliley Act (the "GLB Act") was
signed into law on November 12, 1999 to remove barriers separating banking,
securities and insurance firms and to make other reforms.

     Financial Affiliations. Title I of the GLB Act facilitates affiliations
among banks, securities firms and insurance companies. Financial organizations
may structure new financial affiliations through a holding company structure, or
a financial subsidiary (with limitations on activities and appropriate
safeguards). A bank holding company may now qualify as a financial holding
company and expand into a wide variety of services that are financial in nature,
provided that its subsidiary depository institutions are well-managed,
well-capitalized and have received a "satisfactory" rating on their last
Community Reinvestment Act examination. A bank holding company which does not
qualify as a financial holding company under the GLB Act is generally limited in
the types of activities in which it may engage to those that the Federal Reserve
had recognized as permissible for a bank holding company prior to the date of
enactment of the GLB Act.

     National banks remain limited in the scope of activities they may exercise
directly within the bank, but an eligible national bank may have a financial
subsidiary that exercises many of the expanded financial services authorized for
a financial holding company. A national bank cannot engage in merchant banking
either directly or through a subsidiary, but a financial holding company is
authorized to have an affiliate company that engages in merchant banking.
State-chartered banks may have financial subsidiaries that, upon meeting
eligibility criteria, can engage in activities permitted for financial
subsidiaries of national banks.

     Functional Regulation. The GLB Act designates the Federal Reserve as the
overall umbrella supervisor of the new financial services holding companies. The
GLB Act adopts a system of functional regulation where the primary regulator is
determined by the nature of activity rather than the type of institution.
Securities activities are regulated by the SEC and other securities regulators,
insurance activities by the state insurance authorities, and banking activities
by the appropriate banking regulator.

     Insurance. The GLB Act reaffirms that states are the regulators for
insurance activities of all persons, including acting as the functional
regulator for the insurance activities of federally-chartered banks. However,
states may not prevent depository institutions and their affiliates from
conducting insurance activities.

     Privacy. The GLB Act imposes restrictions on the ability of financial
services firms to share customer information with nonaffiliated third parties.
The GLB Act: (i) requires financial services firms to establish privacy policies
and disclose them annually to customers, explaining how nonpublic personal
information is shared with affiliates and third parties; (ii) directs regulatory
agencies to adopt standards for sharing customer information; (iii) permits
customers to prohibit ("opt-out") of the disclosure of personal information to
nonaffiliated third parties; (iv)

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prohibits the sharing with marketers of credit card and other account numbers;
and, (v) prohibits "pretext" calling. The privacy provisions do allow, however,
a community bank to share information with third parties that sell financial
products, such as insurance companies or securities firms.

     Other. The GLB Act reforms the Federal Home Loan Bank System to provide
small banks with greater access to funds for making loans to small business and
small farmers. Also, the GLB Act obligates operators of automated teller
machines to provide notices to customers regarding surcharge practices. The GLB
Act also provides that CRA agreements between financial institutions and
community groups must be disclosed and reported to the public.

     Other. Additional regulations require annual examinations of all insured
depository institutions by the appropriate federal banking agency, with some
exceptions for small, well-capitalized institutions and state chartered
institutions examined by state regulators, and establish operational and
managerial, asset quality, earnings and stock valuation standards for insured
depository institutions, as well as compensation standards.

     The Bank is subject to examination by the FDIC and the Commissioner. In
addition, the Bank is subject to various other state and federal laws and
regulations, including state usury laws, laws relating to fiduciaries, consumer
credit and equal credit, fair credit reporting laws and laws relating to branch
banking. The Bank, as an insured North Carolina commercial bank, is prohibited
from engaging as a principal in activities that are not permitted for national
banks, unless (i) the FDIC determines that the activity would pose no
significant risk to the appropriate deposit insurance fund and (ii) the Bank is,
and continues to be, in compliance with all applicable capital standards.

     Under Chapter 53 of the North Carolina General Statutes, if the capital
stock of a North Carolina commercial bank is impaired by losses or otherwise,
the Commissioner is authorized to require payment of the deficiency by
assessment upon the bank's shareholders, pro rata, and to the extent necessary,
if any such assessment is not paid by any shareholder, upon 30 days notice, to
sell as much as is necessary of the stock of such shareholder to make good the
deficiency.

ITEM 2. DESCRIPTION OF PROPERTY

     At December 31, 2001, the Company conducted its business from the
headquarters office in Durham, North Carolina, and its eight branch offices in
Durham, Raleigh, Charlotte and Winston-Salem, North Carolina. The following
table sets forth certain information regarding the Bank's properties as of
December 31, 2001. Unless indicated otherwise, the Bank owns the properties.
Rentals paid by the Bank under leases totaled $35,723 for the fiscal year ended
December 31, 2001.

                                       10

<PAGE>

                                                                      Net Book
                                                                      Value of
       Address                                                        Property
       -------                                                       ----------

Main Banking Office                                                  $    3,218
116 West Parrish Street
Durham, North Carolina (Leased)

Corporate Office                                                      3,224,763
2634 Chapel Hill Boulevard
Durham, North Carolina

Mutual Plaza                                                                -0-
Durham, North Carolina (Leased)

2705 Chapel Hill Boulevard                                              328,707
Durham, North Carolina

13 East Hargett Street                                                   66,752
Raleigh, North Carolina

1824 Rock Quarry Road                                                    91,328
Raleigh, North Carolina (Lease Land Only)

2101 Beatties Ford Road                                                     796
Charlotte, North Carolina

101 Beatties Ford Road                                                  221,632
Charlotte, North Carolina

770 Martin Luther King Drive                                            498,109
Winston-Salem, North Carolina

The total net book value of the Company's furniture, fixtures and equipment on
December 31, 2001 was $705,785. All properties are considered by management to
be in good condition and adequately covered by insurance.

ITEM 3. LEGAL PROCEEDINGS

     In the opinion of management, the Company is not involved in any pending
legal proceedings other than routine, non-material proceedings occurring in the
ordinary course of business.

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

     No matter was submitted to a vote of the Company's shareholders during the
quarter ended December 31, 2001.

                                       11

<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The information required by this Item is set forth under the section
captioned "Shareholders' Equity and Dividends" on pages 19 and 20 of the Annual
Report, which section is incorporated herein by reference. See "Item 1.
BUSINESS--Supervision and Regulation-Dividend and Repurchase Limitations" above
for regulatory restrictions which limit the ability of the Company to pay
dividends.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The information required by this Item is set forth in the section captioned
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 6 to 21 of the Annual Report, which section is incorporated
herein by reference.

ITEM 7. FINANCIAL STATEMENTS

     The consolidated financial statements of the Company set forth on pages 22
through 41 of the Annual Report are incorporated herein by reference.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     Not Applicable.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

     The information required by this Item regarding directors and executive
officers of the Company is set forth under the sections captioned "Proposal 1 -
Election of Directors - Nominees for Election at this Annual Meeting" on pages
14 and 15 of the Proxy Statement and "Executive Officers" on pages 5 and 6 of
the Proxy Statement, which sections are incorporated herein by reference.

     The information required by this Item regarding compliance with Section
16(a) of the Securities Exchange Act of 1934 is set forth under the section
captioned "Section 16(a) Beneficial Ownership Reporting Compliance" set forth on
page 16 of the Proxy Statement, which section is incorporated herein by
reference.

ITEM 10. EXECUTIVE COMPENSATION

     The information required by this Item is set forth under the sections
captioned "Board of Directors and Its Committees - How Are Directors
Compensated?" on page 7 and "Executive Compensation" on pages 8 through 13 of
the Proxy Statement, which sections are incorporated herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this Item is incorporated by reference from the
section captioned "Stock Ownership" on pages 3 through 5 of the Proxy Statement.

                                       12

<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         See the section captioned "Executive Compensation - Indebtedness of and
Transactions with Management" on pages 13 and 14 of the Proxy Statement, which
section is incorporated herein by reference.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

13(a)1 Consolidated Financial Statements (contained in the Annual Report
       attached hereto as Exhibit (13) and incorporated herein by reference)

     (a)  Independent Auditors' Report

     (b)  Consolidated Statements of Condition as of December 31, 2001 and 2000

     (c)  Consolidated Statements of Income for the Years Ended December 31,
          2001, 2000 and 1999

     (d)  Consolidated Statements of Shareholders' Equity for the Years Ended
          December 31, 2001, 2000 and 1999

     (e)  Consolidated Statements of Cash Flows for the Years Ended December 31,
          2001, 2000 and 1999

     (f)  Notes to Consolidated Financial Statements

13(a)2 Financial Consolidated Statement Schedules

     All schedules have been omitted as the required information is either
     inapplicable or included in the Notes to Consolidated Financial Statements.

13(a)3 Exhibits

       Exhibit (3)(i)         Articles of Incorporation of M&F Bancorp, Inc.,
                              incorporated by reference to Exhibit (3) to the
                              Form 10-QSB for the quarter ended September 30,
                              1999 filed with the Securities and Exchange
                              Commission on November 12, 1999

       Exhibit (3)(ii)        Bylaws of M&F Bancorp, Inc., incorporated by
                              reference to Exhibit (3) to the Form 10-QSB for
                              the quarter ended September 30, 1999 filed with
                              the Securities and Exchange Commission on November
                              12, 1999

       Exhibit (4)            Specimen Stock Certificate, incorporated by
                              reference to Exhibit 4 to the Form 10-KSB for the
                              year ended December 31, 2000 filed with the
                              Securities and Exchange Commission on April 2,
                              2001

       Exhibit(10)(a)         Employment Agreement between Mechanics and Farmers
                              Bank and Lee Johnson, Jr. incorporated by
                              reference to Exhibit 10 to the Form 10-QSB for the
                              quarter ended September 30, 2000 filed with the
                              Securities and Exchange Commission on November 9,
                              2000

                                       13

<PAGE>

       Exhibit (10)(b)        Retention Bonus Agreement between Mechanics and
                              Farmers Bank and Fohliette Becote incorporated by
                              reference to Exhibit 10.03 to the Form 10-QSB for
                              the quarter ended September 30, 1999 filed with
                              the Securities and Exchange Commission on November
                              12, 1999

       Exhibit(10)(c)         Retention Bonus Agreement between Mechanics and
                              Farmers Bank and Walter D. Harrington incorporated
                              by reference to Exhibit 10.03 to the Form 10-QSB
                              for the quarter ended September 30, 1999 filed
                              with the Securities and Exchange Commission on
                              November 12, 1999

       Exhibit(10)(d)         Retention Bonus Agreement between Mechanics and
                              Farmers Bank and Harold G. Sellers incorporated by
                              reference to Exhibit 10.03 to the Form 10-QSB for
                              the quarter ended September 30, 1999 filed with
                              the Securities and Exchange Commission on November
                              12, 1999

       Exhibit (10)(e)        Retention Bonus Agreement between Mechanics and
                              Farmers Bank and Elaine Small incorporated by
                              reference to Exhibit 10.03 to the Form 10-QSB for
                              the quarter ended September 30, 1999 filed with
                              the Securities and Exchange Commission on November
                              12, 1999

       Exhibit (13)           M&F Bancorp, Inc. 2001 Annual Report to
                              Stockholders

       Exhibit (21)           Subsidiaries of M&F Bancorp, Inc.

       Exhibit (23)           Consent of Deloitte & Touche LLP

                                       14

<PAGE>

                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                      M&F Bancorp, Inc.


                                      By: /s/ Lee Johnson, Jr.
                                          --------------------------------------
                                          Lee Johnson, Jr.
                                          President

                                      Date: March 26, 2002

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated:

<TABLE>
<CAPTION>
Signature                                    Title                             Date
---------                                    -----                             ----
<S>                                 <C>                                     <C>


/s/ Lee Johnson, Jr.                President and Director                  March 26, 2002
------------------------------      (Principal Executive Officer)
Lee Johnson, Jr.


/s/ Fohliette Becote                Secretary and Treasurer                 March 26, 2002
------------------------------      (Principal Financial and Principal
Fohliette Becote                    Accounting Officer)


/s/ Benjamin S. Ruffin              Director                                March 26, 2002
------------------------------
Benjamin S. Ruffin


/s/ Joseph M. Sansom                Director                                March 26, 2002
------------------------------
Joseph M. Sansom


/s/ Aaron L. Spaulding              Director                                March 26, 2002
------------------------------
Aaron L. Spaulding


/s/ Genevia G. Fullbright           Director                                March 26, 2002
------------------------------
Genevia G. Fullbright


/s/ Maceo K. Sloan                  Director                                March 26, 2002
------------------------------
Maceo K. Sloan
</TABLE>

                                       15

<PAGE>

                                INDEX TO EXHIBITS

Exhibit No.                  Description
-----------                  -----------

Exhibit (13)     M&F Bancorp, Inc. 2001 Annual Report to Stockholders,
                 excluding pages 2 through 5.

Exhibit (21)     Subsidiaries of M&F Bancorp, Inc.

Exhibit (23)     Consent of Deloitte & Touche LLP

                                       16