CONTACT:
John G. Copeland
EVP & Chief Financial Officer
(662) 289-8594

July 18, 2007

FOR IMMEDIATE RELEASE

First M&F Corp. reports increase in year over year second quarter earnings

KOSCIUSKO, Miss. - First M&F Corp. (NASDAQ: FMFC) reported today that net income for the quarter ended June 30, 2007 was $3.535 million, or $.39 basic and diluted earnings per share, compared to $3.252 million, or $.36 basic and diluted earnings per share for the second quarter of 2006.

For the second quarter of 2007 the annualized return on assets was .92%, while return on equity was 10.69%. Comparatively, the return on assets for the second quarter of 2006 was .86%, with a return on equity of 10.78%.

“We are pleased to be able to announce an increase in earnings over 2006, consistent performance ratios, solid fundamentals and growth. These are all encouraging results for which we are thankful. Our mission and focus is to build the performance and value of FMFC over time with consistency. To have done this the first half of 2007 is positive, given the difficult economic environment”, said Hugh Potts, Jr., Chairman and CEO. Potts added, “The flat yield curve, caution in the real estate market and modest economic growth make margin retention and balanced growth of earning assets and funding a challenge. We believe asset quality to be good and holding. Costs of operation are a concern, but manageable, and a healthy and patient focus upon execution is in order.”

Mr. Potts further commented, “Our investment in new markets and the resultant pursuit of business opportunities remains viable. We are optimistic about the future growth, performance and value of FMFC. M&F is positioned to serve the present and future needs of our customers from a well situated base.”

Net Interest Income

Reported net interest income was up by 2.1% compared to the second quarter of 2006, with the net interest margin decreasing to 4.00% on a tax equivalent basis in the second quarter of 2007 as compared to 4.05% in the second quarter of 2006. The significant contributor to the increase in net interest income was balance sheet growth offset by continuing erosion in spreads as funding rates increased more than asset yields. The net interest margin for the first quarter of 2007 was 3.94% as compared to 3.99% for the fourth quarter of 2006 and 4.04% for the third quarter of 2006. Loan yields increased to 7.90% in the second quarter of 2007 from 7.48% in the second quarter of 2006. Loan yields also increased slightly from the first quarter of 2007 to the second quarter as the prime rate remained at 8.25%. Loan yields have increased over the last eleven quarters in the higher rate environment. Average loans were $1.122 billion for the second quarter of 2007 as compared to $1.102 billion for the first quarter of 2007 and $1.065 billion during the second quarter of 2006. Loans increased by $38.329 million in the second quarter of 2007 and grew by $21.268 million in the first quarter. Deposit costs increased in the second quarter of 2007 from the first quarter of 2007 and from the second quarter of 2006, in response to the continuing higher rate environment and competitive pressures. Deposit costs were 3.53% in the second quarter of 2007 as compared to 2.96% in the second quarter of 2006. Deposits rose by $3.296 million during the second quarter of 2007. Management plans to continue to focus on core deposit growth for 2007 to offset the influence that rising rates may have on the cost of funds and the net interest margin. Loans as a percentage of assets were 72.38% at June 30, 2007 as compared to 70.44% at June 30, 2006 and 70.59% at December 31, 2006. Loans grew by 6.18% since the second quarter of 2006 while deposits grew by 0.62%.

Non-interest Income

Non-interest income, excluding securities transactions, for the second quarter of 2007 was flat compared to the second quarter of 2006, with deposit-related income down slightly and mortgage income, still a relatively small contributor, up by 84.54%. Insurance agency commissions were up by 3.49%.

A major part of non-interest income is from deposit sources. Deposit revenues continue to be supported by debit card fee income, which has increased by 19.87% in the second quarter of 2007 over 2006, while overdraft fee income fell by 3.35%.

Non-interest Expenses

Non-interest expenses were up by 1.38% in the second quarter of 2007 as compared to the second quarter of 2006. Salaries and benefits were up by 2.71%.

Credit Quality

Annualized net loan charge-offs as a percent of average loans for the second quarter of 2007 were .30% as compared to .13% for the same period in 2006. Non-accrual and 90-day past due loans as a percent of total loans were .55% at the end of the second quarter of 2007 as compared to .30% at the end of the 2006 quarter. The allowance for loan losses as a percentage of loans was 1.31% at June 30, 2007 as compared to 1.37% at June 30, 2006. The provision for loan losses decreased to $.630 million in the second quarter of 2007 from $1.004 million in the second quarter of 2006 due to stable loan quality and modest loan growth.

Balance Sheet

Total assets at June 30, 2007 were $1.585 billion as compared to $1.540 billion at the end of 2006 and $1.533 billion at June 30, 2006. Total loans were $1.147 billion compared to $1.087 billion at the end of 2006 and $1.080 billion at June 30, 2006. Deposits were $1.212 billion compared to $1.186 billion at the end of 2006 and $1.205 billion at June 30, 2006. Total capital was $132.601 million, or $ 14.63 in book value per share at June 30, 2007.

Growth

The Company opened a new branch in Madison, Mississippi in April 2006. The Company acquired Columbiana Bancshares, Inc. and its subsidiary, First National Bank of Shelby County (Alabama) in February 2006 and Crockett County Bancshares and its subsidiary, Bells Banking Company (Tennessee) in May 2006. Both banks were merged with M&F Bank at the time of closing. The Company issued $30 million in Trust Preferred securities in February, 2006 in connection with the Alabama merger. The Company also opened two new banking locations in the Memphis, Tennessee metropolitan area and converted an existing loan production office in the area to a full-service branch. In November 2006 the Company opened a full-service banking location in Crestview, Okaloosa County, Florida. In June 2007 the Company opened another full-service banking location in Cordova, Tennessee in the Memphis metro market.

About First M&F Corporation

First M&F Corp., the parent of M&F Bank, is committed to proceed with its mission of making the mid-south better through the delivery of excellence in financial services to 31 communities in Mississippi, Alabama, Tennessee and Florida.

Caution Concerning Forward Looking Statements

This document includes certain "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive, market and regulatory factors. More detailed information about those factors is contained in First M&F Corporation's filings with the Securities and Exchange Commission.

• First M&F Corporation Condensed Consolidated Statements of Condition
• First M&F Corporation and Subsidiary Consolidated Statements of Income
• First M&F Corporation Financial Highlights
• First M&F Corporation Average Balance Sheets/Yields and Costs

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