First M&F Corporation
Condensed Consolidated Statements of Condition (Unaudited)
(In thousands, except share data)
	June 30	December 31	June 30
	2004	2003	2003
Cash and due from banks	33,464	39,849	38,552
Interest bearing bank balances	4,132	2,554	2,707
Federal funds sold	2,000	950	14,150
Securities available for sale (cost of
$192,338, $181,375, and $204,843)	194,608	187,577	213,846
Loans	790,703	781,321	733,113
Allowance for loan losses	11,792	10,891	10,422
Net loans	778,911	770,430	722,691
Bank premises and equipment	24,973	24,214	21,424
Accrued interest receivable	7,402	7,330	6,973
Other real estate	2,171	802	1,116
Intangible assets	16,789	16,837	16,884
Other assets	29,513	27,755	23,639
	1,093,963	1,078,298	1,061,982
Non-interest bearing deposits	127,156	123,191	120,671
Interest bearing deposits	723,260	697,035	731,635
Total deposits	850,416	820,226	852,306
Federal funds and repurchase agreements	17,639	15,205	14,612
Other borrowings	105,964	122,033	73,420
Accrued interest payable	1,452	1,379	1,570
Other liabilities	8,270	7,732	8,440
Total liabilities	983,741	966,575	950,348
Noncontrolling joint venture interest	(2)	1,045	848
Common stock, 4,542,859, 4,565,038 and
4,611,464 shares issued & outstanding	22,714	22,825	23,057
Additional paid-in capital	30,668	31,624	33,047
Retained earnings	56,950	53,873	50,560
Accumulated other comprehensive income	(108)	2,356	4,122
Total equity	110,224	110,678	110,786
	1,093,963	1,078,298	1,061,982
First M&F Corporation and Subsidiary
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except share data)
	Three Months Ended June 30		Six Months Ended June 30
	2004	2003	2004	2003
Interest and fees on loans	12,108	11,804	24,334	23,512
Taxable investments	1,366	1,778	2,758	3,711
Tax exempt investments	559	595	1,120	1,191
Federal funds sold	29	76	98	183
Interest bearing bank balances	23	37	52	79
Total interest income	14,085	14,290	28,362	28,676
Interest on deposits	2,857	3,620	5,675	7,547
Interest on short-term borrowings	135	135	282	302
Interest on other borrowings	1,114	758	2,185	1,526
Total interest expense	4,106	4,513	8,142	9,375
Net interest income	9,979	9,777	20,220	19,301
Provision for possible loan losses	999	962	3,459	1,882
Net interest income after loan loss	8,980	8,815	16,761	17,419
Service charges on deposits	1,932	1,893	3,753	3,653
Mortgage banking income	295	300	495	472
Agency commission income	932	943	1,797	1,780
Fiduciary and brokerage income	125	75	235	120
Other income	454	427	1,394	990
Gains (losses) on AFS investments	(17)	(19)	53	(20)
Total noninterest income	3,721	3,619	7,727	6,995
Salaries and employee benefits	4,961	4,614	9,907	8,934
Net occupancy expense	552	532	1,124	1,050
Equipment and data processing expenses	944	951	1,935	1,921
Intangible asset amortization	17	34	49	68
Noncontrolling joint venture interest expense	(155)	96	(1,048)	192
Other expenses	2,417	2,454	4,853	4,772
Total noninterest expense	8,736	8,681	16,820	16,937
Net income before taxes	3,965	3,753	7,668	7,477
Income taxes	1,212	1,115	2,314	2,185
Net income	2,753	2,638	5,354	5,292
Weighted average shares (basic)	4,556,375	4,639,631	4,560,800	4,632,908
Weighted average shares (diluted)	4,570,720	4,670,394	4,577,834	4,654,261
Basic earnings per share	$0.60	$0.57	$1.17	$1.14
Diluted earnings per share	$0.60	$0.57	$1.17	$1.14
Return on assets (annualized)	1.01%	1.00%	0.98%	1.00%
Return on equity (annualized)	9.87%	9.45%	9.58%	9.54%
Efficiency ratio	62.16%	63.02%	58.69%	62.60%
Net interest margin (annualized, tax-equivalent)	4.19%	4.26%	4.21%	4.19%
Net charge-offs to average loans (annualized)	0.08%	0.53%	0.66%	0.49%
Nonaccrual and 90 day accruing loans to total loans	0.66%	0.61%	0.66%	0.61%
First M&F Corporation
Financial Highlights
	QTD Ended	QTD Ended	QTD Ended	QTD Ended
	June 30	March 31	December 31	September 30
	2004	2004	2003	2003
Per Common Share (diluted):
Net income	0.60	0.57	0.61	0.60
Cash dividends paid	0.25	0.25	0.25	0.25
Book value	24.26	24.48	24.24	24.06
Closing stock price	31.14	33.51	37.90	35.65
Selected Average Balances: (in thousands)
Assets	1,090,834	1,104,631	1,074,285	1,061,855
Loans	779,171	778,715	783,509	760,505
Earning assets	986,108	1,009,058	981,399	973,817
Deposits	848,953	848,912	815,859	822,661
Equity	111,542	111,950	110,707	111,010
Selected Ratios:
Return on average assets (annualized)	1.01%	0.94%	1.05%	1.05%
Return on average equity (annualized)	9.87%	9.29%	10.15%	10.06%
Average equity to average assets	10.23%	10.13%	10.31%	10.45%
Net interest margin (annualized, tax-equivalent)	4.19%	4.24%	4.44%	4.47%
Efficiency ratio	62.16%	55.34%	62.52%	63.41%
Net charge-offs to average loans (annualized)	0.08%	1.23%	0.55%	0.20%
Nonaccrual and 90 day accruing loans to total loans	0.66%	1.11%	0.77%	0.81%
Price to book (x)	1.28	1.37	1.56	1.48
Price to earnings (x)	12.98	14.70	15.53	14.85
	Historical Earnings Trends
	Net Income	EPS
	(in thousands)	(diluted)
2Q 2004	2,753	0.60
1Q 2004	2,601	0.57
4Q 2003	2,809	0.61
3Q 2003	2,791	0.60
2Q 2003	2,638	0.57
1Q 2003	2,654	0.57
4Q 2002	2,730	0.59
3Q 2002	2,867	0.62
2Q 2002	2,329	0.51
First M&F Corporation
Average Balance Sheets/Yields and Costs (tax-equivalent)
(In thousands with yields and costs annualized)	YTD June, 2004		YTD June, 2003
	Average		Average
	Balance	Yield/Cost	Balance	Yield/Cost
Interest bearing bank balances	8,338	1.24%	11,426	1.38%
Federal funds sold	22,036	0.89%	32,433	1.13%
Taxable investments (amortized cost)	131,138	4.21%	166,869	4.45%
Tax-exempt investments (amortized cost)	53,979	6.62%	54,141	7.02%
Loans held for investment	777,904	6.27%	693,093	6.80%
Total earning assets	993,395	5.85%	957,962	6.15%
Non-earning assets	104,338		97,741
Total average assets	1,097,733		1,055,703
NOW, MMDA & Savings	376,075	0.80%	401,817	1.33%
Certificates of Deposit	355,177	2.34%	348,192	2.80%
Short-term borrowings	16,644	3.39%	18,125	3.33%
Other borrowings	111,280	3.93%	66,031	4.62%
Total interest bearing liabilities	859,176	1.90%	834,165	2.25%
Non-interest bearing deposits	117,680		101,736
Non-interest bearing liabilities	9,131		8,844
Capital	111,746		110,958
Total average liabilities and equity	1,097,733		1,055,703
Net interest spread		3.96%		3.90%
Effect of non-interest bearing deposits		0.23%		0.24%
Effect of leverage		0.02%		0.05%
Net interest margin, tax-equivalent		4.21%		4.19%
Less tax equivalent adjustment:
Investments		0.13%		0.15%
Loans		0.01%		0.01%
Reported book net interest margin		4.07%		4.03%