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

April 20, 2005

FOR IMMEDIATE RELEASE

First M&F Corp. reports first quarter 2005 earnings

KOSCIUSKO, Miss. - First M&F Corp. (NASDAQ: FMFC) reported today that net income for the quarter ended March 31, 2005 was $3.198 million, or $.71 basic and diluted earnings per share, compared to $2.601 million, or $.57 basic and diluted earnings per share for the first quarter of 2004.

For the first quarter of 2005 the annualized return on assets was 1.09%, while return on equity was 11.20%. Comparatively, the return on assets for the first quarter of 2004 was .94%, with a return on equity of 9.29%.

"The results of the first quarter were positive and show an improvement in earnings not only period to period, but versus the previous year," said Hugh S. Potts, Jr., Chairman and CEO. "The quarter benefited from good and improving asset quality, including lower non-performing loans, and strong deposit growth."

Net interest income was up by 3.97% compared to the first quarter of 2004, with the net interest margin decreasing to 4.13% in the first quarter of 2005 from 4.24% in the first quarter of 2004. The net interest margin for the fourth quarter of 2004 was 4.25% as compared to 4.24% for the third quarter of 2004 and 4.19% for the second quarter of 2004. Loan yields increased to 6.39% in the first quarter of 2005 from 6.36% in the first quarter of 2004 while deposit costs increased to 1.88% from 1.53% for the same periods. Loans outstanding increased by 10.46% and deposits increased by 12.78% from March 31, 2004 to March 31, 2005. The primary factors in the improvement in net interest income were (1) the growth in loan volume year-over-year, which improved interest revenues and (2) the growth in non-interest bearing deposits, which reduced the Company’s dependence on interest-bearing sources of funding for the growth. Earning asset yields were 5.97% for the first quarter of 2005, 6.05% for the fourth quarter of 2004 and 5.85% for the first quarter of 2004. Liability costs for the same periods were 2.13%, 2.10% and 1.86%. Management believes that yields and costs will increase in the current and foreseeable rate environment. Short-term Treasury rates increased by 185 basis points during the twelve months ending on March 31, 2005 while the prime rate increased from 4.00% at March 31, 2004 to 5.75% at March 31, 2005. Management plans to focus on core deposit growth for 2005 to offset the influence that rising rates will have on the cost of funds. Loans as a percentage of assets were 71.55% at March 31, 2005 as compared to 72.85% at December 31, 2004 and 70.15% at March 31, 2004.

Noninterest revenues, excluding securities transactions, increased by 5.06% for the first quarter of 2005 as compared to the same period in 2004. Deposit-related income was down by 6.35%, mortgage income was down by 13.72%, and insurance agency commissions were up by 7.69%. Deposit revenues were lower for service charges and overdraft charges, while they were higher for debit card income. The decrease in mortgage revenues was expected as rising interest rates slowed origination volumes. Agency commission growth for the first quarter was dominated by annuity commissions which increased by 55.65%. The growth in other noninterest revenues was due primarily to a 65.25% increase in profit-sharing revenues received by the insurance agencies.

Noninterest expenses increased by 2.58% for the first quarter of 2005 as compared to the same period in 2004. Salaries and benefits were up by 5.60%, due primarily to the expansion efforts, beginning with the opening of a new branch in Flowood, a city in Rankin County, in February of 2004. The Company opened a new branch in Jackson in a rented location in September of 2004. The Olive Branch office was moved out of a rented location into a newly constructed facility in November of 2004. The Company also opened a loan production office in Memphis, Tennessee in December of 2004 with an initial staff of three associates. Expansion plans are continuing in DeSoto and Madison counties.

The negative noncontrolling interest, which increases consolidated pre-tax earnings, primarily represents a minority owner’s share of net losses incurred in Merchants Financial Services Group (MFS), an accounts receivable factoring company that is 51% owned by the Company. The balance sheet and income statement of MFS are included in the consolidated financial statements of the Company. The losses at MFS were primarily incurred through loan loss expenses in March 2004 of $2.030 million needed to cover loan charge-offs. MFS has been mostly liquidated and is currently servicing a small portfolio. The Company is managing its remaining accounts receivable factoring operations in its asset-based lending subsidiary in Memphis.

Annualized net loan charge-offs as a percent of average loans for the first quarter of 2005 were .34% as compared to 1.25% for the comparable period in 2004. Non-accrual and 90-day past due loans as a percent of total loans were .35% at March 31,2005 as compared to .47% at the end of 2004. The allowance for loan losses as a percentage of loans was 1.39% at March 31, 2005 as compared to 1.40% at December 31, 2004 and 1.42% at March 31, 2004.

Total assets at March 31, 2005 were $1.187 billion as compared to $1.143 billion at the end of 2004 and $1.096 billion at March 31, 2004. Total loans were $849.518 million compared to $832.486 million at the end of 2004 and $769.082 million at March 31, 2004. Deposits were $960.876 million compared to $877.264 million at the end of 2004 and $851.989 million at March 31, 2004. Total capital was $112.816 million, or $ 25.08 in book value per share at March 31, 2005.

The Company repurchased 10,000 shares of its common stock during the first quarter of 2005 at an average price of $33.23 per share. Capital was increased in the first quarter of 2005 by stock option exercises of 2,500 shares at an average price of $26.60 per share. The current repurchase program will end in April 2005.

First M&F Corp., the parent of M&F Bank, is committed to proceed with its mission of making the mid-south better by exceeding expectations everyday in 21 communities in Mississippi and Tennessee.

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 Income

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