FIRST M & F CORPORATION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarter ended September 30, 1998 Commission File Number 0-9424
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 No.)
Registrant's telephone number: (601) 289-5121
No Change
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for shorter period that the registrant was required to
file such report), and (2) has been subject to such filing requirements for the
past 90 days.
Yes X 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 October 30, 1998
----- -------------------------------
Common stock ($5.00 par value) 3,394,656 shares
Page 1 of 18
<PAGE>
FIRST M & F CORPORATION AND SUBSIDIARY
FORM 10-Q
CONTENTS
Page
PART I: FINANCIAL INFORMATION 3
Item 1 - Financial Statements (unaudited):
Condensed Consolidated Statements of Condition 4
Condensed Consolidated Statements of Income 5
Condensed Consolidated Statements of Comprehensive
Income 6
Condensed Consolidated Statements of Stockholders'
Equity 7
Condensed Consolidated Statements of Cash Flows 8
Notes to Condensed Consolidated Financial Statements 9
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-15
PART II: OTHER INFORMATION
Item 1 - Legal Proceedings 16
Item 2 - Changes in Securities 16
Item 3 - Defaults upon Senior Securities 16
Item 4 - Submission of Matters to a Vote of Security
Holders 16
Item 5 - Other Information 16
Item 6 - Exhibits and Reports on Form 8-K 16
Exhibit 11 - Computation of Earnings Per Share 17
SIGNATURE 18
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<PAGE>
PART I: FINANCIAL INFORMATION
Item 1 - Financial Statements
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<PAGE>
FIRST M & F CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Condition
(Unaudited)
September 30, December 31,
Assets 1998 1997 (1)
------ ------------- -----------
Cash and due from banks $ 21,585,117 $ 24,719,193
Interest bearing bank balances 11,256,785 10,801,934
Federal funds sold 10,000,000 2,000,000
Securities available for sale 138,612,576 109,002,998
Investment securities, market value of
$54,881,000 in 1998 and $59,696,000 in 1997 53,441,091 58,785,352
Loans 388,573,337 360,192,125
Reserve for possible loan losses (5,576,512) (5,170,000)
----------- ----------
Net loans 382,996,825 355,022,125
Bank premises and equipment 10,982,745 9,326,709
Accrued interest receivable 6,090,394 5,492,942
Other real estate 741,222 842,786
Intangible assets 2,391,685 2,519,053
Other assets 12,621,862 2,387,422
----------- -----------
$ 650,720,302 $ 580,900,514
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Deposits:
Non-interest bearing $ 68,415,825 $ 60,577,750
Interest bearing 516,652,339 449,205,012
----------- -----------
Total deposits 585,068,164 509,782,762
----------- -----------
Borrowings 2,972,765 12,860,760
Accrued interest payable 2,613,478 2,563,911
Other liabilities 1,709,537 1,487,359
----------- -----------
Total liabilities 592,363,944 526,694,792
----------- -----------
Stockholders' equity:
Common stock, $5.00 par value, 15,000,000 shares
authorized, 3,394,656 issued and outstanding 16,973,280 16,973,280
Additional paid-in capital 10,698,388 10,698,388
Retained earnings 29,375,576 26,013,973
Net unrealized gain on securities available for
sale, net of income taxes 1,309,114 520,081
----------- -----------
Net stockholders' equity 58,356,358 54,205,722
----------- -----------
$ 650,720,302 $ 580,900,514
=========== ===========
The accompanying notes are an integral part of these financial statements.
(1) Derived from audited financial statements.
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<PAGE>
FIRST M & F CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ---------------------
1998 1997 1998 1997
---- ---- ---- ----
Interest income:
Interest and fees on loans $ 9,119,156 $ 8,633,081 $ 26,573,079 $ 25,227,537
Interest bearing bank
balances 86,403 55,312 347,107 146,382
Taxable investments 1,960,787 1,896,127 5,832,116 5,299,360
Tax exempt investments 742,638 542,642 1,986,247 1,561,566
Federal funds sold 168,881 136,866 628,945 473,029
---------- ---------- ---------- ----------
Total interest income 12,077,865 11,264,028 35,367,494 32,707,874
---------- ---------- ---------- ----------
Interest expense:
Deposits 5,820,019 5,308,178 16,897,188 15,136,741
Securities sold under
agreements to repurchase 7,262 159 7,262 3,624
Other borrowings 36,258 45,508 256,940 193,149
---------- ---------- ---------- ----------
Total interest expense 5,863,539 5,353,845 17,161,390 15,333,514
---------- ---------- ---------- ----------
Net interest income 6,214,326 5,910,183 18,206,104 17,374,360
Provision for possible loan 518,302 866,780 1,456,648 1,658,068
losses ---------- ---------- ---------- ---------
Net interest income after
provision for possible
loan losses 5,696,024 5,043,403 16,749,456 15,716,292
---------- ---------- ---------- ----------
Other operating income:
Service charges on deposits 934,115 841,484 2,661,419 2,500,830
Credit insurance income 187,266 664,192 385,758 854,307
Gains on AFS investments 27,068 11,989 19,355 18,701
Other income 310,219 45,505 794,443 409,491
---------- ---------- ---------- ----------
Total other operating
income 1,458,668 1,563,170 3,860,975 3,783,329
---------- ---------- ---------- ----------
Other operating expenses:
Salaries and employee benefits 2,358,288 2,110,487 6,799,771 6,202,214
Net occupancy expense 283,884 256,521 794,278 731,055
Equipment and data processing
expenses 472,950 419,487 1,381,821 1,308,113
Other expenses 1,532,425 1,049,142 3,867,439 3,092,749
--------- ---------- ---------- ----------
Total other operating
expenses 4,647,547 3,835,637 12,843,309 11,334,131
--------- ---------- ---------- ----------
Income before income
taxes 2,507,145 2,770,936 7,767,122 8,165,490
Income taxes 606,145 794,976 1,961,367 2,339,040
---------- ---------- ---------- ----------
Net income $ 1,901,000 $ 1,975,960 $ 5,805,755 $ 5,826,450
========== ========== ========== ==========
Earnings per share:
Basic $ 0.56 $ 0.58 $ 1.71 $ 1.72
==== ==== ==== ====
The accompanying notes are an integral part of these financial statements.
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<PAGE>
FIRST M & F CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- ----------------------
1998 1997 1998 1997
---- ---- ---- ----
Net income $ 1,901,000 $ 1,975,960 $ 5,805,755 $ 5,826,450
--------- --------- --------- ---------
Other comprehensive income:
Unrealized holding gains
(losses) on securities,
net 778,786 361,883 801,168 191,274
Plus (minus) reclassification
adjustments for losses
(gains) included in net
income (16,971) (7,518) (12,135) (11,726)
--------- --------- --------- ---------
Other comprehensive
income 761,815 354,365 789,033 179,548
--------- --------- --------- ---------
Total comprehensive
income $ 2,662,815 $ 2,330,325 $ 6,594,788 $ 6,005,998
========= ========= ========= =========
-6-
<PAGE>
<TABLE>
<CAPTION>
FIRST M & F CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Stockholders' Equity
(Unaudited)
Additional
Common Paid-In Retained Treasury Unrealized
Stock Capital Earnings Stock Gain (Loss) Total
----- ------- -------- ----- ----------- -----
<S> <C> <C> <C> <C> <C> <C>
January 1,
1997 $ 16,973,280 $ 10,698,388 $ 21,087,077 $ - $ 329,835 $ 49,088,580
Net income - - 5,826,450 - - 5,826,450
Cash
dividends
paid ($.64
per share) - - (2,172,533) - - (2,172,533)
Net change in
unrealized
gain - - - - 179,548 179,548
---------- ---------- ---------- ---- ------- ----------
September 30,
1997 $ 16,973,280 $ 10,698,388 $ 24,740,994 $ - $ 509,383 $ 52,922,045
========== ========== ========== ==== ======= ==========
January 1,
1998 $ 16,973,280 $ 10,698,388 $ 26,013,973 $ - $ 520,081 $ 54,205,722
Net income - - 5,805,755 - - 5,805,755
Cash
dividends
paid ($.72
per share) - - (2,444,152) - - (2,444,152)
Net change in
unrealized
gain - - - - 789,033 789,033
---------- ---------- ---------- ---- --------- ----------
September 30,
1998 $ 16,973,280 $ 10,698,388 $ 29,375,576 $ - $ 1,309,114 $ 58,356,358
========== ========== ========== ==== ========= ==========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
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<PAGE>
FIRST M & F CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
------------------------
1998 1997
---- ----
Cash flows from operating activities:
Net income $ 5,805,755 $ 5,826,450
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 932,715 895,607
Provision for possible loan losses 1,456,648 1,658,068
Increase in interest receivable (597,452) (556,280)
Increase in interest payable 49,567 397,642
Increase in CSV of insurance (293,314) -
Other, net 296,137 253,308
---------- ----------
Net cash provided by operating activities 7,650,056 8,474,795
---------- ----------
Cash flows from investing activities:
Net (increase) decrease in:
Interest bearing bank balances (454,851) (1,075,481)
Federal funds sold (8,000,000) (3,400,000)
Investment securities-purchases (11,861,891) (7,280,798)
Investment securities-maturities and calls 17,206,152 6,592,978
Securities available for sale-purchases (59,589,199) (40,010,947)
Securities available for sale-maturities
and calls 30,808,129 18,300,160
Loans (29,384,271) (13,191,677)
Bank premises and equipment (2,461,456) (1,231,600)
Investment in bank owned life insurance (10,000,000) -
---------- ----------
Net cash used in investing activities (73,737,387) (41,297,365)
---------- ----------
Cash flows from financing activities:
Net increase (decrease) in:
Deposits 75,285,402 44,484,754
Other borrowings (9,887,995) (3,691,271)
Cash dividends (2,444,152) (2,172,533)
---------- ----------
Net cash provided by financing activities 62,953,255 38,620,950
---------- ----------
Net increase (decrease) in cash and
due from banks (3,134,076) 5,798,380
Cash and due from banks at January 1 24,719,193 20,213,398
---------- ----------
Cash and due from banks at September 30 $ 21,585,117 $ 26,011,778
========== ==========
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE>
FIRST M & F CORPORATION AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1: Basis of Presentation
- ------------------------------
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The condensed
consolidated financial statements of First M & F Corporation include the
financial statements of Merchants & Farmers Bank, a wholly owned subsidiary,
and its wholly owned subsidiaries, First M & F Insurance Co., M & F Financial
Services, Inc. and M & F Bank Securities Corporation. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year
ended December 31, 1997.
Note 2: Statements of Cash Flows
- ---------------------------------
During the nine months ended September 30, 1998 and 1997, the Company had the
following payments:
1998 1997
---- ----
Income taxes $ 2,284,000 $ 2,315,000
Interest on deposit liabilities 16,850,000 14,724,000
Interest on other borrowings 261,000 211,000
========== ==========
Note 3: Comprehensive Income
- -----------------------------
On January 1, 1998, First M&F Corp adopted SFAS No. 130, "Reporting
Comprehensive Income" which establishes standards for the reporting and
display of comprehensive income and its components, net income and other
comprehensive income, in a full set of financial statements. Other
comprehensive income consists of revenues, expenses, gains and losses that
are excluded from earnings under current accounting standards.
Note 4: Bank Owned Life Insurance
- ----------------------------------
In March, 1998, Merchants and Farmers Bank invested $10,000,000 in corporate
owned life insurance policies covering approximately 160 employees. The
policies are designed to generate earnings through increases in cash
surrender value, thus covering costs of current and potential employee
benefit plans. The cash surrender value of the policies at September 30, 1998
was $10,293,314.
-9-
<PAGE>
FIRST M & F CORPORATION
Item 2: Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
-------------
The following provides a narrative discussion and analyses of significant
changes in the Company's results of operations and financial condition. This
discussion should be read in conjunction with the interim consolidated financial
statements and supplemental financial data presented elsewhere in this report.
Certain of the information included in this discussion contains forward looking
financial data and information that is based upon management's belief as well as
certain assumptions made by, and information currently available to management.
Specifically, this discussion includes statements with respect to the adequacy
of the reserve for possible loan losses; the effect of legal proceedings against
the Company's financial condition, results of operations and liquidity; year
2000 compliance issues; and market risk disclosures. Should one or more of these
risks materialize or the assumptions prove to be significantly different, actual
results may vary from those estimated, anticipated, projected or expected.
Financial Summary
- -----------------
For the nine month period ended September 30, 1998, the Company's net income was
$5,805,755 as compared to $5,826,450 for the same period of 1997. Basic and
diluted earnings per share was $1.71 for 1998 and $1.72 for 1997. Quarterly
earnings for the two periods reflect $.56 per share for the quarter ending
Seqtember 30, 1998 and $.58 per share for the same quarter of 1997. Net income
for 1998 reflects several factors which have contributed to the Company's
overall flatness in earnings. These include a lack of anticipated loan growth
during the period; higher than anticipated interest bearing deposit growth;
increased operating expenses associated with new branch locations; and added
personnel costs at both the administrative and operating levels.
Total assets at September 30, 1998, increased 12.02% over year end 1997 to
$650.7 million, while stockholders' equity increased 7.66% over year end 1997
and equaled $58.4 million. The return on average assets for the period ended
September 30, 1998, was 1.24% as compared to the same period of 1997 of 1.41%;
the return on average equity in 1998 was 13.75% as compared to 15.34% for 1997.
Both of these declines reflect a percentage growth in total assets during the
quarter and year-to-date that exceeded the percentage growth in net income.
-10-
<PAGE>
FIRST M & F CORPORATION
Asset/Liability Management/Liquidity
- ------------------------------------
Responsibility for managing the Company's program for controlling and monitoring
interest rate risk and for maintaining income stability, given the Company's
exposure to changes in interest rates, is vested in the asset/liability
committee. Appropriate policy and guidelines, approved by the board of
directors, govern these actions. Monitoring is primarily accomplished through
weekly reviews and analysis of asset/liability market conditions. These include
rate shocked scenarios of up and down 100, 200 and 300 basis points; yield curve
scenarios; and prepayment risk scenarios. Additionally, static gap analysis is
used to highlight short-term repricing volumes. Management believes, at
September 30, 1998, there is adequate flexibility to alter the rate structure as
necessary to minimize the exposure to changes in interest rates, should they
occur.
The asset/liability committee further establishes guidelines, approved by
appropriate board action, by which the current liquidity position of the Company
is monitored to ensure adequate funding capacity. Accessibility to local,
regional and other funding sources is also maintained in order to actively
manage both the asset and liability sides of the balance sheet. These funding
requirements and the Company's ability to maintain liquidity is also enhanced by
the Company's consistent earning capacity and adequate capital.
Net Interest Income
- -------------------
Net interest income (NII) is income produced by interest earning assets reduced
by the interest expense associated with the funding of those assets. Changes in
the mix of these interest earning assets and interest bearing liabilities and
their yields and rates contribute to the levels of NII realized and have a
significant impact on earnings.
During the three month period ended September 30, 1998, the level of NII
increased $304,143 or 5.15% over the comparable period of 1997. NII for 1998
increased $831,744 or 4.79% over 1997's period. Average earning assets for the
period ended September 30, 1998, was $579.1 million as contrasted to $509.1 for
1997's period, reflecting a $70.0 million or 13.8% increase.
For the 1998 period, this increase in average earning assets compared to same
period of 1997 was driven by a $28.4 million or 7.9% increase in loans and a
$24.3 million or 14.5% increase in the investment portfolio. Average interest
bearing liabilities increased $55.4 million or 12.5%. As a result, there was
only a slight improvement in NII, 1998's quarter versus 1997's quarter, as the
cost of funding the increase in funding sources almost equaled the earnings of
the higher volume of interest earning assets.
-11-
<PAGE>
FIRST M & F CORPORATION
Provision for Loan Losses
- -------------------------
During the nine month period ending September 30, 1998, the Company's provision
for loan losses was $1,456,648 contrasted to $1,658,068 for the same period of
1997. This provision reflects management's assessment of the adequacy of the
reserve for possible loan losses to absorb potential losses in the loan
portfolio. Factors considered involve an assessment of growth and composition of
the portfolio; historical credit loss experience; current and anticipated
economic conditions; and changes in the borrower's financial condition. Net
charge offs for the first nine months of 1998 were $1,050,136 as compared to
$925,079 for the same period in 1997.
Non Interest Income
- -------------------
One of the Company's key long-term strategies is to continue to boost its growth
in non interest income. For the nine month period ending September 30, 1998, non
interest income was $3,860,975 as compared to $3,783,329 for 1997. Service
charges on deposits reflected an increase of $160,589 or 6.4% for 1998. Credit
insurance income for 1997 was effected by a $530,000 receipt of a settlement for
reinsurance premiums due to the Company, but not paid in previous years.
Management continues to emphasize the non interest income area through increased
focus and budget/incentive processes.
Non Interest Expense
- --------------------
Another strategy of the Company is to contain non interest expenses within an
overall growth discipline. At September 30, 1998, the Company's efficiency
ratio, an indicator of control of non interest expenses, was 58% and compared
favorably with peer groups. Improvements continue to be made in the overall
monitoring and control of expense through the budgeting and review process.
Salaries and benefits comprise the largest portion of non interest expense and
increased 9.6% when compared to the same period of 1997. Additional staffing has
been required in several locations as a result of volume and increased demand.
Other expense reflects an increase of approximately $775,000 in 1998 compared to
1997. Other expense for 1997 increased $64,000 over 1996. Both are considered
normal increases given the overall growth of the Company and the expansion
efforts made in 1998.
Income Taxes
- ------------
For the nine months ended September 30, 1998, the Company's effective tax rate
was 25.3% as compared to 28.7% for the same period of 1997. This decrease in
effective rate is the result of the increase in the level of tax-exempt
investment income and other tax advantaged strategies.
-12-
<PAGE>
FIRST M & F CORPORATION
Assets/Liabilities
- ------------------
Loans, net of unearned discount, increased to $388.6 million at September 30,
1998, as compared to $360.2 million at the end of 1997. This approximate $28.4
million, or 7.9% increase in loans since December 31, 1997, generally reflects a
lack of consumer and commercial loan volumes. The commercial real estate lending
sector has remained fairly strong, showing 10.7% growth in the first nine months
of 1998.
The current level of the reserve for possible loan losses approximates 1.44% of
net loans outstanding. The Company's nonperforming loans past due 90 days or
more remain well controlled and continue to compare favorably to peer levels.
The adequacy of the reserve is reviewed quarterly using criteria and guidance
provided by the appropriate regulatory agencies and is presented to the Board of
Directors for subsequent review and approval. Management will continue to take a
prudent approach in the evaluation of the reserve for loan losses.
The securities portfolio is utilized to provide quality investment alternatives
for available funds and a stable source of interest income. At September 30,
1998, the total securities portfolio was approximately $192 million, up from the
December 31, 1997 level by approximately $24 million. Yield for the portfolio
was at 5.63% for the nine months ended September 30, 1998 and is comparable to
peer groups. There were no sales of held to maturity securities during the
period.
Deposits originating from the various communities served by the Company provide
the primary source of its funds. Total deposits increased approximately $75
million or 14.8% during the nine month period ended September 30, 1998, ahead of
growth plans for the year.
Other borrowings of $2,972,765 represent advances from the Federal Home Loan
Bank of Dallas and are primarily funding sources tied to specific loans.
Approximately $10 million of advances were repaid prior to quarter-end March 31,
1998.
-13-
<PAGE>
FIRST M & F CORPORATION
Equity
- ------
The Company's regulatory capital ratios at September 30, 1998, as shown below
are in excess of the minimum requirements and qualify the institution as "well
capitalized" under the definition of such.
($ in Thousands)
---------------
Tier 1 capital $ 54,656
Tier 2 capital element 5,180
------
Total qualifying capital $ 59,836
======
Risk weighted assets $ 414,098
=======
Total qualifying capital/risk weighted assets 14.45%
=====
Leverage ratio 8.45%
====
The dividend payout ratio for the nine months ended September 30, 1998 was 42.1%
of net income reflecting total dividends of $.72 per share. Book value per share
at September 30, 1998 was $17.19 compared to a $35.50 per share market price.
-14-
<PAGE>
FIRST M & F CORPORATION
Year 2000 Compliance
- --------------------
The Company has established a task-force to review all computer based systems
and applications to ensure proper functioning in the year 2000. The plan has
been approved by the Board of Directors, and management believes that
implementation will not materially effect operations in the future. Management
does not expect costs of achieving year 2000 compliance to have a material
adverse effect on the Company's consolidated financial statements.
Management has also begun the process of reviewing commercial loans for year
2000 risk and expects to determine a reserve for loan loss allocation for this
risk by December 31, 1998.
-15-
<PAGE>
FIRST M & F CORPORATION
PART II: OTHER INFORMATION
---------------------------
Item 1 - Legal Proceedings
- --------------------------
No new legal proceedings occurred in the second quarter of 1998.
Item 2 - Changes in Securities
- ------------------------------
None
Item 3 - Defaults Upon Senior Securities
- ----------------------------------------
None
Item 4 - Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
None
Item 5 - Other Information
- --------------------------
None
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibit 11 - Statement of computation of earnings per share
(b) A Form 8-K was filed on September 14, 1998, reporting the signing of a
definitive merger agreement whereby the Company would acquire First
Bolivar Capital Corporation, Cleveland, Mississippi.
-16-
<PAGE>
FIRST M & F CORPORATION
Exhibit 11 - Computation of Earnings Per Share
- ----------------------------------------------
Three Months Ended
September 30,
----------------------------------
1998 1997
---- ----
Net income $ 1,901,000 $ 1,975,960
========= =========
Weighted average shares outstanding $ 3,394,656 $ 3,394,656
========= =========
Earnings per share:
Basic $ .56 $ .58
=== ===
Nine Months Ended
September 30,
----------------------------------
1998 1997
---- ----
Net income $ 5,805,755 $ 5,826,450
========= =========
Weighted average shares outstanding $ 3,394,656 $ 3,394,656
========= =========
Earnings per share:
Basic $ 1.71 $ 1.72
==== ====
-17-
<PAGE>
FIRST M & F CORPORATION
Pursuant to the requirements 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
- -----------------------
(Registrant)
DATE: November 16, 1998 ____________________________________
Hugh S. Potts, Jr.
Chairman and Chief Executive Officer
DATE: November 16, 1998 ____________________________________
Robert C. Thompson, III
Executive Vice President and
Treasurer
-18-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 21,585
<INT-BEARING-DEPOSITS> 11,257
<FED-FUNDS-SOLD> 10,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 138,613
<INVESTMENTS-CARRYING> 53,441
<INVESTMENTS-MARKET> 54,881
<LOANS> 388,573
<ALLOWANCE> 5,577
<TOTAL-ASSETS> 650,720
<DEPOSITS> 585,068
<SHORT-TERM> 2,973
<LIABILITIES-OTHER> 4,323
<LONG-TERM> 0
0
0
<COMMON> 16,973
<OTHER-SE> 40,074
<TOTAL-LIABILITIES-AND-EQUITY> 650,720
<INTEREST-LOAN> 26,573
<INTEREST-INVEST> 7,818
<INTEREST-OTHER> 976
<INTEREST-TOTAL> 35,367
<INTEREST-DEPOSIT> 16,897
<INTEREST-EXPENSE> 17,161
<INTEREST-INCOME-NET> 18,206
<LOAN-LOSSES> 1,457
<SECURITIES-GAINS> 19
<EXPENSE-OTHER> 12,843
<INCOME-PRETAX> 7,767
<INCOME-PRE-EXTRAORDINARY> 7,767
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,806
<EPS-PRIMARY> 1.71
<EPS-DILUTED> 1.71
<YIELD-ACTUAL> 4.47
<LOANS-NON> 616
<LOANS-PAST> 1,588
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 3,665
<ALLOWANCE-OPEN> 5,170
<CHARGE-OFFS> 1,437
<RECOVERIES> 387
<ALLOWANCE-CLOSE> 5,577
<ALLOWANCE-DOMESTIC> 5,577
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
