First M&F revises earnings for second quarter

                First M&F revises earnings for second quarter

PR Newswire

KOSCIUSKO, Miss., Aug. 7, 2013

KOSCIUSKO, Miss., Aug. 7, 2013 /PRNewswire/ --First M&F Corp. (NASDAQ: FMFC)
revised net income for the quarter ended June 30, 2013 to $222 thousand from
$2.205 million reported in the July 19 earnings announcement. Earnings per
share after preferred stock dividends were revised to a loss of $.03 basic and
diluted per share from the previously reported net profit of $.18 basic and
$.17 diluted per share. Net income for the year was revised to $2.820 million
or $.19 basic and diluted per share from the previously reported $4.803
million or $.40 basic and $.39 diluted per share.

As a result of a third quarter review of transactions and events, management
determined it appropriate to record a loss on the sale of a foreclosed
property and an other-than-temporary impairment of certain securities in the
second quarter of 2013 rather than the third quarter. The foreclosed property
sale resulted in a $1.125 million pre-tax loss. The other-than-temporary
impairment, related to the Company's investments in certain collateralized
debt obligations that were sold during the third quarter, resulted in a
pre-tax charge of $2.038 million. The impairment charge effectively wrote the
amortized cost basis of the securities down to their June 30 fair value of
$1.070 million. The subsequent third quarter sale of the securities resulted
in a gain of $375 thousand, resulting in net losses of $1.663 million on the
securities for the year.

Hugh Potts, Jr., Chairman and CEO commented, "We are making these revisions
after a detailed review of the accounting and reporting of certain
transactions, identified in the third quarter but which had second quarter
effects. We have made great strides in reducing our non-performing assets and
improving the quality of our balance sheet, especially in light of our
anticipated merger with Renasant. These transactions will not have a material
impact on the combined company after the merger is completed. All indications
are that the pending merger with Renasant will be completed during the third
quarter."

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 26 communities in Mississippi, Alabama, 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 Condition
(Unaudited)
(In thousands, except share data)
                                     June 30           December 31 June 30
                                     2013              2012        2012
Cash and due from banks              $            $      $     
                                     51,293            54,811      37,147
Interest bearing bank balances       133,333           94,313      20,708
Federal funds sold                   10,000            10,000      6,750
Securities available for sale (cost
of
 $275,550, $341,273 and $371,424)   273,553           348,562     377,670
Loans held for sale                  2,614             21,014      22,291
Loans                                967,013           975,473     982,596
Allowance for loan losses            19,431            17,492      15,310
 Net loans                       947,582           957,981     967,286
Bank premises and equipment          36,438            37,264      37,529
Accrued interest receivable          4,777             5,683       6,060
Other real estate                    19,721            25,970      31,077
Other intangible assets              3,946             4,159       4,373
Other assets                         44,548            41,926      50,605
 Total assets                    $   1,527,805  $        $   
                                                       1,601,683   1,561,496
Non-interest bearing deposits        $     304,734 $       $    
                                                       276,295    236,145
Interest bearing deposits            1,061,474         1,126,380   1,125,193
 Total deposits                  1,366,208         1,402,675   1,361,338
Federal funds and repurchase         1,994             3,720       3,224
agreements
Other borrowings                     2,792             36,007      40,333
Junior subordinated debt             30,928            30,928      30,928
Accrued interest payable             482               661         844
Other liabilities                    8,828             9,249       10,912
 Total liabilities               1,411,232         1,483,240   1,447,579
Preferred stock, 30,000 shares       19,569            18,865      18,198
issued and outstanding
Common stock, 9,236,479, 9,230,799
and 9,172,098
 shares issued & outstanding     46,182            46,154      45,860
Additional paid-in capital           32,515            32,469      31,890
Nonvested restricted stock awards    405               244         836
Retained earnings                    20,876            19,180      16,699
Accumulated other comprehensive      (2,974)           1,531       434
income (loss)
 Total equity                    116,573           118,443     113,917
 Total liabilities & equity      $   1,527,805  $        $   
                                                       1,601,683   1,561,496







First M&F Corporation and
Subsidiary
Condensed Consolidated Statements of
Income (Unaudited)
(In thousands, except share
data)
                              Three Months Ended June Six Months Ended June 30
                              30
                              2013        2012        2013         2012
Interest and fees on loans    $      $      $       $     
                              12,652      13,741      25,350       27,899
Interest on loans held for    25          244         81           417
sale
Taxable investments           1,338       1,563       2,569        3,053
Tax exempt investments        348         319         700          637
Federal funds sold            6           11          12           26
Interest bearing bank         40          28          98           79
balances
 Total interest income    14,409      15,906      28,810       32,111
Interest on deposits          1,452       2,233       2,968        4,746
Interest on fed funds and     2           5           6            11
repurchase agreements
Interest on other borrowings  329         437         700          888
Interest on subordinated debt 297         315         580          586
 Total interest expense   2,080       2,990       4,254        6,231
 Net interest income      12,329      12,916      24,556       25,880
Provision for possible loan   1,380       2,280       2,660        4,560
losses
 Net interest income      10,949      10,636      21,896       21,320
after loan loss
Service charges on deposits   2,437       2,548       4,808        5,005
Mortgage banking income       619         1,806       1,910        2,373
Agency commission income      880         848         1,700        1,677
Fiduciary and brokerage       203         163         363          303
income
Other income                  618         673         1,662        1,510
Loss on extinguishment of     (1,511)     -           (1,511)      -
debt
Other-than-temporary
impairment on securities, net
of
$0, $4, $0, and $4
reclassified to other
comprehensive income          (2,038)     (4)         (2,038)      (4)
Gains on AFS securities       1,378       1           1,394        592
 Total noninterest income 2,586       6,035       8,288        11,456
Salaries and employee         6,377       6,737       12,739       13,600
benefits
Net occupancy expense         819         932         1,684        1,840
Equipment expenses            390         423         822          886
Software and processing       555         346         911          708
expenses
FDIC insurance assessments    323         553         671          1,067
Foreclosed property expenses  2,051       1,282       2,639        2,738
Intangible asset amortization 107         106         213          213
and impairment
Other expenses                3,042       3,940       6,924        7,253
 Total noninterest        13,664      14,319      26,603       28,305
expense
 Net income before taxes  (129)       2,352       3,581        4,471
Income tax expense            (351)       599         761          1,111
 Net income               $      $      $       $     
                                222      1,753      2,820      3,360
Earnings Per Common Share
Calculations:
 Net income               $      $      $       $     
                                222      1,753      2,820      3,360
Dividends and accretion on    (507)       (471)       (1,004)      (934)
preferred stock
 Net income applicable to (285)       1,282       1,816        2,426
common stock
Earnings attributable to      (12)        56          69           61
participating securities
 Net income allocated to  $      $      $       $     
common shareholders            (273)     1,226      1,747      2,365
Weighted average shares       9,234,452   9,164,576   9,232,963    9,160,526
(basic)
Weighted average shares       9,234,452   9,164,576   9,403,561    9,160,526
(diluted)
Basic earnings per share      $      $      $       $     
                               (0.03)      0.14      0.19      0.26
Diluted earnings per share    $      $      $       $     
                               (0.03)      0.14      0.19      0.26







First M&F Corporation
Financial Highlights
                            YTD Ended     YTD Ended   YTD Ended   YTD Ended
                            June 30       December 31 June 30     December 31
                            2013          2012        2012        2011
Performance Ratios:
Return on assets            0.37%         0.44%       0.42%       0.27%
(annualized)
Return on equity            4.73%         6.12%       6.06%       4.00%
(annualized) (a)
Return on common equity     3.63%         5.30%       5.21%       2.81%
(annualized) (a)
Efficiency ratio (c)        79.88%        74.98%      74.94%      78.47%
Net interest margin
(annualized,                3.55%         3.67%       3.69%       3.68%
tax-equivalent)
Net charge-offs to average  0.15%         0.61%       0.86%       1.05%
loans (annualized)
Nonaccrual loans to total   0.62%         0.75%       0.64%       1.68%
loans
90 day accruing loans to    0.02%         0.03%       0.15%       0.06%
total loans
                            QTD Ended     QTD Ended   QTD Ended   QTD Ended
                            June 30       March 31    December 31 September 30
                            2013          2013        2012        2012
Per Common Share (diluted):
Net income                  $       $      $      $     
                            (0.03)          0.22      0.14     0.14
Cash dividends paid         0.01          0.01        0.01        0.01
Book value                  10.50         11.00       10.79       10.69
Closing stock price         15.81         14.15       6.98        7.42
Loan Portfolio Composition:
(in thousands)
Commercial, financial and   $         $       $       $    
agricultural                145,411       150,125    153,550    155,890
Non-residential real estate 540,694       557,453     542,859     554,475
Residential real estate     206,490       203,260     200,992     197,629
Home equity loans           38,340        39,047      37,736      37,196
Consumer loans              36,078        37,772      40,336      42,137
 Total loans              $         $       $       $    
                            967,013       987,657    975,473    987,327
Deposit Composition: (in
thousands)
Noninterest-bearing         $         $       $       $    
deposits                    304,734       252,453    276,295    233,684
NOW deposits                404,457       419,376     423,461     386,371
MMDA deposits               200,839       207,931     214,091     216,620
Savings deposits            119,583       119,728     118,123     117,404
Core certificates of        176,722       182,245     188,733     201,361
deposit under $100,000
Core certificates of        148,734       159,913     165,979     177,084
deposit $100,000 and over
Brokered certificates of    3,305         3,295       3,549       3,417
deposit under $100,000
Brokered certificates of    7,834         7,834       12,444      13,533
deposit $100,000 and over
 Total deposits           $           $        $        $  
                            1,366,208    1,352,775   1,402,675   1,349,474
Nonperforming Assets: (in
thousands)
Nonaccrual loans            $        $      $      $     
                            6,036         7,277      7,444     6,219
Other real estate           19,721        24,820      25,970      28,002
Investment securities       679           604         733         644
 Total nonperforming      $         $      $      $    
assets                      26,436       32,701      34,147      34,865
Accruing loans past due 90  $       $      $      $     
days or more                 186           268      321      408
Restructured loans          $        $      $      $    
(accruing)                  6,209        21,657      21,800      16,784
Total nonaccrual loan to    0.62%         0.72%       0.75%       0.62%
loans
Total nonperforming credit  2.60%         3.12%       3.27%       3.29%
assets to loans and ORE
Total nonperforming assets  1.73%         2.11%       2.13%       2.24%
to assets ratio
Allowance For Loan Loss
Activity: (in thousands)
Beginning balance           $        $      $      $     
                            18,269        17,492      16,656      15,310
Provision for loan loss     1,380         1,280       1,980       1,980
Charge-offs                 (569)         (747)       (1,584)     (1,035)
Recoveries                  351           244         440         401
Ending balance              $        $      $      $     
                            19,431        18,269      17,492      16,656



First M&F Corporation
Financial Highlights
                          QTD Ended     QTD Ended     QTD Ended   QTD Ended
                          June 30       March 31      December 31 September 30
                          2013          2013          2012        2012
Condensed Income
Statements: (in
thousands)
Interest income           $        $        $      $     
                          14,409        14,401        15,186      15,625
Interest expense          2,080         2,174         2,545       2,753
 Net interest income    12,329        12,227        12,641      12,872
Provision for loan losses 1,380         1,280         1,980       1,980
Noninterest revenues      2,586         5,702         5,735       5,607
Noninterest expenses      13,664        12,939        13,913      14,060
 Net income before      (129)         3,710         2,483       2,439
taxes
Income tax expense        (351)         1,112         652         645
 Net income             $       $       $      $     
                           222         2,598          1,831     1,794
Preferred dividends       (507)         (497)         (488)       (479)
 Net income applicable  (285)         2,101         1,343       1,315
to common stock
Earnings attributable to  (12)          81            53          51
participating securities
 Net income allocated   $       $       $      $     
to common shareholders    (273)        2,020          1,290     1,264
Tax-equivalent net        $        $        $      $     
interest income           12,557        12,458        12,859      13,088
Selected Average
Balances: (in thousands)
Assets                    $           $          $        $  
                          1,543,020    1,570,994     1,585,467   1,546,416
Loans held for investment 973,160       977,198       982,894     984,282
Earning assets            1,408,023     1,431,054     1,436,348   1,396,824
Deposits                  1,345,703     1,369,784     1,381,667   1,343,559
Equity                    121,328       119,209       117,529     115,544
Common equity             101,940       100,171       98,837      97,186
Selected Ratios:
Return on average assets  0.06%         0.67%         0.46%       0.46%
(annualized)
Return on average equity  0.73%         8.84%         6.19%       6.18%
(annualized) (a)
Return on average common  -1.12%        8.51%         5.40%       5.38%
equity (annualized) (a)
Average equity to average 7.86%         7.59%         7.41%       7.47%
assets
Tangible equity to        7.39%         7.55%         7.15%       7.28%
tangible assets (b)
Tangible common equity to 6.11%         6.31%         5.97%       6.08%
tangible assets (b)
Net interest margin
(annualized,              3.58%         3.53%         3.56%       3.73%
tax-equivalent)
Efficiency ratio (c)      90.24%        71.25%        74.83%      75.21%
Net charge-offs to
average loans             0.09%         0.21%         0.46%       0.26%
(annualized)
Nonaccrual loans to total 0.62%         0.72%         0.75%       0.62%
loans
90 day accruing loans to  0.02%         0.03%         0.03%       0.04%
total loans
Price to book             1.51x         1.29x         0.65x       0.69x
Price to earnings         N/A           16.08x        12.46x      13.25x







First M&F
Corporation
Financial
Highlights
Historical                         Earnings        Earnings
Earnings Trends:
                                   Applicable to   Allocated to
                                   Common          Common
                   Earnings        Stock           Shareholders    EPS
                   (in thousands)  (in thousands)  (in thousands)  (diluted)
2Q 2013            $        $        $        $     
                   222             (285)           (273)            (0.03)
1Q 2013            2,598           2,101           2,020           0.22
4Q 2012            1,831           1,343           1,290           0.14
3Q 2012            1,794           1,315           1,264           0.14
2Q 2012            1,753           1,282           1,226           0.14
1Q 2012            1,607           1,144           1,139           0.12
4Q 2011            987             533             530             0.05
3Q 2011            1,330           882             878             0.10
2Q 2011            1,106           666             661             0.07
Revenue                            Non-interest    Non-interest
Statistics:
                   Revenues        Revenues to     Revenues to
                   Per FTE         Ttl. Revenues   Avg. Assets
                   (thousands)     (percent)       (percent)
2Q 2013            $         17.07%          0.67%
                   35.6
1Q 2013            40.4            31.40%          1.47%
4Q 2012            40.2            30.85%          1.44%
3Q 2012            39.9            29.99%          1.44%
2Q 2012            41.1            31.48%          1.54%
1Q 2012            40.5            29.14%          1.36%
4Q 2011            39.0            31.48%          1.50%
3Q 2011            36.6            27.96%          1.30%
2Q 2011            36.6            25.88%          1.18%
Expense            Non-interest
Statistics:
                   Expense to      Efficiency
                   Avg. Assets     Ratio
                   (percent)       (percent) (c)
2Q 2013            3.55%           90.24%
1Q 2013            3.34%           71.25%
4Q 2012            3.49%           74.83%
3Q 2012            3.62%           75.21%
2Q 2012            3.65%           74.70%
1Q 2012            3.50%           75.18%
4Q 2011            3.82%           80.29%
3Q 2011            3.52%           75.76%
2Q 2011            3.59%           78.56%



First M&F Corporation
Average Balance Sheets/Yields and Costs
(tax-equivalent)
(In thousands with yields and   QTD June 2013           QTD June 2012
costs annualized)
                                Average                 Average
                                Balance      Yield/Cost Balance     Yield/Cost
Interest bearing bank balances  $       0.26%      $      0.37%
                                61,978                  30,923
Federal funds sold              10,000       0.25%      15,082      0.27%
Taxable investments (amortized  313,887      1.71%      333,794     1.88%
cost)
Tax-exempt investments          44,109       5.04%      36,610      5.59%
(amortized cost)
Loans held for sale             4,889        2.08%      30,416      3.22%
Loans held for investment       973,160      5.22%      973,545     5.69%
 Total earning assets         1,408,023    4.17%      1,420,370   4.57%
Non-earning assets              134,997                 157,050
 Total average assets         $                     $   
                                1,543,020              1,577,420
NOW                             $        0.23%      $       0.43%
                                411,929                 404,958
MMDA                            200,444      0.18%      217,533     0.37%
Savings                         120,227      0.76%      121,778     0.95%
Certificates of Deposit         345,147      1.04%      402,703     1.31%
Short-term borrowings           2,862        0.20%      2,974       0.62%
Other borrowings                62,062       4.05%      71,771      4.21%
 Total interest bearing       1,142,671    0.73%      1,221,717   0.98%
liabilities
Non-interest bearing deposits   267,956                 232,744
Non-interest bearing            11,065                  10,493
liabilities
Preferred equity                19,388                  18,036
Common equity                   101,940                 94,430
 Total average liabilities    $                     $   
and equity                      1,543,020              1,577,420
Net interest spread                          3.44%                  3.59%
Effect of non-interest bearing               0.14%                  0.16%
deposits
Effect of leverage                           0.00%                  -0.03%
 Net interest margin,                      3.58%                  3.72%
tax-equivalent
Less tax equivalent adjustment:
 Investments                               0.06%                  0.05%
 Loans                                     0.01%                  0.01%
Reported book net interest                   3.51%                  3.66%
margin



First M&F Corporation
Average Balance Sheets/Yields
and Costs (tax-equivalent)
(In thousands with yields and    YTD June 2013          YTD June 2012
costs annualized)
                                 Average                Average
                                 Balance     Yield/Cost Balance     Yield/Cost
Interest bearing bank balances   $      0.29%      $      0.29%
                                 69,212                 55,067
Federal funds sold               10,000      0.25%      20,041      0.26%
Taxable investments (amortized   311,642     1.66%      316,708     1.94%
cost)
Tax-exempt investments           44,148      5.10%      35,790      5.71%
(amortized cost)
Loans held for sale              9,305       1.76%      26,573      3.15%
Loans held for investment        975,168     5.25%      978,672     5.74%
 Total earning assets          1,419,475   4.16%      1,432,851   4.57%
Non-earning assets               137,455                159,365
 Total average assets          $                    $   
                                 1,556,930             1,592,216
NOW                              $       0.23%      $       0.45%
                                 417,417                412,108
MMDA                             206,242     0.18%      222,067     0.45%
Savings                          119,477     0.78%      121,307     0.97%
Certificates of Deposit          353,048     1.06%      409,895     1.35%
Short-term borrowings            4,093       0.27%      4,014       0.53%
Other borrowings                 64,107      4.03%      72,439      4.09%
 Total interest bearing        1,164,384   0.74%      1,241,830   1.01%
liabilities
Non-interest bearing deposits    261,493                229,177
Non-interest bearing liabilities 10,779                 9,603
Preferred equity                 19,214                 17,878
Common equity                    101,060                93,728
 Total average liabilities and $                    $   
equity                           1,556,930             1,592,216
Net interest spread                          3.42%                  3.56%
Effect of non-interest bearing               0.14%                  0.16%
deposits
Effect of leverage                           -0.01%                 -0.03%
 Net interest margin,                      3.55%                  3.69%
tax-equivalent
Less tax equivalent adjustment:
 Investments                               0.06%                  0.05%
 Loans                                     0.01%                  0.01%
Reported book net interest                   3.49%                  3.63%
margin



First M&F Corporation
Notes to Financial Schedules
(a) Return on equity is calculated as: (Net income attributable to First M&F
     Corp) divided by (Total equity)
     Return on common equity is calculated as: (Net income attributable to
     First M&F Corp minus preferred dividends) divided by

     (Total First M&F Corp equity minus preferred stock)
     Tangible equity to tangible assets is calculated as: (Total equity minus
(b) goodwill and other intangible assets) divided by

     (Total assets minus goodwill and other intangible assets)
     Tangible common equity to tangible assets is calculated as: (Total First
     M&F Corp equity minus preferred stock minus

     goodwill and other intangible assets) divided by (Total assets minus
     goodwill and other intangible assets)
(c) Efficiency ratio is calculated as: (Noninterest expense) divided by
     (Tax-equivalent net interest income plus noninterest revenues)

SOURCE First M&F Corp.

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