First M&F Corp. Announces Extraordinary Provision for Possible Loan Loss

KOSCIUSKO, Miss., June 20 /PRNewswire-FirstCall/ -- Today First M&F Corporation announced that it will make an extraordinary addition to the allowance for loan loss of M&F Bank of $5 million in June, 2008. The allowance, now at $14 million or 1.17% of total loans, will be increased to approximately $19 million or 1.58% of loans. This action is to be taken in light of recent downgrades on construction and development loans largely due to several trends and factors including: the slowdown in the housing market, declining real estate values, longer absorption periods and developer and builder difficulties brought about by current excess inventories and rising construction costs. This increase in the allowance for loan loss is a recognition of construction and development stress and the uncertainty of the duration and severity of the current real estate market downturn and economic cycle.