Charter of the Compensation Committee

Purpose

The Compensation Committee of First M&F Corporation (M&F Bank) shall evaluate the compensation of executive officers of M&F Bank and assure that they are compensated effectively in a manner consistent with the stated compensation strategy of M&F Bank, competitive practice, internal equity considerations, performance of M&F Bank relative to compensation, and the requirements of the appropriate regulatory bodies.

Composition

The Compensation Committee shall consist of three or more independent directors elected annually by the Board of Directors for a term of one year, or until their successors can be duly elected and qualified. The Board of Directors may remove a committee member at any time.

Unless the Board of Directors otherwise elects a Committee Chairman, the non-employee Chairman of the Board shall be designated as the Chairman of the Compensation Committee.

Meetings

The Compensation Committee shall meet at least once per year and at such additional times as may be necessary to carry out its responsibilities. Either the Chairman of the Compensation Committee or the Chairman & Chief Executive Officer may call meetings.

All meetings of and actions by the committee shall be held and taken pursuant to the Bylaws of First M&F Corporation, including provisions governing notice of meetings and waiver thereof, the number of committee members required to take actions at meetings and by written consent, and other related matters.

Reports of meetings and actions taken at the meetings or by consent of the Compensation Committee since the most recent meeting of the Board of Directors shall be made by the Compensation Committee Chairman at its next regularly scheduled meeting following the Compensation Committee meeting or action.

Authority and Responsibility

The Compensation Committee shall have the following authority and responsibility:

• The Compensation Committee shall review and approve:




1. M&F Bank’s corporate goals and objectives relevant to executive compensation



2. The framework of M&F Bank’s executive compensation practices to ensure that such framework and practices are appropriate to achieve M&F Bank’s objectives of rewarding executives appropriately for their contributions to M&F Bank’s growth and profitability and other goals and objectives linking the interests of executives to the long-term interests of M&F Bank’s equity owners.



3. The compensation (and performance relative to compensation) of the Chairman & Chief Executive Officer and other executives. Determine the amounts and elements of total compensation consistent with M&F Bank’s corporate objectives. In determining such amounts and elements, the Committee shall consider M&F Bank’s performance and relative shareholder return, the value of similar compensation at comparable companies and compensation provided in prior years.



• The Compensation Committee shall also provide oversight of management’s decisions concerning the performance and compensation of other employees.



• The Compensation Committee shall provide an Annual Compensation Committee Report to shareholders including the factors, criteria and performance level on which the Chairman & Chief Executive Officer’s compensation was based.



• Periodically review, and modify, as needed, M&F Bank’s cash-based incentive compensation plans. Ensure such plans are structured and administered consistent with M&F Bank’s goals and objectives as to participation in such plans, target annual incentives, financial goals and actual awards paid to executives.



• Administer equity-based incentive plan(s) consistent with the authority and responsibilities provided by such plan(s). Periodically evaluate such plan(s) and determine when it is necessary or otherwise desirable to (a) modify, discontinue or supplement any such plan(s), or (b) submit any material amendment for adoption to a vote of the Board of Directors and/or the shareholders of M&F Bank.



• Periodically evaluate the compensation of non-employee directors, including service on committees, taking into consideration compensation of directors at other comparable companies. Approve annual retainer and meeting fees for the Board of Directors and committees and fix the terms and conditions of any equity-based compensation for members of the Board of Directors.



• Periodically evaluate M&F Bank’s employee benefits programs and approve any changes as desired and/or required.



• Have sole authority to retain and terminate any compensation consultant engaged to assist in evaluating compensation of the Chairman & Chief Executive Officer, other executives or the Board of Directors and to approve such consultant’s fees.



• Perform an annual self-assessment of the committee’s performance.



• Perform such other duties and responsibilities as may be assigned, from time to time, by the Board of Directors.

Approved by Board of Directors
April 14, 2004