##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from  to
 Commission File Number 1-14343
 MIDLAND CAPITAL HOLDINGS CORPORATION
  Delaware
    
    36-4238089(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification Number)
 8929 S. Harlem Avenue, Bridgeview, Illinois 60455
 (708) 598-9400
 þ o
 o þ
 o þ
  Common Stock, par value $.01
 As of May 15, 2006, the Issuer had
372,600 shares of Common Stock issued and outstanding.




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##### 



MIDLAND CAPITAL HOLDINGS CORPORATION
  
 PAGEPart I. FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated Statements of Financial Condition - March 31, 2006 (unaudited) and June 30, 2005
    
    1Consolidated Statements of Earnings - Three months ended March 31, 2006 and 2005 and Nine months ended March 31, 2006 and 2005 (unaudited)
    
    2Consolidated
Statements of Changes in Stockholders Equity - Nine months ended March 31, 2006 (unaudited)
    
    3Consolidated Statements of Cash Flows - Nine months ended March 31, 2006 and 2005 (unaudited)
    
    4Notes to Consolidated Financial Statements
    
    5-6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    7-15Item 3.
    
    Controls and Procedures
    
    15Part II. OTHER INFORMATION
    
    16Item 1.
    
    Legal Proceedings
    
    16Item 2.
    
    Changes in Securities
    
    16Item 3.
    
    Defaults Upon Senior Securities
    
    16Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    16Item 5.
    
    Other Information
    
    16Item 6.
    
    Exhibits
    
    16Index to Exhibits
 
    
       
    17Computation of Per Share EarningsCertificationCertification




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##### Table of Contents



MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 
 Part I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 
 Consolidated Statements of Financial Condition
 March 31,
    
    
    June 30,2006
    
    
    2005(Unaudited)AssetsCash and amounts due from depository institutions
    
    $
    2,244,257
    
    
    
    2,640,369Interest-bearing deposits
    
    
    13,847,899
    
    
    
    34,069,224Total cash and cash equivalents
    
    
    16,092,156
    
    
    
    36,709,593Investment securities available for sale, at fair value
    
    
    15,965,137
    
    
    
    1,310,937Mortgage-backed securities, held to maturity (fair value:March 31, 2006 - $1,731,719;June 30, 2005 - $1,938,460)
    
    
    1,723,269
    
    
    
    1,920,221Loans receivable (net of allowance for loan losses:March 31, 2006 - $441,980;June 30, 2005 - $456,550)
    
    
    93,238,521
    
    
    
    94,578,810Loans receivable held for sale
    
    
    506,400
    
    
    
    250,500Stock in Federal Home Loan Bank of Chicago
    
    
    1,148,087
    
    
    
    1,123,500Accrued interest receivable
    
    
    370,633
    
    
    
    367,351Office properties and equipment, net
    
    
    2,230,590
    
    
    
    2,240,391Prepaid expenses and other assets
    
    
    716,828
    
    
    
    477,467Total assets
    
    $
    131,991,621
    
    
    
    138,978,770Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    117,624,391
    
    
    
    124,836,132Advance payments by borrowers for taxes and insurance
    
    
    788,525
    
    
    
    1,060,670Other liabilities
    
    
    445,086
    
    
    
    385,286Total liabilities
    
    
    118,858,002
    
    
    
    126,282,088Stockholders equity:Preferred stock, $.01 par value:authorized 50,000 shares; none outstanding
    
    
    
    
    
    
    Common stock, $.01 par value: authorized 600,000
shares; issued and outstanding 372,600 shares
at March 31, 2006 and June 30, 2005
    
    
    3,726
    
    
    
    3,726Additional paid-in capital
    
    
    3,395,580
    
    
    
    3,395,580Retained earnings  substantially restricted
    
    
    9,585,448
    
    
    
    9,080,803Accumulated other comprehensive income, net of income taxes
    
    
    148,865
    
    
    
    216,573Total stockholders equity
    
    
    13,133,619
    
    
    
    12,696,682Total liabilities and stockholders equity
    
    $
    131,991,621
    
    
    
    138,978,770
 See accompanying notes to consolidated financial statements.
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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 
 Consolidated Statements of Earnings (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005
    
    
    2006
    
    
    2005Interest income:Interest on loans
    
    $
    1,370,266
    
    
    
    1,378,263
    
    
    
    4,079,774
    
    
    
    4,135,905Interest on mortgage-backed securities
    
    
    20,547
    
    
    
    19,908
    
    
    
    60,958
    
    
    
    68,413Interest on investment securities
    
    
    192,526
    
    
    
    18,990
    
    
    
    518,793
    
    
    
    56,969Interest on interest-bearing deposits
    
    
    122,097
    
    
    
    202,838
    
    
    
    389,475
    
    
    
    524,902Dividends on FHLB stock
    
    
    8,642
    
    
    
    15,010
    
    
    
    33,248
    
    
    
    46,882Total interest income
    
    
    1,714,078
    
    
    
    1,635,009
    
    
    
    5,082,248
    
    
    
    4,833,071Interest expense:Interest on deposits
    
    
    425,659
    
    
    
    332,686
    
    
    
    1,192,765
    
    
    
    1,015,622Total interest expense
    
    
    425,659
    
    
    
    332,686
    
    
    
    1,192,765
    
    
    
    1,015,622Net interest income
    
    
    1,288,419
    
    
    
    1,302,323
    
    
    
    3,889,483
    
    
    
    3,817,449Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net interest income after provision
for loan losses
    
    
    1,288,419
    
    
    
    1,302,323
    
    
    
    3,889,483
    
    
    
    3,817,449Non-interest income:Loan fees and service charges
    
    
    46,019
    
    
    
    38,182
    
    
    
    201,918
    
    
    
    180,806Commission income
    
    
    19,192
    
    
    
    16,689
    
    
    
    40,661
    
    
    
    41,932Gain on sale of loans
    
    
    13,381
    
    
    
    2,150
    
    
    
    32,426
    
    
    
    16,002Gain on sale of other assets
    
    
    
    
    
    
    
    
    
    
    16,286
    
    
    
    Deposit related fees
    
    
    109,491
    
    
    
    104,226
    
    
    
    338,529
    
    
    
    324,076Other income
    
    
    11,200
    
    
    
    18,114
    
    
    
    36,802
    
    
    
    47,707Total non-interest income
    
    
    199,283
    
    
    
    179,361
    
    
    
    666,622
    
    
    
    610,523Non-interest expense:Staffing costs
    
    
    653,719
    
    
    
    640,335
    
    
    
    1,958,929
    
    
    
    1,937,629Advertising
    
    
    15,512
    
    
    
    15,171
    
    
    
    48,517
    
    
    
    48,766Occupancy and equipment expenses
    
    
    177,276
    
    
    
    162,714
    
    
    
    492,785
    
    
    
    484,275Data processing
    
    
    52,721
    
    
    
    57,004
    
    
    
    150,854
    
    
    
    156,254Federal deposit insurance premiums
    
    
    4,029
    
    
    
    4,864
    
    
    
    12,460
    
    
    
    15,124Other
    
    
    246,081
    
    
    
    221,999
    
    
    
    755,347
    
    
    
    689,234Total non-interest expense
    
    
    1,149,338
    
    
    
    1,102,087
    
    
    
    3,418,892
    
    
    
    3,331,282Income before income taxes
    
    
    338,364
    
    
    
    379,597
    
    
    
    1,137,213
    
    
    
    1,096,690Income tax provision
    
    
    115,044
    
    
    
    129,089
    
    
    
    386,652
    
    
    
    372,900Net income
    
    $
    223,320
    
    
    
    250,508
    
    
    
    750,561
    
    
    
    723,790Earnings per share (basic)
    
    $
    .60
    
    
    
    .67
    
    
    
    2.01
    
    
    
    1.94Earnings per share (diluted)
    
    $
    .60
    
    
    
    .67
    
    
    
    2.01
    
    
    
    1.94Dividends declared per common share
    
    $
    .22
    
    
    
    .20
    
    
    
    .66
    
    
    
    .60
 See accompanying notes to consolidated financial statements.
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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 
 Consolidated Statements of Changes in Stockholders Equity (Unaudited)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon
    
    
    Paid-In
    
    
    Retained
    
    
    ComprehensiveStock
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    TotalBalance at June 30, 2005
    
    $
    3,726
    
    
    
    3,395,580
    
    
    
    9,080,803
    
    
    
    216,573
    
    
    
    12,696,682Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    750,561
    
    
    
    
    
    
    
    750,561Other comprehensive
income, net of tax:Unrealized holding loss
during the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (67,708
    )
    
    
    (67,708
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    750,561
    
    
    
    (67,708
    )
    
    
    682,853Dividends declared on common
stock ($0.66 per share)
    
    
    
    
    
    
    
    
    
    
    (245,916
    )
    
    
    
    
    
    
    (245,916
    )Balance at March 31, 2006
    
    $
    3,726
    
    
    
    3,395,580
    
    
    
    9,585,448
    
    
    
    148,865
    
    
    
    13,133,619
 See accompanying notes to consolidated financial statements.
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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 
 Consolidated Statements of Cash Flows (Unaudited)
 Nine Months EndedMarch 31,2006
    
    
    2005Cash flows from operating activities:Net income
    
    $
    750,561
    
    
    
    723,790Adjustments to reconcile net income to net cash from
operating activities:Depreciation
    
    
    158,305
    
    
    
    161,240Net (accretion) amortization on securities
    
    
    (462,543
    )
    
    
    (1,988
    )Federal Home Loan Bank stock dividend
    
    
    (24,587
    )
    
    
    (46,800
    )Proceeds from sale of loans held for sale
    
    
    2,534,462
    
    
    
    1,140,050Origination of loans held for sale
    
    
    (2,769,703
    )
    
    
    (715,050
    )Gain on sale of loans
    
    
    (32,426
    )
    
    
    (4,346
    )Gain on sale of other assets
    
    
    (16,286
    )
    
    
    Increase in accrued interest receivable
    
    
    (3,281
    )
    
    
    (22,209
    )Increase in accrued interest payable
    
    
    300
    
    
    
    493Increase (decrease) in deferred income on loans
    
    
    3,470
    
    
    
    (14,987
    )Increase in other assets
    
    
    (187,995
    )
    
    
    (54,024
    )Increase in other liabilities
    
    
    59,500
    
    
    
    101,492Net cash provided by operating activities
    
    
    9,777
    
    
    
    1,267,661Cash flows from investing activities:Proceeds from repayments of mortgage backed securities,
held to maturity
    
    
    196,952
    
    
    
    870,756Proceeds from maturities of investment securities,
available for sale
    
    
    20,000,000
    
    
    
    Purchase of investment securities, available for sale
    
    
    (34,294,245
    )
    
    
    Loan disbursements
    
    
    (14,608,912
    )
    
    
    (16,686,784
    )Loan repayments
    
    
    15,941,011
    
    
    
    14,430,509Proceeds from sale of other assets
    
    
    16,286
    
    
    
    Property and equipment expenditures
    
    
    (148,504
    )
    
    
    (71,522
    )Net cash provided for investing activities
    
    
    (12,897,412
    )
    
    
    (1,457,041
    )Cash flows from financing activities:Deposit account receipts
    
    
    268,426,852
    
    
    
    286,705,343Deposit account withdrawals
    
    
    (276,764,413
    )
    
    
    (300,634,980
    )Interest credited to deposit accounts
    
    
    1,125,820
    
    
    
    959,348Payment of dividends
    
    
    (245,916
    )
    
    
    (223,560
    )Decrease in advance payments by borrowers
for taxes and insurance
    
    
    (272,145
    )
    
    
    (176,955
    )Net cash provided for financing activities
    
    
    (7,729,802
    )
    
    
    (13,370,804
    )Net change in cash and cash equivalents
    
    
    (20,617,437
    )
    
    
    (13,560,184
    )Cash and cash equivalents at beginning of period
    
    
    36,709,593
    
    
    
    50,496,629Cash and cash equivalents at end of period
    
    $
    16,092,156
    
    
    
    36,936,445Cash paid during the period for:Interest
    
    $
    1,192,465
    
    
    
    1,015,129Income taxes
    
    
    327,049
    
    
    
    337,329
 See accompanying notes to consolidated financial statements.
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 
 Notes to Consolidated Financial Statements
 Note A  Basis of Presentation
  Note B  Principles of Consolidation
  Note C  Earnings Per Share
  Note D  Industry Segments
  Note E  Effect of New Accounting Pronouncements
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 Note E  Effect of New Accounting Pronouncements (continued)
     -6-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 
 Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 FORWARD-LOOKING STATEMENTS
    GENERAL
   -7-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 GENERAL (continued)
  FINANCIAL CONDITION
     -8-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 FINANCIAL CONDITION (continued)
  March 31,
    
    
    June 30,2006
    
    
    2005(Dollars in Thousands)Non-Accruing Loans:One-to-four family
    
    $
    175
    
    
    $
    316Multi-family
    
    
    
    
    
    
    Consumer
    
    
    58
    
    
    
    64Commercial business
    
    
    
    
    
    
    Total non-performing loans
    
    $
    233
    
    
    $
    380Repossessed Assets:Automobile
    
    
    5
    
    
    
    Total repossessed assets
    
    
    5
    
    
    
    Total non-performing assets
    
    $
    238
    
    
    $
    380Total as a percentage of total assets
    
    
    0.18
    %
    
    
    0.27
    %
  -9-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 FINANCIAL CONDITION (continued)
  Nine Months EndedMarch 31,2006
    
    
    2005(Dollars in Thousands)Balance at beginning of period
    
    $
    457
    
    
    $
    460Charge-offs:One-to-four family loans
    
    
    
    
    
    
    Consumer loans
    
    
    17
    
    
    
    1Commercial business loans
    
    
    
    
    
    
    Total charge-offs
    
    
    17
    
    
    
    1Recoveries:One-to-four family loans
    
    
    
    
    
    
    Multi-family loans
    
    
    
    
    
    
    Consumer loans
    
    
    2
    
    
    
    Total recoveries
    
    
    2
    
    
    
    Net (charge-offs) recoveries
    
    
    (15
    )
    
    
    (1
    )Additions charged to operations
    
    
    
    
    
    
    Balance at end of period
    
    $
    442
    
    
    $
    459Ratio of net charge-offs during the period to
average loans outstanding during the period
    
    
    .02
    %
    
    
    .01
    %Ratio of net charge-offs during the period to
average non-performing assets
    
    
    5.32
    %
    
    
    .46
    %Allowance for loan losses to non-performing loans
    
    
    189.79
    %
    
    
    151.69
    %Allowance for loan losses to total loans
    
    
    0.47
    %
    
    
    0.47
    %
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 FINANCIAL CONDITION (continued)
  RESULTS OF OPERATIONS
     Interest Income
  -11-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 Interest Income (continued)
      -12-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 Interest Income (continued)
     Interest Expense
   -13-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 Provisions for Losses on Loans
  Non-Interest Income
   Non-Interest Expense
   Income Taxes
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 Income Taxes (continued)
  LIQUIDITY AND CAPITAL RESOURCES
     
 Item 3. CONTROLS AND PROCEDURES
   -15-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 
 PART II  OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 2. CHANGES IN SECURITIES
  
 Item 3. DEFAULTS UPON SENIOR SECURITIES
  
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 Item 5. OTHER INFORMATION
  
 Item 6. EXHIBITS
  -16-




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INDEX TO EXHIBITS
 ExhibitNumber
    
    Description11
    
    Computation of Per Share Earnings31.1
    
    Rule 13a-14(a)/15d-14(a) Certification32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 -17-




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SIGNATURES
  MIDLAND CAPITAL HOLDINGS CORPORATIONRegistrantDATE: May 15, 2006
    
    BY:
    
    /s/ Paul ZogasPaul ZogasPresident, Chief Executive Officer
and Chief Financial OfficerDATE: May 15, 2006
    
    BY:
    
    /s/ Charles Zogas

Charles ZogasExecutive Vice President and
Chief Operating Officer