##### 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 1934
 For the quarterly period ended December 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For 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 February 14, 2008, 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 
December 31, 2007 (unaudited) and June 30, 2007
    
    
    1Consolidated Statements of Earnings 
Three months ended December 31, 2007 and 2006 and
Six months ended December 31, 2007 and 2006 (unaudited)
    
    
    2Consolidated Statements of Changes in Stockholders Equity 
Six months ended December 31, 2007 (unaudited)
    
    
    3Consolidated Statements of Cash Flows  Six months
ended December 31, 2007 and 2006 (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
    
    
    18Exhibit 11Exhibit 31.1Exhibit 32.1




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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
 December 31,
    
    
    June 30,2007
    
    
    2007(Unaudited)AssetsCash and amounts due from depository institutions
    
    $
    2,356,472
    
    
    
    2,224,076Interest-bearing deposits
    
    
    19,881,618
    
    
    
    11,231,760Total cash and cash equivalents
    
    
    22,238,090
    
    
    
    13,455,836Investment securities available for sale, at fair value
    
    
    11,230,381
    
    
    
    21,019,975Mortgage-backed securities, held to maturity (fair value:
December 31, 2007 - $1,326,780;
June 30, 2007 - $1,482,977)
    
    
    1,317,902
    
    
    
    1,474,504Loans receivable (net of allowance for loan losses:
December 31, 2007 - $410,845;
June 30, 2007 - $420,079)
    
    
    82,089,023
    
    
    
    83,844,418Loans receivable held for sale
    
    
    187,200
    
    
    
    1,012,200Stock in Federal Home Loan Bank of Chicago
    
    
    1,148,087
    
    
    
    1,148,087Other investments, available for sale
    
    
    48,439
    
    
    
    106,633Accrued interest receivable
    
    
    316,502
    
    
    
    333,666Office properties and equipment, net
    
    
    1,978,232
    
    
    
    2,071,621Prepaid expenses and other assets
    
    
    511,221
    
    
    
    425,814Total assets
    
    $
    121,065,077
    
    
    
    124,892,754Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    105,852,495
    
    
    
    109,744,662Advance payments by borrowers for taxes and insurance
    
    
    951,247
    
    
    
    998,142Other liabilities
    
    
    373,648
    
    
    
    439,476Total liabilities
    
    
    107,177,390
    
    
    
    111,182,280Stockholders 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 December 31, 2007 and June 30, 2007
    
    
    3,726
    
    
    
    3,726Additional paid-in capital
    
    
    3,395,580
    
    
    
    3,395,580Retained earnings  substantially restricted
    
    
    10,264,400
    
    
    
    10,104,065Accumulated other comprehensive income, net of income taxes
    
    
    223,981
    
    
    
    207,103Total stockholders equity
    
    
    13,887,687
    
    
    
    13,710,474Total liabilities and stockholders equity
    
    $
    121,065,077
    
    
    
    124,892,754
  -1-




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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 
 Consolidated Statements of Earnings (Unaudited)
 Three Months Ended
    
    
    Six Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest income:Interest on loans
    
    $
    1,225,765
    
    
    
    1,298,862
    
    
    
    2,467,024
    
    
    
    2,648,839Interest on mortgage-backed securities
    
    
    19,917
    
    
    
    22,700
    
    
    
    39,934
    
    
    
    44,459Interest on investment securities
    
    
    167,857
    
    
    
    274,309
    
    
    
    408,089
    
    
    
    533,852Interest on interest-bearing deposits
    
    
    215,297
    
    
    
    87,832
    
    
    
    382,289
    
    
    
    195,429Dividends on FHLB stock
    
    
    
    
    
    
    9,410
    
    
    
    8,015
    
    
    
    18,283Total interest income
    
    
    1,628,836
    
    
    
    1,693,113
    
    
    
    3,305,351
    
    
    
    3,440,862Interest expense:Interest on deposits
    
    
    557,414
    
    
    
    515,178
    
    
    
    1,119,221
    
    
    
    1,007,852Total interest expense
    
    
    557,414
    
    
    
    515,178
    
    
    
    1,119,221
    
    
    
    1,007,852Net interest income
    
    
    1,071,422
    
    
    
    1,177,935
    
    
    
    2,186,130
    
    
    
    2,433,010Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net interest income after provision
for loan losses
    
    
    1,071,422
    
    
    
    1,177,935
    
    
    
    2,186,130
    
    
    
    2,433,010Non-interest income:Loan fees and service charges
    
    
    53,761
    
    
    
    35,975
    
    
    
    103,731
    
    
    
    87,141Gain on sale of other investments
    
    
    
    
    
    
    
    
    
    
    66,726
    
    
    
    Commission income
    
    
    23,677
    
    
    
    10,756
    
    
    
    39,952
    
    
    
    22,350Gain on sale of loans
    
    
    41,379
    
    
    
    24,767
    
    
    
    77,114
    
    
    
    51,063Deposit related fees
    
    
    83,122
    
    
    
    83,544
    
    
    
    162,377
    
    
    
    178,436Other income
    
    
    13,332
    
    
    
    37,002
    
    
    
    27,195
    
    
    
    50,459Total non-interest income
    
    
    215,271
    
    
    
    192,044
    
    
    
    477,095
    
    
    
    389,449Non-interest expense:Staffing costs
    
    
    613,498
    
    
    
    626,761
    
    
    
    1,233,196
    
    
    
    1,283,982Advertising
    
    
    13,795
    
    
    
    17,696
    
    
    
    30,000
    
    
    
    35,591Occupancy and equipment expenses
    
    
    173,222
    
    
    
    169,894
    
    
    
    339,342
    
    
    
    335,539Data processing
    
    
    43,367
    
    
    
    45,425
    
    
    
    87,443
    
    
    
    89,432Federal deposit insurance premiums
    
    
    6,484
    
    
    
    3,613
    
    
    
    9,726
    
    
    
    7,318Professional fees
    
    
    18,841
    
    
    
    27,488
    
    
    
    51,612
    
    
    
    51,940Other
    
    
    193,977
    
    
    
    219,433
    
    
    
    398,101
    
    
    
    423,776Total non-interest expense
    
    
    1,063,184
    
    
    
    1,110,310
    
    
    
    2,149,420
    
    
    
    2,227,578Income before income taxes
    
    
    223,509
    
    
    
    259,669
    
    
    
    513,805
    
    
    
    594,881Income tax provision
    
    
    75,936
    
    
    
    88,183
    
    
    
    174,622
    
    
    
    202,155Net income
    
    $
    147,573
    
    
    
    171,486
    
    
    
    339,183
    
    
    
    392,726Earnings per share (basic)
    
    $
    .40
    
    
    
    .46
    
    
    
    0.91
    
    
    
    1.05Earnings per share (diluted)
    
    $
    .40
    
    
    
    .46
    
    
    
    0.91
    
    
    
    1.05Dividends declared per common share
    
    $
    .24
    
    
    
    .24
    
    
    
    .48
    
    
    
    .48
  -2-




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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, 2007
    
    $
    3,726
    
    
    
    3,395,580
    
    
    
    10,104,065
    
    
    
    207,103
    
    
    
    13,710,474Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    339,183
    
    
    
    
    
    
    
    339,183Other comprehensive
income, net of tax:Unrealized holding gain
during the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,878
    
    
    
    16,878Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    339,183
    
    
    
    16,878
    
    
    
    356,061Dividends declared on common
stock ($0.48 per share)
    
    
    
    
    
    
    
    
    
    
    (178,848
    )
    
    
    
    
    
    
    (178,848
    )Balance at December 31, 2007
    
    $
    3,726
    
    
    
    3,395,580
    
    
    
    10,264,400
    
    
    
    223,981
    
    
    
    13,887,687
  -3-




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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 
 Consolidated Statements of Cash Flows (Unaudited)
 Six Months EndedDecember 31,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    339,183
    
    
    
    392,726Adjustments to reconcile net income to net cash from
operating activities:Depreciation
    
    
    110,504
    
    
    
    113,051Net accretion on securities
    
    
    (370,410
    )
    
    
    (496,352
    )Proceeds from sale of loans held for sale
    
    
    6,463,185
    
    
    
    3,670,916Origination of loans held for sale
    
    
    (5,592,600
    )
    
    
    (2,934,750
    )Gain on sale of loans
    
    
    (77,114
    )
    
    
    (51,063
    )Gain on sale of other investments
    
    
    (66,726
    )
    
    
    Decrease in accrued interest receivable
    
    
    17,164
    
    
    
    12,820(Decrease) increase in accrued interest payable
    
    
    (1,401
    )
    
    
    645Increase in deferred income on loans
    
    
    16,750
    
    
    
    25,449Increase in other assets
    
    
    (62,573
    )
    
    
    (137,650
    )Decrease in other liabilities
    
    
    (64,427
    )
    
    
    (553
    )Net cash provided by operating activities
    
    
    711,535
    
    
    
    595,239Cash flows from investing activities:Proceeds from repayments of mortgage backed securities,
held to maturity
    
    
    156,602
    
    
    
    110,311Proceeds from maturities of investment securities,
available for sale
    
    
    20,000,000
    
    
    
    20,000,000Purchase of investment securities, available for sale
    
    
    (9,757,333
    )
    
    
    (19,493,307
    )Loan disbursements
    
    
    (4,159,394
    )
    
    
    (4,774,609
    )Loan repayments
    
    
    5,898,039
    
    
    
    8,034,913Proceeds from sale of other investments
    
    
    67,830
    
    
    
    Property and equipment expenditures
    
    
    (17,115
    )
    
    
    (24,379
    )Net cash provided by investing activities
    
    
    12,188,629
    
    
    
    3,852,929Cash flows from financing activities:Deposit account receipts
    
    
    150,877,448
    
    
    
    153,681,353Deposit account withdrawals
    
    
    (155,816,070
    )
    
    
    (160,615,507
    )Interest credited to deposit accounts
    
    
    1,046,455
    
    
    
    935,426Payment of dividends
    
    
    (178,848
    )
    
    
    (178,848
    )Decrease in advance payments by borrowers for taxes
and insurance
    
    
    (46,895
    )
    
    
    (94,953
    )Net cash provided for financing activities
    
    
    (4,117,910
    )
    
    
    (6,272,529
    )Net change in cash and cash equivalents
    
    
    8,782,254
    
    
    
    (1,824,361
    )Cash and cash equivalents at beginning of period
    
    
    13,455,836
    
    
    
    11,259,904Cash and cash equivalents at end of period
    
    $
    22,238,090
    
    
    
    9,435,543Cash paid during the period for:Interest
    
    $
    1,120,622
    
    
    
    1,007,207Income taxes
    
    
    187,587
    
    
    
    183,501
  -4-




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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
  -5-




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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
 FINANCIAL CONDITION
      -8-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 FINANCIAL CONDITION (continued)
   December 31,
    
    
    June 30,2007
    
    
    2007(Dollars in Thousands)Non-Accruing Loans:One-to-four family
    
    $
    573
    
    
    $
    484Multi-family
    
    
    
    
    
    
    Consumer
    
    
    24
    
    
    
    27Commercial business
    
    
    
    
    
    
    Total non-performing loans
    
    $
    597
    
    
    $
    511Foreclosed Assets:One-to-four family
    
    
    
    
    
    
    Total foreclosed assets
    
    
    
    
    
    
    Total non-performing assets
    
    $
    597
    
    
    $
    511Total as a percentage of total assets
    
    
    0.49
    %
    
    
    0.41
    %
  -9-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 FINANCIAL CONDITION (continued)
  Six Months EndedDecember 31,2007
    
    
    2006(Dollars in Thousands)Balance at beginning of period
    
    $
    420
    
    
    $
    416Charge-offs:One-to-four family loans
    
    
    
    
    
    
    Consumer loans
    
    
    9
    
    
    
    Commercial business loans
    
    
    
    
    
    
    Total charge-offs
    
    
    9
    
    
    
    Recoveries:One-to-four family loans
    
    
    
    
    
    
    Multi-family loans
    
    
    
    
    
    
    Consumer loans
    
    
    
    
    
    
    6Total recoveries
    
    
    
    
    
    
    6Net (charge-offs) recoveries
    
    
    (9
    )
    
    
    6Additions charged to operations
    
    
    
    
    
    
    Balance at end of period
    
    $
    411
    
    
    $
    422Ratio of net charge-offs during the period to
average loans outstanding during the period
    
    
    .01
    %
    
    
    
    %Ratio of net charge-offs during the period to
average non-performing assets
    
    
    1.66
    %
    
    
    
    %Allowance for loan losses to non-performing loans
    
    
    68.87
    %
    
    
    80.07
    %Allowance for loan losses to total loans
    
    
    0.50
    %
    
    
    0.47
    %
    -10-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 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
   Provisions for Losses on Loans
  -13-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 Non-Interest Income
   Non-Interest Expense
   Income Taxes
   -14-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 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
  I.
    
    Election of Directors
    
    
    
    332,061 shares voted, as follows:Jonas Vaznelis:
    
    
    
    316,261 votes FOR; 15,800 votes WITHHELD.Paul Zogas:
    
    
    
    316,261 votes FOR; 15,800 votes WITHHELD.II.
    
    Ratification of the appointment of Cobitz, VandenBerg & Fennessy as auditors
for the Company for the fiscal year ending June 30, 2008  332,061 shares
voted, as follows:
 FOR:
    
    
    332,061AGAINST:
    
    
    -0-ABSTAIN:
    
    
    -0-
 
 Item 5. OTHER INFORMATION
  
 Item 6. EXHIBITS
  -16-




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SIGNATURES
  MIDLAND CAPITAL HOLDINGS CORPORATIONRegistrantDATE:  February 14, 2008

BY:
    /s/ Paul ZogasPaul ZogasPresident, Chief Executive Officer
       and Chief Financial OfficerDATE:  February 14, 2008
    BY:
/s/ Charles ZogasCharles ZogasExecutive Vice President,
       and Chief Operating Officer -17-




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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
 -18-