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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 September 30, 2005
 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
(State or Other Jurisdiction of
Incorporation or Organization)
    
    36-4238089
(I.R.S. Employer
Identification Number)8929 S. Harlem Avenue, Bridgeview, Illinois
(Address of Principal Executive Offices)
    
    60455
(Zip Code)
 (708) 598-9400
 þ o
 o þ
 o þ
  Common Stock, par value $.01
 As of November 10, 2005, 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 
September 30, 2005 (unaudited) and June 30, 2005
    
    
    1Consolidated Statements of Earnings  Three Months
Ended September 30, 2005 and 2004 (unaudited)
    
    
    2Consolidated
Statements of Changes in Stockholders Equity 
Three Months Ended September 30, 2005 (unaudited)
    
    
    3Consolidated Statements of Cash Flows  Three Months
Ended September 30, 2005 and 2004 (unaudited)
    
    
    4Notes to Consolidated Financial Statements
    
    
    5-7Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    8-14Item 3. Controls and Procedures
    
    
    14Part II. OTHER INFORMATION
    
    
    15Item 1. Legal Proceedings
    
    
    15Item 2. Changes in Securities
    
    
    15Item 3. Defaults Upon Senior Securities
    
    
    15Item 4. Submission of Matters to a Vote of Security Holders
    
    
    15Item 5. Other Information
    
    
    15Item 6. Exhibits
    
    
    15Index to Exhibits
    
    
    16Computation of Per Share EarningsCertificationSection 906 Certification




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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 
 Part I  FINANCIAL INFORMATION
 
 Consolidated Statements of Financial Condition
 September 30,
    
    
    June 30,2005
    
    
    2005(Unaudited)AssetsCash and amounts due from depository institutions
    
    $
    1,885,536
    
    
    
    2,640,369Interest-bearing deposits
    
    
    12,410,777
    
    
    
    34,069,224Total cash and cash equivalents
    
    
    14,296,313
    
    
    
    36,709,593Investment securities available for sale, at fair value
    
    
    21,004,862
    
    
    
    1,310,937Mortgage-backed securities, held to maturity
(fair value: September 30, 2005  $1,867,934;
June 30, 2005  $1,938,460)
    
    
    1,860,505
    
    
    
    1,920,221Loans receivable (net of allowance for
loan losses: September 30, 2005  $458,014;
June 30, 2005  $456,550)
    
    
    94,360,269
    
    
    
    94,578,810Loans receivable held for sale
    
    
    250,000
    
    
    
    250,500Stock in Federal Home Loan Bank of Chicago
    
    
    1,137,400
    
    
    
    1,123,500Accrued interest receivable
    
    
    371,709
    
    
    
    367,351Office properties and equipment, net
    
    
    2,240,175
    
    
    
    2,240,391Prepaid expenses and other assets
    
    
    702,130
    
    
    
    477,467Total assets
    
    $
    136,223,363
    
    
    
    138,978,770Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    121,459,297
    
    
    
    124,836,132Advance payments by borrowers for taxes and insurance
    
    
    1,357,928
    
    
    
    1,060,670Other liabilities
    
    
    544,946
    
    
    
    385,286Total liabilities
    
    
    123,362,171
    
    
    
    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 September 30, 2005 and June 30, 2005
    
    
    3,726
    
    
    
    3,726Additional paid-in capital
    
    
    3,395,580
    
    
    
    3,395,580Retained earnings  substantially restricted
    
    
    9,272,680
    
    
    
    9,080,803Accumulated other comprehensive income, net of income taxes
    
    
    189,206
    
    
    
    216,573Total stockholders equity
    
    
    12,861,192
    
    
    
    12,696,682Total liabilities and stockholders equity
    
    $
    136,223,363
    
    
    
    138,978,770
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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 
 Consolidated Statements of Earnings (Unaudited)
 Three Months EndedSeptember 30,2005
    
    
    2004Interest income:Interest on loans
    
    $
    1,360,611
    
    
    
    1,374,769Interest on mortgage-backed securities
    
    
    19,913
    
    
    
    26,030Interest on investment securities
    
    
    121,552
    
    
    
    18,990Interest on interest-bearing deposits
    
    
    178,128
    
    
    
    145,111Dividends on FHLB stock
    
    
    13,920
    
    
    
    15,731Total interest income
    
    
    1,694,124
    
    
    
    1,580,631Interest expense:Interest on deposits
    
    
    376,199
    
    
    
    347,148Total interest expense
    
    
    376,199
    
    
    
    347,148Net interest income
    
    
    1,317,925
    
    
    
    1,233,483Provision for loan losses
    
    
    
    
    
    
    Net interest income after provision for loan losses
    
    
    1,317,925
    
    
    
    1,233,483Non-interest income:Loan fees and service charges
    
    
    101,935
    
    
    
    71,015Commission income
    
    
    10,638
    
    
    
    12,252Gain on sale of loans
    
    
    9,233
    
    
    
    9,704Deposit related fees
    
    
    113,145
    
    
    
    113,023Gain on sale of other assets
    
    
    16,286
    
    
    
    Other income
    
    
    14,084
    
    
    
    17,390Total non-interest income
    
    
    265,321
    
    
    
    223,384Non-interest expense:Staffing costs
    
    
    674,642
    
    
    
    629,783Advertising
    
    
    16,905
    
    
    
    18,117Occupancy and equipment expenses
    
    
    152,625
    
    
    
    164,329Data processing
    
    
    54,370
    
    
    
    50,349Federal deposit insurance premiums
    
    
    4,256
    
    
    
    5,158Other
    
    
    265,526
    
    
    
    226,002Total non-interest expense
    
    
    1,168,324
    
    
    
    1,093,738Income before income taxes
    
    
    414,922
    
    
    
    363,129Income tax provision
    
    
    141,073
    
    
    
    123,464Net income
    
    $
    273,849
    
    
    
    239,665Earnings per share (basic)
    
    $
    0.73
    
    
    
    0.64Earnings per share (diluted)
    
    $
    0.73
    
    
    
    0.64Dividends declared per common share
    
    $
    0.22
    
    
    
    0.20
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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
    
    
    
    
    
    
    
    
    
    
    273,849
    
    
    
    
    
    
    
    273,849Other comprehensive
income, net of tax:Unrealized holding loss
during the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27,367
    )
    
    
    (27,367
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    273,849
    
    
    
    (27,367
    )
    
    
    246,482Dividends declared on common
stock ($0.22 per share)
    
    
    
    
    
    
    
    
    
    
    (81,972
    )
    
    
    
    
    
    
    (81,972
    )Balance at September 30, 2005
    
    $
    3,726
    
    
    
    3,395,580
    
    
    
    9,272,680
    
    
    
    189,206
    
    
    
    12,861,192
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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 
  Three Months EndedSeptember 30,2005
    
    
    2004Cash flows from operating activities:Net income
    
    $
    273,849
    
    
    
    239,665Adjustments to reconcile net income to net cash from
operating activities:Depreciation
    
    
    52,041
    
    
    
    55,348Net accretion on securities
    
    
    (102,802
    )
    
    
    (1,508
    )Federal Home Loan Bank stock dividend
    
    
    (13,900
    )
    
    
    (15,700
    )Proceeds from sale of loans held for sale
    
    
    581,861
    
    
    
    693,050Origination of loans held for sale
    
    
    (578,500
    )
    
    
    (349,550
    )Gain on sale of loans
    
    
    (9,233
    )
    
    
    (9,704
    )Gain on sale of other assets
    
    
    (16,286
    )
    
    
    Increase in accrued interest receivable
    
    
    (4,358
    )
    
    
    (43,267
    )Decrease in accrued interest payable
    
    
    (653
    )
    
    
    (614
    )Decrease in deferred income on loans
    
    
    (697
    )
    
    
    (10,378
    )Increase in other assets
    
    
    (204,193
    )
    
    
    (147,282
    )Increase in other liabilities
    
    
    160,313
    
    
    
    109,771Net cash provided by operating activities
    
    
    137,442
    
    
    
    519,831Cash flows from investing activities:Proceeds from repayments of mortgage-backed securities,
held to maturity
    
    
    59,716
    
    
    
    474,315Purchase of investment securities, available for sale
    
    
    (19,632,588
    )
    
    
    Loan disbursements
    
    
    (6,891,282
    )
    
    
    (5,717,202
    )Loan repayments
    
    
    7,110,520
    
    
    
    3,850,501Proceeds from sale of other assets
    
    
    16,286
    
    
    
    Property and equipment expenditures
    
    
    (51,825
    )
    
    
    (29,035
    )Net cash provided for investing activities
    
    
    (19,389,173
    )
    
    
    (1,421,421
    )Cash flows from financing activities:Deposit account receipts
    
    
    93,906,798
    
    
    
    96,179,684Deposit account withdrawals
    
    
    (97,642,934
    )
    
    
    (101,277,121
    )Interest credited to deposit accounts
    
    
    359,301
    
    
    
    328,363Payment of dividends
    
    
    (81,972
    )
    
    
    (74,520
    )Increase in advance payments by borrowers
for taxes and insurance
    
    
    297,258
    
    
    
    356,816Net cash provided for financing activities
    
    
    (3,161,549
    )
    
    
    (4,486,778
    )Net change in cash and cash equivalents
    
    
    (22,413,280
    )
    
    
    (5,388,368
    )Cash and cash equivalents at beginning of period
    
    
    36,709,593
    
    
    
    50,496,629Cash and cash equivalents at end of period
    
    $
    14,296,313
    
    
    
    45,108,261Cash paid during the period for:Interest
    
    $
    376,852
    
    
    
    347,762Income taxes
    
    
    
    
    
    
    25,076
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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)
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 Note E  Effect of New Accounting Pronouncements (continued)
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 FORWARDLOOKING STATEMENTS
    GENERAL
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 GENERAL (continued)
  FINANCIAL CONDITION
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 FINANCIAL CONDITION (continued)
  September 30,
    
    
    June 30,2005
    
    
    2005(Dollars in Thousands)Non-Accruing Loans:One-to-four family
    
    $
    249
    
    
    $
    316Multi-family
    
    
    
    
    
    
    Consumer
    
    
    76
    
    
    
    64Commercial business
    
    
    3
    
    
    
    Total non-performing loans
    
    $
    328
    
    
    $
    380Foreclosed Assets:One-to-four family
    
    
    
    
    
    
    Total foreclosed assets
    
    
    
    
    
    
    Total non-performing assets
    
    $
    328
    
    
    $
    380Total as a percentage of total assets
    
    
    0.24
    %
    
    
    0.27
    %
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 FINANCIAL CONDITION (continued)
  Three Months EndedSeptember 30,2005
    
    
    2004(Dollars in Thousands)Balance at beginning of period
    
    $
    457
    
    
    $
    460Charge-offs:One-to-four family loans
    
    
    
    
    
    
    Consumer loans
    
    
    1
    
    
    
    Commercial business loans
    
    
    
    
    
    
    Total charge-offs
    
    
    1
    
    
    
    Recoveries:One-to-four family loans
    
    
    
    
    
    
    Multi-family loans
    
    
    
    
    
    
    Consumer loans
    
    
    2
    
    
    
    Total recoveries
    
    
    2
    
    
    
    Net (charge-offs) recoveries
    
    
    1
    
    
    
    Additions charged to operations
    
    
    
    
    
    
    Balance at end of period
    
    $
    458
    
    
    $
    460Ratio of net charge-offs during the period to
average loans outstanding during the period
    
    
    
    %
    
    
    
    %Ratio of net charge-offs during the period to
average non-performing assets
    
    
    
    %
    
    
    
    %Allowance for loan losses to non-performing loans
    
    
    139.75
    %
    
    
    344.99
    %Allowance for loan losses to total loans
    
    
    0.48
    %
    
    
    0.48
    %
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 RESULTS OF OPERATIONS
   Interest Income
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 Interest Income (continued)
  Interest Expense
  Provisions for Losses on Loans
  Non-Interest Income
  Non-Interest Expense
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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 Income Taxes
  LIQUIDITY AND CAPITAL RESOURCES
     
 Item 3. CONTROLS AND PROCEDURES
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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
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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
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SIGNATURES
  MIDLAND CAPITAL
HOLDINGS CORPORATIONRegistrantDATE: November 10, 2005
    
    BY:
    
    /s/ Paul ZogasPaul ZogasPresident, Chief Executive Officerand Chief Financial OfficerDATE: November 10, 2005
    
    BY:
    
    /s/ Charles ZogasCharles ZogasExecutive Vice President andChief Operating Officer