##### 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 March 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
(State or Other Jurisdiction of 
Incorporation or Organization)
    
    36-4238089
(I.R.S. Employer
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 14, 2007, 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, 2007 (unaudited) and June 30, 2006
    
    
    1Consolidated Statements of Earnings -Three months ended March 31, 2007 and 2006 andNine months ended March 31, 2007 and 2006 (unaudited)
    
    
    2Consolidated Statements of Changes in Stockholders' Equity -Nine months ended March 31, 2007 (unaudited)
    
    
    3Consolidated Statements of Cash Flows -Nine months ended March 31, 2007 and 2006 (unaudited)
    
    
    4Notes to Consolidated Financial Statements
    
    
    5-7Item 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    
    8-16Item 3.
    
    Controls and Procedures
    
    
    16Part II. OTHER INFORMATION
    
    
    17Item 1.
    
    Legal Proceedings
    
    
    17Item 2.
    
    Changes in Securities
    
    
    17Item 3.
    
    Defaults Upon Senior Securities
    
    
    17Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    17Item 5.
    
    Other Information
    
    
    17Item 6.
    
    Exhibits
    
    
    17Index to Exhibits
    
    
    18Exhibit 11Exhibit 31.1Exhibit 32.1




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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 
 Part I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 
 Consolidated Statements of Financial Condition
 March 31,
    
    
    June 30,2007
    
    
    2006(Unaudited)AssetsCash and amounts due from depository institutions
    
    $
    2,554,822
    
    
    
    2,204,602Interest-bearing deposits
    
    
    10,407,530
    
    
    
    9,055,302Total cash and cash equivalents
    
    
    12,962,352
    
    
    
    11,259,904Investment securities available for sale, at fair value
    
    
    20,922,775
    
    
    
    21,021,975Mortgage-backed securities, held to maturity (fair value:March 31, 2007 - $1,531,164;
June 30, 2006 - $1,688,292)
    
    
    1,517,660
    
    
    
    1,684,228Loans receivable (net of allowance for loan losses:March 31, 2007 - $421,920;
June 30, 2006 - $415,666)
    
    
    85,369,049
    
    
    
    91,701,483Loans receivable held for sale
    
    
    
    
    
    
    843,090Stock in Federal Home Loan Bank of Chicago
    
    
    1,148,087
    
    
    
    1,148,087Other Investments, available for sale
    
    
    97,456
    
    
    
    1,104Accrued interest receivable
    
    
    365,120
    
    
    
    370,190Office properties and equipment, net
    
    
    2,096,872
    
    
    
    2,240,702Prepaid expenses and other assets
    
    
    595,407
    
    
    
    546,586Total assets
    
    $
    125,074,778
    
    
    
    130,817,349Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    110,279,517
    
    
    
    115,971,229Advance payments by borrowers for taxes and insurance
    
    
    699,646
    
    
    
    1,127,293Other liabilities
    
    
    422,154
    
    
    
    422,743Total liabilities
    
    
    111,401,317
    
    
    
    117,521,265Stockholders 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, 2007 and June 30, 2006
    
    
    3,726
    
    
    
    3,726Additional paid-in capital
    
    
    3,395,580
    
    
    
    3,395,580Retained earnings  substantially restricted
    
    
    10,052,994
    
    
    
    9,764,211Accumulated other comprehensive income, net of income taxes
    
    
    221,161
    
    
    
    132,567Total stockholders equity
    
    
    13,673,461
    
    
    
    13,296,084Total liabilities and stockholders equity
    
    $
    125,074,778
    
    
    
    130,817,349
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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 Consolidated Statements of Earnings (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest income:Interest on loans
    
    $
    1,267,497
    
    
    
    1,370,266
    
    
    
    3,916,335
    
    
    
    4,079,774Interest on mortgage-backed securities
    
    
    22,415
    
    
    
    20,547
    
    
    
    66,874
    
    
    
    60,958Interest on investment securities
    
    
    268,142
    
    
    
    192,526
    
    
    
    801,994
    
    
    
    518,793Interest on interest-bearing deposits
    
    
    117,366
    
    
    
    122,097
    
    
    
    312,796
    
    
    
    389,475Dividends on FHLB stock
    
    
    9,609
    
    
    
    8,642
    
    
    
    27,892
    
    
    
    33,248Total interest income
    
    
    1,685,029
    
    
    
    1,714,078
    
    
    
    5,125,891
    
    
    
    5,082,248Interest expense:Interest on deposits
    
    
    526,848
    
    
    
    425,659
    
    
    
    1,534,700
    
    
    
    1,192,765Total interest expense
    
    
    526,848
    
    
    
    425,659
    
    
    
    1,534,700
    
    
    
    1,192,765Net interest income
    
    
    1,158,181
    
    
    
    1,288,419
    
    
    
    3,591,191
    
    
    
    3,889,483Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net interest income after provision
for loan losses
    
    
    1,158,181
    
    
    
    1,288,419
    
    
    
    3,591,191
    
    
    
    3,889,483Non-interest income:Loan fees and service charges
    
    
    55,935
    
    
    
    46,019
    
    
    
    143,076
    
    
    
    201,918Commission income
    
    
    25,466
    
    
    
    19,192
    
    
    
    47,816
    
    
    
    40,661Gain on sale of loans
    
    
    31,714
    
    
    
    13,381
    
    
    
    82,777
    
    
    
    32,426Gain on sale of other assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,286Deposit related fees
    
    
    75,678
    
    
    
    109,491
    
    
    
    254,114
    
    
    
    338,529Other income
    
    
    14,214
    
    
    
    11,200
    
    
    
    64,673
    
    
    
    36,802Total non-interest income
    
    
    203,007
    
    
    
    199,283
    
    
    
    592,456
    
    
    
    666,622Non-interest expense:Staffing costs
    
    
    643,598
    
    
    
    653,719
    
    
    
    1,927,580
    
    
    
    1,958,929Advertising
    
    
    14,290
    
    
    
    15,512
    
    
    
    49,881
    
    
    
    48,517Occupancy and equipment expenses
    
    
    177,858
    
    
    
    177,276
    
    
    
    513,397
    
    
    
    492,785Data processing
    
    
    52,038
    
    
    
    52,721
    
    
    
    141,470
    
    
    
    150,854Federal deposit insurance premiums
    
    
    3,407
    
    
    
    4,029
    
    
    
    10,725
    
    
    
    12,460Other
    
    
    221,245
    
    
    
    246,081
    
    
    
    696,960
    
    
    
    755,347Total non-interest expense
    
    
    1,112,436
    
    
    
    1,149,338
    
    
    
    3,340,013
    
    
    
    3,418,892Income before income taxes
    
    
    248,752
    
    
    
    338,364
    
    
    
    843,634
    
    
    
    1,137,213Income tax provision
    
    
    84,424
    
    
    
    115,044
    
    
    
    286,579
    
    
    
    386,652Net income
    
    $
    164,328
    
    
    
    223,320
    
    
    
    557,055
    
    
    
    750,561Earnings per share (basic)
    
    $
    .44
    
    
    
    .60
    
    
    
    1.50
    
    
    
    2.01Earnings per share (diluted)
    
    $
    .44
    
    
    
    .60
    
    
    
    1.50
    
    
    
    2.01Dividends declared per common share
    
    $
    .24
    
    
    
    .22
    
    
    
    .72
    
    
    
    .66
   -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, 2006
    
    $
    3,726
    
    
    
    3,395,580
    
    
    
    9,764,211
    
    
    
    132,567
    
    
    
    13,296,084Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    557,055
    
    
    
    
    
    
    
    557,055Other comprehensive
income, net of tax:Unrealized holding gain
during the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88,594
    
    
    
    88,594Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    557,055
    
    
    
    88,594
    
    
    
    645,649Dividends declared on common
stock ($0.72 per share)
    
    
    
    
    
    
    
    
    
    
    (268,272
    )
    
    
    
    
    
    
    (268,272
    )Balance at March 31, 2007
    
    $
    3,726
    
    
    
    3,395,580
    
    
    
    10,052,994
    
    
    
    221,161
    
    
    
    13,673,461
   -3-




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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 Consolidated Statements of Cash Flows (Unaudited)
 Nine Months EndedMarch 31,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    557,055
    
    
    
    750,561Adjustments to reconcile net income to net cash from
operating activities:Depreciation
    
    
    168,809
    
    
    
    158,305Net accretion on securities
    
    
    (745,744
    )
    
    
    (462,543
    )Federal Home Loan Bank stock dividend
    
    
    
    
    
    
    (24,587
    )Proceeds from sale of loans held for sale
    
    
    6,583,274
    
    
    
    2,534,462Origination of loans held for sale
    
    
    (5,673,600
    )
    
    
    (2,769,703
    )Gain on sale of loans
    
    
    (82,777
    )
    
    
    (32,426
    )Gain on sale of other assets
    
    
    
    
    
    
    (16,286
    )Decrease (increase) in accrued interest receivable
    
    
    5,070
    
    
    
    (3,281
    )Increase in accrued interest payable
    
    
    912
    
    
    
    300Increase in deferred income on loans
    
    
    27,868
    
    
    
    3,470Increase in other assets
    
    
    (78,268
    )
    
    
    (187,995
    )(Decrease) increase in other liabilities
    
    
    (1,501
    )
    
    
    59,500Net cash provided by operating activities
    
    
    761,098
    
    
    
    9,777Cash flows from investing activities:Proceeds from repayments of mortgage backed securities,
held to maturity
    
    
    166,568
    
    
    
    196,952Proceeds from maturities of investment securities,
available for sale
    
    
    35,000,000
    
    
    
    20,000,000Purchase of investment securities, available for sale
    
    
    (34,117,174
    )
    
    
    (34,294,245
    )Loan disbursements
    
    
    (7,242,854
    )
    
    
    (14,608,912
    )Loan repayments
    
    
    13,547,420
    
    
    
    15,941,011Proceeds from sale of other assets
    
    
    
    
    
    
    16,286Property and equipment expenditures
    
    
    (24,979
    )
    
    
    (148,504
    )Net cash provided by (for) investing activities
    
    
    7,328,981
    
    
    
    (12,897,412
    )Cash flows from financing activities:Deposit account receipts
    
    
    233,524,306
    
    
    
    268,426,852Deposit account withdrawals
    
    
    (240,633,213
    )
    
    
    (276,764,413
    )Interest credited to deposit accounts
    
    
    1,417,195
    
    
    
    1,125,820Payment of dividends
    
    
    (268,272
    )
    
    
    (245,916
    )Decrease in advance payments by borrowers
for taxes and insurance
    
    
    (427,647
    )
    
    
    (272,145
    )Net cash provided for financing activities
    
    
    (6,387,631
    )
    
    
    (7,729,802
    )Net change in cash and cash equivalents
    
    
    1,702,448
    
    
    
    (20,617,437
    )Cash and cash equivalents at beginning of period
    
    
    11,259,904
    
    
    
    36,709,593Cash and cash equivalents at end of period
    
    $
    12,962,352
    
    
    
    16,092,156Cash paid during the period for:Interest
    
    $
    1,533,788
    
    
    
    1,192,465Income taxes
    
    
    262,456
    
    
    
    327,049
   -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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Note E  Effect of New Accounting Pronouncements (continued)
      -6-




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Note E  Effect of New Accounting Pronouncements (continued)
      -7-




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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
    -8-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 FINANCIAL CONDITION
       -9-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 FINANCIAL CONDITION (continued)
 March 31,
    
    
    June 30,2007
    
    
    2006(Dollars in Thousands)Non-Accruing Loans:One-to-four family
    
    $
    808
    
    
    $
    295Multi-family
    
    
    
    
    
    
    Consumer
    
    
    26
    
    
    
    32Commercial business
    
    
    
    
    
    
    Total non-performing loans
    
    $
    834
    
    
    $
    327Foreclosed Assets:One-to-four family
    
    
    
    
    
    
    Total foreclosed assets
    
    
    
    
    
    
    Total non-performing assets
    
    $
    834
    
    
    $
    327Total as a percentage of total assets
    
    
    0.67
    %
    
    
    0.25
    %
   -10-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 FINANCIAL CONDITION (continued)
 Nine Months EndedMarch 31,2007
    
    
    2006(Dollars in Thousands)Balance at beginning of period
    
    $
    416
    
    
    $
    457Charge-offs:One-to-four family loans
    
    
    
    
    
    
    Multi-family loans
    
    
    
    
    
    
    Consumer loans
    
    
    
    
    
    
    17Total charge-offs
    
    
    
    
    
    
    17Recoveries:One-to-four family loans
    
    
    
    
    
    
    Multi-family loans
    
    
    
    
    
    
    Consumer loans
    
    
    6
    
    
    
    2Total recoveries
    
    
    6
    
    
    
    2Net recoveries (charge-offs)
    
    
    6
    
    
    
    (15
    )Additions charged to operations
    
    
    
    
    
    
    Balance at end of period
    
    $
    422
    
    
    $
    442Ratio of net charge-offs during the period to
average loans outstanding during the period
    
    
    
    %
    
    
    .02
    %Ratio of net charge-offs during the period to
average non-performing assets
    
    
    
    %
    
    
    5.32
    %Allowance for loan losses to non-performing loans
    
    
    50.61
    %
    
    
    189.79
    %Allowance for loan losses to total loans
    
    
    0.49
    %
    
    
    0.47
    %
     -11-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 RESULTS OF OPERATIONS
    Interest Income
   -12-




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




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 Interest Income (continued)
  Interest Expense
  Provisions for Losses on Loans
  -14-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 Non-Interest Income
  Non-Interest Expense
  Income Taxes
   -15-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 LIQUIDITY AND CAPITAL RESOURCES
    
 Item 3. CONTROLS AND PROCEDURES
   -16-




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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
  -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-




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SIGNATURES
  MIDLAND CAPITAL HOLDINGS CORPORATION
RegistrantDATE:  May 14, 2007
    BY:
    /s/ Paul ZogasPaul ZogasPresident, Chief Executive Officer
and Chief Financial OfficerDATE:  May 14, 2007
    BY:
    /s/ Charles ZogasCharles ZogasExecutive Vice President and
Chief Operating Officer




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EXHIBIT INDEX
 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