##### 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, 2006
 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 
Incorporation or Organization)
    
    (I.R.S. Employer
Identification Number)
 8929 S. Harlem Avenue, Bridgeview, Illinois 60455
 (708) 598-9400
 Yes þ No o
 Yes o No þ
 o þ
  Common Stock, par value $.01
 As of February 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  December 31, 2006 (unaudited) and June 30, 2006
    
    1Consolidated Statements of Earnings  Three months ended December 31, 2006 and 2005 and Six months ended December 31, 2006 and 2005 (unaudited)
    
    2Consolidated Statements of Changes in Stockholders Equity  Six months ended December 31, 2006 (unaudited)
    
    3Consolidated Statements of Cash Flows  Six months ended December 31, 2006 and 2005 (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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##### 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 30,2006
    
    
    2006(Unaudited)AssetsCash and amounts due from depository institutions
    
    $
    2,914,501
    
    
    
    2,204,602Interest-bearing deposits
    
    
    6,521,042
    
    
    
    9,055,302Total cash and cash equivalents
    
    
    9,435,543
    
    
    
    11,259,904Investment securities available for sale, at fair value
    
    
    21,053,125
    
    
    
    21,021,975Mortgage-backed securities, held to maturity (fair value:December 31, 2006 - $1,588,399;
June 30, 2006 - $1,688,292)
    
    
    1,573,917
    
    
    
    1,684,228Loans receivable (net of allowance for loan losses:December 31, 2006 - $421,920;
June 30, 2006 - $415,666)
    
    
    88,415,730
    
    
    
    91,701,483Loans receivable held for sale
    
    
    146,500
    
    
    
    843,090Stock in Federal Home Loan Bank of Chicago
    
    
    1,148,087
    
    
    
    1,148,087Other investments, available for sale
    
    
    95,640
    
    
    
    1,104Accrued interest receivable
    
    
    357,370
    
    
    
    370,190Office properties and equipment, net
    
    
    2,152,030
    
    
    
    2,240,702Prepaid expenses and other assets
    
    
    649,474
    
    
    
    546,586Total assets
    
    $
    125,027,415
    
    
    
    130,817,349Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    109,972,501
    
    
    
    115,971,229Advance payments by borrowers for taxes and insurance
    
    
    1,032,340
    
    
    
    1,127,293Other liabilities
    
    
    422,835
    
    
    
    422,743Total liabilities
    
    
    111,427,676
    
    
    
    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 December 31, 2006 and June 30, 2006
    
    
    3,726
    
    
    
    3,726Additional paid-in capital
    
    
    3,395,580
    
    
    
    3,395,580Retained earnings  substantially restricted
    
    
    9,978,089
    
    
    
    9,764,211Accumulated other comprehensive income, net of income taxes
    
    
    222,344
    
    
    
    132,567Total stockholders equity
    
    
    13,599,739
    
    
    
    13,296,084Total liabilities and stockholders equity
    
    $
    125,027,415
    
    
    
    130,817,349
   -1-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 
 Consolidated Statements of Earnings (Unaudited)
 Three Months Ended
    
    
    Six Months EndedDecember 31,
    
    
    December 31,2006
    
    
    2005
    
    
    2006
    
    
    2005Interest income:Interest on loans
    
    $
    1,298,862
    
    
    
    1,348,897
    
    
    
    2,648,839
    
    
    
    2,709,508Interest on mortgage-backed securities
    
    
    22,700
    
    
    
    20,497
    
    
    
    44,459
    
    
    
    40,410Interest on investment securities
    
    
    274,309
    
    
    
    204,715
    
    
    
    533,852
    
    
    
    326,267Interest on interest-bearing deposits
    
    
    87,832
    
    
    
    89,250
    
    
    
    195,429
    
    
    
    267,379Dividends on FHLB stock
    
    
    9,410
    
    
    
    10,686
    
    
    
    18,283
    
    
    
    24,606Total interest income
    
    
    1,693,113
    
    
    
    1,674,045
    
    
    
    3,440,862
    
    
    
    3,368,170Interest expense:Interest on deposits
    
    
    515,178
    
    
    
    390,907
    
    
    
    1,007,852
    
    
    
    767,106Total interest expense
    
    
    515,178
    
    
    
    390,907
    
    
    
    1,007,852
    
    
    
    767,106Net interest income
    
    
    1,177,935
    
    
    
    1,283,138
    
    
    
    2,433,010
    
    
    
    2,601,064Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net interest income after provision
for loan losses
    
    
    1,177,935
    
    
    
    1,283,138
    
    
    
    2,433,010
    
    
    
    2,601,064Non-interest income:Loan fees and service charges
    
    
    35,975
    
    
    
    53,966
    
    
    
    87,141
    
    
    
    155,900Commission income
    
    
    10,756
    
    
    
    10,832
    
    
    
    22,350
    
    
    
    21,470Gain on sale of loans
    
    
    24,767
    
    
    
    9,811
    
    
    
    51,063
    
    
    
    19,044Gain on sale of other assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,286Deposit related fees
    
    
    83,544
    
    
    
    115,892
    
    
    
    178,436
    
    
    
    229,038Other income
    
    
    37,002
    
    
    
    11,518
    
    
    
    50,459
    
    
    
    25,602Total non-interest income
    
    
    192,044
    
    
    
    202,019
    
    
    
    389,449
    
    
    
    467,340Non-interest expense:Staffing costs
    
    
    626,761
    
    
    
    630,568
    
    
    
    1,283,982
    
    
    
    1,305,209Advertising
    
    
    17,696
    
    
    
    16,099
    
    
    
    35,591
    
    
    
    33,005Occupancy and equipment expenses
    
    
    169,894
    
    
    
    162,884
    
    
    
    335,539
    
    
    
    315,510Data processing
    
    
    45,425
    
    
    
    43,763
    
    
    
    89,432
    
    
    
    98,133Federal deposit insurance premiums
    
    
    3,613
    
    
    
    4,176
    
    
    
    7,318
    
    
    
    8,431Other
    
    
    246,921
    
    
    
    243,740
    
    
    
    475,716
    
    
    
    509,266Total non-interest expense
    
    
    1,110,310
    
    
    
    1,101,230
    
    
    
    2,227,578
    
    
    
    2,269,554Income before income taxes
    
    
    259,669
    
    
    
    383,927
    
    
    
    594,881
    
    
    
    798,850Income tax provision
    
    
    88,183
    
    
    
    130,535
    
    
    
    202,155
    
    
    
    271,609Net income
    
    $
    171,486
    
    
    
    253,392
    
    
    
    392,726
    
    
    
    527,241Earnings per share (basic)
    
    $
    .46
    
    
    
    .68
    
    
    
    1.05
    
    
    
    1.42Earnings per share (diluted)
    
    $
    .46
    
    
    
    .68
    
    
    
    1.05
    
    
    
    1.42Dividends declared per common share
    
    $
    .24
    
    
    
    .22
    
    
    
    .48

    
    
    
    .44
 -2-
    Table of Contents   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
    
    
    
    
    
    
    
    
    
    
    392,726
    
    
    
    
    
    
    
    392,726Other comprehensive
income, net of tax:Unrealized holding gain
during the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,777
    
    
    
    89,777Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    392,726
    
    
    
    89,777
    
    
    
    482,503Dividends declared
on common
stock ($0.48 per share)
    
    
    
    
    
    
    
    
    
    
    (178,848
    )
    
    
    
    
    
    
    (178,848
    )Balance at December 31, 2006
    
    $
    3,726
    
    
    
    3,395,580
    
    
    
    9,978,089
    
    
    
    222,344
    
    
    
    13,599,739
   -3-




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MIDLAND CAPITAL HOLDINGS CORPORATION  AND SUBSIDIARIES
 
 Consolidated Statements of Cash Flows (Unaudited)
 Six Months EndedDecember 31,2006
    
    
    2005Cash flows from operating activities:Net income
    
    $
    392,726
    
    
    
    527,241Adjustments to reconcile net income to net cash from
operating activities:Depreciation
    
    
    113,051
    
    
    
    105,009Net accretion on securities
    
    
    (496,352
    )
    
    
    (288,766
    )Federal Home Loan Bank stock dividend
    
    
    
    
    
    
    (24,587
    )Proceeds from sale of loans held for sale
    
    
    3,670,916
    
    
    
    1,318,782Origination of loans held for sale
    
    
    (2,934,750
    )
    
    
    (1,204,400
    )Gain on sale of loans
    
    
    (51,063
    )
    
    
    (19,044
    )Gain on sale of other assets
    
    
    
    
    
    
    (16,286
    )Decrease in accrued interest receivable
    
    
    12,820
    
    
    
    22,782Increase in accrued interest payable
    
    
    645
    
    
    
    1,276Increase (decrease) in deferred income on loans
    
    
    25,449
    
    
    
    (1
    )Increase in other assets
    
    
    (137,650
    )
    
    
    (181,502
    )(Decrease) increase in other liabilities
    
    
    (553
    )
    
    
    98,911Net cash provided by operating activities
    
    
    595,239
    
    
    
    339,415Cash flows from investing activities:Proceeds from repayments of mortgage backed securities,
held to maturity
    
    
    110,311
    
    
    
    120,364Proceeds from maturities of investment securities,
available for sale
    
    
    20,000,000
    
    
    
    Purchase of investment securities, available for sale
    
    
    (19,493,307
    )
    
    
    (19,632,588
    )Loan disbursements
    
    
    (4,774,609
    )
    
    
    (11,892,152
    )Loan repayments
    
    
    8,034,913
    
    
    
    12,376,730Proceeds from sale of other assets
    
    
    
    
    
    
    16,286Property and equipment expenditures
    
    
    (24,379
    )
    
    
    (80,784
    )Net cash provided by (for) investing activities
    
    
    3,852,929
    
    
    
    (19,092,144
    )Cash flows from financing activities:Deposit account receipts
    
    
    153,681,353
    
    
    
    183,923,004Deposit account withdrawals
    
    
    (160,615,507
    )
    
    
    (189,571,970
    )Interest credited to deposit accounts
    
    
    935,426
    
    
    
    728,167Payment of dividends
    
    
    (178,848
    )
    
    
    (163,944
    )Decrease in advance payments by borrowers for taxes
and insurance
    
    
    (94,953
    )
    
    
    (27,486
    )Net cash provided for financing activities
    
    
    (6,272,529
    )
    
    
    (5,112,229
    )Net change in cash and cash equivalents
    
    
    (1,824,361
    )
    
    
    (23,864,958
    )Cash and cash equivalents at beginning of period
    
    
    11,259,904
    
    
    
    36,709,593Cash and cash equivalents at end of period
    
    $
    9,435,543
    
    
    
    12,844,635Cash paid during the period for:Interest
    
    $
    1,007,207
    
    
    
    765,830Income taxes
    
    
    183,501
    
    
    
    214,361
   -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)
 December 31,
    
    
    June 30,2006
    
    
    2006(Dollars in Thousands)Non-Accruing Loans:One-to-four family
    
    $
    501
    
    
    $
    295Multi-family
    
    
    
    
    
    
    Consumer
    
    
    23
    
    
    
    32Commercial business
    
    
    3
    
    
    
    Total non-performing loans
    
    $
    527
    
    
    $
    327Foreclosed Assets:One-to-four family
    
    
    
    
    
    
    Total foreclosed assets
    
    
    
    
    
    
    Total non-performing assets
    
    $
    527
    
    
    $
    327Total as a percentage of total assets
    
    
    0.42
    %
    
    
    0.25
    %
   -10-




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MIDLAND CAPITAL HOLDINGS CORPORATION
AND SUBSIDIARIES
 FINANCIAL CONDITION (continued)
 Six Months EndedDecember 31,2006
    
    
    2005(Dollars in Thousands)Balance at beginning of period
    
    $
    416
    
    
    $
    457Charge-offs:One-to-four family loans
    
    
    
    
    
    
    Consumer loans
    
    
    
    
    
    
    9Commercial business loans
    
    
    
    
    
    
    Total charge-offs
    
    
    
    
    
    
    9Recoveries:One-to-four family loans
    
    
    
    
    
    
    Multi-family loans
    
    
    
    
    
    
    Consumer loans
    
    
    6
    
    
    
    2Total recoveries
    
    
    6
    
    
    
    2Net recoveries (charge-offs)
    
    
    6
    
    
    
    (7
    )Additions charged to operations
    
    
    
    
    
    
    Balance at end of period
    
    $
    422
    
    
    $
    450Ratio 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
    
    
    
    %
    
    
    2.29
    %Allowance for loan losses to non-performing loans
    
    
    80.07
    %
    
    
    171.95
    %Allowance for loan losses to total loans
    
    
    0.47
    %
    
    
    0.48
    %
     -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-
    Table of Contents   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  353,518 shares voted, as follows:
Algerd Brazis:             337,718 votes FOR; 15,800 votes WITHHELD.
Charles Zogas:           337,718 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, 2007  353,518 shares voted, as follows:
FOR:              353,518
AGAINST:           -0-
ABSTAIN:           -0-
 
 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: February 14, 2007
    By:
    /s/ Paul ZogasPaul ZogasPresident, Chief Executive Officer
and Chief Financial OfficerDATE: February 14, 2007
    By:
    /s/ Charles ZogasCharles ZogasExecutive Vice President and
Chief Operating Officer