##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-KSB
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended June 30, 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
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification Number)8929 South Harlem AvenueBridgeview, Illinois
    
    60455(Address of Principal Executive Offices)
    
    Zip Code
 (708) 598-9400
 
  None
  Common Stock, par value $.01 per share
 þ o
 þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS  PART IItem 1. Description of BusinessItem 2. Description of PropertyItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Common Equity and Related Stockholder MattersItem 6. Managements Discussion and Analysis or Plan of OperationItem 7. Financial StatementsItem 8. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 8A. Controls and ProceduresItem 8B. Other InformationPART IIIItem 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange ActItem 10. Executive CompensationItem 11. Security Ownership of Certain Beneficial Owners and ManagementItem 12. Certain Relationships and Related TransactionsPART IVItem 13. ExhibitsItem 14. Principal Accountant Fees and ServicesSIGNATURESAnnual Report to Security HoldersSubsidiaries of RegistrantCertificationCertification    Table of Contents  
 PART I
 
 Item 1. Description of Business
      Forward-Looking Statements
  2




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##### Table of Contents



Lending Activities
 General
      3




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4




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##### Table of Contents



Loan and Mortgage-backed Securities Portfolio Composition
 June 30,2006
    
    
    2005
    
    
    2004Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in Thousands)Real Estate LoansOne-to four-family (1):Held for investment
    
    $
    88,618
    
    
    
    95.55
    %
    
    $
    91,558
    
    
    
    96.46
    %
    
    $
    90,636
    
    
    
    95.69
    %Available for sale
    
    
    843
    
    
    
    0.91
    
    
    
    250
    
    
    
    0.26
    
    
    
    582
    
    
    
    0.61Multi-family
    
    
    1,642
    
    
    
    1.77
    
    
    
    1,125
    
    
    
    1.19
    
    
    
    1,119
    
    
    
    1.18Non-Residential
    
    
    750
    
    
    
    0.81
    
    
    
    805
    
    
    
    0.85
    
    
    
    821
    
    
    
    0.87Total real estate loans
    
    
    91,853
    
    
    
    99.04
    
    
    
    93,738
    
    
    
    98.76
    
    
    
    93,158
    
    
    
    98.35Other LoansConsumer Loans:Deposit accounts
    
    
    188
    
    
    
    0.20
    
    
    
    269
    
    
    
    0.28
    
    
    
    311
    
    
    
    0.33Student
    
    
    161
    
    
    
    0.18
    
    
    
    247
    
    
    
    0.26
    
    
    
    587
    
    
    
    0.62Automobile
    
    
    355
    
    
    
    0.38
    
    
    
    448
    
    
    
    0.47
    
    
    
    465
    
    
    
    0.49Credit card
    
    
    149
    
    
    
    0.16
    
    
    
    189
    
    
    
    0.20
    
    
    
    159
    
    
    
    0.16Other
    
    
    2
    
    
    
    0.00
    
    
    
    12
    
    
    
    0.01
    
    
    
    17
    
    
    
    0.02Total consumer loans
    
    
    855
    
    
    
    0.92
    
    
    
    1,165
    
    
    
    1.22
    
    
    
    1,539
    
    
    
    1.62Commercial business loans
    
    
    38
    
    
    
    0.04
    
    
    
    17
    
    
    
    0.02
    
    
    
    26
    
    
    
    0.03Total loans receivable
    
    
    92,746
    
    
    
    100.00
    %
    
    
    94,920
    
    
    
    100.00
    %
    
    
    94,723
    
    
    
    100.00
    %LessLoans in process
    
    
    172
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    109Deferred yield adjustments
    
    
    (407
    )
    
    
    
    
    
    
    (405
    )
    
    
    
    
    
    
    (398
    )Allowance for uncollected interest
    
    
    20
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    9Allowance for loan losses
    
    
    416
    
    
    
    
    
    
    
    457
    
    
    
    
    
    
    
    460Loans receivable, net
    
    $
    92,545
    
    
    
    
    
    
    $
    94,829
    
    
    
    
    
    
    $
    94,543Mortgage-backed securities:FHLMC
    
    $
    1,065
    
    
    
    63.24
    %
    
    $
    1,219
    
    
    
    63.49
    %
    
    $
    1,887
    
    
    
    64.12
    %FNMA
    
    
    615
    
    
    
    36.52
    
    
    
    680
    
    
    
    35.42
    
    
    
    1,012
    
    
    
    34.38GNMA
    
    
    4
    
    
    
    0.24
    
    
    
    21
    
    
    
    1.09
    
    
    
    44
    
    
    
    1.50Total mortgage-backed securities
    
    
    1,684
    
    
    
    100.00
    %
    
    
    1,920
    
    
    
    100.00
    %
    
    
    2,943
    
    
    
    100.00
    %Net discounts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Net mortgage-backed securities
    
    $
    1,684
    
    
    
    
    
    
    $
    1,920
    
    
    
    
    
    
    $
    2,942
 
 (1)
    
    Includes $3,247 of home equity loans and lines of credit at June 30, 2006. 5




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June 30,2006
    
    
    2005
    
    
    2004Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in Thousands)Fixed-Rate LoansReal Estate:One-to four-family
    
    $
    78,961
    
    
    
    85.14
    %
    
    $
    81,686
    
    
    
    86.06
    %
    
    $
    83,540
    
    
    
    88.19
    %Multi-family
    
    
    872
    
    
    
    0.94
    
    
    
    415
    
    
    
    0.44
    
    
    
    425
    
    
    
    0.45Non-Residential
    
    
    522
    
    
    
    0.56
    
    
    
    574
    
    
    
    0.61
    
    
    
    588
    
    
    
    0.62Total real estate loans
    
    
    80,355
    
    
    
    86.64
    
    
    
    82,675
    
    
    
    87.11
    
    
    
    84,553
    
    
    
    89.26Consumer
    
    
    692
    
    
    
    0.74
    
    
    
    906
    
    
    
    0.95
    
    
    
    935
    
    
    
    0.99Total fixed-rate loans
    
    
    81,047
    
    
    
    87.38
    
    
    
    83,581
    
    
    
    88.06
    
    
    
    85,488
    
    
    
    90.25Adjustable-Rate LoansReal estate:One-to four-family
    
    
    10,500
    
    
    
    11.32
    
    
    
    10,122
    
    
    
    10.66
    
    
    
    7,678
    
    
    
    8.11Multi-family
    
    
    770
    
    
    
    0.83
    
    
    
    710
    
    
    
    0.53
    
    
    
    694
    
    
    
    0.73Non-Residential
    
    
    228
    
    
    
    0.25
    
    
    
    231
    
    
    
    0.24
    
    
    
    233
    
    
    
    0.25Total real estate loans
    
    
    11,498
    
    
    
    12.40
    
    
    
    11,063
    
    
    
    11.65
    
    
    
    8,605
    
    
    
    9.09Consumer
    
    
    163
    
    
    
    0.18
    
    
    
    259
    
    
    
    0.27
    
    
    
    604
    
    
    
    0.63Commercial business
    
    
    38
    
    
    
    0.04
    
    
    
    17
    
    
    
    0.02
    
    
    
    26
    
    
    
    0.03Total adjustable-rate loans
    
    
    11,699
    
    
    
    12.62
    
    
    
    11,339
    
    
    
    11.94
    
    
    
    9,235
    
    
    
    9.75Total loans receivable
    
    
    92,746
    
    
    
    100.00
    %
    
    
    94,920
    
    
    
    100.00
    %
    
    
    94,723
    
    
    
    100.00
    %LessLoans in process
    
    
    172
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    109Deferred yield adjustments
    
    
    (407
    )
    
    
    
    
    
    
    (405
    )
    
    
    
    
    
    
    (398
    )Allowance for uncollected interest
    
    
    20
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    9Allowance for loan losses
    
    
    416
    
    
    
    
    
    
    
    457
    
    
    
    
    
    
    
    460Loans receivable, net
    
    $
    92,545
    
    
    
    
    
    
    $
    94,829
    
    
    
    
    
    
    $
    94,543
  6




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Multi-Family and
    
    
    
    
    
    
    
    
    
    
    CommercialOne-to-Four Family
    
    
    Commercial
    
    
    Consumer
    
    
    Business
    
    
    TotalWeighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageAmount
    
    
    Rate
    
    
    Amount
    
    
    Rate
    
    
    Amount
    
    
    Rate
    
    
    Amount
    
    
    Rate
    
    
    Amount
    
    
    Rate(Dollars in Thousands)Due During Years
Ending June 30,2007(1)
    
    $
    1,596
    
    
    
    6.92
    %
    
    $
    528
    
    
    
    8.86
    %
    
    $
    195
    
    
    
    10.28
    %
    
    $
    38
    
    
    
    0.00
    %
    
    
    2,357
    
    
    
    7.52
    %2008
    
    
    216
    
    
    
    8.08
    %
    
    
    
    
    
    
    
    %
    
    
    98
    
    
    
    6.07
    %
    
    
    
    
    
    
    
    %
    
    
    314
    
    
    
    7.45
    %2009
    
    
    543
    
    
    
    7.68
    %
    
    
    
    
    
    
    
    %
    
    
    229
    
    
    
    6.06
    %
    
    
    
    
    
    
    
    %
    
    
    772
    
    
    
    7.20
    %2010 to 2011
    
    
    1,576
    
    
    
    7.71
    %
    
    
    793
    
    
    
    6.56
    %
    
    
    255
    
    
    
    6.20
    %
    
    
    
    
    
    
    
    %
    
    
    2,624
    
    
    
    7.22
    %2012 to 2015
    
    
    2,812
    
    
    
    5.83
    %
    
    
    
    
    
    
    
    %
    
    
    29
    
    
    
    5.53
    %
    
    
    
    
    
    
    
    %
    
    
    2,841
    
    
    
    5.83
    %2016 to 2030
    
    
    31,274
    
    
    
    5.68
    %
    
    
    301
    
    
    
    5.75
    %
    
    
    49
    
    
    
    5.82
    %
    
    
    
    
    
    
    
    %
    
    
    31,624
    
    
    
    5.68
    %2031 and following
    
    $
    51,444
    
    
    
    5.81
    %
    
    
    770
    
    
    
    6.36
    %
    
    $
    
    
    
    
    
    %
    
    
    
    
    
    
    
    %
    
    
    52,214
    
    
    
    5.82
    %$
    89,461
    
    
    
    
    
    
    $
    2,392
    
    
    
    
    
    
    $
    855
    
    
    
    
    
    
    $
    38
    
    
    
    
    
    
    $
    92,746
    
    
    
    5.87
    %
 
 (1)
    
    Includes demand loans, loans having no stated maturity and overdraft
loans.  7




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##### Table of Contents



One- to Four-Family Residential Real Estate Lending
       8




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##### Table of Contents



Multi-Family Residential Lending
     Consumer Lending
   9




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##### Table of Contents



Commercial Real Estate Lending
  10




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##### Table of Contents



Mortgage-Backed Securities
    Due In
    
    
    Balance Outstanding1 to 5
    
    
    6 to 20
    
    
    Over 20Years
    
    
    Years
    
    
    Years
    
    
    Fixed
    
    
    Adjustable(In Thousands)Federal Home Loan Mortgage Corporation
    
    $
    
    
    
    $
    874
    
    
    $
    191
    
    
    $
    
    
    
    $
    1,065Federal National Mortgage Association
    
    
    4
    
    
    
    611
    
    
    
    
    
    
    
    4
    
    
    
    611Government National Mortgage Association
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4
    
    
    
    Total
    
    $
    4
    
    
    $
    1,489
    
    
    $
    191
    
    
    $
    8
    
    
    $
    1,676
 Loan Originations, Purchases and Sales
   11




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Year Ended June 30,2006
    
    
    2005
    
    
    2004(In Thousands)Originations by type:Adjustable-Rate:Real estate  one- to- four family
    
    $
    5,437
    
    
    $
    5,905
    
    
    $
    5,987Real estate  multi-family
    
    
    318
    
    
    
    222
    
    
    
    Non-Residential
    
    
    225
    
    
    
    
    
    
    
    Non-real estate  consumer
    
    
    
    
    
    
    15
    
    
    
    47Total adjustable rate
    
    
    5,980
    
    
    
    6,142
    
    
    
    6,034Fixed-Rate:Real estate  one- to- four family
    
    
    15,479
    
    
    
    14,943
    
    
    
    34,810Real estate  multi-family
    
    
    575
    
    
    
    
    
    
    
    316Non-Residential
    
    
    
    
    
    
    
    
    
    
    150Non-real estate  consumer
    
    
    934
    
    
    
    1,196
    
    
    
    1,227Total fixed-rate
    
    
    16,988
    
    
    
    16,139
    
    
    
    36,503Total loans originated
    
    
    22,968
    
    
    
    22,281
    
    
    
    42,537Sales and Repayments:Real estate loans sold
    
    
    (5,145
    )
    
    
    (1,823
    )
    
    
    (1,371
    )Principal repayments
    
    
    (19,998
    )
    
    
    (20,261
    )
    
    
    (40,625
    )Net (decrease) increase
    
    $
    (2,175
    )
    
    
    197
    
    
    $
    541Mortgage-backed securities:Purchased
    
    
    
    
    
    $
    
    
    
    $
    Sold
    
    
    
    
    
    
    
    
    
    
    Amortization and repayments
    
    
    (236
    )
    
    $
    (1,022
    )
    
    $
    (3,331
    )Net decrease
    
    $
    (236
    )
    
    $
    (1,022
    )
    
    $
    (3,331
    )
 12




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##### Table of Contents



Non-Performing Assets, Classified Assets, Loan Delinquencies and Defaults
  13




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##### Table of Contents



At June 30, 2006Loans Delinquent For:30-59 days
    
    
    60-89 days
    
    
    90 days and over
    
    
    TotalNumber
    
    
    Amount
    
    
    Percent
    
    
    Number
    
    
    Amount
    
    
    Percent
    
    
    Number
    
    
    Amount
    
    
    Percent
    
    
    Number
    
    
    Amount
    
    
    Percent(Dollars in Thousands)Real estate:One-to four-family
    
    
    12
    
    
    $
    1,107
    
    
    
    1.24
    %
    
    
    1
    
    
    $
    50
    
    
    
    0.05
    %
    
    
    4
    
    
    $
    295
    
    
    
    0.33
    %
    
    
    17
    
    
    $
    1,452
    
    
    
    1.62
    %Consumer
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    %
    
    
    6
    
    
    
    64
    
    
    
    7.49
    %
    
    
    6
    
    
    
    64
    
    
    
    7.49
    %Total
    
    
    12
    
    
    $
    1,107
    
    
    
    1.19
    %
    
    
    1
    
    
    $
    50
    
    
    
    0.05
    %
    
    
    10
    
    
    $
    359
    
    
    
    0.39
    %
    
    
    23
    
    
    $
    1,516
    
    
    
    1.63
    %
 At June 30, 2005Loans Delinquent For:30-59 days
    
    
    60-89 days
    
    
    90 days and over
    
    
    TotalNumber
    
    
    Amount
    
    
    Percent
    
    
    Number
    
    
    Amount
    
    
    Percent
    
    
    Number
    
    
    Amount
    
    
    Percent
    
    
    Number
    
    
    Amount
    
    
    Percent(Dollars in Thousands)Real estate:One-to four-family
    
    
    11
    
    
    $
    936
    
    
    
    1.02
    %
    
    
    4
    
    
    $
    350
    
    
    
    0.38
    %
    
    
    7
    
    
    $
    316
    
    
    
    0.34
    %
    
    
    22
    
    
    $
    1,602
    
    
    
    1.74
    %Consumer
    
    
    1
    
    
    
    6
    
    
    
    0.06
    
    
    
    3
    
    
    
    30
    
    
    
    0.25
    
    
    
    6
    
    
    
    64
    
    
    
    0.55
    
    
    
    10
    
    
    
    100
    
    
    
    0.86Total
    
    
    12
    
    
    $
    942
    
    
    
    0.99
    %
    
    
    7
    
    
    $
    380
    
    
    
    0.40
    %
    
    
    13
    
    
    $
    380
    
    
    
    0.40
    %
    
    
    32
    
    
    $
    1,702
    
    
    
    1.79
    %
 14




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##### Table of Contents



At June 30,2006
    
    
    2005
    
    
    2004(Dollars in Thousands)Non-Accruing Loans:One- to four-family
    
    $
    295
    
    
    $
    316
    
    
    $
    36Multi-family
    
    
    
    
    
    
    
    
    
    
    Consumer
    
    
    32
    
    
    
    64
    
    
    
    19Commercial business
    
    
    
    
    
    
    
    
    
    
    Total non-performing assets
    
    
    327
    
    
    
    380
    
    
    
    55Foreclosed Assets:Total
    
    
    
    
    
    
    
    
    
    
    Total non-performing assets
    
    $
    327
    
    
    $
    380
    
    
    $
    55Total as a percentage of total assets
    
    
    0.25
    %
    
    
    0.27
    %
    
    
    0.04
    %
    Classified Assets
 15




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##### Table of Contents



Allowance for Losses on Loans and Real Estate
   16




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##### Table of Contents



Year Ended June 30,2006
    
    
    2005
    
    
    2004(Dollars in Thousands)Balance at beginning of period
    
    $
    457
    
    
    $
    460
    
    
    $
    410Charge-offs:One- to four-family
    
    
    
    
    
    
    
    
    
    
    Consumer
    
    
    43
    
    
    
    3
    
    
    
    18Commercial business
    
    
    
    
    
    
    
    
    
    
    Total charge-offs
    
    
    43
    
    
    
    3
    
    
    
    18Recoveries:One- to four-family
    
    
    
    
    
    
    
    
    
    
    Consumer
    
    
    2
    
    
    
    
    
    
    
    8Total recoveries
    
    
    2
    
    
    
    
    
    
    
    8Net charge-offs
    
    
    (41
    )
    
    
    (3
    )
    
    
    (10
    )Additions charged to operations
    
    
    
    
    
    
    
    
    
    
    60Balance at end of period
    
    $
    416
    
    
    $
    457
    
    
    $
    460Ratio of net charge-offs during the year to
average loans outstanding during the period
    
    
    0.04
    %
    
    
    
    %
    
    
    0.01
    %Ratio of net charge-offs during the year to
average non-performing assets
    
    
    13.35
    %
    
    
    1.35
    %
    
    
    3.19
    %Allowance for loan losses to
non-performing loans
    
    
    127.27
    %
    
    
    120.06
    %
    
    
    829.00
    %Allowance for loan losses to total loans
    
    
    0.45
    %
    
    
    0.48
    %
    
    
    0.49
    %
 17




---



##### Table of Contents



June 30,2006
    
    
    2005
    
    
    2004Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent ofLoans in
    
    
    
    
    
    
    Loans in
    
    
    
    
    
    
    Loans inEach
    
    
    
    
    
    
    Each
    
    
    
    
    
    
    EachCategory to
    
    
    
    
    
    
    Category
    
    
    
    
    
    
    Category toTotal
    
    
    
    
    
    
    to Total
    
    
    
    
    
    
    TotalAmount
    
    
    Loans
    
    
    Amount
    
    
    Loans
    
    
    Amount
    
    
    Loans(Dollars in Thousands)One- to four-family
    
    $
    140
    
    
    
    96.46
    %
    
    $
    154
    
    
    
    96.72
    %
    
    $
    110
    
    
    
    96.30
    %Multi-family
    
    
    3
    
    
    
    1.77
    
    
    
    2
    
    
    
    1.19
    
    
    
    2
    
    
    
    1.18Non-residential
    
    
    2
    
    
    
    0.81
    
    
    
    2
    
    
    
    0.85
    
    
    
    2
    
    
    
    0.87Consumer
    
    
    3
    
    
    
    0.92
    
    
    
    4
    
    
    
    1.22
    
    
    
    4
    
    
    
    1.62Commercial business.
    
    
    1
    
    
    
    0.04
    
    
    
    
    
    
    
    0.02
    
    
    
    
    
    
    
    0.03Unallocated
    
    
    267
    
    
    
    
    
    
    
    295
    
    
    
    
    
    
    
    342
    
    
    
    Total
    
    $
    416
    
    
    
    100.00
    %
    
    $
    457
    
    
    
    100.00
    %
    
    $
    460
    
    
    
    100.00
    %
 Investment Activities
   18




---



##### Table of Contents



At June 30,2006
    
    
    2005
    
    
    2004Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairValue
    
    
    Value
    
    
    Value
    
    
    Value
    
    
    Value
    
    
    Value(In Thousands)Investment Securities:U.S. government securities
    
    $
    20,821
    
    
    $
    21,022
    
    
    $
    983
    
    
    $
    1,311
    
    
    $
    982
    
    
    $
    1,234FHLB  Chicago stock
    
    
    1,148
    
    
    
    1,148
    
    
    
    1,124
    
    
    
    1,124
    
    
    
    1,062
    
    
    
    1,062Total investment securities
    
    $
    21,969
    
    
    $
    22,170
    
    
    $
    2,107
    
    
    $
    2,435
    
    
    $
    2,044
    
    
    $
    2,296Interest-bearing deposits:FHLB daily investment
    
    $
    3,488
    
    
    $
    3,488
    
    
    $
    3,909
    
    
    $
    3,909
    
    
    $
    2,850
    
    
    $
    2,850Other daily investments
    
    
    5,567
    
    
    
    5,567
    
    
    
    30,160
    
    
    
    30,160
    
    
    
    43,861
    
    
    
    43,861Total interest-bearing deposits
    
    $
    9,055
    
    
    $
    9,055
    
    
    $
    34,069
    
    
    $
    34,069
    
    
    $
    46,711
    
    
    $
    46,711
  June 30, 20061 Year or
    
    
    1 to 5
    
    
    Over 10
    
    
    Total InvestmentLess
    
    
    Years
    
    
    Years
    
    
    SecuritiesWeightedBook
    
    
    Book
    
    
    Book
    
    
    Book
    
    
    Fair
    
    
    AverageValue
    
    
    Value
    
    
    Value
    
    
    Value
    
    
    Value
    
    
    Yield(Dollars in Thousands)U.S. government securities
    
    $
    19,837
    
    
    $
    
    
    
    $
    984
    
    
    $
    20,821
    
    
    $
    21,022
    
    
    
    $
    19,837
    
    
    $
    
    
    
    $
    984
    
    
    $
    20,821
    
    
    $
    21,022
    
    
    
    4.87
    %
 Sources of Funds
 General
 Deposits
 19




---



##### Table of Contents



Year Ended June 30,2006
    
    
    2005
    
    
    2004(Dollars in Thousands)Opening balance
    
    $
    124,836
    
    
    $
    140,437
    
    
    $
    147,490Deposits
    
    
    353,793
    
    
    
    380,517
    
    
    
    400,918Withdrawals
    
    
    (364,207
    )
    
    
    (397,415
    )
    
    
    (409,569
    )Balance before interest credited
    
    
    114,422
    
    
    
    123,539
    
    
    
    138,839Interest credited
    
    
    1,549
    
    
    
    1,297
    
    
    
    1,598Ending balance
    
    $
    115,971
    
    
    $
    124,836
    
    
    $
    140,437Net decrease
    
    $
    (8,865
    )
    
    $
    (15,601
    )
    
    $
    (7,053
    )Percent decrease
    
    
    (7.10
    )%
    
    
    (11.11
    )%
    
    
    (4.78
    )%
 20




---



##### Table of Contents



June 30,2006
    
    
    2005
    
    
    2004Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent ofAmount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    Amount
    
    
    Total(Dollars in Thousands)Passbook accounts
    
    $
    48,439
    
    
    
    41.77
    %
    
    $
    52,859
    
    
    
    42.34
    %
    
    $
    59,698
    
    
    
    42.51
    %NOW accounts
    
    
    10,855
    
    
    
    9.36
    
    
    
    12,029
    
    
    
    9.64
    
    
    
    12,983
    
    
    
    9.25Money market account
    
    
    5,106
    
    
    
    4.40
    
    
    
    6,108
    
    
    
    4.89
    
    
    
    7,497
    
    
    
    5.34Non-interest bearing deposits
    
    
    11,783
    
    
    
    10.16
    
    
    
    13,528
    
    
    
    10.84
    
    
    
    12,097
    
    
    
    8.61Total non-certificates
    
    
    76,183
    
    
    
    65.69
    
    
    
    84,524
    
    
    
    67.71
    
    
    
    92,275
    
    
    
    65.71Certificates:Interest rate range:0.75  1.00%
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,210
    
    
    
    2.291.01  2.00%
    
    
    818
    
    
    
    0.70
    
    
    
    14,589
    
    
    
    11.68
    
    
    
    32,083
    
    
    
    22.842.01  3.00%
    
    
    8,212
    
    
    
    7.08
    
    
    
    23,220
    
    
    
    18.60
    
    
    
    10,075
    
    
    
    7.173.01  4.00%
    
    
    21,533
    
    
    
    18.57
    
    
    
    2,503
    
    
    
    2.01
    
    
    
    2,794
    
    
    
    1.994.01  5.00%
    
    
    6,768
    
    
    
    5.84
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.01  6.00%
    
    
    2,457
    
    
    
    2.12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total certificates
    
    
    39,788
    
    
    
    34.31
    
    
    
    40,312
    
    
    
    32.29
    
    
    
    48,162
    
    
    
    34.29Total deposits
    
    $
    115,971
    
    
    
    100.00
    %
    
    $
    124,836
    
    
    
    100.00
    %
    
    $
    140,437
    
    
    
    100.00
    %
 21




---



##### Table of Contents



1.01-
    
    
    2.01-
    
    
    3.01-
    
    
    4.01-
    
    
    5.01-
    
    
    
    
    
    
    Percent of2.00%
    
    
    3.00%
    
    
    4.00%
    
    
    5.00%
    
    
    6.00%
    
    
    Total
    
    
    Total(Dollars in Thousands)Certificate Accounts Maturing in
Quarter Ending:September 30, 2006
    
    $
    614
    
    
    $
    5,015
    
    
    $
    4,719
    
    
    
    1,579
    
    
    
    
    
    
    $
    11,927
    
    
    
    29.98
    %December 31, 2006
    
    
    100
    
    
    
    1,239
    
    
    
    8,440
    
    
    
    2,177
    
    
    
    189
    
    
    
    12,145
    
    
    
    30.52March 31, 2007
    
    
    104
    
    
    
    817
    
    
    
    2,274
    
    
    
    1,856
    
    
    
    606
    
    
    
    5,657
    
    
    
    14.22June 30, 2007
    
    
    
    
    
    
    261
    
    
    
    1,512
    
    
    
    551
    
    
    
    1,248
    
    
    
    3,572
    
    
    
    8.98September 30, 2007
    
    
    
    
    
    
    880
    
    
    
    1,116
    
    
    
    64
    
    
    
    196
    
    
    
    2,256
    
    
    
    5.67December 31, 2007
    
    
    
    
    
    
    
    
    
    
    999
    
    
    
    504
    
    
    
    101
    
    
    
    1,604
    
    
    
    4.03March 31, 2008
    
    
    
    
    
    
    
    
    
    
    1,073
    
    
    
    19
    
    
    
    
    
    
    
    1,092
    
    
    
    2.75June 30, 2008
    
    
    
    
    
    
    
    
    
    
    719
    
    
    
    
    
    
    
    11
    
    
    
    730
    
    
    
    1.83September 30, 2008
    
    
    
    
    
    
    
    
    
    
    417
    
    
    
    18
    
    
    
    36
    
    
    
    471
    
    
    
    1.18December 31, 2008
    
    
    
    
    
    
    
    
    
    
    264
    
    
    
    
    
    
    
    70
    
    
    
    334
    
    
    
    0.84Total
    
    $
    818
    
    
    $
    8,212
    
    
    $
    21,533
    
    
    
    6,768
    
    
    
    2,457
    
    
    $
    39,788
    
    
    
    100.00
    %Percent of total
    
    
    2.06
    
    
    
    20.64
    
    
    
    54.12
    
    
    
    17.01
    
    
    
    6.17
    
    
    
    100.00
    %
  MaturityOver
    
    
    Over
    
    
    Over3 Months
    
    
    3 to 6
    
    
    6 to 12
    
    
    12or Less
    
    
    Months
    
    
    Months
    
    
    Months
    
    
    Total(In Thousands)Certificates of deposit less than $100,000
    
    $
    9,900
    
    
    $
    8,230
    
    
    $
    7,598
    
    
    $
    4,958
    
    
    $
    30,686Certificate of deposit of $100,000 or more
    
    
    2,027
    
    
    
    3,915
    
    
    
    1,631
    
    
    
    1,529
    
    
    
    9,102Total certificates of deposit
    
    $
    11,927
    
    
    $
    12,145
    
    
    $
    9,229
    
    
    $
    6,487
    
    
    $
    39,788
 Borrowings
  22




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##### Table of Contents



Competition
   Service Corporation
    REGULATION
 General
 23




---



##### Table of Contents



Federal Regulation of Savings Associations
      24




---



##### Table of Contents



Insurance of Accounts and Regulation by the FDIC
    Regulatory Capital Requirements
  25




---



##### Table of Contents



26




---



##### Table of Contents



27




---



##### Table of Contents



Limitations on Dividends and Other Capital Distributions
   Accounting
  Qualified Thrift Lender Test
 28




---



##### Table of Contents



Community Reinvestment Act
  Transactions with Affiliates and Insiders
  29




---



##### Table of Contents



Anti-Money Laundering
  Holding Company Regulation
     Federal Securities Law
 30




---



##### Table of Contents



Federal Reserve System
  Federal Home Loan Bank System
    31




---



##### Table of Contents



Federal Taxation
     Illinois Taxation
 Employees
  
 32




---



##### Table of Contents



Item 2. Description of Property
 Offices
    Computer Equipment
  
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 PART II
 
 Item 5. Market for Common Equity and Related Stockholder Matters
  
 Item 6. Managements Discussion and Analysis or Plan of Operation
  33




---



##### Table of Contents



Item 7. Financial Statements
  
 Item 8. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 8A. Controls and Procedures
   
 Item 8B. Other Information
  
 PART III
 
 Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section
16(a) of the Exchange Act
  
 Item 10.
Executive Compensation
  34




---



##### Table of Contents



Item 11. Security Ownership of Certain Beneficial Owners and Management
   (a)
    
    (b)
    
    (c)Number of securitiesremaining availablefor future issuanceNumber of securities
    
    
    
    under equityto be issued upon
    
    
    
    compensation plansexercise of
    
    Weighted-average
    
    [excludingoutstanding
    
    exercise price of
    
    securitiesoptions, warrants and
    
    outstanding options,
    
    reflected in columnPlan Category
    
    rights
    
    warrants and rights
    
    (a)]Equity compensation plans approved by 
securities holders:1. 1993 Stock Option and Incentive Plan.
    
    1. None
    
    1. N/A
    
    1. 6,9002. Recognition and Retention Plan
    
    2. N/A
    
    2. N/A
    
    2. N/AEquity compensation plans not approved 
by security holders
    
    N/A
    
    N/A
    
    N/ATotal
    
    None
    
    N/A
    
    None
 
 (1)
    
    Information regarding these plans is set forth under Item 10 to this Report.(2)
    
    Awards under this plan consist of restricted stock. 
 Item 12. Certain Relationships and Related Transactions
  35




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##### Table of Contents



PART IV
 
 Item 13. Exhibits
 Reference to PriorRegulation
    
    
    
    FilingS-K Exhibit
    
    
    
    or Exhibit NumberNumber
    
    Document
    
    Attached Hereto2
    
    Plan of acquisition, reorganization, arrangement, liquid, or succession
    
    None3
    
    Articles of Incorporation and Bylaws
    
    **4
    
    Instruments defining the rights of security holders, including indentures:Common Stock Certificate
    
    **9
    
    Voting trust agreement
    
    None10
    
    Material contracts:Employee Stock Ownership Plan
    
    **1993 Stock Option and Incentive Plan
    
    *Employment Agreements
    
    **Recognition and Retention Plan
    
    *401(k) Retirement/Savings Plan
    
    **11
    
    Statement re computation of per share earnings
    
    ***13
    
    Annual Report to Security Holders
    
    1314
    
    Code of Ethics
    
    ****16
    
    Letter on change in certifying accountant
    
    None18
    
    Letter on change in accounting principles
    
    None21
    
    Subsidiaries of Registrant
    
    2122
    
    Published report regarding matters submitted to vote of security holders
    
    None23
    
    Consent of Experts and Counsel
    
    None24
    
    Power of Attorney
    
    Not required31.1
    
    Certification of Paul M. Zogas pursuant to Rule 13a-14 under the
Securities and Exchange Act of 1934
    
    31.132.1
    
    Certification of Paul M. Zogas pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2003
    
    32.1
 
 *
    
    Filed on March 19, 1993 as an exhibit to Midland Federals Pre-Effective Amendment No. One
to the Form AC.**
    
    Filed on June 22, 1998 as exhibits to Midland Capitals Registration Statement No.
333-57399 on Form S-4. All of such previously filed documents are hereby incorporated
herein by reference in accordance with Item 601 of Regulation S-B.***
    
    See Note 1 of the Notes to be Consolidated Financial Statements included in the Annual
Report under Exhibit 13.****
    
    Filed on September 28, 2004 as Exhibit 14 to Midland Capitals Annual Report on Form
10-QSB for the year ended June 30, 2004. 
 Item 14. Principal Accountant Fees and Services
  36




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##### Table of Contents



SIGNATURES
  MIDLAND CAPITAL HOLDINGS CORPORATIONDate:   September 28, 2006
    By:
    /s/ Paul M. ZogasPaul M. ZogasChairman, President and Chief Executive Officer
(Duly Authorized Representative)  /s/ Paul M. Zogas
    
    
    
    /s/ Charles A. ZogasPaul M. Zogas, Chairman, President and
Chief Executive and Financial Officer
(Principal Executive and Financial and
Accounting Officer)
    
    
    
    Charles A. Zogas, Director, Executive
Vice President and SecretaryDate: September 28, 2006
    
    
    
    Date: September 28, 2006/s/ Jonas Vaznelis, Director
    
    
    
    /s/ Richard TaylorJonas Vaznelis, Director
    
    
    
    Richard Taylor, Director and Vice
PresidentDate: September 28, 2006
    
    
    
    Date: September 28, 2006/s/ Michael J. Kukanza
    
    
    
    /s/ Algerd BrazisMichael J. Kukanza, Director
    
    
    
    Algerd Brazis, DirectorDate: September 28, 2006
    
    
    
    Date: September 28, 2006
 37