Midland Capital Holdings Corporation Reports Fiscal 4th Quarter
Earnings and Declares Cash Dividend BRIDGEVIEW, Ill., July 29
/PRNewswire-FirstCall/ -- Midland Capital Holdings Corporation
(OTC:MCPH) (BULLETIN BOARD: MCPH) (the "Company"), the holding
company for Midland Federal Savings and Loan Association ("Midland
Federal"), today announced that net income for the quarter ended
June 30, 2005 totaled $479,000, or $1.28 per diluted share,
compared to net income of $185,000, or $0.50 per diluted share, for
the quarter ended June 30, 2004. Net income for the fiscal year
ended June 30, 2005 totaled $1.2 million, or $3.23 per diluted
share, compared to net income totaling $1.0 million, or $2.80 per
diluted share for the fiscal year ended June 30, 2004. The Company
also announced a 10% increase in its quarterly cash dividend to
$0.22 per share for the quarter ended June 30, 2005, from $0.20 per
share. The dividend will be paid on August 18, 2005 to shareholders
of record as of August 8, 2005. Net income in the current quarter
included a $217,000 gain, net of income taxes, on the sale of
Midland Federal's investment in Intrieve, Incorporated
("Intrieve"), Midland Federal's data processing provider. Net
income in the current quarter also included the collection of
non-accruing loan interest in the amount of $17,000, net of income
taxes, from a loan workout. Exclusive of the after tax impact of
these items, net income for the quarter ended June 30, 2005 would
have been $245,000, or $0.66 per diluted share. Net income in the
prior year quarter also included the collection of non-accruing
loan interest from a loan workout in the amount of $10,000, net of
income taxes. Net income in the current fiscal year included the
$217,000 gain, net of income taxes, on the sale of Midland
Federal's investment in Intrieve as well as the collection of
non-accruing loan interest in the amount of $46,000, net of income
taxes, from a loan workout. Net income in the prior fiscal year
included the collection of non- accruing loan interest in the
amount of $154,000, net of income taxes, from loan workouts and a
$286,000 gain, net of income taxes, from the satisfaction of
foreclosure judgments, under a loan workout agreement that was paid
in full during the quarter ended September 30, 2003. Net income in
the prior fiscal year also included a $57,000 gain, net of income
taxes, on the sale of a non-performing loan without recourse.
Exclusive of the after tax impact of these items in both periods,
net income for the fiscal year ended June 30, 2005 would have been
$939,000, or $2.52 per diluted share, compared to net income of
$546,000, or $1.46 per diluted share, for the fiscal year ended
June 30, 2004. Annualized return on average assets and annualized
return on average equity during the quarter ended June 30, 2005
were 1.37% and 15.28%, respectively compared to .48% and 6.35%,
respectively, for the comparable prior year quarter. For the fiscal
year ended June 30, 2005, annualized return on average assets was
.83% and annualized return on average equity was 9.91%, compared to
.66% and 9.10%, respectively, for the fiscal year ended June 30,
2004. Net interest income increased $173,000 to $1.3 million in the
quarter ended June 30, 2005 compared to the prior year quarter. The
increase in net interest income was primarily the result of an
increase in interest rate spread to 3.71% in the current quarter
compared to 2.98% in the prior year quarter. The increase in
interest rate spread was due to an increase in the Company's
average yield on interest earning assets which offset an increase
in the average yield paid on interest costing deposits. The average
balance of net earning assets also increased to $21.7 million for
the quarter ended June 30, 2005 from $17.6 million in the prior
year quarter. For the fiscal year ended June 30, 2005 net interest
income increased $500,000 to $5.1 million. The increase in net
interest income in the current fiscal year was primarily the result
of an increase in interest rate spread to 3.55% compared to 2.98%
in the prior year period. Non-interest income increased $307,000 to
$534,000 in the quarter ended June 30, 2005 from $227,000 in the
quarter ended June 30, 2004. The increase in non-interest income
was primarily the result of a $329,000 gain on the sale of Midland
Federal's investment in Intrieve, discussed above, as well as a
$10,000 profit on the sale of loans which offset an $17,000
decrease in loan fees and service charges. For the fiscal year
ended June 30, 2005 non-interest income decreased $419,000 to $1.1
million compared to the prior year. The decrease in non- interest
income was primarily the result of a $433,000 gain from the
satisfaction of deficiency judgments and an $87,000 gain on the
non-performing loan sale, both of which occurred in the prior year
period. Non-interest income in the current fiscal year was
increased by the $329,000 gain on the sale of Midland Federal's
investment in Intrieve, which gain was offset by a $160,000
decrease in loan fees and service charges, a $41,000 decrease in
deposit related fees and a $14,000 decrease in commission income.
The decrease in loan fees and service charges in the current fiscal
year is attributed to a decrease in loan origination activity from
the prior year period due to a reduction in loan refinancing
activity. Non-interest expense increased $29,000 to $1.1 million in
the quarter ended June 30, 2005 compared to the prior year quarter.
The increase in non- interest expense is primarily the result of a
$12,000 increase in staffing costs and a $35,000 increase in
computer software and support expense offset by a $15,000 decrease
in office occupancy expense, a $7,000 decrease in professional fees
and a $6,000 decrease in data processing fees. The increase in
computer software and support expense was primarily attributed to
the installation of new computer servers. The increase in staffing
costs was primarily attributed to a $29,000 increase in employee
medical and pension benefits. For the fiscal year ended June 30,
2005 non-interest expense decreased $122,000 to $4.5 million
compared to the prior year. The primary factors for the decrease in
non-interest expense in the current fiscal year were a $94,000
decrease in office occupancy expense, a $57,000 decrease in
staffing costs, a $25,000 decrease in professional fees and a
$9,000 decrease in data processing fees offset by a $59,000
increase in computer software and support expense. The decrease in
staffing costs is primarily attributed to a $109,000 decrease in
loan origination commissions offset by an $85,000 increase in costs
for employee medical and pension benefits. The decrease in office
occupancy expense is primarily the result of a $55,000 decrease in
depreciation expense. Non-performing assets were .27% of total
assets at June 30, 2005 and consisted of $380,000 in non-performing
loans. The allowance for loan losses decreased by $3,000 to
$457,000, or .48% of total loans, at June 30, 2005 as a result of
net loan charge offs. The Company made no loan loss provisions
during the fiscal year ended June 30, 2005. At June 30, 2005 the
Company's ratio of allowance for loan losses to non-performing
loans was 120.06% compared to 829.00% at June 30, 2004. At June 30,
2005 the Company's assets totaled $139.0 million, compared to total
assets of $153.6 million at June 30, 2004. Net loans receivable
increased $286,000 to $94.8 million at June 30, 2005. Total
deposits decreased $15.6 million to $124.8 million at June 30, 2005
from $140.4 million at June 30, 2004. The decrease in savings
deposits is primarily attributed to increased competition for
deposit liabilities in a rising interest rate environment.
Stockholders' equity in the Company totaled $12.7 million at June
30, 2005 resulting in a book value per common share of $34.08 based
upon 372,600 shares outstanding. At June 30, 2005 Midland Federal's
capital ratios exceeded all of its regulatory capital requirements
with both tangible and core capital ratios of 7.83% and a
risk-based capital ratio of 14.27%. Midland Federal's deposits are
insured up to applicable limits by the Federal Deposit Insurance
Corporation. Midland Federal operates four banking offices located
in Chicago, Homer Glen and Bridgeview, Illinois. (Selected
Consolidated Financial Information follows) FINANCIAL HIGHLIGHTS
Unaudited SELECTED FINANCIAL CONDITION DATA: June 30, 2005 June 30,
2004 Total assets $138,978,770 153,560,361 Loans receivable, net
94,829,310 94,542,860 Mortgage-backed securities 1,920,221
2,941,517 Cash and cash equivalents 36,709,593 50,496,629
Investment securities 1,310,937 1,234,375 Deposits 124,836,132
140,436,704 Stockholders' equity 12,696,682 11,742,314 PER SHARE
DATA: Book value per common share at period end $34.08 31.51
SELECTED ASSET QUALITY RATIOS: Non-performing loans to loans
receivable, net .40% .06% Non-performing assets to total assets
.27% .04% Allowance for loan losses to non-performing loans 120.06%
829.00% Allowance for loan losses to total loans .48% .49% SELECTED
OPERATIONS DATA: Three Months Ended Twelve Months Ended June 30,
June 30, 2005 2004 2005 2004 Total interest income $1,672,650
1,503,358 6,505,721 6,340,088 Total interest expense 355,340
358,754 1,370,963 1,705,562 Net interest income 1,317,310 1,144,604
5,134,758 4,634,526 Provision for loan losses 0 15,000 0 60,000 Net
interest income after provision for loan losses 1,317,310 1,129,604
5,134,758 4,574,526 Non-interest income 533,573 226,540 1,144,097
1,563,071 Non-interest expense 1,120,910 1,092,198 4,452,192
4,574,405 Income before income taxes 729,973 263,946 1,826,663
1,563,192 Income tax expense 251,213 78,780 624,114 520,524 Net
income 478,760 185,166 1,202,549 1,042,668 PER SHARE DATA: Earnings
per basic share $1.28 .50 3.23 2.80 Earnings per diluted share
$1.28 .50 3.23 2.80 Dividends declared per common share $.20 .17
.80 .68 SELECTED OPERATING RATIOS: Annualized return on average
assets 1.37% .48% .83% .66% Annualized return on average equity
15.28% 6.35% 9.91% 9.10% Annualized operating expenses to average
total assets 3.19% 2.83% 3.07% 2.92% Interest rate spread during
the period 3.71% 2.98% 3.55% 2.98% Net interest margin 3.91% 3.12%
3.71% 3.13% Average interest-earning assets to average
interest-bearing liabilities 119.17% 113.65% 116.91% 112.56%
DATASOURCE: Midland Capital Holdings Corporation CONTACT: Paul
Zogas, President of Midland Capital Holdings Corporation,
+1-708-598-9400 Web site: http://www.midlandfederal.com/
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