BRIDGEVIEW, Ill., Oct. 28 /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 September 30, 2005 totaled $274,000,
or $0.73 per diluted share, compared to net income of $240,000, or
$0.64 per diluted share for the quarter ended September 30, 2004.
Midland Capital Holdings Corporation also announced that it will
pay a regular cash dividend of $0.22 per share for the quarter
ended September 30, 2005. The dividend will be payable November 17,
2005 to shareholders of record as of November 7, 2005. Net income
in the current quarter included an $11,000 gain, net of income
taxes, from additional proceeds received on the sale of Midland
Federal's investment in Intrieve, Incorporated ("Intrieve"),
Midland Federal's data processing provider. Exclusive of the after
tax impact of this item, net income for the quarter ended September
30, 2005 would have been $263,000, or $0.71 per diluted share.
Annualized return on average assets and annualized return on
average equity during the quarter ended September 30, 2005 were
0.80% and 8.57%, respectively, compared to 0.63% and 8.09%,
respectively, for the comparable prior year quarter. Net interest
income increased $84,000 to $1.3 million in the quarter ended
September 30, 2005 as compared to the prior year quarter. The
increase in net interest income is primarily attributed to an
increase in the Company's interest rate spread to 3.78% for the
quarter ended September 30, 2005 from 3.30% for the prior year
period. The increase in interest rate spread was primarily due to
an increase in the Company's average yield earned on interest
earning assets to 5.15% in the current quarter from 4.41% in the
prior year quarter. The increase in the average yield earned on
interest earning assets offset an increase in the average yield
paid on interest costing deposits to 1.37% in the current quarter
from 1.11% in the prior year quarter. The average balance of net
earning assets also increased by $2.9 million to $21.6 million
compared with the prior year period. Non-interest income increased
$42,000 to $265,000 in the quarter ended September 30, 2005 as
compared to the prior year quarter. The primary factors for the
increase in non-interest income were a $31,000 increase in loan
fees and service charges and a $16,000 gain from the additional
proceeds received on the sale of Midland Federal's investment in
Intrieve, discussed above, offset by a $2,000 decrease in
commission income. The increase in loan fees and service charges in
the current quarter is attributed to an increase in brokered loan
activity compared to the prior year period. Non-interest expense
increased $74,000 to $1.2 million in the quarter ended September
30, 2005 as compared to the prior year quarter. The increase in
non-interest expense is primarily the result of a $45,000 increase
in staffing costs, a $29,000 increase in computer software and
support expense and a $17,000 increase in professional fees, offset
by a $12,000 decrease in office occupancy expense. The increase in
staffing costs is primarily attributed to a $23,000 increase in the
cost of employee benefits and a $10,000 increase in loan
origination commissions, due to an increase in brokered loan
activity. Non-performing assets were .24% of total assets at
September 30, 2005 and consisted of $328,000 in non-performing
loans. The allowance for loan losses increased $1,000, due to net
recoveries, and amounted to $458,000, or 0.48% of total loans, at
September 30, 2005 as compared to June 30, 2005. The Company made
no additional loan loss provisions during the quarter ended
September 30, 2005. At September 30, 2005 the Company's ratio of
allowance for loan losses to non-performing loans was 139.75%
compared to 120.06% at June 30, 2005. At September 30, 2005 the
Company's assets totaled $136.2 million, compared to total assets
of $139.0 million at June 30, 2005. Net loans receivable remained
stable at $94.6 million at September 30, 2005. During the quarter
ended September 30, 2005, the Company changed its mix of short term
investments to take advantage of higher short term interest rates
and purchased $19.6 million of six month United States Treasury
Bills. This purchase of United States Treasury securities resulted
in a $19.7 million increase in the balance of investment securities
available for sale to $21.0 million at September 30, 2005 compared
to $1.3 million at June 30, 2005 and was funded out of the balance
of cash and cash equivalents, which decreased by $22.4 million to
$14.3 million at September 30, 2005. Total deposits for the quarter
ended September 30, 2005 decreased $3.4 million to $121.4 million.
The net decrease in deposits is primarily attributed to increased
competition for certificate of deposit accounts from special rate
promotions. Stockholders' equity in the Company totaled $12.9
million at September 30, 2005 resulting in a book value per common
share of $34.52 based upon 372,600 shares outstanding. At September
30, 2005 Midland Federal's capital ratios exceeded all of its
regulatory capital requirements with both tangible and core capital
ratios of 8.04% and a risk-based capital ratio of 18.04%. 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 SELECTED FINANCIAL CONDITION DATA: September
30, June 30, 2005 2005 (Unaudited) Total assets $136,223,363
138,978,770 Loans receivable, net 94,610,269 94,829,310
Mortgage-backed securities 1,860,505 1,920,221 Cash and cash
equivalents 14,296,313 36,709,593 Investment securities 21,004,862
1,310,937 Deposits 121,459,297 124,836,132 Stockholders' equity
12,861,192 12,696,682 PER SHARE DATA: Book value per common share
at period end $34.52 $34.08 SELECTED ASSET QUALITY RATIOS:
Non-performing loans to loans receivable, net .35% .40%
Non-performing assets to total assets .24% .27% Allowance for loan
losses to non-performing loans 139.75% 120.06% Allowance for loan
losses to total loans .48% .48% SELECTED OPERATIONS DATA: Three
Months Ended September 30, 2005 2004 (Unaudited) (Unaudited) Total
interest income $1,694,124 1,580,631 Total interest expense 376,199
347,148 Net interest income 1,317,925 1,233,483 Provision for loan
losses - - Net interest income after provision for loan losses
1,317,925 1,233,483 Non-interest income 265,321 223,384
Non-interest expense 1,168,324 1,093,738 Income before income taxes
414,922 363,129 Income tax expense 141,073 123,464 Net income
$273,849 239,665 PER SHARE DATA: Earnings per basic share $0.73
0.64 Earnings per diluted share $0.73 0.64 SELECTED OPERATING
RATIOS: Annualized return on average assets 0.80% 0.63% Annualized
return on average equity 8.57% 8.09% Annualized operating expenses
to average total assets 3.40% 2.90% Interest rate spread during the
period 3.78% 3.30% Net interest margin 4.01% 3.44% Average
interest-earning assets to average interest-bearing liabilities
119.68% 114.98% 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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