EXHIBIT 99.1
DC 126463 v 1, 52142.00002
FOR IMMEDIATE RELEASE
Date: July 25, 2003
CONTACT: Paul Zogas, President (708) 598-9400
MIDLAND CAPITAL HOLDINGS CORPORATION
REPORTS FISCAL 4th QUARTER EARNINGS
AND DECLARES CASH DIVIDEND
BRIDGEVIEW, ILLINOIS - Midland Capital Holdings Corporation (OTC 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, 2003 totaled $131,000, or $0.35 per both diluted and
basic share, compared to net income of $256,000, or $0.70 per both diluted and
basic share, for the quarter ended June 30, 2002. Net income for the fiscal year
ended June 30, 2003 totaled $690,000, or $1.88 per both diluted and basic share,
compared to net income totaling $866,000, or $2.36 per diluted share ($2.38 per
basic share) for the fiscal year ended June 30, 2002.
Midland Capital Holdings Corporation also announced an increase in its
quarterly cash dividend to $0.17 per share for the quarter ended June 30, 2003,
an increase of approximately 13% from $0.15 per share. The dividend will be paid
on August 14, 2003 to shareholders of record as of August 4, 2003.
Annualized return on average assets and annualized return on average equity
during the quarter ended June 30, 2003 were .33% and 4.77%, respectively
compared to .68% and 10.04%, respectively, for the prior year quarter. For the
fiscal year ended June 30, 2003, annualized return on average assets and
annualized return on average equity were .44% and 6.44%, respectively, compared
to .59% and 8.69% for the fiscal year ended June 30, 2002.
Net interest income before provision for loan losses decreased $85,000 to
$1.1 million in the quarter ended June 30, 2003 compared to $1.2 million in the
2002 quarter. The decrease in net interest income was primarily the result of a
decrease in interest rate spread to 2.74% for the quarter ended June 30, 2003
from 3.14% for the prior year period. The decrease in interest rate spread was
offset by a $2.4 million increase in the average balance of net earning assets
to $15.9 million from $13.6 million during the prior year period.
For the fiscal year ended June 30, 2003 net interest income increased
$106,000 from the prior fiscal year to $4.6 million. Interest rate spread and
net interest margin decreased to 2.85% and 3.05%, respectively, for the fiscal
year ended June 30, 2003 compared to 2.89% and 3.19%, respectively, in the prior
fiscal year.
Non-interest income increased $51,000 to $318,000 in the quarter ended June
30, 2003 from $266,000 in the quarter ended June 30, 2002. The primary factor
for the increase in non-interest
income in the current quarter was an $81,000 increase in loan fees and service
charges, offset by a $12,000 decrease in deposit related fees, a $9,000 decrease
in commission income and a $4,000 decrease in profit on the sale of loans.
For the fiscal year ended June 30, 2003 non-interest income increased
$80,000 to $1.2 million from $1.1 million in the prior year period. The increase
in non-interest income in the current fiscal year compared with the prior year
period is primarily attributed to a $113,000 increase in loan fees and service
charges, offset by a $17,000 decrease in profit on the sale of loans. The
increase in loan fees and service charges in the fiscal year ended June 30, 2003
is attributed to an increase in loan origination activity compared to the prior
fiscal year.
Non-interest expense increased $150,000 to $1.2 million in the quarter
ended June 30, 2003 compared to the prior year quarter. The increase in
non-interest expense is primarily the result of a $108,000 increase in staffing
costs. The increase in staffing costs in the quarter ended June 30, 2003 is
primarily attributed to a $45,000 increase in loan origination commissions due
to an increase in lending volume compared to the prior year quarter as well as a
$30,000 increase in employee benefit costs.
For the fiscal year ended June 30, 2003 non-interest expense increased
$402,000 to $4.6 million from $4.2 million in the prior year period. The primary
factors for the increase in non-interest expense in the current fiscal year were
a $247,000 increase in staffing costs, a $27,000 increase in office occupancy
and equipment expense, a $27,000 increase in computer software and support
expense and a $15,000 increase in professional fees. The increase in staffing
costs in the fiscal year ended June 30, 2003 is primarily attributed to a
$76,000 increase in loan origination commissions, due to an increase in lending
volume and a $94,000 increase in employee benefit costs. The increase in
computer software and support expense is primarily attributed to the conversion
to a new computer network operating system during the current year.
At June 30, 2003 the Company's assets totaled $160.0 million, compared to
total assets of $150.6 million at June 30, 2002. The $9.4 million increase in
assets was primarily the result of increases in loans receivable and cash
equivalents that were funded by reductions in investment securities and
mortgage-backed securities as well as a $9.1 million increase in deposits to
$147.5 million at June 30, 2003 from $138.4 million at June 30, 2002. Net loans
receivable increased $7.2 million to $93.3 million at June 30, 2003.
Non-performing assets were .30% of total assets at June 30, 2003 and consisted
of $483,000 in non-performing loans. Allowance for loan losses totaled $410,000
or 84.8% of non-performing loans at June 30, 2003.
Stockholders' equity in the Company totaled $11.1 million at June 30, 2003
resulting in a book value per common share of $29.67 based upon 372,600 shares
outstanding. At June 30, 2003 Midland Federal's capital ratios exceeded all of
its regulatory capital requirements with both tangible and core capital ratios
of 5.88% and a risk-based capital ratio of 11.98%. 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, 2003 June 30, 2002
------------- -------------
Total assets............................. $159,976,384 150,588,948
Loans receivable, net.................... 93,299,553 86,086,652
Mortgage-backed securities............... 6,272,466 10,359,768
Cash and cash equivalents................ 49,421,065 32,921,438
Investment securities.................... 6,388,900 16,306,245
Deposits................................. 147,489,604 138,443,669
Stockholders' equity..................... 11,056,147 10,396,555
PER SHARE DATA:
Book value per common share at period end $29.67 28.56
SELECTED ASSET QUALITY RATIOS:
Non-performing loans to
loans receivable, net.................. .52% .19%
Non-performing assets to total assets.... .30% .11%
Allowance for loan losses to
non-performing loans................... 84.80% 213.29%
Allowance for loan losses to total loans. .44% .41%
SELECTED OPERATIONS DATA: Three Months Ended Twelve Months Ended
June 30, June 30,
-------- --------
2003 2002 2003 2002
---- ---- ---- ----
Total interest income.......... $1,681,580 1,984,078 7,278,083 8,281,589
Total interest expense......... 569,382 787,017 2,724,478 3,834,055
---------- --------- --------- ---------
Net interest income............ 1,112,198 1,197,061 4,553,605 4,447,534
Provision for loan losses...... 15,000 15,000 60,000 15,000
---------- --------- --------- ---------
Net interest income after provision
for loan losses.............. 1,097,198 1,182,061 4,493,605 4,432,534
---------- --------- --------- ---------
Non-interest income............ 317,799 266,436 1,208,365 1,128,068
Non-interest expense........... 1,210,360 1,060,685 4,649,514 4,247,848
---------- --------- --------- ---------
Income before income taxes..... 204,637 387,812 1,052,456 1,312,754
Income tax expense............. 74,014 131,934 362,273 446,414
---------- --------- --------- ---------
Net income..................... 130,623 255,878 690,183 866,340
========== ========= ========= =========
PER SHARE DATA:
Earnings per basic share $ .35 .70 1.88 2.38
Earnings per diluted share $ .35 .70 1.88 2.36
SELECTED OPERATING RATIOS:
Annualized return on
average assets.................... .33% .68% .44% .59%
Annualized return on
average equity.................... 4.77% 10.04% 6.44% 8.69%
Annualized operating expenses to
average total assets.............. 3.02% 2.83% 2.97% 2.90%
Interest rate spread during
the period........................ 2.74% 3.14% 2.85% 2.89%
Net interest margin................. 2.91% 3.38% 3.05% 3.19%
Average interest-earning assets to
average interest-bearing
liabilities....................... 111.65% 110.58% 111.07% 110.76%