SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials

MIDLAND CAPITAL HOLDINGS CORPORATION
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(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:

________________________________________________________________________________

3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):

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[_] Fee paid previously with preliminary materials:

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[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.

1) Amount previously paid:

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4) Date Filed:

________________________________________________________________________________

[MIDLAND CAPITAL HOLDINGS CORPORATION]

September 29, 2003

Dear Fellow Stockholder:

On behalf of the Board of Directors and management of Midland Capital
Holdings Corporation, we cordially invite you to attend Midland Capital's 2003
Annual Meeting of Stockholders. The meeting will be held at 2:00 p.m., local
time, on October 22, 2003, at the main office of Midland Capital located at 8929
S. Harlem Avenue, Bridgeview, Illinois.

In addition to the election of two directors, stockholders are being asked
to ratify the appointment of Cobitz, VandenBerg & Fennessy as auditors for
Midland Capital. Accordingly, your Board of Directors unanimously recommends
that you vote for each of these proposals.

We encourage you to attend the meeting in person. Whether or not you plan
to attend, however, please read the enclosed proxy statement and then complete,
sign and date the enclosed proxy and return it in the accompanying postpaid
return envelope as promptly as possible. This will save Midland Capital
additional expense in soliciting proxies and will ensure that your shares are
represented at the meeting.

Thank you for your attention to this important matter.

Very truly yours,

PAUL M. ZOGAS
Chairman of the Board,
President and Chief
Executive Officer

MIDLAND CAPITAL HOLDINGS CORPORATION
8929 South Harlem Avenue
Bridgeview, Illinois 60455
(708) 598-9400

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 22, 2003

Notice is hereby given that the 2003 Annual Meeting of Stockholders of
Midland Capital Holdings Corporation will be held at 2:00 p.m., local time, on
October 22, 2003, at the main office of Midland Capital located at 8929 South
Harlem Avenue, Bridgeview, Illinois.

A proxy card and a proxy statement for the Meeting are enclosed. The
Meeting is for the purpose of considering and acting upon:

1. The election of two directors of Midland Capital; and

2. The ratification of the appointment of Cobitz, VandenBerg & Fennessy
as independent auditors of Midland Capital for the fiscal year
ending June 30, 2004; and

such other matters as may properly come before the meeting or any adjournments
or postponements thereof. The Board of Directors is not aware of any other
business to come before the meeting.

Any action may be taken on any one of the foregoing proposals at the
meeting on the date specified above, or on any date or dates to which the
meeting may be adjourned or postponed. Stockholders of record at the close of
business on September 22, 2003 are the stockholders entitled to vote at the
meeting and any adjournments or postponements thereof. A complete list of
stockholders entitled to vote at the meeting will be available at the main
office of Midland Capital during the ten days prior to the meeting, as well as
at the meeting.

You are requested to complete, sign and date the enclosed form of proxy,
which is solicited on behalf of the Board of Directors, and to mail it promptly
in the enclosed postage paid return envelope. The proxy will not be used if you
attend and vote at the meeting in person.

By Order of the Board of Directors

Paul M. Zogas
Chairman of the Board, President
and Chief Executive Officer

Bridgeview, Illinois
September 29, 2003

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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A PRE- ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF
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PROXY STATEMENT

MIDLAND CAPITAL HOLDINGS CORPORATION
8929 South Harlem Avenue
Bridgeview, Illinois 60455
(708) 598-9400

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ANNUAL MEETING OF STOCKHOLDERS
October 22, 2003

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This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Midland Capital Holdings
Corporation to be used at the 2003 Annual Meeting of Stockholders to be held at
the main office of Midland Capital located at 8929 South Harlem Avenue,
Bridgeview, Illinois, on October 22, 2003 at 2:00 p.m., local time, and at all
adjournments or postponements of the meeting. The accompanying Notice of
Meeting, proxy card and this proxy statement are first being mailed to
stockholders on or about September 29, 2003. Certain of the information provided
herein relates to Midland Federal Savings and Loan Association, a wholly owned
subsidiary of Midland Capital.

At the meeting, the stockholders of Midland Capital are being asked to
consider and vote upon (i) the election of two directors of Midland Capital and
(ii) the ratification of the appointment of Cobitz, VandenBerg & Fennessy as the
Midland Capital's independent accountants for the fiscal year ending June 30,
2004. Your Board of Directors unanimously recommends that you vote for each of
management's nominees for election as directors and for the ratification of the
appointment of Cobitz, VandenBerg & Fennessy.

Vote Required and Proxy Information

All shares of Midland Capital common stock, par value $.01 per share,
represented at the meeting by properly executed proxies received prior to or at
the meeting, and not revoked, will be voted at the Meeting in accordance with
the instructions thereon. If no instructions are indicated, properly executed
proxies will be voted for the nominees and the adoption of the proposal set
forth in this proxy statement. Midland Capital does not know of any matters,
other than as described in the Notice of Meeting, that are to come before the
meeting. If any other matters are properly presented at the meeting for action,
the persons named in the enclosed form of proxy and acting thereunder will have
the discretion to vote on such matters in accordance with their best judgment.

Directors shall be elected by a plurality of the votes present in person
or represented by proxy at the meeting and entitled to vote on the election of
directors. Votes withheld and broker non-votes will have no effect on the
election of directors. The ratification of the appointment of auditors requires
the affirmative vote of a majority of the votes cast on the proposal. Proxies
marked to abstain will have the same effect as votes against the proposal to
ratify the appointment of the independent auditors. Broker non-votes will have
no effect on this proposal. One-third of the shares of the common stock, present
in person or represented by proxy, shall constitute a quorum for purposes of the
Meeting. Abstentions and broker non-votes are counted for purposes of
determining a quorum.

A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary of
Midland Capital at or before the meeting a written notice of revocation bearing
a later date than the proxy; (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of Midland Capital at or
before the meeting; or (iii) attending the meeting and voting in person
(although attendance at the Meeting will not in and of itself constitute
revocation of a proxy). Any written notice revoking a proxy should be delivered
to Charles A. Zogas, Secretary, at the address stated above.

Voting Securities and Principal Holders Thereof

Stockholders of record as of the close of business on September 22, 2003,
will be entitled to one vote for each share then held. As of that date, Midland
Capital had 372,600 shares of common stock issued and outstanding. The following
table sets forth information regarding share ownership of: (i) those persons or
entities known by management to beneficially own more than five percent of
Midland Capital's common stock, (ii) Midland Capital's Chief Executive Officer,
and each other executive officer whose salary and bonus for fiscal 2003 exceeded
$100,000 (the "Named Officers") and (iii) all directors, nominees and executive
officers of Midland Capital and Midland Federal as a group.

Beneficial Owner Shares Beneficially Owned Percent of Class
----------------------------------------------------------------------------------------

Over 5% Beneficial Owners

Algerd A. Brazis, Director 21,725(1) 5.83%
8929 South Harlem Avenue
Bridgeview, Illinois 60455

Jeffrey S. Halis 20,000(2) 5.37%
500 Park Avenue
Fifth Floor
New York, New York 10022

Richard A. Horstman 20,000(3) 5.37%
31 Boulder Wood Drive
Bernardsville, New Jersey 07924

Named Officers

Paul M. Zogas, Chairman of the Board, 107,907(4) 28.96%
President and Chief Executive Officer
8929 South Harlem Avenue
Bridgeview, Illinois 60455

Charles A. Zogas, Director, Executive 87,987(4) 23.61%
Vice President and Secretary
8929 South Harlem Avenue
Bridgeview, Illinois 60455

Directors and executive officers 241,444(5) 64.80%
of the Company as a group
(6 persons)

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(1) The above information is as reported in a Schedule 13D filed August 3,
1998, by Mr. Brazis. Mr. Brazis reported shared voting and investment
power with his wife and the Algerd A. and Aldona Brazis Loving Trust with
respect to the shares.

(2) The above information is as reported in a Schedule 13D filed June 29,
1999. Mr. Halis claimed sole voting and dispositive power in regards to
all 20,000 shares.

(3) The above information as reported in a Schedule 13D filed September 9,
1993.

(4) Each person has reported sole voting and investment power with respect to
the shares held by them, respectively.

(5) Includes shares held directly, held in retirement accounts, held by
certain members of the named individuals' families, or held by trusts of
which the named individuals may be deemed to have sole or shared voting or
dispositive power.

I. ELECTION OF DIRECTORS

General

Midland Capital's Board of Directors consists of six members. The Board of
Directors is divided into three classes, each of which contains one-third of the
Board of Directors. One-third of the directors are elected annually. Directors
of Midland Capital are generally elected to serve for a three-year period or
until their respective successors are elected and qualified.

The table below sets forth certain information regarding the present
members and nominees of Midland Capital's Board of Directors. The Board of
Directors acting as the nominating committee has recommended and approved the
nominees identified in the following table. Algerd Brazis and Charles A. Zogas
have been nominated for terms of three years. It is intended that the proxies
solicited on behalf of the Board of Directors (other than proxies in which the
vote is withheld as to a nominee) will be voted at the meeting "FOR" the
election of the nominees identified below. If a nominee is unable to serve, the
shares represented by all valid proxies will be voted for the election of such
substitute nominee as the Board of Directors may recommend. At this time, the
Board of Directors knows of no reason why the nominees may be unable to serve,
if elected. Except as disclosed herein, there are no arrangements or
understandings between the nominees and any other person pursuant to which the
nominees were selected.

Shares of
Position(s) Held Common Stock Percent
in the Company Director Term to Beneficially of
Name Age(1) and the Association Since(2) Expire Owned(3) Class
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NOMINEES

Algerd Brazis 88 Director 1976 2006 21,725 5.83%
Charles A. Zogas 49 Director, Executive Vice 1983 2006 87,987 23.61%
President and Secretary

DIRECTORS CONTINUING IN OFFICE

Jonas Vaznelis 83 Director 1977 2004 3,925 1.05%
Paul M. Zogas 48 Chairman of the Board, President 1982 2004 107,907 28.96%
and Chief Executive Officer

Michael J. Kukanza 43 Director 1996 2005 11,725 3.15%
Richard Taylor 53 Director and Vice President 1990 2005 8,175 2.19%

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(1) At June 30, 2003.

(2) Includes service as a director of the Association.

(3) Amounts include shares held directly as well as shares held by certain
members of the named individuals' families with respect to which shares
the respective directors may be deemed to have sole or shared voting
and/or investment power.

The business experience of each director of Midland Capital is set forth
below. All directors have held their present position for at least five years
unless otherwise indicated.

Michael J. Kukanza. Mr. Kukanza was elected to the Board of Directors in
October 1996. Mr. Kukanza is a self-employed private investor. Mr. Kukanza was a
founding General Partner of Compass Asset Management, L.L.C., a Chicago-based
asset management company, from 1997 to 2003. Prior to joining Compass Asset
Management, Mr. Kukanza was Senior Vice President, Global Foreign Exchange
Options Head at NationsBanc-CRT until April 1996. Prior to that position, Mr.
Kukanza was Managing Director responsible for Global Foreign Exchange Options at
Merrill Lynch & Company based both in New York and London from April 1989 to
September 1994. Before joining Merrill Lynch, Mr. Kukanza was a Principal in
Equity Options at O'Connor & Associates, based in Chicago, beginning in
September 1982. Mr. Kukanza holds a BA degree in Economics from the University
of Chicago.

Richard Taylor. Mr. Taylor joined Midland Federal in 1972. Since joining
Midland Federal in 1972, he has held various lending positions and has held the
position of Vice President in Charge of Lending since 1982. Mr. Taylor holds a
BS degree from Illinois State University, and is also a licensed real estate and
insurance broker.

Algerd Brazis. Mr. Brazis retired as the owner of Al's Hilltop Lounge
located in Justice, Illinois in 1983. Mr. Brazis is a Director of the Knights of
Lithuania Mid-America District and is an Officer of the Lithuanian Chamber of
Commerce.

Charles Zogas. Mr. Zogas has been the Executive Vice President and the
Chief Operations Officer of Midland Federal since 1982. He was elected a
Director in 1983, and also serves as Secretary and Treasurer. Mr. Zogas holds a
BS degree from the University of Notre Dame in Notre Dame, Indiana, and a Juris
Doctor degree from IIT/Chicago - Kent College of Law. Mr. Zogas also provides
legal services from time to time to private clients. Mr. Zogas is the brother of
Paul Zogas.

Jonas Vaznelis. Mr. Vaznelis retired as the owner and President of Gifts
International located in Chicago, Illinois, in 1995. Mr. Vaznelis is a member of
the Lithuanian Community Council of Chicago, Illinois, and the Lithuanian
Foundation, Inc. He is also a committee member of the Board of Zoning Appeals
for Beverly Shores, Indiana.

Paul Zogas. Mr. Zogas has been Chairman of the Board, President and Chief
Executive Officer since 1983, and a Director since 1982. Mr. Zogas holds a BA
degree in Economics from the University of Michigan in Ann Arbor, and a Juris
Doctor degree from De Paul University College of Law in Chicago. Mr. Zogas
provides legal services from time to time to private clients. Mr. Zogas is the
brother of Charles Zogas.

Meetings and Committees of the Board of Directors

Meetings of the Midland Capital's Board of Directors are generally held on
a quarterly basis. The Board of Directors met six times during fiscal 2003.
During fiscal 2003, no incumbent director of Midland Capital attended fewer than
75% of the aggregate of the total number of Board meetings and the total number
of meetings held by the committees of the Board of Directors on which he served.

The Board of Directors has established Executive, Audit, Loan,
Asset/Liability, Compensation and Stock Option and Incentive Plan committees.

The Executive Committee, consisting of Directors P. Zogas, C. Zogas and
Brazis, meets on an as needed basis to exercise the power of the Board in
between Board meetings. This committee did not meet during the fiscal year ended
June 30, 2003.

The Compensation Committee, composed of Directors P. Zogas, Kukanza,
Brazis, and Vaznelis, meets at least annually to make compensation
recommendations. This committee met once for the fiscal year ended June 30,
2003.

The Stock Option and Incentive Plan Committee, composed of Directors
Brazis and Vaznelis, meets to make awards under the Stock Option Plan. This
committee did not meet during the fiscal year ended June 30, 2003.

The Audit Committee consisting of Directors Brazis, Kukanza and Vaznelis
meets as needed to review recommendations of the internal auditor, and annually
to review the annual audit by the independent auditors. In fiscal 2003, this
committee met once at the company level. Midland Federal's Audit Committee has
the identical makeup of Midland Capital's Audit Committee and met three times
during fiscal 2003.

The entire Board of Directors acts as a nominating committee for selecting
nominees for election as directors. Nominations of persons for election to the
Board of Directors may be made only by or at the direction of the Board of
Directors or by any stockholder entitled to vote for the election of directors
who complies with the notice procedures set forth below.

Pursuant to the Company's bylaws, nominations for election as directors by
stockholders must be made in writing and delivered to the Secretary of the
Company at least 70 days prior to the annual meeting date. If, however, the

date of the meeting is first given or made to stockholders less than 80 days
prior to the date of the meeting, nominations must be received by the Company
not later than the close of business on the tenth day following the earlier of
the day on which notice of the date of the meeting is mailed to stockholders or
the day on which public disclosure of the date of the meeting is first made. In
addition to meeting the applicable deadline, nominations must be accompanied by
certain information specified in the Company's bylaws.

Director Compensation

Directors fees are paid to directors in the amount of $1,100 for each
regular meeting of the board attended and $150 for each special meeting attended
in fiscal 2003. Non-employee directors received a fee in the amount of $150 for
each committee meeting attended.

Executive Compensation

The following table sets forth information regarding compensation paid or
accrued by Midland Capital and Midland Federal to their Chief Executive Officer
and Vice President for services rendered during the past three fiscal years. No
other executive officer made in excess of $100,000 during the year ended June
30, 2003.

==============================================================================================================================
SUMMARY COMPENSATION TABLE
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Annual Compensation Awards
- ---------------------------------------------------------------------------------------------------------------
Restricted
Other Annual Stock All Other
Name and Principal Salary Bonus Compensation Award(s) Compensation
Position Year ($)(1) ($) ($)(2) ($)(3) ($)(4)
- ------------------------------------------------------------------------------------------------------------------------------

Paul Zogas, Chairman of the Board, 2003 $179,749 $11,675 $3,300 $ -- $ --
President and Chief Executive Officer 2002 173,295 12,566 3,300 -- --
2001 165,546 -- 1,247 21,625 --
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Richard Taylor, Vice President 2003 $108,984 $ 6,705 $ -- $ -- $ --
2002 105,199 7,216 -- -- --
2001 102,529 -- -- 8,625 --
==============================================================================================================================

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(1) Includes directors fees paid to Mr. Zogas and Mr. Taylor of $13,200 for
the years ended June 30, 2002 and 2001 and $7,800 for the year ended June
30, 2000.

(2) Represents club dues paid to Mr. Zogas.

(3) Represents the dollar value of shares of Midland Capital's stock vested
during the 2001 fiscal year and granted pursuant to a Company restricted
stock plan, based on the closing price of the common stock of $25.00 on
June 30, 2001. Mr. Zogas vested in 865 shares in 2001. Mr. Taylor vested
in 345 shares in 2001. There was a grant of 4,313 shares of stock under
this plan to Mr. Zogas and 1,725 shares to Mr. Taylor, which vested in
five equal installments with the first vesting starting on November 20,
1996.

(4) Consists of other personal benefits which, in aggregate, did not exceed
10% of total salary and bonuses reported.

No stock appreciation rights, limited stock appreciation rights or stock
options were granted to Mr. Zogas or Mr. Taylor during the fiscal year ended
June 30, 2003.

Employment Agreement with Paul Zogas. Midland Capital has a three year
employment agreement with Paul Zogas. The agreement with Paul Zogas provides for
an annual base salary in an amount not less than Mr. Zogas's salary as of the
effective date of the agreement. The term of the agreement is automatically
extended daily by one day so that the term is always three years, unless Midland
Capital has given Mr. Zogas 90 days' advance notice that the term is not to be
extended. The agreement provides for termination upon Mr. Zogas's death, for
cause or in the case of certain other events specified in the agreement.

If Mr. Zogas's employment is "involuntarily terminated" by Midland Capital
other than in connection with or within 36 months after a change in control of
Midland Capital or Midland Federal, he will be entitled to receive (i) payment
of his base salary during the remaining term of the agreement in the same manner
and at the same times received by him while employed and (ii) for the remaining
term of the agreement, substantially the same health insurance benefits as he
receives as of the date of termination. The term "involuntary termination" means
termination by Midland Capital or Midland Federal other than for cause or due to
the retirement, death or disability of Mr. Zogas, and includes a material
reduction of Mr. Zogas's current duties, benefits and responsibilities.

If Mr. Zogas's employment is involuntarily terminated in connection with
or within 36 months after a change in control of Midland Capital or Midland
Federal, he will be entitled to receive (i) a lump sum cash payment equal to
299% of his "base amount" of compensation and (ii) for the remaining term of the
agreement substantially the same health insurance benefits as he receives as of
the date of termination. The lump sum payment is subject to reduction to ensure
that all amounts payable by Midland Capital and Midland Federal to him in
connection with a change in control are deductible by Midland Capital or Midland
Federal for federal income tax purposes.

Employment Agreement with Richard Taylor. Midland Federal has an
employment agreement with Richard Taylor for a one year term. The employment
agreement with Richard Taylor provides for an initial base salary equal to his
salary in effect on the date of the contract, with an annual raise to be
determined by the Board of Directors. The contract automatically extends for one
year at each anniversary date (provided that there is a performance review of
the employee) until either the Association or Mr. Taylor gives written notice to
the contrary. The contract provides for termination upon Mr. Taylor's death, for
cause or in certain events specified by regulations of the Office of Thrift
Supervision. Under the terms of the contract, in the event that Mr. Taylor is
terminated in connection with a change in control, he may be entitled to be paid
for the remaining term of his contract as well as to receive a payment equal to
one year's salary.

The contracts provide, among other things, for participation in an
equitable manner in employee benefits applicable to executive personnel. The
employment contract may have an "anti-takeover" effect that could affect a
proposed future acquisition of control of Midland Federal by rendering it more
time consuming and expensive to remove the subject employee.

Pension Plan

Defined Benefit Pension Plan. Midland Federal sponsors a defined benefit
pension plan. Eligible employees participate in the pension plan after they
attain age 21 and following the completion of 12 months of service, provided the
employee has completed at least 1,000 hours of work during such 12-month period.
The pension plan is funded solely through contributions made by the Association.

The table below sets forth, as of June 30, 2003, estimated annual pension
benefits for individuals at age 65 payable in the form of benefit for various
levels of compensation and years of service. The figures in this table are based
upon the assumption that the individual is currently age 65 as of June 30, 2003
with a specified number of years of service. At June 30, 2003, the estimated
credited years of service of Mr. P. Zogas was 25 and of Mr. R. Taylor was 31.

Annual Pension Benefit Based on Years of Service
Average Annual ---------------------------------------------------
Compensation 10 20 30 40
-------------- ------- ------- ------- -------
$20,000 $ 2,000 $ 4,000 $ 6,000 $ 8,200
40,000 4,900 9,800 14,700 20,200
60,000 7,900 15,800 23,700 32,200
80,000 10,900 21,800 32,700 44,200
100,000 13,900 27,800 41,700 56,200
120,000 16,900 33,800 50,700 68,200
140,000 19,900 39,800 59,700 80,200

Report of the Audit Committee of the Board of Directors

Membership and Role of the Audit Committee. The Audit Committee consists
of the following members of Midland Capital's Board of Directors: Brazis,
Kukanza and Vaznelis. Each of the members of the Audit Committee is believed to
be independent as defined under the National Association of Securities Dealers'
current listing standards.

Company management is primarily responsible for the Company's financial
reporting and its internal and disclosure controls. However, the Audit Committee
is responsible for the relationship between the Company and its independent
auditor. The Board of Directors has recently adopted an audit committee charter.
Under this charter, the Committee also receives reports with respect to
financial reporting, internal controls, disclosure controls and internal
controls over financial reporting. In addition, under this charter, the
Committee reviews the Company's unaudited interim financial statements and
audited year end financial statements. A copy of the audit committee charter, is
attached hereto as Appendix A.

During the Audit Committee's meetings during fiscal 2003 and thereafter:

o Management represented to the Audit Committee that the Company's
consolidated financial statements for the year ended June 30, 2003 were
prepared in accordance with generally accepted accounting principles.

o The Audit Committee reviewed and discussed such consolidated financial
statements with management and the independent auditor.

o The Audit Committee discussed with the independent auditor the matters
required to be discussed by Statement on Auditing Standards No. 61,
including the quality (not just the acceptability) of the relevant
accounting principles, the reasonableness of the significant judgments,
and the clarity of the included disclosures.

o The Audit Committee received the written disclosures and the letter from
the independent auditor required by the Independence Standards Board
Standard No. 1 (Independence Discussions With Audit Committees) and
discussed with the independent auditor its independence from the Company
and management.

o The Audit Committee members reviewed the overall scope and plans for the
2003 audit.

o The Audit Committee met with the independent auditor (with and without
management present) to discuss the results of its examination, its
evaluation of the Company's internal controls, and the overall quality of
the Company's financial reporting.

In performing these functions, the Audit Committee acted only in an
oversight capacity. In this oversight role, the Audit Committee relied on the
work and assurances of the Company's management, which has the primary
responsibility for financial statements and reports, and on the independent
auditor which, in its report, expressed an

opinion on the conformity of the Company's financial statements to generally
accepted principles. The Audit Committee's oversight did not provide it with an
independent basis to determine whether management maintained appropriate
accounting and financial accounting standards and complied with applicable laws
and regulations. Furthermore, the Audit Committee's review and discussions with
management and the independent auditor did not assure that the Company's
financial statements were audited in accordance with generally accepted auditing
standards or that the Company's independent auditor was in fact "independent."

In reliance on the above, the Audit Committee recommended to the Board of
Directors, and the board has approved, that the audited consolidated financial
statements be included in the Company's Annual Report on Form 10-KSB for the
year ended June 30, 2003 for filing with the Securities and Exchange Commission.
The Audit Committee and the Board of Directors also have approved, subject to
stockholder ratification, the selection of the Company's independent auditor for
fiscal 2004.

Algerd Brazis Michael J. Kukanza Jonas Vaznelis

Certain Relationships and Related Transactions

Midland Federal, like many financial institutions, has followed a policy
of granting loans to eligible officers, directors and employees for the
financing of their personal residences. Loans are made in the ordinary course of
business on substantially the same terms and conditions as those of comparable
transactions prevailing at the time, and do not involve more than the normal
risk of collectibility or present other unfavorable features. Federal law
requires that all such transactions with officers and directors be on terms and
conditions comparable to those for similar transactions with non-affiliates.

No loans with reduced interest rates or fees were outstanding to any of
its directors and officers whose aggregate indebtedness exceeded $60,000 at any
time during the year ended June 30, 2003.

II. RATIFICATION OF THE APPOINTMENT OF AUDITORS

The Board of Directors has appointed Cobitz, VandenBerg & Fennessy to be
its auditors for the 2004 fiscal year, subject to the ratification of the
appointment by Midland Capital's stockholders. A representative of Cobitz,
VandenBerg & Fennessy is expected to attend the annual meeting to respond to
appropriate questions and will have an opportunity to make a statement if he or
she so desires.

During the fiscal year ended June 30, 2003, Cobitz VandenBerg & Fennessy
provided various audit and non- audit services to Midland Capital. The following
table sets forth the fees billed to Midland Capital by Cobitz VandenBerg &
Fennessy, its independent auditor for each of the last two fiscal years.

Nature of Fees Fiscal 2003 Fiscal 2002
- --------------------------------------------------------------------------------
Audit Fees $50,525 $49,200
(includes review of SEC Reports)

Other Audit Related Feeds $ -- $ --
(includes other services related to audit)

Tax Related Fees $ -- $ --

All other fees $ -- $ --

Under the current policy of the Company's Audit Committee, all services
provided by the Company's independent auditor to the Company must first be
preapproved by the Audit Committee. The Audit Committee of Midland Capital's
Board of Directors determined that the provision of services is compatible with
maintaining the independence of Cobitz, VandenBerg & Fennessy.

The Board of Directors recommends that you vote "FOR" the ratification of
the appointment of Cobitz, VandenBerg & Fennessy as Midland Capital's
independent auditors for the fiscal year ending June 30, 2004.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who beneficially own more than 10% of the Common
Stock, to file with the Securities and Exchange Commission (the "SEC") initial
reports of ownership and reports of changes in ownership of the Common Stock.
Officers, directors and greater than 10% beneficial owners are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.

To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended June 30, 2003, all Section
16(a) filing requirements applicable to its officers, directors and greater than
10% beneficial owners were met.

SHAREHOLDER PROPOSALS

In order to be eligible for inclusion in Midland Capital's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at Midland Capital's office, 8929 South
Harlem Avenue, Bridgeview, Illinois 60455, no later than June 24, 2004. Any such
proposals shall be subject to the requirements of the proxy rules adopted under
the Securities Exchange Act of 1934, as amended, the Company's certificate of
incorporation and bylaws and applicable law.

To be considered for presentation at the next annual meeting (although not
necessarily for inclusion in the Company's proxy materials), proposals must be
received at Midland Capital's main office later than August 23, 2004, provided
however, that in the event that the date of next year's annual meeting is held
before October 23, 2004 or after December 21, 2004, the stockholder proposal
must be received on or before the close of business on the later of the 60th day
prior to such annual meeting or the tenth day following the day on which notice
of the date of the annual meeting is mailed or public announcement of the date
of such meeting is made.

OTHER MATTERS

The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this proxy statement. However,
if any other matters should properly come before the Meeting, it is intended
that holders of the proxies will act in accordance with their best judgment.

The cost of solicitation of proxies will be borne by Midland Capital.
Midland Capital will reimburse brokerage firms and other custodians, nominees
and fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners of Midland Capital common stock. In addition
to solicitation by mail, directors and officers of Midland Capital and its
regular employees may solicit proxies personally or by telegraph or telephone,
without additional compensation.

By Order of the Board of Directors

Paul Zogas
Chairman of the Board, President
and Chief Executive Officer

Bridgeview, Illinois
September 29, 2003

APPENDIX A

MIDLAND CAPITAL HOLDINGS CORPORATION

AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

CHARTER

PREAMBLE

This Audit Committee Charter (the "Charter") has been adopted by the Board of
Directors of Midland Capital Holdings Corporation (the "Company"). The Audit
Committee of the Board shall review and reassess this charter annually and
recommend any proposed changes to the Board for approval.

OBJECTIVES OF COMMITTEE

o To provide assistance to the Board of Directors in fulfilling its
fiduciary responsibilities to oversee management's activities relating to
accounting, record keeping, financial reporting, internal controls,
disclosure controls and internal control over financial reporting.

o Provide a vehicle and establish a forum for the free and open
communication of views and information among the Company's directors,
independent public accounting firm, internal auditor and management.

o To review the independence of the Company's independent public accounting
firm and the objectivity of internal auditor.

o To review the adequacy and reliability of disclosures to stockholders.

o To perform the audit committee functions specified by the Securities and
Exchange Commission and the Electronic Bulletin Board of the National
Association of Securities Dealers, Inc.

o To establish and maintain a system for confidential complaints regarding
the Company's accounting, financial reporting, internal controls,
disclosure controls and internal control over financial reporting.

o The committee's duties do not include planning or conducting external or
internal audits or determining that the Company's financial statements are
complete, accurate and in accordance with generally accepted accounting
principles. Nor is it the duty of the committee to assure compliance with
laws and regulations. These are the responsibilities of management.

ROLES AND RESPONSIBILITIES

The responsibilities of the committee, if not performed by the Board of
Directors, shall include the following:

Independent Auditors:

o Appoint an independent public accounting firm for the purpose of auditing
the Company's financial statements and, if and when required, attesting to
its internal control over financial reporting.

o Assess the qualifications of the Company's public auditing firm and its
lead engagement partner. Oversee and evaluate the performance of such
person and firm; if necessary, remove them.

o Obtain annually from the Company's independent public auditing firm a
formal written statement describing all relationships between the firm and
the Company, consistent with Independence Standards Board Standard Number
1. Discuss with the Company's independent public auditing firm any
relationships that may impact the objectivity and independence of such
firm and take, or recommend that the Board take, appropriate actions with
respect to the independence of such firm from the Company.

o Resolve any disagreements between management and the Company's independent
public auditing firm regarding accounting, financial reporting, internal
controls, disclosure controls, internal control over financial reporting
and similar matters.

o Approve, in advance, all audit and non-audit services to be performed for
the Company by its independent public auditing firm, subject to applicable
law and regulation. Negotiate and approve all fees and engagement terms of
the Company's independent public auditing firm for audit and non-audit
services.

o Obtain assurance from the Company's independent public auditing firm that
Section 10A(b) of the Exchange Act has not been implicated.

o Review with the Company's independent public auditing firm the plan,
procedures and scope of its annual audit of the Company's financial
statements.

Financial Reporting Review:

o Review at least annually critical accounting policies, alternate
treatments within GAAP and significant assumptions and estimates with
respect to the Company's financial statements with its management and
independent public auditing firm. In connection with such review, review
the financial accounting and reporting treatments preferred by the
Company's independent auditing firm.

o Review and discuss the Company's audited financial statements with
management and the Company's independent public auditing firm including
all of the matters indicated in Statement of Auditing Standards Number 61.
Based on such review, recommend to the board whether such audited
financial statements should be included in the Company's Annual Report on
Form 10-KSB and Annual Report to Stockholders for the relevant fiscal
year.

o Review material written communications between the Company's independent
public auditing firm and management including the management letter and
schedule of unadjusted differences.

o Review and discuss with management and Company's independent public
auditing firm on at least an annual basis the Company's disclosure of
off-balance sheet data and non-financial data.

o Review any pro forma data to be included in the Company's public financial
reports.

o Review any proposed earnings announcement or financial press release.

o Review prior to filing the Company's Annual Reports on Form 10-KSB,
Quarterly Reports on Form 10-QSB and any other SEC disclosure filings.

o Monitor the efforts of management and the Company's independent public
auditors to cure any deficiencies noted in its financial statements or
accounting process.

Internal Controls, Disclosure Controls and Internal Control over Financial
Reporting:

o Oversee the selection, compensation and performance of the Company's
internal auditor. Assess the qualifications and independence of the
Company's internal auditor.

o Discuss with the Company's management, independent public auditing firm
and internal auditor the organization, scope, objectivity, budget and
staffing of the Company's internal audit.

o Determine that no restrictions are placed upon the scope of the internal
audit. Assess reports regarding computer systems, facilities and backup
systems.

o Review regulatory examination reports and internal audit reports and
monitor management's compliance efforts.

o Review with the Company's independent public auditing firm, internal
auditor and management, the adequacy and effectiveness of the Company's
internal controls, accounting and financial controls, disclosure controls
and, if and when implemented, internal control over financial reporting.

o Review reports of management and the Company's independent public auditing
firm on internal and quality controls including, if and when required by
applicable law or regulation, management's report on and the independent
public auditing firm attestation on internal control over financial
reporting.

o Discuss with management on a quarterly basis its review and conclusions
regarding the Company's disclosure controls and whether there has been any
changes in the Company's internal control over financial reporting.

Other:

o Discuss the Company's legal and regulatory compliance with the Company's
Chief Compliance Officer on at least an annual basis.

o Review and, to the extent required under applicable SEC and NASD rules,
approve all transactions with related parties.

o Establish procedures for (a) the receipt, retention and treatment of any
complaints received by the Company regarding accounting, financial
reporting, internal control or auditing matters and (b) the confidential,
anonymous submission by the Company's employees of concerns regarding
questionable accounting, financial reporting, internal controls, internal
control over financial reporting and auditing matters.

o Reassess the adequacy of this Charter at least annually.

ORGANIZATION

o The committee shall consist of a minimum of three outside directors of the
Company. All members must be (i) financially literate, (ii) able to read
and understand financial statements and (iii) able to satisfy applicable
NASD and SEC requirements with respect thereto. In addition, if required
by applicable SEC or NASD regulation, at least one member shall have
financial reporting knowledge and experience that would qualify him or her
as an audit committee financial expert within the meaning of such
regulation.

o All members of the committee must be free from any relationship with the
Company which would interfere with their independent judgement. Other than
in his or her capacity as a member of the board of directors or any
committee thereof, no audit committee member shall accept directly or
indirectly any fee or other compensation from the Company or any
subsidiary and no audit committee member may be an affiliated person of
the Company. No audit committee member or any of his family members shall
have been employed by the Company, its independent public auditing firm or
any of their affiliates or, received any payments from the Company (except
as set forth above), its independent public accounting firm or any of
their affiliates over the last three years. All audit committee members
must comply with the independence requirements of the NASD and the SEC.

o Required Meetings. The committee shall meet at least four times a year and
more frequently as circumstances require. The timing of meetings shall be
determined by the committee. However, at least once per year, the
committee shall have private meetings with each of the Company's
independent public auditing firm, management and the internal auditor.

o One member of the committee shall be appointed as chairman. The chairman
shall be responsible for leadership of the committee, including scheduling
and presiding over meetings, preparing agendas, and making regular reports
to the board. The chairman will also maintain regular liaison with the
Company's CEO, CFO, the lead partner of its independent public auditing
firm, the internal auditor and the general counsel.

o The committee shall have the power to conduct or authorize investigations
into any matters within its scope of responsibilities. The committee is
empowered to engage independent counsel and such other advisers as it
determines necessary or appropriate to carry out its duties.

REVOCABLE PROXY
MIDLAND CAPITAL HOLDINGS CORPORATION

[X]PLEASE MARK VOTES
AS IN THIS EXAMPLE

Annual Meeting of Stockholders
October 22, 2003

The undersigned hereby appoints the Board of Directors of Midland Capital
Holdings Corporation (the "Company"), and its survivor, with full powers of
substitution, to act as attorney and proxy for the undersigned to vote all
shares of common stock of the Company which the undersigned is entitled to vote
at the Annual Meeting of Stockholders, to be held on October 22, 2003, at 2:00
p.m., local time, and at any and all adjournments thereof, as follows:

With- For All
For hold Except
[ ] [ ] [ ]

I. The election as directors of all nominees listed (except as marked to the
contrary below):

ALGERD BRAZIS (3-year term)
CHARLES A. ZOGAS (3-year term)

INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.

For Against Abstain
[ ] [ ] [ ]

II. The ratification of the appointment of Cobitz, VandenBerg & Fennessy as
independent auditors for the Company for the fiscal year ending June 30, 2004.

In their discretion, the proxies are authorized to vote upon any other business
matters that may properly come before the Meeting or any adjournment thereof.

The Board of Directors recommends a vote "FOR" the election of the nominees
listed above and "FOR" the ratification for the appointment of Cobitz,
VandenBerg & Fennessy.

THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE NOMINEES LISTED ABOVE AND FOR THE
RATIFICATION FOR THE APPOINTMENT OF COBITZ, VANDENBERG & FENNESSY. IF ANY OTHER
BUSINESS IS PRESENTED AT THIS MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED
IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.

Please be sure to sign and date this proxy in the box below.

------------------------------------------------------------
Date

------------------------------------------------------------
Stockholder sign above

------------------------------------------------------------
Co-holder (if any) sign above

Detach above card, sign, date and mail in postage-paid envelope provided.

MIDLAND CAPITAL HOLDINGS CORPORATION

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

Should the above signed be present and elect to vote at the Meeting or at
any adjournment thereof, and after notification to the Secretary of the Company
at the Meeting of the stockholder's decision to terminate this proxy, then the
power of such attorney and proxy shall be deemed terminated and of no further
force and effect.

The above signed acknowledges receipt from the Company, prior to the
execution of this proxy, of a Notice of the Meeting, a proxy statement and the
Company's Annual Report to Stockholders for the fiscal year ended June 30, 2003.

Please sign exactly as your name appears above on this card. When signing
as attorney, executor, administrator, trustee or guardian, please give your full
title.

If shares are held jointly, each holder should sign.

PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE

If your address has changed, please correct the address in the space provided
below and return this portion with the proxy in the envelope provided.

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