EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Date: October 31, 2003
CONTACT: Paul Zogas, President (708) 598-9400
MIDLAND CAPITAL HOLDINGS CORPORATION
REPORTS FISCAL 1st QUARTER EARNINGS
AND DECLARES REGULAR 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 September 30, 2003 totaled $547,000, or $1.47 per diluted share,
compared to net income of $211,000, or $0.57 per diluted share for the quarter
ended September 30, 2002.
The increase in net income in the current quarter was due to the collection
of non-accruing loan interest in the amount of $142,000, net of income taxes, as
well as a $286,000 gain, net of income taxes, from the satisfaction of
foreclosure judgments, both of which were the result of a loan workout agreement
that was paid in full during the quarter ended September 30, 2003. Absent the
gain from these non-recurring items, net income for the quarter ended September
30, 2003 would have been $119,000, or $0.32 per diluted share. The prior year
quarter also included the collection of non-accruing loan interest under the
same loan workout agreement in the amount of $24,000, net of income taxes, or
$.06 per diluted share.
Midland Capital Holdings Corporation also announced that it will pay a
regular cash dividend of $0.17 per share for the quarter ended September 30,
2003. The dividend will be payable November 20, 2003 to shareholders of record
as of November 10, 2003.
Annualized return on average assets and annualized return on average equity
during the quarter ended September 30, 2003 were 1.37% and 19.62%, respectively,
compared to .56% and 8.06%, respectively, for the comparable prior year quarter.
Net interest income before provision for loan losses increased $100,000 to
$1.3 million in the quarter ended September 30, 2003 compared to $1.2 million in
the 2002 quarter. The increase in net interest income was primarily the result
of the collection of non-accruing loan interest during the current quarter in
the amount of $216,000 as compared to $36,000 in the prior year quarter.
-MORE-
Net of the collection of non-accruing loan interest in both periods,
discussed above, the Company's interest rate spread decreased to 2.67% for the
three months ended September 30, 2003 from 2.89% for the prior year period. The
decrease in interest rate spread was primarily due to a decrease in the
Company's average yield on interest earning assets, which declined at a faster
rate than the decrease in the average yield paid on interest costing deposits.
The decrease in interest rate spread was offset by a $1.1 million increase in
the average balance of net earning assets to $15.8 million compared with the
prior year period.
Non-interest income increased $485,000 to $791,000 in the quarter ended
September 30, 2003 as compared to the prior year quarter. The primary factors
for the increase in non-interest income in the current quarter were a $433,000
gain from the satisfaction of foreclosure judgments under the loan workout
agreement, discussed above, and a $46,000 increase in loan fees and service
charges offset by a $5,000 decrease in profit on the sale of loans and a $5,000
decrease in deposit related fees. The increase in loan fees and service charges
in the current quarter is attributed to an increase in loan origination activity
compared to the prior year period.
Non-interest expense increased $76,000 to $1.2 million in the quarter ended
September 30, 2003 as compared to the prior year quarter. The increase in
non-interest expense is primarily the result of a $75,000 increase in staffing
costs, a $12,000 increase in office occupancy expense, a $10,000 increase in
professional fees and a $3,000 increase in advertising expense offset by a
$26,000 decrease in computer software and support expense. The increase in
staffing costs is primarily attributed to a $31,000 increase in loan origination
commissions, due to an increase in lending volume and a $27,000 increase in the
cost of employee pension benefits.
Non-performing assets were .26% of total assets at September 30, 2003 and
consisted of $410,000 in non-performing loans. The allowance for loan losses
increased during the current quarter by $14,000 to $424,000, or 0.46% of total
loans, at September 30, 2003. The $14,000 increase in the allowance for loan
losses was the result of $15,000 in loan loss provisions net of $1,000 in loan
charge offs during the quarter ended September 30, 2003. At September 30, 2003
the Company's ratio of allowance for loan losses to non-performing loans was
103.35% compared to 84.89% at June 30, 2003.
At September 30, 2003 the Company's assets totaled $157.5 million, compared
to total assets of $160.0 million at June 30, 2003. Net loans receivable
decreased $1.1 million to $92.2 million at September 30, 2003. Total deposits
decreased $2.4 million to $145.1 million at September 30, 2003 from $147.5
million at June 30, 2003.
-MORE-
Stockholders' equity in the Company totaled $11.5 million at September 30,
2003 resulting in a book value per common share of $30.83 based upon 372,600
shares outstanding. At September 30, 2003 Midland Federal's capital ratios
exceeded all of its regulatory capital requirements with both tangible and core
capital ratios of 6.34% and a risk-based capital ratio of 12.91%. 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: September 30, June 30,
2003 2003
------------ -----------
Total assets................................ $157,523,818 159,976,384
Loans receivable, net....................... 92,162,705 93,299,553
Mortgage-backed securities.................. 5,012,968 6,272,466
Cash and cash equivalents................... 51,854,267 49,421,065
Investment securities....................... 3,811,875 6,388,900
Deposits.................................... 145,062,610 147,489,604
Stockholders' equity........................ 11,488,399 11,056,147
PER SHARE DATA:
Book value per common share at period end $30.83 $29.67
SELECTED ASSET QUALITY RATIOS:
Non-performing loans to
loans receivable, net..................... .45% .44%
Non-performing assets to total assets....... .26% .30%
Allowance for loan losses to
non-performing loans...................... 103.35% 84.80%
Allowance for loan losses to total loans.... .46% .44%
SELECTED OPERATIONS DATA: Three Months Ended
September 30,
-------------
2003 2002
---- ----
Total interest income....................... $1,764,827 1,958,767
Total interest expense...................... 490,728 785,134
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Net interest income......................... 1,274,099 1,173,633
Provision for loan losses 15,000 15,000
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Net interest income after provision
for loan losses........................... 1,259,099 1,158,633
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Non-interest income......................... 790,908 305,482
Non-interest expense........................ 1,221,405 1,144,847
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Income before income taxes.................. 828,602 319,268
Income tax expense.......................... 281,725 108,551
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Net income.................................. $ 546,877 210,717
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PER SHARE DATA:
Earnings per basic share $ 1.47 .58
Earnings per diluted share $ 1.47 .57
SELECTED OPERATING RATIOS:
Annualized return on average assets......... 1.37% .56%
Annualized return on average equity......... 19.62% 8.06%
Annualized operating expenses to
average total assets...................... 3.06% 3.02%
Interest rate spread during the period...... 3.24% 2.98%
Net interest margin......................... 3.40% 3.22%
Average interest-earning assets to
average interest-bearing liabilities...... 111.75% 111.18%