EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release dated April 30, 2004
FOR IMMEDIATE RELEASE
Date: April 30, 2004
CONTACT: Paul Zogas, President (708) 598-9400
MIDLAND CAPITAL HOLDINGS CORPORATION
REPORTS FISCAL 3rd 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 March 31, 2004 totaled $193,000, or $0.52 per diluted share,
compared to net income of $178,000, or $0.48 per diluted share, for the quarter
ended March 31, 2003. Net income for the nine months ended March 31, 2004
totaled $858,000, or $2.30 per diluted share, compared to net income totaling
$560,000, or $1.53 per diluted share, for the nine months ended March 31, 2003.
The increase in net income in the current quarter was due to a $57,000
gain, net of income taxes, on the sale of a non-performing loan without
recourse. Absent the gain from this non-recurring item, net income for the
quarter ended March 31, 2004 would have been $136,000, or $0.36 per diluted
share. Net income in the prior year quarter included the collection of
non-accruing loan interest in the amount of $10,000, net of income taxes, or
$0.03 per diluted share, under the terms of a loan workout agreement that was
paid in full during the quarter ended September 30, 2003.
Net income in the current nine month period also included the collection of
non-accruing loan interest in the amount of $142,000, net of income taxes, and a
$286,000 gain, net of income taxes, from the satisfaction of foreclosure
judgments, both of which were the result of the payment in full of the loan
workout agreement, discussed above. Absent the gains from these non-recurring
items, net income for the nine months ended March 31, 2004 would have been
$372,000, or $1.00 per diluted share. The prior year nine month period also
included the collection of non-accruing loan interest under the same loan
workout agreement in the amount of $37,000, net of income taxes, or $0.10 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 March 31, 2004.
The dividend will be payable May 20, 2004 to shareholders of record as of May
10, 2004.
-MORE-
Annualized return on average assets and annualized return on average equity
during the quarter ended March 31, 2004 were .50% and 6.67%, respectively
compared to .45% and 6.57%, respectively, for the comparable prior year quarter.
For the nine months ended March 31, 2004, annualized return on average assets
and annualized return on average equity were .73% and 10.03%, respectively,
compared to .48% and 7.01% for the nine months ended March 31, 2003.
Net interest income decreased $11,000 to $1.14 million in the quarter ended
March 31, 2004 compared to the prior year quarter. The decrease in net interest
income was the result of the collection of $15,000 in non-accruing loan interest
in the prior year quarter from the loan workout agreement, discussed above. Net
of the collection of non-accruing loan interest in the prior year quarter, the
Company's interest rate spread increased to 2.96% in the current quarter
compared to 2.83% in the prior year quarter. The average balance of net earning
assets also increased for the quarter ended March 31, 2004 to $16.3 million from
$15.0 million in the prior year quarter.
For the nine months ended March 31, 2004 net interest income increased
$49,000 to $3.49 million. The increase in net interest income was the result of
the collection of non-accruing loan interest during the current nine month
period in the amount of $216,000 as compared to $57,000 in the prior year
period, both as a result of the loan workout agreement, discussed above. Net of
the collection of non-accruing loan interest in both nine month periods, the
Company's interest rate spread decreased to 2.79% for the nine months ended
March 31, 2004 from 2.84% for the prior year period. The decrease in interest
rate spread was offset by a $1.6 million increase in the average balance of net
earning assets to $16.2 million compared with the prior year period.
Non-interest income increased $18,000 to $285,000 in the quarter ended
March 31, 2004 from $267,000 in the quarter ended March 31, 2003. The primary
factor for the increase in non-interest income in the current quarter was an
$87,000 gain from the sale of a non-performing loan, without recourse, which
offset a $60,000 decrease in loan fees and service charges and a $13,000
decrease in deposit related fees. The decrease in loan fees and service charges
is attributed to a decrease in loan origination activity as loan originations
decreased to $4.8 million in the current quarter from $11.5 million in the prior
year quarter.
\ -MORE-
For the nine months ended March 31, 2004 non-interest income increased
$446,000 to $1.34 million from $891,000 in the prior year period. The increase
in non-interest income in the current nine month period compared with the prior
year period is primarily attributed to a $433,000 gain on the satisfaction of
foreclosure judgments resulting from the payment in full of the loan workout
agreement, discussed above, and the $87,000 gain from the non-performing loan
sale. Offsetting this gain was a $58,000 decrease in loans fees and service
charges, a $28,000 decrease in deposit related fees and a $3,000 decrease in
commission income. The decrease in loan fees and service charges in the nine
month period ended March 31, 2004 is attributed to a decrease in loan
origination activity compared to the prior year period.
Non-interest expense decreased $16,000 to $1.11 million in the quarter
ended March 31, 2004 compared to the prior year quarter. The decrease in
non-interest expense is primarily the result of a $25,000 decrease in office
occupancy expense offset by a $5,000 increase in staffing costs, a $2,000
increase in advertising expense and a $1,000 increase in data processing fees.
The increase in staffing costs is primarily attributed to a $36,000 increase in
costs for employee medical and pension benefits offset by a $32,000 decrease in
loan origination commissions, due to a decrease in lending volume.
For the nine months ended March 31, 2004 non-interest expense increased
$43,000 to $3.48 million from $3.44 million in the prior year period. The
primary factors for the increase in non-interest expense in the current nine
month period were a $69,000 increase in staffing costs, a $9,000 increase in
advertising expense, an $8,000 increase in professional fees and a $6,000
increase in data processing fees. Non-interest expense was decreased in the nine
months ended March 31, 2004 as a result of a $30,000 decrease in computer
software and support expense and a $20,000 decrease in office occupancy expense.
The increase in staffing costs is primarily attributed to a $70,000 increase in
costs for employee medical and pension benefits offset by a $24,000 decrease in
loan origination commissions compared with the prior year period.
Non-performing assets were .09% of total assets at March 31, 2004 and
consisted of $133,000 in non-performing loans. The allowance for loan losses
increased by $27,000 to $437,000, or 0.47% of total loans, at March 31, 2004
compared to $410,000, or .44% of total loans, at June 30, 2003. The $27,000
increase in the allowance for loan losses during the nine months ended March 31,
2004 was the result of $45,000 in loan loss provisions offset by $18,000 in net
loan charge offs. At March 31, 2004 the Company's ratio of allowance for loan
losses to non-performing loans was 327.58% compared to 84.80% at June 30, 2003.
-MORE-
At March 31, 2004 the Company's assets totaled $153.4 million, compared to
total assets of $160.0 million at June 30, 2003. Net loans receivable decreased
$571,000 to $92.7 million at March 31, 2004. Total deposits decreased $6.9
million to $140.6 million at March 31, 2004 from $147.5 million at June 30,
2003. The decrease in savings deposits is primarily attributed to a $7.0 million
decrease in certificate of deposit accounts as a result of increased competition
for such deposits.
Stockholders' equity in the Company totaled $11.68 million at March 31,
2004 resulting in a book value per common share of $31.34 based upon 372,600
shares outstanding. At March 31, 2004 Midland Federal's capital ratios exceeded
all of its regulatory capital requirements with both tangible and core capital
ratios of 6.73% and a risk-based capital ratio of 13.07%. 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: March 31, 2004 June 30, 2003
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Total assets................................ $153,394,570 159,976,384
Loans receivable, net....................... 92,728,430 93,299,553
Mortgage-backed securities.................. 3,813,349 6,272,466
Cash and cash equivalents................... 51,102,243 49,421,065
Investment securities....................... 1,319,063 6,388,900
Deposits.................................... 140,604,251 147,489,604
Stockholders' equity........................ 11,676,542 11,056,147
PER SHARE DATA:
Book value per common share at period end... $ 31.34 $ 29.67
SELECTED ASSET QUALITY RATIOS:
Non-performing loans to
loans receivable, net..................... .14% .44%
Non-performing assets to total assets....... .09% .30%
Allowance for loan losses to
non-performing loans...................... 327.58% 84.80%
Allowance for loan losses to total loans.... .47% .44%
SELECTED OPERATIONS DATA: Three Months Ended Nine Months Ended
March 31, March 31,
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2004 2003 2004 2003
---- ---- ---- ----
Total interest income................ $1,534,230 1,772,848 4,836,730 5,596,503
Total interest expense............... 398,178 626,161 1,346,808 2,155,096
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Net interest income.................. 1,136,052 1,146,687 3,489,922 3,441,407
Provision for loan losses............ 15,000 15,000 45,000 45,000
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Net interest income after provision
for loan losses.................... 1,121,052 1,131,687 3,444,922 3,396,407
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Non-interest income.................. 285,291 267,603 1,336,531 890,566
Non-interest expense................. 1,114,064 1,130,271 3,482,207 3,439,154
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Income before income taxes........... 292,279 269,019 1,299,246 847,819
Income tax expense................... 99,375 91,466 441,744 288,258
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Net income........................... 192,904 177,553 857,502 559,561
========= ========= ========= =========
PER SHARE DATA:
Earnings per basic share............. $ .52 .48 2.30 1.53
Earnings per diluted share........... $ .52 .48 2.30 1.53
Dividends declared per common share.. $ .17 .15 .51 .45
SELECTED OPERATING RATIOS:
Annualized return on average assets... .50% .45% .73% .48%
Annualized return on average equity... 6.67% 6.57% 10.03% 7.01%
Annualized operating expenses to
average total assets................ 2.86% 2.87% 2.94% 2.95%
Interest rate spread during the period 2.96% 2.87% 2.98% 2.89%
Net interest margin................... 3.09% 3.06% 3.12% 3.10%
Average interest-earning assets to
average interest-bearing liabilities 112.49% 111.11% 112.21% 110.88%