Midland Capital Holdings Corporation Reaches Definitive Agreement to Be Acquired by Investor Group

BRIDGEVIEW, Ill., Sept. 12, 2023 /PRNewswire/ -- Midland Capital Holdings Corporation ("the "Company") (OTC Pink Marketplace: "MCPH"), the holding company of Midland Federal Savings and Loan Association ("Midland Federal" or the "Bank"), a federal savings and loan association headquartered in Bridgeview, Illinois, and Midfed Acquisition Corp. have reached an agreement for the Company and the Bank to be acquired by Midfed Acquisition Corp., a newly formed corporation headed by experienced bank executives and investors.

The merger agreement, which has been unanimously adopted by the boards of the Company and Midfed Acquisition Corp., provides for all-cash merger consideration equal to a percentage of the Bank's capital and the Company's net performing assets at closing, less unaccrued transaction expenses and certain other adjustments.

Based on the Bank's capital as of June 30, 2023 and assuming for estimated transaction costs and other adjustments pursuant to the merger agreement, Company shareholders are currently estimated to receive between $31.00 and $32.50 in cash consideration for each share of Company common stock (the "per share consideration"). The per share consideration ultimately received by shareholders is subject to significant adjustment based on the Bank's capital at closing and could decrease as a result of a variety of factors, including but not limited to the Company's future operating results, transaction costs and the costs to terminate certain of the Company's contracts. As a result, Company shareholders should not assume they will receive between $31.00 and $32.50 per share upon the closing of the transaction. 

The transaction is subject to customary closing conditions, including the receipt of federal bank regulatory approvals, and approval of the Company's shareholders. We currently estimate that the transaction will close in the first or second quarter of 2024.

Midland Federal operates from four full service locations in Bridgeview, Homer Glen and Chicago, Illinois. As of June 30, 2023, the Company had $117.6 million in total assets and total equity capital of $10.0 million. The proposed transaction will merge the Company into a wholly owned subsidiary of Midfed Acquisition Corp., with the Company surviving the merger. Upon consummation of the proposed transaction, Midfed Acquisition Corp. will own 100% of the outstanding shares of the Company and its banking subsidiary, Midland Federal. It is expected that Midfed Acquisition Corp. will ultimately merge with and into the Company, with the Company surviving the merger, and the shareholders of Midfed Acquisition Corp. becoming shareholders of the Company.

Kurt Fuchs, the President of Midfed Acquisition Corp., stated, "We wish to thank the current Board of Directors of Midland Federal for the opportunity to expand on the Midland Federal legacy. We are committed as equally as Midland Federal is to the customers and employees, and our investment in the Bank will allow us to expand products of the Bank, enhance technology and enhance community convenience while maintaining an exceptional customer experience."

Paul Zogas, Chief Executive Officer of the Company and the Bank, said, "We believe that Midfed Acquisition Corp.'s investment in the Bank will expand on the product offerings for our customers and community. Our customers will continue to see the same friendly faces they have always seen at Midland Federal. This is an exciting time for Midland Federal, our customers and the communities we serve."

Midland Capital Holdings Corporation and Midland Federal are being advised by Hovde Group, LLC as financial advisor and Luse Gorman, PC as legal counsel. Midfed Acquisition Corp. is being advised by Bank Advisors, Ltd. as financial advisors and Barack Ferrazzano Kirschbaum & Nagelberg LLP as legal counsel.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements include statements regarding the estimated per share consideration, the anticipated closing date of the transaction and anticipated future results of the Company and Bank. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate" and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include delays in completing the merger, including Midfed Acquisition Corp.'s inability to secure all final regulatory approvals, higher than anticipated transaction costs, increased competitive pressures, changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business in which Midland Federal is engaged, changes in the securities markets and other risks and uncertainties.

About Midland Capital Holdings Corporation and Midland Federal Savings and Loan Association

Midland Capital Holdings Corporation has served as the holding company of Midland Federal Savings and Loan Association since 1998. Midland Federal has operated continuously in the Chicago metropolitan area since its founding in 1914. Midland Federal conducts its business from its four full-service offices in Bridgeview, Homer Glen and Chicago, Illinois.

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SOURCE Midland Capital Holdings Corporation