<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                    FORM 10-Q

[x]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended March 31, 1999

                                       OR

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

  For the transition period from ___________________ to ______________________

                        Commission File Number 333-68363


                            CAPITOL FEDERAL FINANCIAL
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


               United States                                48-1212142
      -------------------------------                  ----------------------
     (State or other jurisdiction of                       (IRS Employer
     incorporation or organization)                    Identification Number)

     700 Kansas Avenue, Topeka, Kansas                         66603
-----------------------------------------------            -------------  
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code:    (785) 235-1341


     Indicate  by check  mark  whether  the  issuer  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or for such shorter  period that the issuer
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

     Transitional Small Business Format:       Yes [ ] No [X]

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

       Common Stock                                 91,512,287
---------------------------                  --------------------------
           Class                                 Shares Outstanding
                                                 as of May 12, 1999



                                                            

<PAGE>



                                    FORM 10-Q
                            Capitol Federal Financial
                                      INDEX

<TABLE>
<CAPTION>
                                                                                   Page
PART I -- FINANCIAL INFORMATION                                                    Number
                                                                                   ------
<S>                                                                                <C>

Item 1.  Financial Statements
         Consolidated Balance Sheets at March 31, 1999 and September 30, 1998           3 
         Consolidated Statements of Income for the three and six months ended                    
          March 31, 1999 and March 31, 1998                                             4 
         Consolidated Statement of Stockholders' Equity for the six months
          ended March 31, 1999                                                          5
         Consolidated Statements of Cash Flows for the six months ended
          March 31, 1999 and March 31, 1998                                             6
         Notes to Consolidated Interim Financial Statements                             8
Item 2.  Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                                    13
Item 3.  Quantitative and Qualitative Disclosures about Market Risk                    20

PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings                                                             21
Item 2.  Changes in Securities and Use of Proceeds                                     21
Item 3.  Defaults Upon Senior Securities                                               21
Item 4.  Submission of Matters to a Vote of Security Holders                           21
Item 5.  Other Information                                                             21
Item 6.  Exhibits and Reports on Form 8-K                                              21

Signature Page                                                                         22



                                        2

</TABLE>

<PAGE>


<TABLE>
<CAPTION>

                         PART 1 -- FINANCIAL INFORMATION

                    CAPITOL FEDERAL FINANCIAL AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS


                                                                         March 31,        September 30,
                                                                           1999               1998
                                                                      --------------      -------------
                                                                         (Unaudited)
                                                                               (dollars in thousands)
<S>                                                                   <C>                 <C>
ASSETS:
Cash and cash equivalents                                             $    16,070         $   24,454
Securities purchased under agreement to resell                                  0            235,000
Investment securities held to maturity (market value of $100                                         
 and $160,712)                                                                100            160,569
Capital stock of Federal Home Loan Bank                                    45,119             43,584
Mortgage-related securities:
   Available-for-sale                                                   1,436,162            747,991
   Held-to-maturity (market value of $280,567 and $319,128)               282,771            320,379

Loans held for sale, net                                                    1,098             14,578
Loans receivable, net                                                   3,871,958          3,711,152
Premises and equipment                                                     23,904             22,785
Real estate owned, net                                                      1,756              1,964
Accrued interest receivable                                                29,030             27,998
Deferred tax asset                                                         11,488                  0
Other assets                                                               11,435              5,347
                                                                      -----------         ----------
    Total Assets                                                       $5,730,891         $5,315,801
                                                                      ===========         ==========

LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits                                                               $3,950,384         $3,894,180
Advances from Federal Home Loan Bank                                      500,000            500,000
Securities sold under agreement to repurchase                             175,000            175,000
Advance payments by borrowers for taxes and insurance                      37,064             37,426
Deferred income taxes                                                      26,793             28,995
Accounts payable and accrued expenses                                      17,364             17,868
                                                                      -----------         ----------
   Total liabilities                                                    4,706,605          4,653,469

COMMITMENTS AND CONTINGENCIES (NOTE 11)

STOCKHOLDERS' EQUITY:
Preferred stock ($0.01 par value) 50,000,000 shares                                                  
 authorized; none issued                                                        0                  0
Common stock ($0.01 par value) 450,000,000 authorized;                                               
 91,512,287 shares issued                                                     915                  0
Additional paid in capital                                                384,625                  0
Retained earnings                                                         657,250            649,199
Unrealized gains on mortgage-related securities available-for-sale         10,692             13,133
Unearned compensation, employee stock ownership plan                     (29,196)                  0
                                                                      -----------         ----------
   Total stockholders' equity                                           1,024,286            662,332

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $5,730,891         $5,315,801
                                                                      ===========         ==========

</TABLE>

See accompanying notes to consolidated interim financial statements.


                                        3

<PAGE>


<TABLE>
<CAPTION>
                    CAPITOL FEDERAL FINANCIAL AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)


                                                             Three Months Ended                  Six Months Ended
                                                                  March 31,                          March 31,
                                                         ------------------------          --------------------------        

                                                          1999              1998             1999              1998
                                                         -------          -------          --------          --------
<S>                                                      <C>              <C>              <C>               <C>

INTEREST AND DIVIDEND INCOME:
Loans receivable                                         $70,236          $66,186          $140,182          $131,444
Mortgage-related securities                               22,827           12,732            39,070            26,576
Investment securities                                        ---            7,392               765            16,204
Securities purchased under agreement to resell             1,206            1,720             3,894             1,720
Cash and cash equivalents                                    662              946             1,763             2,397
Capital stock of Federal Home Loan Bank                      859              762             1,535             1,592
                                                         -------          -------          --------          --------
   Total interest and dividend income                     95,790           89,738           187,209           179,933

INTEREST EXPENSE:
Deposits                                                  49,498           50,110            99,830           101,198
Borrowings                                                12,048            6,444            21,928            13,021
                                                         -------          -------          --------          --------
   Total interest expense                                 61,546           56,554           121,758           114,219
                                                         -------          -------          --------          --------
Net interest and dividend income                          34,244           33,184            65,451            65,714
Provision for loan losses                                    135              ---               135               ---
                                                         -------          -------          --------          --------
   Net interest and dividend income after
     provision for loan losses                            34,109           33,184            65,316            65,714

OTHER INCOME:
Automated teller and debit card transaction fees             889              819             1,762             1,590
Checking account transaction fees                            637              577             1,389             1,411
Loan fees                                                    467              596               996             1,225
Insurance commissions                                        455              356               799               686
Other, net                                                   840              668             1,451             1,435
                                                         -------          -------          --------          --------
   Total other income                                      3,288            3,016             6,397             6,347

OTHER EXPENSES:
Salaries and employee benefits                             9,833            6,474            16,193            12,481
Occupancy of premises                                      2,066            1,726             4,431             3,838
Office supplies and related expenses                         820              834             1,570             1,551
Deposit and loan transaction fees                            977              922             1,928             1,657
Advertising                                                  652              669             1,028             1,045
Federal insurance premium                                    599              601             1,169             1,211
Contribution to Foundation                                30,231                             30,231
Other, net                                                   826              900             1,723             1,667
                                                         -------          -------          --------          --------
   Total other expenses                                   46,004           12,126            58,273            23,450
                                                         -------          -------          --------          --------

Income (loss) before income tax expense                  (8,607)           24,074            13,440            48,611

Income tax expense (benefit)                             (3,266)            9,663             5,289            19,478
                                                        --------          -------          --------          --------
NET INCOME (LOSS)                                       $(5,341)          $14,411          $  8,151          $ 29,133
                                                        ========          =======          ========          ========

</TABLE>

See accompanying notes to consolidated interim financial statements.


                                        4

<PAGE>

<TABLE>
<CAPTION>

                                         CAPITOL FEDERAL FINANCIAL AND SUBSIDIARY 
                                      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                        (Unaudited)


                                                                              Unrealized
                                                  Additional                   gains on          Unearned
                                        Common      Paid-In     Retained   mortgage-related    Compensation
                                        Stock       Capital     Earnings      securities          (ESOP)          Total
                                     ---------------------------------------------------------------------------------------
<S>                                    <C>        <C>         <C>             <C>               <C>            <C>

Balance at October 1, 1998              $    -     $      -    $649,199        $13,133           $      -       $662,332
Capitalization of Mutual Holding
 Company                                     -            -        (100)             -                  -           (100)
Net income for six months ended 
 March 31, 1999                              -            -       8,151              -                  -          8,151
Unearned Compensation (ESOP)                 -            -           -              -            (30,245)       (30,245)
Issuance of 91,512,287 shares of
 $.01 par value common stock in
 initial public offering, net of
 conversion related expenses               915      384,625           -              -                  -        385,540
Amortization of unearned
 compensation, ESOP                          -            -           -              -              1,049          1,049 
Change in unrealized gain or loss
 on securities available for sale            -            -           -         (2,441)                 -         (2,441)
                                     --------------------------------------------------------------------------------------
     TOTAL                                $915     $384,625    $657,250        $10,692           $(29,196)    $1,024,286
                                     =======================================================================================

</TABLE>

See accompanying notes to consolidated interim financial statements.


                                        5

<PAGE>

<TABLE>
<CAPTION>

                    CAPITOL FEDERAL FINANCIAL AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                                            For Six Months Ended March 31,
                                                                          ---------------------------------      

                                                                               1999                 1998
                                                                          ------------          -----------      
<S>                                                                      <C>                   <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                $   8,151             $  29,133

Adjustments to reconcile net income to net cash provided
 by operating activities:

     Federal Home Loan Bank stock dividends                                  (1,535)               (1,593)
     Amortization of net deferred loan origination fees                      (5,255)                 (858)
     Provision for loan losses                                                  135                     0
     Provision for losses on real estate owned                                    0                   (11)
     Net loan origination fees capitalized                                    5,954                 1,252
     Gain on sales of real estate owned, net                                     57                   (65)
     Originations of loans held for sale                                        500                (9,985)
     Proceeds from sales of loans held for sale                              12,976                18,782
     Amortization and accretion of premiums and discounts                     2,023                  (270)
      on      mortgage related securities and investment securities
     Depreciation and amortization on premises & equipment                    1,637                 1,421
     Provision (benefit) for deferred income taxes                          (11,488)                    0
     Termination of Pension Plan                                              1,600
     Amortization of unearned compensation - ESOP                             1,049
Changes in:
     Accrued interest receivable                                             (1,033)                2,725
     Other assets                                                            (7,618)                1,410
     Income taxes payable                                                    (1,468)                 (836)
     Accounts payable and accrued expenses                                    1,863                (1,527)
                                                                         ----------             ---------
      Net cash provided by (used in) operating activities                     7,548                39,578

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of investment securities                           160,470               408,918
Purchases of investment securities                                                0              (200,000)
Purchases of securities under agreement to resell                        (1,383,410)             (271,910)
Principal collected on mortgage-related securities available-                                             
 for-sale                                                                   316,571                52,849
Purchases of mortgage-related securities available-for-sale              (1,010,909)               58,547
Principal collected on mortgage-related securities held-to-                                               
 maturity                                                                   216,068                26,669
Purchases of mortgage-related securities held-to-maturity                  (178,960)                    0
Loan originations net of principal collected on loans                                                     
 receivable                                                                (112,083)             (106,084)
Purchases of loans receivable                                               (50,731)              (65,114)
Purchases of premises and equipment, net                                     (2,756)               (2,584)
Proceeds from sales of real estate owned                                        361                 2,178
                                                                         ----------             ---------
   Net cash used in investing activities                                 (2,045,379)              (96,531)



                                        6

<PAGE>




CASH FLOWS FROM FINANCING ACTIVITIES:
Deposits, net of payments                                                    56,104                89,842
Proceeds from advances from Federal Home Loan Bank                         (300,000)              (66,000)
Repayments on advances from Federal Home Loan Bank                          300,000                66,000
Proceeds from securities sold under agreement to repurchase               1,618,410                     0
Repayments of securities sold under agreement to repurchase                       0                72,934
Proceeds from stock issuance, net                                           355,295                     0
Advance payments by borrowers for taxes and insurance                          (362)               (9,082)
                                                                         ----------             ---------
   Net cash provided by financing activities                              2,029,447               153,694
NET INCREASE (DECREASE) IN CASH AND CASH                                                                         
 EQUIVALENTS                                                                 (8,384)               96,741
CASH AND CASH EQUIVALENTS:
Beginning of Period                                                         $24,454               $31,188
End of Period                                                               $16,070              $127,929
                                                                         ==========             =========    

SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING TRANSACTIONS:
   Note received from ESOP in exchange for stock                            $30,245
                                                                         ==========       

</TABLE>

See accompanying notes to consolidated interim financial statements.




                                        7

<PAGE>



Notes to Consolidated Interim Financial Statements

1.   Basis of Financial Statement Presentation
The accompanying  consolidated  financial statements were prepared in accordance
with generally accepted accounting principles ("GAAP"). Accordingly, they do not
include  information  or  footnotes  necessary  for a complete  presentation  of
financial  position,  results of operations  and cash flows in  conformity  with
generally  accepted  accounting  principles.   However,  all  normal,  recurring
adjustments  which,  in the  opinion of  management,  are  necessary  for a fair
presentation  of  financial  statements,  have been  included.  These  financial
statements should be read in conjunction with the audited  financial  statements
and the notes thereto for the period ended  September 30, 1998  contained in the
Company's  Prospectus dated February 11, 1999. The results for the three and six
months ended March 31, 1999 are not  necessarily  indicative of the results that
may be expected for the year ended  September  30, 1999.  In  particular,  it is
noted that during the second quarter of fiscal year 1999, the Company recorded a
pre-tax  expense  of $30.2  million in  conjunction  with the  formation  of the
Foundation and $2.6 million in conjunction  with the termination of the existing
pension  plan  and the  implementation  of the  Employee  Stock  Ownership  Plan
("ESOP").

In preparing the financial statements,  management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities as of
the date of the balance sheet and revenues and expenses for the period. Material
estimates  that  are  particularly  susceptible  to  significant  change  in the
near-term relate to the  determination of the allowances for losses on loans and
real estate owned. While management believes that these allowances are adequate,
future additions to the allowances may be necessary based on changes in economic
conditions.

2.   Summary of Significant Accounting Policies
On March 31, 1999,  Capitol  Federal  Financial  (the  "Company")  completed the
reorganization  of Capitol  Federal  Savings and Loan  Association,  a federally
chartered  mutual  savings and loan ("Capitol  Federal  Savings" or the "Bank"),
into the federal  mutual  holding  company form of  ownership,  whereby the Bank
converted  into a  federally  chartered  stock  savings  bank as a wholly  owned
subsidiary of the Company, and the Company became a majority-owned subsidiary of
Capitol Federal Savings MHC, a federally  chartered  mutual holding company (the
"MHC")  (the  "Reorganization").  In  connection  with the  Reorganization,  the
Company sold  37,807,183  shares of Company  common  stock,  par value $0.01 per
share ("Company Common Stock") at $10.00 per share,  which net of issuance costs
generated  proceeds of $355.3 million,  including shares issued to the ESOP. The
Company also issued  52,192,817 shares of Company Common Stock to the MHC. As an
integral  part of the  Reorganization  and in  furtherance  of  Capitol  Federal
Savings' commitment to the communities  that it serves,  Capitol Federal Savings
and the Company established a charitable foundation known as the Capitol Federal
Savings  Foundation (the "Foundation") and contributed $15.1 million in cash and
1,512,287  shares to the  Foundation.  The  Foundation  will provide  funding to
support  education,  affordable  housing,  the United Way, and other  charitable
causes  that  will  complement   Capitol  Federal  Savings'  existing  community
activities.  In addition,  the Company  established an ESOP for the employees of
the Company  and the Bank which  became  effective  with the  completion  of the
Reorganization.

Additional information regarding the Reorganization is included in the Company's
Registration Statement on Form S-1 filed on December 4, 1998, as amended.



                                        8

<PAGE>



3.   Loan Portfolio
The  following  table  presents  the  Company's  loan  portfolio  at  the  dates
indicated.

<TABLE>
<CAPTION>

                                                March 31, 1999          September 30, 1998
                                         --------------------------  ------------------------
                                            Amount       Percent       Amount       Percent
                                         -----------   ------------  ----------   -----------
<S>                                       <C>           <C>          <C>            <C>          
Real Estate Loans:
    One- to four-family                   $3,662,927      93.65%    $3,504,799        93.47%
    Multi-family                              36,748       0.94         40,361         1.08
    Commercial                                13,508       0.35          9,069         0.24
    Construction or development               52,468       1.34         52,086         1.39
                                          ----------     ------     ----------      --------
           Total real estate loans         3,765,651      96.28      3,606,315        96.18

Other Loans:
    Consumer loans:
        Savings loans                         15,502       0.40         16,446         0.44
        Student                               19,481       0.50         20,120         0.54
        Home improvement                       2,131       0.05          2,776         0.07
        Automobile                             6,624       0.17          5,758         0.15
        Home equity                          101,306       2.59         97,829         2.61
        Other                                    350       0.01            420         0.01
                                          ----------     ------     ----------      -------
           Total consumer loans              145,394       3.72        143,349         3.82
    Commercial business loans                      8       0.00             10         0.00
                                          ----------     ------     ----------      -------

           Total other loans                 145,402       3.72        143,359         3.82
                                          ----------     ------     ----------      -------
           Total loans receivable          3,911,053     100.00%     3,749,674       100.00%

Less:
    Loans in process                          21,148                    21,690
    Deferred fees and discounts               13,772                    12,751
    Allowance for losses                       4,175                     4,081
                                          ----------                ----------
           Total loans receivable, net    $3,871,958                $3,711,152


</TABLE>

                                        9

<PAGE>



4.  Non-Performing Loans

The following  table  presents the  Company's  non-performing  loans,  including
non-accrual loans and real estate owned, at the dates indicated.


                                                  March 31,  September 30,
                                                    1999         1998
                                                -----------  -------------
Non-accruing loans:
     One-to four-family                           $6,488         $6,048
     Multi-family                                    ---            ---
     Commercial real estate                          ---            ---
     Construction or development                     ---            ---
     Consumer                                         22            181
     Commercial business                             ---            ---
                                                  ------         ------
         Total                                    $6,510         $6,229
                                                  ======         ======

Accruing loans delinquent more than 90 days:
     One- to four-family                             ---            ---
     Multi-family                                    ---            ---
     Commercial real estate                          ---            ---
     Construction or development                     ---            ---
     Consumer                                        ---            ---
     Commercial business                             ---            ---
                                                  ------         ------
         Total                                       ---            ---
                                                  ======         ======

Real Estate Owned:
     One- to four-family                          $1,893         $1,964
     Multi-family                                    ---            ---
     Commercial real estate                          ---            ---
     Construction or development                     ---            ---
     Consumer                                        ---            ---
     Commercial business                             ---            ---
                                                  ------         ------
         Total                                    $1,893         $1,964
                                                  ======         ======

         Total non-performing assets              $8,403         $8,193
                                                  ======         ======

         Total as a percentage of total assets     0.15%          0.15%
                                                  ======         ======



                                       10

<PAGE>



5.   Allowance for Loan Losses

The following table presents the Company's activity for loan losses at the dates
and for the periods indicated.


                                         For the quarter       For the six
                                             ending           months ending
                                            March 31,            March 31,
                                         ----------------     ----------------
                                           1999     1998       1999      1998
                                         -------   ------     ------    ------

Balance at the beginning of period        $4,081   $1,639     $4,081    $1,639

Charge offs:
    One- to four-family                       33      ---         33       ---
    Multi-family                             ---      ---        ---       ---
    Commercial real estate                   ---      ---        ---       ---
    Construction or development              ---      ---        ---       ---
    Consumer                                   8      ---          8       ---
    Commercial business                      ---      ---        ---       ---
                                         -------   ------     ------    ------
        Total charge-offs                     41      ---         41       ---
                                         =======   ======     ======    ======

Recoveries:
    One- to four-family                      ---      ---        ---       ---
    Multi-family                             ---      ---        ---       ---
    Commercial real estate                   ---      ---        ---       ---
    Construction or development              ---      ---        ---       ---
    Consumer                                 ---      ---        ---       ---
    Commercial business                      ---      ---        ---       ---
                                         -------   ------     ------    ------
        Total charge offs                    ---      ---        ---       ---
                                         =======   ======     ======    ======

Net charge-offs                               41      ---         41       ---
Additions charged to operations              135      ---        135       ---
Balance at end of period                  $4,175   $1,639     $4,175    $1,639
                                         =======   ======     ======    ======

6.  Savings Portfolio
The table below presents the Company's savings portfolio at the dates indicated.


<TABLE>
<CAPTION>
                                                    March 31, 1999                       September 30, 1998
                                         -----------------------------------      ---------------------------------
                                            Amount          Percent of Total        Amount       Percent of Total
                                         ------------      -----------------      -----------   -------------------
<S>                                       <C>                  <C>                 <C>              <C>

Demand deposits                            $  283,835            7.18%             $  260,440          6.69%
Passbook and passcard                         131,481            3.33                 129,180          3.32
Money market select                           293,945            7.44                 213,181          5.47
Cash fund                                     218,740            5.54                 225,356          5.79
Certificates                                3,022,383           76.51               3,066,023         78.73
                                           ----------                              ----------              

        Total deposits                     $3,954,669          100.00%             $3,898,854        100.00%
                                           ==========          ======              ==========        ======

</TABLE>

7.  Earnings Per Share
Earnings  per share for  quarters  current  and prior to March 31,  1999 are not
meaningful, as the Bank's Reorganization was not completed until March 31, 1999.


                                       11

<PAGE>



8.  Equity
At March 31, 1999, the Bank exceeded all minimum  regulatory  requirements for a
well  capitalized  institution as of March 31, 1999, with GAAP capital at 16.00%
and  risk-based  capital  of  35.30%.  The  Company  declared  a $0.10 per share
dividend on April 21st to holders of record on May 5th payable on May 21st.

9.  Recent Accounting Pronouncements
In June  1997,  FASB  issued  SFAS No. 131  "Disclosures  about  Segments  of an
Enterprise and Related Information". The Statement establishes standards for the
way that public business enterprises report information about operating segments
in annual  financial  statements  and  requires  that those  enterprises  report
selected  information  about  operating  segments in interim  financial  reports
issued to shareholders.  It also establishes  standards for related  disclosures
about  products  and  services,  geographic  areas,  and  major  customers.  The
statement is effective for the  Company's  financial  statements  for the fiscal
year  ending  September  30,  1999.  The  Company is prepared to comply with the
additional reporting requirements of this Statement and does not anticipate that
the  implementation  of  this  Statement  will  have a  material  impact  on the
consolidated financial statements.

In June  1998,  the  FASB  issued  SFAS  No.  133.  "Accounting  for  Derivative
Instruments and instruments including certain derivative instruments embedded in
other  contracts   (collectively   referred  to  as  derivatives)   and  hedging
activities.  The Statement  requires an entity to recognize all  derivatives  as
either assets or liabilities in the statement of financial  position and measure
those  instruments  at fair value.  The Statement is effective for the Company's
financial statements for the fiscal year ending September 30, 2000. The adoption
of this  Statement  is not  expected to have  material  impact on the  Company's
consolidated financial statements.

In October 1998,  the FASB issued SFAS No.134  "Accounting  for  Mortgage-Backed
Securities  Retained after the Securitization of Mortgage Loans Held for Sale by
a Mortgage Banking  Enterprise." The Statement  changes the way mortgage banking
firms  account for certain  securities  and other  interests  they retain  after
securitizing  mortgage loans that were held for sale. The statement is effective
for the Company's financial statements as of January 1, 1999. The implementation
of  this  Statement  had  no  material  impact  on  the  consolidated  financial
statements.

10.     Comprehensive Income
The only component of other comprehensive  income is the change in the estimated
fair value of mortgage-  related  securities  available-for-sale.  Comprehensive
income  (loss) was ($2.0)  million for the three months ended March 31, 1999 and
income of $5.7 million for the six months ended March 31, 1999.

11.     Commitments and Contingencies
In the normal  course of business,  the Company and its  Subsidiaries  are named
defendants in various lawsuits and counter claims. In the opinion of management,
after consultation with legal counsel,  none of the suits will have a materially
adverse effect on the financial position or results of the Company.



                                       12

<PAGE>



Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

Capitol Federal  Financial  ("Company"),  headquartered  in Topeka,  Kansas is a
federally chartered savings and loan holding company incorporated in March 1999.
The Company was organized at the direction of Capitol Federal  Savings  ("Bank")
for the  purpose  of  acquiring  all of the common  stock of the Bank  issued in
connection   with  the  conversion  of  the  Bank  from  mutual  to  stock  form
("Conversion").  On March 31, 1999, the Bank completed its  Conversion,  and the
Company  sold  37,807,183  shares of its  common  stock at a price of $10.00 per
share in a subscription offering ("Offering") to certain depositors of the Bank.
At that time, the Company also issued 52,192,817 of its common stock to the MHC.
The Conversion, the Offering and the issuance of Company common stock to the MHC
are referred to  collectively  as the  "Reorganization."  In connection with the
Reorganization,  the Company  established the Capitol Federal Savings Foundation
("Foundation")  and made a charitable  contribution of $15.1 million in cash and
1,512,287 shares of the Company's common stock to the Foundation, which resulted
in a one-time  charge relating to the funding of the Foundation of $30.2 million
($18.7 million net of tax). The net proceeds from the Offering, excluding shares
issued to the ESOP,  amounted to $355.3 million.  The Company contributed $275.0
million of the remaining $325.1 of the proceeds from the Offering to the Bank in
exchange  for all of the issued and  outstanding  shares of common  stock of the
Bank.  The Company had no  significant  assets or operations  prior to March 31,
1999. Per share data is not  applicable.  The period ended March 31, 1999 is the
Company's  first  earnings  report  as a  public  company.  Presently,  the only
significant  assets  of the  Company  are the  capital  stock of the  Bank,  the
Company's loan to the Employee Stock  Ownership Plan and the  investments of the
net proceeds from the Offering  retained by the Company.  The Company is subject
to the financial reporting  requirements of the Securities Exchange Act of 1934,
as amended.

Financial Condition
Assets.  For the six month  period  ended March 31,  1999,  total  assets of the
company  increased $415.1 million,  or 7.8%, from $5.32 billion at September 30,
1998 to $5.73  billion at March 31,  1999.  This  increase  in total  assets was
primarily  attributable  to a $160.8  million,  or 4.3%,  increase  in net loans
receivable  which  increased  from $3.71  billion at September 30, 1998 to $3.87
billion at March 31, 1999,  and a $650.6  million  increase in  mortgage-related
securities,  or 60.9%,  which increased from $1.07 billion at September 30, 1998
to $1.72 billion at March 31, 1999.  These  increases  resulted  from  continued
growth  in the  loan  portfolio,  particularly  mortgage  loans,  and  from  the
investment of  Conversion  proceeds and the use of proceeds from the maturity of
$235.0  million of  securities  sold under  agreement  to resell.  Total one- to
four-family loan  originations and purchase for the quarter ended March 31, 1999
were $329.7 million.  Total originations of consumer loans for the quarter ended
March 31, 1999 were $29.7 million.

Liabilities.  Deposits  increased $56.2 million,  or 1.4%, from $3.89 billion at
September  30,  1998,  to $3.95  billion at March 31,  1999.  This  increase was
attributable to $86.5 million of interest credits during the period. Borrowings,
at the end of the period, remained unchanged from September 30, 1998.

Equity.  Total  stockholders'  equity increased $361.9 million,  or 54.6%,  from
$662.3  million at September 30, 1998,  to $1.02 billion at March 31, 1999.  The
increase was  primarily  attributable  to the funds raised by the Company in its
Offering in connection with the Bank's Conversion.

Comparison  of  Operating  Results for the Three Months Ended March 31, 1999 and
1998 General.  For the three months ended March 31, 1999, the Company recognized
a net loss of $5.3  million,  compared  to net income of $14.4  million  for the
three months ended March 31, 1998.  Excluding  the effect of the  Reorganization
related  items,  net income was $15.0  million for the  quarter  ended March 31,
1999.

                                       13

<PAGE>



The  Company's  efficiency  ratio,   exclusive  of  the  Reorganization  related
expenses,  for the three  months  ended  March 31,  1999 was 35.83%  compared to
34.26% for the quarter ended March 31, 1998.

Net Interest  Income.  Net interest  income for the three months ended March 31,
1999 was $34.2  million,  an increase of $1.1  million from the same period last
year.  The increase was  primarily the result of an increase of $1.36 billion in
the  balance of loans  receivable  and  mortgage-related  securities  from $4.23
billion  at March 31,  1998 to $5.59  billion  at March  31,  1999  while  total
interest  bearing  liabilities  increased  $298.4  million from $4.33 billion at
March 31, 1998 to $4.63 billion at March 31, 1999.  The net interest rate spread
for the quarter ended March 31, 1999  decreased 23 basis  points.  The Company's
net interest rate spread at March 31, 1999 was 1.70%,  down 17 basis points from
1.87% at March 31, 1998.

Interest  Income.  Interest income for the three months ended March 31, 1999 was
$95.8  million,  up from $89.7 million for the same period in 1998.  The largest
component of interest  income is interest on loans.  Interest on loans increased
from $66.2  million for the three months  ended March 31, 1998 to $70.2  million
for the three months ended March 31, 1999. This increase of $4.0 million was the
result of an increase in the average balance of loans which was partially offset
by a  decrease  in the  average  yield  earned.  The  average  balance  of loans
receivable  increased $423.6 million to $3.87 billion for the three months ended
March 31, 1999  compared to $3.45  billion for the three  months ended March 31,
1998,  while the average  yield on loans  decreased 33 basis points to 7.34% for
the quarter  ended  March 31,  1999 from 7.67% for the  quarter  ended March 31,
1998. The yield on loans receivable at March 31, 1999 was 7.17%. The increase in
interest   on  loans  was   supplemented   by  an   increase   in   interest  on
mortgage-related securities.  Interest income on the mortgage-related securities
increased  $10.1 million from $12.7 million for the quarter ended March 31, 1998
to $22.8  million for the quarter ended March 31, 1999.  The average  balance of
mortgage-related  securities  increased  $877.5  million from $646.8  million at
March 31,  1998 to $1.52  billion at March 31,  1999,  while the  average  yield
decreased  from  7.03% for the  quarter  ended  March 31,  1998 to 6.49% for the
quarter ended March 31, 1999. The yield on mortgage-related  securities at March
31,  1999  was  6.58%.   The   increase   in   interest   income  on  loans  and
mortgage-related  securities  was offset by a reduction  in  interest  income on
investment  securities.  Investment  security income for the quarter ended March
31, 1999 was less than $1,000  compared  to $7.4  million for the quarter  ended
March 31, 1998.  Investment  securities were allowed to mature and were replaced
with higher rate mortgage-backed securities and CMO's.

Interest Expense.  Interest expense increased during the quarter ended March 31,
1999 to $61.5  million,  up from  $56.5  million  for the same  period  in 1998.
Substantially   all  of  the  Bank's   interest   expense  is  from  the  Bank's
interest-bearing deposits. For the quarter ended March 31, 1999 interest expense
on deposits was $49.5  million  compared to $50.1  million for the quarter ended
March 31, 1998,  a decrease of $612,000.  The decrease was due to a reduction in
interest  rates paid on  short-term  deposits,  a reduction  in the rate paid on
money market  accounts,  and  certificates of deposit maturing and renewing into
lower rate  accounts.  The  average  balance of  deposits  increased  during the
quarter ended March 31, 1999 to $3.95 billion  compared to $3.86 billion for the
quarter ended March 31, 998, an increase of $89.1 million, or 2.3%. At March 31,
1999, the average cost of deposits was 5.19%. Interest expense on borrowings for
the quarter ended March 31, 1999 was $12.0 million  compared to $6.4 million for
the quarter  ended March 31, 1998, an increase of $5.6  million,  or 87.5%.  The
average  balance of  borrowings  for the quarter ended March 31, 1999 was $875.0
million  compared to $450.0  million for the quarter  ended March 31, 1998,  and
increase of 425.0 million, or 94.4%. The increase is due to additional long-term
fixed rate  advances  from the Federal  Home Loan Bank and  short-term  advances
taken out during the quarter to pre-fund the investment of the proceeds from the
Offering  prior  to  completing  the  Reorganization.  The  average  cost of the
borrowings  for the quarter ended March 31, 1999 was 5.54% compared to 5.31% for
the quarter  ended March 31, 1998.  The average rate paid on borrowings at March
31, 1999 was 5.73%.


                                       14

<PAGE>



Provision for Loan Losses.  The  provision for loan losses of $135,000  resulted
from the  assessment  of the  estimated  losses  inherent in the loan  portfolio
resulting from the formula allowance, specific allowances for identified problem
loans and  portfolio  segments.  There were no charges to the provision for loan
losses for the quarter ended March 31, 1998.

Noninterest  Income.  Total  noninterest  income for the quarter ended March 31,
1999 was $3.3  million,  up from $3.0  million for the  quarter  ended March 31,
1998. There were no significant  changes in noninterest  income for any category
for the quarter  ended March 31,  1998  compared to the quarter  ended March 31,
1999.

Noninterest Expense.  Total noninterest expense increased $33.9 million to $46.0
million for the quarter  ended March 31, 1999  compared to $12.1 million for the
same period in 1998.  The increase in  noninterest  expense was primarily due to
Reorganization  related  activities  including the  contribution  to the Capitol
Federal Foundation of cash and stock totalling $30.2 million, the termination of
the existing pension plan of $1.6 million and the  establishment of the ESOP and
accrued ESOP benefits of $1.0  million.  Excluding  the  Reorganization  related
items,  noninterest  expense was $13.2  million for the quarter  ended March 31,
1999  compared  to $12.1  million for the quarter  ended March 31,  1998,  or an
increase  of  9.1%.  This  increase,  exclusive  of the  Reorganization  related
expense,  is due to increases in personnel expense as a result of adding two new
limited service  branches,  one full service branch and other staff increases in
support  departments  and  increased  occupancy  costs  associated  with the new
locations.

Income Tax  Expense.  Income tax  expense  decreased  from $9.7  million for the
quarter  ended March 31, 1998 to a benefit of $3.3 million for the quarter ended
March 31,  1999.  The  reduction  is  primarily  the  result of the tax  benefit
associated with the contribution to the Foundation and the other  Reorganization
related expenses.

Comparison of Operating Results for the Six Months Ended March 31, 1999 and 1998
General.  For the six months ended March 31, 1999,  the Company  recognized  net
income of $8.1  compared to net income of $29.1 million for the six months ended
March 31, 1998.  Noninterest  expense increased $34.9 million for the six months
ended March 31, 1999 compared to the same period last year. This increase was in
part  offset  by a  reduction  in  income  tax  expense  of $14.2  million.  The
efficiency ratio,  exclusive of the Reorganization related expenses, for the six
months  ended  March 31,  1999 was 36.15%  compared to 33.29% for the six months
ended March 31, 1998.

Net Interest Income. Net interest income for the six months ended March 31, 1999
was $65.5  million  compared to $65.7 million for the six months ended March 31,
1999,  an decrease of $263,000,  or 0.4%.  The average net interest  rate spread
decreased 14 basis  points from 2.00% for the six month period  ending March 31,
1998 to 1.86% for the six month period ended March 31, 1999.

Interest  Income.  Interest  income for the six months  ended March 31, 1999 was
$187.2 million,  up from $179.9 million for the six months ended March 31, 1998.
The  largest  component  of interest  income is  interest  on loans  receivable.
Interest on loans  increased  from $131.4 million for the six months ended March
31,  1998 to $140.2  million  for the six  months  ended  March 31,  1999.  This
increase of $8.8 million is the result of an increase in the average  balance of
loans  receivable  which  was  partially  offset  by  a decrease  in the average
yield earned.  The average  balance of loans  increased  $363.9 million to $3.78
billion for the six months  ended March 31, 1999 from $3.41  billion for the six
months  ended March 31,  1998.  The average  yield on loans  decreased  32 basis
points  from 7.71% for the six months  ended March 31, 1998 to 7.39% for the six
months ended March 31, 1999. The increase in interest on loans was  supplemented
by an  increase  in the  average  balance of  mortgage-related  securities.  The
average balance of  mortgage-related  securities  increased  $634.6 million,  or



                                       15

<PAGE>



93.8%,  from  $676.2  million  for the six months  ended March 31, 1998 to $1.31
billion for the six months ended March 31, 1999, while the average yield for the
six months ended March 31, 1999 was 6.54% down from 7.00% for the quarter  ended
March 31, 1998. Interest on investment  securities was $16.2 million for the six
months ended March 31, 1998  compared to $765,000 for the six months ended March
31, 1999.  Investment  securities  were allowed to mature and were replaced with
higher rate mortgage-backed securities and CMO's.

Interest  Expense.  Interest expense increased during the six month period ended
March 31, 1999 to $121.7  million from $114.2  million for the six months ending
March 31, 1998.  Substantially  all of the Bank's  interest  expense is from the
Bank's  interest-bearing  deposits.  Interest expense on deposits decreased from
$101.2  million for the six months ended March 31, 1998 to $99.8 million for the
six months ended March 31, 1999, a $1.4 million  decrease,  or 1.4%. The average
cost of deposits decreased to 5.08% for the six months ended March 31, 1999 from
5.28% for the six months  ended March 31,  1998,  or 20 basis  points.  Interest
expense on  borrowings  increased to $21.9 million from $13.0  million,  an $8.9
million  increase,  or 68.5%.  The average balance of borrowings  increased from
$450.0 million for the six months ended March 31, 1998 to $774.0 million for the
six months ended March 31, 1999.  The average  cost of  borrowings  dropped from
5.75% for the six months  ended March 31, 1998 to 5.64% for the six months ended
March 31, 1999. Additional borrowings during the year between March 31, 1998 and
March 31, 1999  lowered the average  cost of  borrowings  while at the same time
increasing the amount of borrowed money.

Provision for Loan Losses.  The  provision for loan losses of $135,000  resulted
from the  assessment  of the  estimated  losses  inherent in the loan  portfolio
resulting from the formula allowance, specific allowances for identified problem
loans and  portfolio  segments.  There were no charges to the provision for loan
losses for the six months ended March 31, 1998.

Noninterest  Income.  Total  noninterest  income for the six month  period ended
March 31, 1999 was $6.4  million,  up slightly from the $6.3 million for the six
month  period  ended  March 31,  1998.  There  were no  significant  changes  in
noninterest income between the periods.

Noninterest Expense.  Total noninterest expense increased $34.8 million to $58.3
million for the six months ended March 31, 1999,  up from $23.4  million for the
six months  ended  March 31,  1998.  The  increase  in  noninterest  expense was
primarily due to Conversion related activities including the contribution to the
Capitol  Federal  Foundation  of cash and stock  totalling  $30.2  million,  the
termination of the existing  pension plan of $1.6 million and the  establishment
of the  ESOP  and  accrued  ESOP  benefits  of $1.0  million.  Exclusive  of the
Reorganization  related  expenses,  noninterest  expense was up $2.1  million to
$25.5  million for the six months ended March 31, 1999 compared to $23.4 million
for the six months  ended March 31, 1998, or 9.0%. The increase is due to a $1.1
million  increase in  compensation  related  expenses and  $593,000  increase in
occupancy  expense.  The  increase  in  compensation  related  expenses  is  due
primarily  to the  opening of two limited  service  branches,  one full  service
branch,  and an increase in support  staff.  The increase in  occupancy  related
expenses is primarily related to the cost of operating three new locations.

Income Tax Expense.  Income tax expense decreased from $19.5 million for the six
month period ended March 31, 1998 to $5.3 million for the six months ended March
31, 1999. The reduction is primarily the result of less income before income tax
expense and the tax benefit associated with the contribution to the Foundation.

Impact of the Year 2000 Issues

General.  The Year  2000  issue  confronting  Capitol  Federal  Savings  and its
suppliers,  customers,  customers  suppliers  and  competitors,  centers  on the
inability of computer systems to recognize the year 2000 ("Y2K").

                                       16

<PAGE>



Many existing computer programs and systems  originally were programmed with six
digit dates that  provided  only two digits to identify the calendar year in the
date field. With the impending new millennium, these programs and computers will
recognize "00" as the year 1900 rather than the year 2000.

Financial  institution  regulators  recently have increased their focus upon Y2K
compliance issues and have issued guidance  concerning the  responsibilities  of
senior management and directors.  The Federal Financial Institution  Examination
Council has issued  several  interagency  statements  on Y2K Project  Management
Awareness.  These  statements  require  financial  institutions  to, among other
things,  examine the Y2K  implications of their reliance on vendors with respect
to data exchange and the potential  impact of the Y2K issue on their  customers,
suppliers and borrowers.  These statements also require each federally regulated
financial  institution  to survey its  exposure,  measure its risk and prepare a
plan to address the Y2K issue. In addition,  the federal banking regulators have
issued  safety and  soundness  guidelines  to be followed by insured  depository
institutions  to assure  resolution  of any Y2K  problems.  The federal  banking
agencies  have  assured that Y2K testing and  certification  is a key safety and
soundness  issue  in  conjunction  with  regulatory  exams  and  thus,  that  an
institution's  failure to address  appropriately  the Y2K issue could  result in
supervisory  action,  including the reduction of the  institution's  supervisory
ratings,  the denial of applications  for approval of mergers or acquisitions or
the imposition of civil money penalties.

Risk.  Like most financial  service  providers,  Capitol Federal Savings and its
operations may be significantly  affected by the Y2K issue due to its dependence
on technology and date-sensitive  data.  Computer  software,  hardware and other
equipment,  both within and outside Capitol Federal  Savings' direct control and
third parties with whom Capitol Federal Savings  electronically or operationally
interfaces  are likely to be affected.  If computer  systems are not modified in
order to be able to identify the year 2000,  many  computer  applications  could
fail or create erroneous results.  As a result,  many calculations which rely on
date  field  information,  such as  interest,  payment  or due  dates  and other
operating functions,  could generate results which are significantly  misstated,
consequently  Capitol Federal  Savings could  experience an inability to process
transactions,   prepare   statements  or  engage  in  similar  normal   business
activities.  Likewise,  under  certain  circumstances  a failure  to  adequately
address the Y2K issue could  adversely  affect the viability of Capitol  Federal
Savings'  suppliers  and creditors and the  creditworthiness  of its  borrowers.
Thus, if not adequately  addressed,  the Y2K issue could result in a significant
adverse  impact  on  Capitol  Federal  Savings'  operations  and,  in turn,  its
financial condition and results of operations.

     State of Readiness.  During April 1997,  Capitol Federal Savings formulated
its plan to address the Y2K issue.  Since that time, Capitol Federal Savings has
taken the following steps:


o    Established senior management advisory and review responsibilities;

o    Completed a company-wide inventory of application and system software;

o    Built an internal tracking database for application and vendor software;

o    Developed compliance plans and schedules for all lines of business;

o    Remediated or replaced all mission critical applications;

o    Began computer code testing;

o    Initiated vendor compliance verification;

                                       17

<PAGE>




o    Began  awareness and education  activities for employees  through  existing
     internal communication channels; and

o    Developed a process to help  educate  customers on the Y2K issue as well as
     respond to customer inquiries.

     The following  paragraphs  summarize the phases of Capitol Federal Savings'
Y2K plan:

                  Awareness Phase.  Capitol Federal  Savings' senior  management
         formally  established a Y2K plan,  and a project team was assembled for
         management  of the Y2K  project.  The  project  team  created a plan of
         action that includes  milestones,  budget  estimates,  strategies,  and
         methodologies to track and report the status of the project. Members of
         the project team also  attended  conferences  and  information  sharing
         sessions  to gain  more  insight  into  the  Y2K  issue  and  potential
         strategies for addressing it. This stage is substantially complete.

                  Assessment  Phase.  Capitol Federal  Savings'  strategies were
         further  developed  with respect to how the  objectives of the Y2K plan
         would be  achieved,  and a Y2K  business  risk  assessment  was made to
         quantify  the  extent of  Capitol  Federal  Savings'  Y2K  exposure.  A
         corporate inventory, which is periodically updated as new technology is
         acquired  and  as  systems  progress  through  subsequent  phases,  was
         developed to identify and monitor Y2K readiness for information systems
         (hardware,  software,  utilities, and vendors) as well as environmental
         systems (security systems, facilities, etc.).  Systems were prioritized
         based on business  impact and available  alternatives.  As part of this
         process,  118 vendors and 2,458  programs  were  identified  as mission
         critical.  Mission critical systems supplied by vendors were researched
         to determine Y2K readiness.  As of March 31, 1999, all mission critical
         programs were identified as or determined to be Y2K-ready.  As of March
         31, 1999,  all mission  critical  vendors had  indicated  they would be
         Y2K-ready.  If Y2K-ready  versions were not available,  Capitol Federal
         Savings began identifying functional replacements which were upgradable
         or are currently Y2K-ready,  and a formal plan was developed to repair,
         upgrade  or  replace  all  mission  critical  systems.  This  phase  is
         substantially complete.

                  Capitol Federal  Savings' larger borrowers have been evaluated
         for Y2K exposure  using a  questionnaire  developed by Capitol  Federal
         Savings'  Y2K  Business  Systems  Team.  As part of the current  credit
         approval process, all new and renewed loans are evaluated for Y2K risk.
         Capitol  Federal  Savings' loan policy  clearly  states that all loans,
         especially  commercial  real estate  loans,  require an analysis of the
         impact of Y2K issues on the  creditworthiness  of the borrower prior to
         approval.  Commercial  real estate loans  represent only 0.35% of total
         loans at  March  31,  1999,  and all are  secured  by real  estate.  No
         commercial  real estate  borrower was  identified  as mission  critical
         during the assessment  process due to the size,  nature, and collateral
         of  commercial  real estate  loans at Capitol  Federal  Savings.  While
         Capitol  Federal  Savings will  continue to monitor the progress  being
         made by its larger  borrowers in  addressing  their own Y2K issues,  to
         date  Capitol  Federal  Savings  is  generally   satisfied  with  these
         customers' responses to Capitol Federal Savings' inquiries.

                  Renovation Phase. Capitol Federal Savings' corporate inventory
         revealed  that Y2K  upgrades  were  available  for all vendor  supplied
         mission  critical  systems,  and  these  Y2K-ready  versions  have been
         delivered,  installed and have entered the validation process.  Capitol
         Federal  Savings  has  substantially  renovated  all  mission  critical
         proprietary software.


                                       18

<PAGE>



                  Validation Phase. The validation phase is designed to test the
         ability of hardware and software to accurately  process date  sensitive
         data. Capitol Federal Savings currently is in the process of validation
         testing of each mission  critical  system.  Capitol Federal Savings has
         created  a  test  environment  comprised  of  an  IBM  Multiprise  2000
         dedicated to Y2K testing which is virtually  insulated from  production
         and development environments.  Capitol Federal Savings anticipates that
         the validation phase will follow the estimated industry norm in that it
         will  absorb  at least 50% of the total  Y2K  resources  (computer  and
         personnel) over the life cycle of the project.  Capitol Federal Savings
         has increased staff in  anticipation  of that work effort.  As of March
         31, 1999,  the  validation  phase is complete for all mission  critical
         applications.  During  the  validation  testing  process  to  date,  no
         significant Y2K problems have been identified  relating to any modified
         or upgraded mission critical systems.

                  Implementation  Phase. Capitol Federal Savings' plan calls for
         putting Y2K-ready code into production before having actually completed
         Y2K validation  testing.  Y2K-ready modified or upgraded  versions have
         been  installed  and  placed  into   production  with  respect  to  all
         proprietary mission critical systems.

     Bank  Resources  Invested.  Capitol  Federal  Savings' Y2K project team has
completed the task of ensuring that all mission  critical systems across Capitol
Federal  Savings are  identified,  analyzed  for Y2K  compliance,  corrected  if
necessary,  tested,  and  changes  implemented.  The Y2K  project  team  members
represent all functional areas of Capitol Federal Savings,  including  branches,
data  processing,   loan   administration,   accounting,   item  processing  and
operations, compliance, internal audit, human resources, and marketing. The team
is headed by an Executive Vice President who reports  directly to the President.
Capitol Federal  Savings' board of directors  oversees the Y2K plan and provides
guidance and resources to and receives monthly updates from the Y2K project team
leader.

     Capitol  Federal  Savings is expensing all costs  associated  with required
system  changes as those  costs are  incurred,  and such costs are being  funded
through  operating cash flows. The total cost of the Y2K conversion  project for
Capitol  Federal   Savings  is  estimated  to  be  $2.3  million.   Expenses  of
approximately  $1.1 million were  incurred and expensed  through March 31, 1999.
Y2K expenses are not expected to exceed the budget,  and Capitol Federal Savings
does not expect  significant  increases in future data processing costs relating
to Y2K compliance.

     Contingency  Plans.  During the assessment  phase,  Capitol Federal Savings
began to develop back-up or contingency  plans for each of its mission  critical
systems.  A few  of  Capitol  Federal  Savings'  mission  critical  systems  are
dependent upon third party vendors or service providers, therefore,  contingency
plans include selecting a new vendor or service provider and converting to their
system.  In the event a current  vendor's  system  fails  during the  validation
phase,  and it is  determined  that the vendor is unable or unwilling to correct
the  failure,  Capitol  Federal  Savings  will  convert to a new  system  from a
pre-selected list of prospective  vendors. In each case, realistic trigger dates
have been established to allow for orderly and successful conversions.  For some
systems, contingency plans consist of using or reverting to manual systems until
system problems can be corrected.

     Capitol Federal Savings has identified a worst case scenario that envisions
the possibility of the lack of power and/or communication  services for a period
of time in  excess  of one day.  Contingency  planning  is an  integral  part of
Capitol  Federal  Savings' Y2K  readiness  plan.  Key  operating  personnel  are
actively  analyzing  services that will be supported during extended outages and
preparing written plans and procedures to train Bank personnel.  The contingency
plans are tested when  practical to validate  the  effectiveness  of  contingent
procedures.

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<PAGE>




     Virtually all of Capitol  Federal  Savings'  mission  critical  systems are
written  and  maintained  by  Capitol  Federal  Savings'   Information   Systems
Department. During 1998, Capitol Federal Savings hired additional programmers to
assist in completing  the project on time.  Contingency  plans have been adopted
which includes hiring more  programmers or to contract with programmers to speed
the renovation process, if necessary.  As of March 31, 1999, 100% of all mission
critical  proprietary  software  has been  renovated.  Although  there can be no
assurances,  Capitol  Federal  Savings does not anticipate any material  adverse
effect on its operations as a result of the impact of the Y2K issue.


Item 3.  Quantitative and Qualitative Disclosure About Market Risk

For a discussion of the Company's  asset and  liability  management  policies as
well as the  potential  impact of interest rate changes upon the market value of
the Company's portfolio,  see "Management's Discussion and Analysis of Financial
Condition and Results of Operations,  Asset and Liability  Management and Market
Risk" in the Company's prospectus dated February 11, 1999.




                                       20

<PAGE>



                           Part 2 -- OTHER INFORMATION

Item 1.  Legal Proceedings

Not Applicable

Item 2.  Use of Proceeds From Registered Securities

The Company's  initial  registration  statement (No.  333-68363) on Form S-1 was
declared effective on February 11, 1999. The subscription  offering commenced on
February  12,  1999 and  terminated  on March 17,  1999.  Charles  Webb & Co., a
division of Keefe,  Bruyette & Woods,  Inc.,  assisted  the  Company,  on a best
efforts  basis,  in the offering.  The sale in the offering of 37,807,183 of the
Company's  common  stock  closed  on  March  31,  1999  for  gross  proceeds  of
$378,071,830.  Net of offering costs and expenses of  approximately  $7,654,385,
the offering generated net proceeds of $370.4 million.  Of such proceeds,  $30.2
million  was  loaned  to the  Company's  ESOP  for the  purchase  by the ESOP of
3,024,574  shares  of  Common  Stock,  $275.0  million  was  paid to the Bank in
exchange  for all of the common  stock of the Bank issued in its  reorganization
from a  federally-chartered  mutual  savings  and loan to a  federally-chartered
stock savings and loan. A total of $50.0 million was retained by the Company.

Item 3.  Defaults Upon Senior Securities

Not applicable

Item 4.  Submission of Matters to a Vote of Security Holders

Not applicable

Item 5.  Other Information

Not applicable

Item 6.  Exhibits and Reports on Form 8-K



                                       21

<PAGE>



                                   Signatures


Pursuant  to the  requirement  of the  Securities  Exchange  Act  of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                 CAPITOL FEDERAL FINANCIAL




Date: May 14, 1999               By: /s/ John C. Dicus
      -------------------------     -----------------------------------------
                                     John C. Dicus, Chairman and
                                      Chief Executive Officer



Date: May 14, 1999               By: /s/ Neil F.M. McKay
      -------------------------     -----------------------------------------
                                     Neil F.M. McKay, Executive Vice President
                                      and Chief Financial Officer







                                       22

<PAGE>



                                Index to Exhibits


                                  Sequentially
                                  Numbered Page
Exhibit                           Where Attached
Number                            Exhibits are Located


27      Financial Data Schedule           24








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