|UNITED STATES                                                                                                                                                                                                                                                                                                                                                 
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|SECURITIES AND EXCHANGE COMMISSION                                                                                                                                                                                                                                                                                                                            
|Washington, D.C.  20549                                                                                                                                                                                                                                                                                                                                       
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|FORM 10-Q                                                                                                                                                                                                                                                                                                                                                     
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|CAPITOL FEDERAL FINANCIAL                                                                                                                                                                                                                                                                                                                                     
|(Exact name of registrant as specified in its charter)                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                              
|United States(State or other jurisdiction of incorporation or organization)                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                              
|700 Kansas Avenue, Topeka, Kansas(Address of principal executive offices)                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                              
|Registrant's telephone number, including area code:  (785) 235-1341                                                                                                                                                                                                                                                                                           
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|                                                                                                                                                                                                                                                                                                                                                              
|Indicate by check mark whether the registrant (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 registrant was required to file such reports) and (2) has been subject to such requirements for the past 90 days.  YES  X  NO .
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|Transitional Small Business Format:    Yes [  ] No [X]                                                                                                                                                                                                                                                                                                        
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|Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.                                                                                                                                                                                                                                 
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FORM 10-QCapitol Federal FinancialINDEX

|PART I -- FINANCIAL INFORMATION                                                                                             | Page
Number
|--------------------------------------------------------------------------------------------------------------------------- | -----------
|Item 1. Financial Statements                                                                                                |            
|Consolidated Balance Sheets at December 31, 2001 and September 30, 2001                                                     | 3          
|Consolidated Statements of Income for the three months ended December 31, 2001
             and December 31, 2000           | 4          
|Consolidated Statement of Stockholders' Equity for the three months ended                   December 31, 2001               | 5          
|Consolidated Statements of Cash Flows for the three months ended 
                  December 31, 2001 and December 31, 2000 | 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                                                          | 17         
|                                                                                                                            |            
|PART II -- OTHER INFORMATION                                                                                                |            
|Item 1. Legal Proceedings                                                                                                   | 18         
|Item 2. Changes in Securities and Use of Proceeds                                                                           | 18         
|Item 3. Defaults Upon Senior Securities                                                                                     | 18         
|Item 4. Submission of Matters to a Vote of Security Holders                                                                 | 18         
|Item 5. Other Information                                                                                                   | 18         
|Item 6. Exhibits and Reports on Form 8-K                                                                                    | 18         
|                                                                                                                            |            
|Signature Page                                                                                                              | 19         

---

PART 1 -- FINANCIAL INFORMATION
CAPITOL FEDERAL FINANCIAL AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)

|                                                                     |               |  |              
|-------------------------------------------------------------------- | ------------- |  | -------------
|                                                                     | December 31,  |  | September 30,
|                                                                     | 2001          |  | 2001         
|                                                                     | (Unaudited)   |  |              
|ASSETS:                                                              |               |  |              
|Cash and cash equivalents                                            | $      29,652 |  | $    153,462 
|Investment securities held to maturity (market value of $515,933     |               |  |              
|and $520,099)                                                        | 501,916       |  | 502,283      
|Capital stock of Federal Home Loan Bank                              | 162,000       |  | 162,350      
|Mortgage-related securities:                                         |               |  |              
|Available-for-sale (amortized cost of $950,318 and $1,041,069)       | 964,567       |  | 1,059,110    
|Held-to-maturity (market value of $1,646,224 and $1,294,248)         | 1,623,300     |  | 1,248,813    
|Loans held for sale, net                                             | 17,284        |  | 16,904       
|Loans receivable, net                                                | 5,335,293     |  | 5,416,507    
|Premises and equipment                                               | 22,035        |  | 22,494       
|Real estate owned, net                                               | 1,282         |  | 1,031        
|Accrued interest receivable                                          | 43,992        |  | 47,219       
|Other assets                                                         | 4,003         |  | 5,270        
|TOTAL ASSETS                                                         | $8,705,324    |  | $8,635,443   
|                                                                     |               |  |              
|LIABILITIES AND STOCKHOLDERS' EQUITY:                                |               |  |              
|Deposits                                                             | $4,342,882    |  | $4,285,835   
|Advances from Federal Home Loan Bank                                 | 3,220,000     |  | 3,200,000    
|Other borrowings                                                     | 116,488       |  | --           
|Advance payments by borrowers for taxes and insurance                | 9,129         |  | 40,161       
|Accrued and deferred income taxes payable                            | 32,291        |  | 24,625       
|Accounts payable and accrued expenses payable                        | 38,955        |  | 36,560       
|Total Liabilities                                                    | 7,759,745     |  | 7,587,181    
|                                                                     |               |  |              
|COMMITMENTS AND CONTINGENCIES (NOTE 10)                              |               |  |              
|                                                                     |               |  |              
|STOCKHOLDERS' EQUITY:                                                |               |  |              
|Preferred stock ($0.01 par value) 50,000,000 shares                  |               |  |              
|authorized; none issued                                              | --            |  | --           
|Common stock ($0.01 par value) 450,000,000 authorized; 91,512,287    |               |  |              
|shares issued as of December 31, 2001 and September 30, 2001         | 915           |  | 915          
|Additional paid in capital                                           | 387,702       |  | 387,018      
|Retained earnings                                                    | 826,375       |  | 809,127      
|Accumulated other comprehensive income                               | 8,845         |  | 11,457       
|Unearned compensation, Employee Stock Ownership Plan                 | (23,692)      |  | (24,197)     
|Unearned compensation, Recognition and Retention Plan                | (5,562)       |  | (6,156)      
|Less shares held in treasury (16,931,373 and 11,103,005 shares as of |               |  |              
|December 31, 2001 and September 30, 2001, at cost)                   | (249,004)     |  | (129,902)    
|Total Stockholders' Equity                                           | 945,579       |  | 1,048,262    
|                                                                     |               |  |              
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                           | $8,705,324    |  | $8,635,443   
|                                                                     |               |  |              

See accompanying notes to consolidated interim financial statements.

---

CAPITOL FEDERAL FINANCIAL AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands)

|                                                 |                            |  |            
|------------------------------------------------ | -------------------------- |  | -----------
|                                                 | For the Three Months Ended
|                                                 | December 31,              
|                                                 | 2001                       |  | 2000       
|INTEREST AND DIVIDEND INCOME:                    |                            |  |            
|Loans receivable                                 | $    97,172                |  | $    99,847
|Mortgage-related securities                      | 36,347                     |  | 40,721     
|Investment securities                            | 6,517                      |  | 230        
|Cash and cash equivalents                        | 783                        |  | 1,985      
|Capital stock of Federal Home Loan Bank          | 2,248                      |  | 3,547      
|Total interest and dividend income               | 143,067                    |  | 146,330    
|                                                 |                            |  |            
|INTEREST EXPENSE:                                |                            |  |            
|Deposits                                         | 46,234                     |  | 54,123     
|Borrowings                                       | 51,261                     |  | 50,528     
|Total interest expense                           | 97,495                     |  | 104,651    
|                                                 |                            |  |            
|Net interest and dividend income                 | 45,572                     |  | 41,679     
|Provision for loan losses                        | 100                        |  | --         
|Net interest and dividend income after           |                            |  |            
|provision for loan losses                        | 45,472                     |  | 41,679     
|                                                 |                            |  |            
|OTHER INCOME:                                    |                            |  |            
|Automated teller and debit card transaction fees | 1,517                      |  | 1,348      
|Checking account transaction fees                | 1,139                      |  | 847        
|Loan fees                                        | 424                        |  | 710        
|Insurance commissions                            | 503                        |  | 549        
|Other, net                                       | 812                        |  | 727        
|Total other income                               | 4,395                      |  | 4,181      
|                                                 |                            |  |            
|OTHER EXPENSES:                                  |                            |  |            
|Salaries and employee benefits                   | 9,409                      |  | 9,031      
|Occupancy of premises                            | 2,540                      |  | 2,417      
|Office supplies and related expenses             | 790                        |  | 754        
|Deposit and loan transaction fees                | 1,256                      |  | 936        
|Advertising                                      | 805                        |  | 496        
|Federal insurance premium                        | 197                        |  | 202        
|Other, net                                       | 1,209                      |  | 1,239      
|Total other expenses                             | 16,206                     |  | 15,075     
|                                                 |                            |  |            
|Income before income tax expense                 | 33,661                     |  | 30,785     
|                                                 |                            |  |            
|Income tax expense                               | 12,897                     |  | 11,320     
|NET INCOME                                       | $20,764                    |  | $19,465    
|                                                 |                            |  |            
|Basic earnings per share                         | $0.29                      |  | $0.25      
|Diluted earnings per share                       | $0.28                      |  | $0.24      

See accompanying notes to consolidated interim financial statements.

---

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



|                                                               |            |          |               | Accumulated  |              |          |            |           
|-------------------------------------------------------------- | ---------- | -------- | ------------- | ------------ | ------------ | -------- | ---------- | ----------
|                                                               | Additional |          | Other         | Unearned     | Unearned     |          |           
|Common                                                         | Paid-In    | Retained | Comprehensive | Compensation | Compensation | Treasury |           
|Stock                                                          | Capital    | Earnings | Income        | (ESOP)       | (RRP)        | Stock    | Total     
|                                                               |            |          |               |              |              |          |            |           
|Balance at October 1, 2001                                     | $915       | $387,018 | $809,127      | $11,457      | ($24,197)    | ($6,156) | ($129,902) | $1,048,262
|Comprehensive Income:                                          |            |          |               |              |              |          |            |           
|Net income                                                     |            |          | 20,764        |              |              |          |            | 20,764    
|Change in unrealized gain on available                         |            |          |               |              |              |          |            |           
|for sale securities, net of deferred    income tax    ($1,182) |            |          |               | (2,612)      |              |          |            | (2,612)   
|Total Comprehensive income                                     |            |          |               |              |              |          |            | 18,152    
|                                                               |            |          |               |              |              |          |            |           
|Change in Employee Stock Ownership Plan                        |            | 529      |               |              | 505          |          |            | 1,034     
|Change in Recognition and Retention Plan                       |            | 4        |               |              |              | 594      |            | 598       
|Acquisition of treasury stock                                  |            |          |               |              |              |          | (121,167)  | (121,167) 
|Stock options exercised                                        |            | 151      | (231)         |              |              |          | 2,065      | 1,985     
|Dividends on common stock to stockholders    ($0.17 per share) |            |          | (3,285)       |              |              |          |            | (3,285)   
|Balance at December 31, 2001                                   | $915       | $387,702 | $826,375      | $8,845       | ($23,692)    | ($5,562) | ($249,004) | $945,579  

See accompanying notes to consolidated interim financial statements.

---

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



|                                                              | For the Three Months Ended
|------------------------------------------------------------- | --------------------------
|                                                              | December 31,              
|                                                              | 2001                      
|CASH FLOWS FROM OPERATING ACTIVITIES:                         |                           
|Net income                                                    | $20,764                   
|Adjustments to reconcile net income to net cash provided      |                           
|by operating activities:                                      |                           
|Amortization of net deferred loan origination fees            | (2,542)                   
|Provision for loan losses                                     | 100                       
|Net loan origination fees capitalized                         | 3,005                     
|Gain on sale of loans held for sale                           | (2)                       
|Loss/(Gain) on sales of real estate owned, net                | 4                         
|Originations of loans held for sale                           | (1,275)                   
|Proceeds from sales of loans held for sale                    | 897                       
|Amortization and accretion of premiums and discounts on       |                           
|mortgage-related securities and investment securities         | 1,090                     
|Depreciation and amortization on premises and equipment       | 918                       
|Amortization of capitalized cost on other borrowings          | 43                        
|Common stock committed to be released for allocation - ESOP   |                           
|Employee Stock Ownership Plan                                 | 1,034                     
|Amortization of unearned compensation - RRP                   | 594                       
|Changes in:                                                   |                           
|Accrued interest receivable                                   | 3,227                     
|Other assets                                                  | 777                       
|Income taxes payable                                          | 12,897                    
|Accounts payable and accrued expenses                         | (2,001)                   
|Net cash provided by operating activities                     | 39,530                    
|                                                              |                           
|CASH FLOWS FROM INVESTING ACTIVITIES:                         |                           
|Proceeds from maturities of investment securities             | 350                       
|Principal collected on mortgage-related securities available- |                           
|for-sale                                                      | 89,948                    
|Principal collected on mortgage-related securities held-to-   |                           
|maturity                                                      | 190,850                   
|Purchases of mortgage-related securities held-to-maturity     | (565,259)                 
|Loan originations net of principal collected                  | (96,182)                  
|Loan purchases net of principal collected                     | 176,486                   
|Purchases of premises and equipment, net                      | (459)                     
|Proceeds from sales of real estate owned                      | 529                       
|Net cash (used in) provided by investing activities           | (203,737)                 

---



|                                                                                                      |           |  |         
|----------------------------------------------------------------------------------------------------- | --------- |  | --------
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                 |           |  |         
|Dividends paid                                                                                        | (3,285)   |  | (3,060) 
|Deposits, net of payments                                                                             | 57,047    |  | 72,796  
|Proceeds from advances from Federal Home Loan Bank                                                    | 20,000    |  | --      
|Proceeds from other borrowings                                                                        | 117,000   |  | --      
|Repayments on advances from Federal Home Loan Bank                                                    | --        |  | (25,000)
|Payments for the repurchase of common stock                                                           | (121,167) |  | (16,634)
|Stock options exercised                                                                               | 1,834     |  | 260     
|Change in advance payments by borrowers for taxes and                                                 |           |  |         
|insurance                                                                                             | (31,032)  |  | (29,537)
|Net cash provided by (used in) financing activities                                                   | 40,397    |  | (1,175) 
|                                                                                                      |           |  |         
|NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS                                                  | (123,810) |  | 74,358  
|CASH AND CASH EQUIVALENTS:                                                                            |           |  |         
|Beginning of Period                                                                                   | 153,462   |  | 133,034 
|End of Period                                                                                         | $29,652   |  | $207,392
|                                                                                                      |           |  |         
|SUPPLEMENTAL SCHEDULE OF NON-CASH  
   INVESTING AND FINANCING TRANSACTIONS:                          |           |  |         
|Loans transferred to real estate owned                                                                | $849      |  | $275    
|Treasury stock issued to RRP, net of forfeited shares                                                 | --        |  | $21     
|Equity adjustment for tax effect of RRP shares                                                        | $4        |  | --      
|Equity adjustment for tax effect of disqualifying              disposition of incentive stock options | $151      |  | --      
|                                                                                                      |           |  |         

---





Notes to Consolidated Interim Financial Statements

2.   Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 141 ("SFAS 141"), "Business Combinations."  SFAS 141 requires the purchase method of accounting for business combinations initiated after June 30, 2001 and eliminates the pooling-of-interests method.  The Company does not believe that the adoption of SFAS 141 will have a significant impact on its financial statements.

In July 2001, the FASB issued Statement of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets."  SFAS 142 changes the accounting for goodwill from an amortization method to an impairment-only approach.  The Company does not believe that the adoption of SFAS 142 will have a significant impact on its financial statements.

In July 2001, the FASB issued Statement of Financial Accounting Standards No. 143 ("SFAS 143"), "Accounting for Asset Retirement Obligations."  SFAS 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs.  The Company does not believe that the adoption of SFAS 143 will have a significant impact on its financial statements.

In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144 ("SFAS 144"), "Accounting for the Impairment or Disposal of Long-lived Assets."  SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets.  The Company does not believe that the adoption of SFAS 144 will have a significant impact on its financial statements.

---

|                             | December 31, 2001 |  | September 30, 2001
|---------------------------- | ----------------- |  | ------------------
|                             | Amount            |  | % of Total        
|                             |                   |  |                   
|Real Estate Loans:           |                   |  |                   
|One- to four-family          | $5,086,267        |  | 94.63             
|Multi-family                 | 48,106            |  | 0.90              
|Commercial                   | 6,562             |  | 0.12              
|Construction and development | 43,868            |  | 0.82              
|Total real estate loans      | 5,184,803         |  | 96.47             
|                             |                   |  |                   
|Consumer loans:              |                   |  |                   
|Savings loans                | 13,038            |  | 0.25              
|Home improvement             | 1,852             |  | 0.03              
|Automobile                   | 9,764             |  | 0.18              
|Home equity                  | 163,587           |  | 3.04              
|Other                        | 1,862             |  | 0.03              
|Total consumer loans         | 190,103           |  | 3.53              
|                             |                   |  |                   
|Total loans receivable       | 5,374,906         |  | 100.00            
|                             |                   |  |                   
|Less:                        |                   |  |                   
|Loans in process             | 17,631            |  |                   
|Deferred fees and discounts  | 17,116            |  |                   
|Allowance for losses         | 4,866             |  |                   
|Total loans receivable, net  | $5,335,293        |  |                   

---

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.

|                                             | December 31, |      | September 30,
|-------------------------------------------- | ------------ | ---- | -------------
|2001                                         |              | 2001
|Non-accruing loans:                          |              |      |              
|One- to four-family                          | $6,994       |      | $6,384       
|Multi-family                                 | --           |      | --           
|Commercial real estate                       | --           |      | --           
|Construction or development                  | --           |      | --           
|Consumer                                     | 341          |      | 276          
|Total                                        | $7,335       |      | $6,660       
|                                             |              |      |              
|Accruing loans delinquent more than 90 days: |              |      |              
|One- to four-family                          | --           |      | --           
|Multi-family                                 | --           |      | --           
|Commercial real estate                       | --           |      | --           
|Construction or development                  | --           |      | --           
|Consumer                                     | --           |      | --           
|Total                                        | --           |      | --           
|                                             |              |      |              
|Real Estate Owned:                           |              |      |              
|One- to four-family                          | $1,282       |      | $1,031       
|Multi-family                                 | --           |      | --           
|Commercial real estate                       | --           |      | --           
|Construction or development                  | --           |      | --           
|Consumer                                     | --           |      | --           
|Total                                        | $1,282       |      | $1,031       
|                                             |              |      |              
|Total non-performing assets                  | $8,617       |      | $7,691       
|                                             |              |      |              
|Total as a percentage of total assets        | 0.10%        |      | 0.09%        

---

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 Three Months Ended
|December 31,                      
|                                   | 2001                       |  | 2000  
|                                   |                            |  |       
|Balance at the beginning of period | $4,837                     |  | $4,596
|                                   |                            |  |       
|Charge offs:                       |                            |  |       
|One- to four-family                | 66                         |  | 11    
|Multi-family                       | --                         |  | --    
|Commercial real estate             | --                         |  | --    
|Construction or development        | --                         |  | --    
|Consumer                           | 5                          |  | 8     
|Total charge-offs                  | 71                         |  | 19    
|                                   |                            |  |       
|Recoveries:                        |                            |  |       
|One- to four-family                | --                         |  | 2     
|Multi-family                       | --                         |  | --    
|Commercial real estate             | --                         |  | --    
|Construction or development        | --                         |  | --    
|Consumer                           | --                         |  | --    
|Total recoveries                   | --                         |  | 2     
|                                   |                            |  |       
|Net charge-offs                    | 71                         |  | 17    
|Additions charged to operations    | 100                        |  | --    
|Balance at end of period           | $4,866                     |  | $4,579

6.  Deposits

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

|                      | December 31, 2001 |  | September 30, 2001
|--------------------- | ----------------- |  | ------------------
|                      | Amount            |  | % of Total        
|                      |                   |  |                   
|Demand deposits       | $   337,006       |  | 7.76              
|Passbook and passcard | 101,384           |  | 2.33              
|Money market          | 719,454           |  | 16.57             
|Certificates          | 3,185,038         |  | 73.34             
|Total deposits        | $ 4,342,882       |  | 100.00            

---

7.   Earnings Per Share

Basic earnings per share for the quarter ended December 31, 2001 was $0.29 and diluted earnings per share for the same period was $0.28.  The Company accounts for the 3,024,574 shares acquired by its ESOP in accordance with SOP 93-6 and the shares acquired for its Recognition and Retention Plan in a manner similar to the ESOP shares; shares acquired by the ESOP and the Recognition and Retention Plan are not considered in the basic average shares outstanding until the shares are committed for allocation or vested to an employee's individual account.  The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations.

|                                             |  | Three Months Ended
|-------------------------------------------- |  | ------------------
|                                             |  | December 31,      
|                                             |  | 2001              
|Net Income                                   |  | $      20,764     
|                                             |  |                   
|Average common shares outstanding            |  | 71,137,449        
|Average allocated ESOP shares outstanding    |  | 605,462           
|Average allocated RRP shares                 |  | 513,500           
|Total basic average common shares            |  |                   
|Outstanding                                  |  | 72,256,411        
|                                             |  |                   
|Effect of dilutive Recognition and Retention |  |                   
|Plan shares                                  |  | 484,452           
|Effect of dilutive stock options             |  | 1,570,365         
|Total diluted average common shares          |  |                   
|Outstanding                                  |  | 74,311,228        
|                                             |  |                   
|Net earnings per share                       |  |                   
|Basic                                        |  | $0.29             
|Diluted                                      |  | $0.28             

8.   Equity

Stockholders' equity totaled $945.6 million at December 31, 2001 compared to $1.05 billion at September 30, 2001.  During the quarter, the company paid a $0.17 per share dividend on November 16, 2001 to holders of record as of November 2, 2001.  At its meeting on January 22, 2002, the Board  declared an $0.18 per share dividend to holders of record on February 1, 2002, payable on February 15, 2002.  On October 15, 2001, 5,852,596 shares were repurchased in the modified dutch auction tender offer at $20.00 per share.  The total number of treasury shares at December 31, 2001 was 16,931,373 with 74,580,914 shares outstanding.  The current stock repurchase plan has 2,147,404 shares authorized to be purchased.  We have repurchased 165,672 shares under the current program.  At December 31, 2001, book value per share was $13.24 compared to $13.58 book value per share at September 30, 2001.

9.   Comprehensive Income

The only component of other comprehensive income is the change in the estimated fair value of mortgage-related securities available-for-sale which was $(2.6) million for the three months ended December 31, 2001.

10.   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 Company's consolidated financial statements for either the current interim period or fiscal year ending September 30, 2002.

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

Except for the historical information contained in this filing, the matters discussed may be deemed to be forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties, including changes in economic conditions in the Company's market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Company's market area, competition, and other risks detailed from time to time in the Company's SEC reports.  Actual strategies and results in future periods may differ materially from those currently expected.  These forward-looking statements represent the Company's judgment as of the date of this filing.  The Company disclaims, however, any intent or obligation to update these forward-looking statements.

The following discussion is intended to assist in understanding the financial condition and results of operations of the Company.  The discussion includes comments relating to Capitol Federal Savings Bank (the "Bank"), since the Bank is wholly owned by the Company and comprises the majority of assets and principal source of income for the Company.

Financial Condition

Assets.  Total assets of the Company increased $69.9 million from $8.64 billion at September 30, 2001 to $8.71 billion at December 31, 2001.  The increase from September 30, 2001 was primarily due to the growth in the Company's mortgage-related securities, which was partially offset by a decrease in our loan portfolio and in cash and cash equivalents.  The change in total assets was primarily distributed as follows:

- $279.9 million, or 12.1%, increase in mortgage-related securities from $2.31 billion at September 30, 2001 to $2.59 billion at December 31, 2001,
- $123.8 million, or 80.7%, decrease in cash and cash equivalents from $153.5 million at September 30, 2001 to $29.7 million at December 31, 2001,
- $81.2 million decrease in our loan portfolio, or 1.5%, from $5.42 billion at September 30, 2001 and $5.34 billion at December 31, 2001.

The following table presents loan origination activity for the period indicated.

|                                  | For the Three Months Ended
|--------------------------------- | --------------------------
|December 31, 2001                 |                           
|Fixed Rate                        | Amount                    
|Origination - One- to four-family | $  217,422                
|Refinance - One- to four-family   | 111,927                   
|Multi-family and commercial       | 36                        
|Consumer Loans                    | 7,247                     
|                                  |                           
|Adjustable Rate                   |                           
|Origination - One- to four-family | 49,194                    
|Refinance - One- to four-family   | 34,144                    
|Commercial                        | 22                        
|Consumer Loans                    | 34,860                    
|Purchased Loans                   | 15,545                    
|Total Originations and Purchases  | $  470,397                

During the quarter the Company modified the terms on loans with a total principal balance of $503.2 million.  Those loans were modified under a program that provides current borrowers with the opportunity to modify their existing loan term or rate of interest.  The program requires a fee to be paid by the borrower of $650.00 to $950.00 and allows us to retain our relationship with the borrower who might otherwise attain home financing elsewhere.

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Our level of non-performing loans continues to be minimal because of the underwriting standards on our 1-4 family loans we originate and purchase.  At December 31, 2001 our ratio of non-performing loans to total loans was 0.14%.

Liabilities.  Deposits increased $57.0 million, or 1.3%, from $4.29 billion at September 30, 2001 to $4.34 billion at December 31, 2001.  Money Market accounts increased in balance over the period by $46.8 million.Advances from the Federal Home Loan Bank of Topeka ("FHLB") increased from September 30, 2001 by $20.0 million, or 0.63%.  The increase in the balance of advances resulted from the use of our line of credit at the FHLB.  The increase in other borrowings is the result of loans taken out by the Company for $117.0 million, the proceeds of which were used to fund the repurchase of shares tendered in the modified dutch auction tender.

Equity.  Total stockholders' equity decreased $102.7 million, or 9.8%, from $1.05 billion at September 30, 2001, to $945.6 million at December 31, 2001.  The decrease was due primarily to the repurchase of 6,027,358 shares during the quarter at a total cost of $121.2 million, dividends paid of $3.3 million and a reduction in the balance of the unrealized gain on securities available-for-sale of $2.6 million.  These were partially offset by net income during the quarter of $20.8 million.  At December 31, 2001, book value per share was $13.24 compared to $13.58 at September 30, 2001.  Our equity to assets ratio was 10.86% at December 31, 2001 compared to 12.14% at September 30, 2001.

Comparison of Operating Results for the Three Months Ended December 31, 2001 and 2000

- The increase was in part due to an increase in the average balance of investment securities of $487.1 million over the same quarter one year ago, partially offset by a decrease in the average balance of our loan portfolio of $116.1 million and a decrease in the average yield on mortgage-related securities of 72 basis points.
- The increase was also due in part to the average cost of our deposits decreasing 115 basis points to 4.29% compared to the same quarter one year ago.  This was partially offset by the total of average interest-bearing liabilities increasing $410.3 million from $7.16 billion at December 31, 2000 to $7.58 billion at December 31, 2001.
- The net interest margin for the quarter ended December 31, 2001 increased 9 basis points to 2.13% from 2.04% for the quarter ended December 31, 2000.  The Company's net interest rate spread at December 31, 2001 was 1.61%, 20 basis points higher than at December 31, 2000.

- Interest on loans decreased from $99.8 million for the three months ended December 31, 2000 to $97.2 million for the three months ended December 31, 2001.  This decrease of $2.6 million was primarily the result of a decrease in the average balance of loans and a decrease in the average yield.  The average balance of loans receivable decreased $116.1 million to $5.40 billion for the three months ended December 31, 2001 compared to $5.51 billion for the same period one year ago, while the average yield on loans decreased 4 basis points to 7.20% for the quarter ended December 31, 2001 from 7.24% for the quarter ended December 31, 2000.  The yield on loans receivable at December 31, 2001 was 7.00%.
- Interest income on mortgage-related securities decreased $4.4 million from $40.7 million for the quarter ended December 31, 2000 to $36.3 million for the quarter ended December 31, 2001.  The decrease was due primarily to a decrease in average yield.  The average yield decreased 72 basis points from 6.91% for the quarter ended December 31, 2000 to 6.19% for the quarter ended December 31, 2001.  The yield on mortgage-related securities at December 31, 2001 was 6.21%.

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- Interest income on investment securities increased $6.3 million from $230,000 for the quarter ended December 31, 2000 to $6.5 million for the quarter ended December 31, 2001.  This increase was due primarily to an increase in the average balance of $487.1 million.  The average balance of these assets during the quarter was $502.2 million with an average yield of 5.19%.
- Dividend income on capital stock in the FHLB for the quarter ended December 31, 2001 was $2.2 million compared to $3.5 million for the quarter ended December 31, 2000, a decrease of $1.3 million.  The average balance of FHLB stock increased $936,000 from $161.3 million at December 31, 2000 to $162.2 million at December 31, 2001.  The average yield during the quarter was 5.50% compared to 8.73% for the same quarter one year ago.

- For the quarter ended December 31, 2001 interest expense on deposits was $46.2 million compared to $54.1 million for the quarter ended December 31, 2000, a decrease of $7.9 million.  The average balance of deposits during the quarter ended December 31, 2001 was $4.28 billion compared to $3.94 billion for the quarter ended December 31, 2000, an increase of $331.8 million, or 8.4%.  The average rate paid on deposits for the quarter ended December 31, 2001 was 4.29% compared to 5.44% for the quarter ended December 31, 2000, a decrease of 115 basis points.  At December 31, 2001, the average cost of deposits was 4.03%.
- Interest expense on borrowings for the quarter ended December 31, 2001 was $51.3 million compared to $50.5 million for the quarter ended December 31, 2000, an increase of $733,000, or 1.5%.  Interest expense during the quarter of $1.1 million was attributed to the loan acquired to purchase shares in the modified dutch auction tender.  The average balance of all borrowings for the quarter ended December 31, 2001 was $3.30 billion compared to $3.22 billion for the quarter ended December 31, 2000, an increase of $78.6 million, or 2.4%.  The average cost of all borrowings for the quarter ended December 31, 2001 was 6.09% compared to 6.14% for the quarter ended December 31, 2000.  The average rate paid on all borrowings at December 31, 2001 was 6.05%.



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Liquidity and Commitments

The Bank's liquidity, represented by cash and cash equivalents and mortgage-related securities available for sale, is a product of its operating, investing and financing activities.  The Bank's primary sources of funds are deposits, advances from the FHLB, prepayments, and maturities of outstanding loans and mortgage-related securities, other short-term investments and funds provided from operations.  While scheduled payments from the amortization of loans and mortgage-related securities and short-term investments are relatively predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition.  In addition, we invest excess funds in short-term interest-earning assets, which provide liquidity to meet lending requirements.  We utilize FHLB advances to provide funds for our lending and investment activities and as an interest rate risk management tool.

Liquidity management is both a daily and a long-term function of business management.  Excess liquidity is generally invested in short-term investments such as overnight deposits or U.S. agency securities.  We use our sources of funds primarily to meet our ongoing commitments, to pay maturing certificates of deposit and savings withdrawals, to fund loan commitments and to maintain our portfolio of mortgage-related securities.

At December 31, 2001:

- The total approved loan origination and purchase commitments outstanding amounted to $274.0 million.
- The unadvanced portion of construction loans was $17.6 million.
- Unused home equity lines of credit were $227.3 million.
- Outstanding letters of credit totaled $590,931.
- Certificates of deposit scheduled to mature in one year or less, totaled $1.81 billion.

Based on historical experience, management believes that a significant portion of maturing deposits will remain with the Bank.  We anticipate that we will continue to have sufficient funds, through repayments, deposits and borrowings, to meet our current commitments.

Capital

Consistent with our goals to operate a sound and profitable financial organization, we actively seek to maintain a "well capitalized" institution in accordance with regulatory standards.  Total equity for the Bank was $962.5 million at December 31, 2001, or 11.06% of total assets on that date.  As of December 31, 2001, the Bank exceeded all capital requirements of the Office of Thrift Supervision.  The Bank's regulatory capital ratios at December 31, 2001 were as follows: Tier I (leverage) capital, 10.9%; Tier I risk-based capital, 26.7%; and total risk-based capital, 26.6%.  The regulatory capital requirements to be considered well capitalized are 5.0%, 6.0%, and 10.0%, respectively.

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For a complete 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 Annual Report for the year ended September 30, 2001.

The asset and liability management committee regularly reviews the interest rate risk position of the Bank by forecasting the impact of alternative interest rate environments on net interest income and measuring the market value of portfolio equity at various dates.  The market value of portfolio equity is defined as the net present value of an institution's existing assets, liabilities and off-balance sheet instruments.  The present values are determined in alternative interest rate environments and evaluated against the potential changes in market value of portfolio equity.

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Part 2 -- OTHER INFORMATION

Item 1.  Legal Proceedings

Not Applicable

Item 2.  Change in Securities and Use of Proceeds

Not applicable

Item 3.  Defaults Upon Senior Securities

Not applicable

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

At the Annual Meeting of Shareholders for the fiscal year ended September 30, 2001, held January 22, 2002, two matters were presented to shareholders.  Shareholders elected Robert B. Maupin, Marilyn S. Ward, and Carl W. Quarnstrom to three-year terms as directors.  Shareholders also ratified the appointment of Deloitte & Touche LLP as auditors for the fiscal year ending September 30, 2002.  The vote's casts as to each matter are set forth below:

|Proposal                                                                     | Number of Votes
|---------------------------------------------------------------------------- | ---------------
|                                                                             |                
|                                                                             | For            
|Election of the following directors for the terms indicated                  |                
|Robert B. Maupin (three years)                                               | 71,535,650     
|Marilyn S. Ward (three years)                                                | 72,538,836     
|Carl W. Quarnstrom (three years)                                             | 71,538,466     
|The following directors had their term of office continue after the meeting: |                
|B. B. Anderson                                                               |                
|Frederick P. Reynolds                                                        |                
|John B. Dicus                                                                |                
|John C. Dicus                                                                |                

|Proposal                                           | Number of Votes
|-------------------------------------------------- | ---------------
|                                                   |                
|                                                   | For            
|Ratification of Deloitte & Touche LLP as auditors. | 71,639,407     



Item 5.  Other Information

Not applicable

Item 6.  Exhibits and Reports on Form 8-K

No reports on Form 8-K were filed by the Company during the quarter ended December 31, 2001.



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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: | February 13, 2002 |  | By:                      
|Date: | February 13, 2002 |  | By:                      

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