<PAGE>   1
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

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

For Quarterly Period ended June 30, 1997

                                       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 no.  0-20863

                         CAPITAL FACTORS HOLDING, INC.
                         ------------------------------
             (Exact name of Registrant as Specified in its Charter)

              FLORIDA                                 65-0500757
              -------                                 ----------
  (State or other Jurisdiction of                  (I.R.S. Employer
  Incorporation or Organization)                   Identification Number)

     120 EAST PALMETTO PARK ROAD, SUITE 500, BOCA RATON, FLORIDA    33432
     ---------------------------------------------------------------------
     (Address of Principal Executive Offices)                    (Zip Code)

                                 (561) 346-3511
                                 --------------
              (Registrant's Telephone Number, Including Area Code)

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 filing
requirements for the past 90 days.

                               X      Yes            No
                          -----------     ----------

 As of August 13, 1997 there were 12,301,600 shares of the registrant's Common
 Stock outstanding.

================================================================================



<PAGE>   2

ITEM 1.

                          PART I. FINANCIAL INFORMATION
                 CAPITAL FACTORS HOLDING, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>

                                                                                June 30,          December 31,
                                                                                  1997                1996
                                                                        -------------------   ------------------
                                                                              (Unaudited)
<S>                                                                            <C>                  <C>        
    ASSETS
      Cash                                                                     $30,436,645          $28,101,237
      Restricted cash                                                            8,130,000            6,562,500
      Receivables                                                              538,900,496          490,977,592
        Unearned discounts                                                      (2,591,369)          (2,436,301)
        Allowance for credit losses                                             (3,245,491)          (2,993,534)
                                                                        -------------------   ------------------
      Receivables, net                                                         533,063,636          485,547,757
      Property and equipment, net                                                4,199,817            3,095,157
      Other assets                                                               8,501,691            7,260,672
                                                                        -------------------   ------------------
    TOTAL                                                                     $584,331,789         $530,567,323
                                                                        ===================   ==================

    LIABILITIES AND STOCKHOLDERS' EQUITY

    LIABILITIES
      Due to affiliates                                                         $3,977,251         $  1,310,304
      Capital Factors variable rate asset backed certificates                  218,884,515          175,000,000
      Note payable to affiliate                                                 73,653,000           70,131,000
      Other borrowings                                                          37,200,000           25,900,000
      Due to factoring clients                                                 176,529,296          191,488,668
      Other liabilities                                                          6,539,718            4,648,892
                                                                        -------------------   ------------------
        Total liabilities                                                     $516,783,780         $468,478,864
                                                                        ===================   ==================

    COMMITMENTS AND CONTINGENCIES

    STOCKHOLDERS' EQUITY
      Common stock, $0.01 par value, 25,000,000
       shares authorized; 12,300,000 issued and
       outstanding at 6/30/97 and 12/31/96                                         123,000              123,000
      Additional paid-in capital                                                27,151,932           27,151,932
      Retained earnings                                                         40,273,077           34,813,527
                                                                        -------------------   ------------------
        Total stockholders' equity                                              67,548,009           62,088,459
                                                                        -------------------   ------------------
    TOTAL                                                                     $584,331,789         $530,567,323
                                                                        ===================   ==================

</TABLE>
          See accompanying notes to consolidated financial statements.



                                       2
<PAGE>   3

                 CAPITAL FACTORS HOLDING, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                             Three Months Ended                        Six Months Ended
                                                                  June 30,                                  June 30,

                                                         1997                 1996                 1997                1996
                                                    ----------------    -----------------    -----------------    ----------------
<S>                                                     <C>                  <C>                 <C>                 <C>         
REVENUES
Factoring fees                                          $ 7,053,027          $ 6,118,784         $ 13,877,404        $ 11,643,233
Interest income                                          10,836,702            8,359,757           20,230,857          16,015,455
Letter of credit and other fees                           1,118,953              852,595            2,071,389           1,524,805
Other                                                       603,161              357,699            1,027,963             648 742
                                                    ----------------    -----------------    -----------------    ----------------
Total revenues                                           19,611,843           15,688,835           37,207,613          29,832,235

EXPENSES
Interest expense                                          4,704,882            3,920,749            8,553,259           7,061,860
Interest expense to affiliates                            1,337,795            1,003,465            2,803,520           2,418,662
Salaries and benefits                                     4,666,900            3,411,341            9,172,244           6,662,178
Provision for credit losses                                 800,000            1,000,000            2,200,000           2,100,000
Occupancy and other office expenses                       1,154,809              863,260            2,108,762           1,744,136
Depreciation                                                215,594              154,194              391,357             307,834
Professional fees                                           378,365              269,465              680,254             448,504
Other                                                     1,095,338              766,620            2,110,999           1,590,838
                                                    ----------------    -----------------    -----------------    ----------------
Total expenses                                           14,353,683           11,389,094           28,020,395          22,334,012
                                                    ================    =================    =================    ================


INCOME BEFORE INCOME TAXES                                5,258,160            4,299,741            9,187,218           7,498,223

PROVISION FOR INCOME TAXES                                2,118,554            1,741,625            3,727,668           3,037,063
                                                    ----------------    -----------------    -----------------    ----------------


NET INCOME                                              $ 3,139,606         $  2,558,116          $ 5,459,550        $  4,461,160
                                                    ================    =================    =================    ================

NET INCOME PER SHARE                                    $      0.26         $       0.26          $      0.44        $       0.45
                                                    ================    =================    =================    ================
</TABLE>




          See accompanying notes to consolidated financial statements.



                                       3
<PAGE>   4

                 CAPITAL FACTORS HOLDING, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                                                             Six Months Ended June 30,
                                                                                             1997                1996
                                                                                      ----------------     ----------------
<S>                                                                                       <C>                 <C>         
OPERATING ACTIVITIES:
Net income                                                                               $ 5,459,550         $  4,461,160
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation                                                                                 391,357              307,834
Deferred income taxes                                                                       (609,853)             (89,129)
Provision for credit losses                                                                2,200,000            2,100,000
Increase in restricted cash                                                               (1,567,500)            (375,000)
Loss on sale of assets                                                                             -               11,405
Due to affiliates                                                                          2,666,947           (3,354,770)
Other assets                                                                                (445,447)            (759,079)
Other liabilities                                                                          1,890,826              447,721
                                                                                      ----------------     ----------------
Net cash provided by operating activities                                                  9,985,880            2,750,142
                                                                                      ----------------     ----------------

INVESTING ACTIVITIES:
Loan to clients, net                                                                     (21,273,833)           4,998,592
Increase in asset based loans                                                            (17,342,625)          (6,072,733)
Net increase in factoring accounts receivable,
net of due to factoring clients                                                          (39,669,362)         (55,725,875)
Sales of participations                                                                   16,825,635            3,312,828
Payments on participations                                                                (3,215,066)          (1,851,214)
Purchase of property and equipment                                                        (1,442,983)            (259,548)
Disposal of property and equipment                                                                 -                9,560
                                                                                      ----------------     ----------------
Net cash used in investing activities                                                    (66,118,234)         (55,588,390)
                                                                                      ----------------     ----------------

FINANCING ACTIVITIES:
Issuance of Senior Certificates                                                           43,884,515                    -
Restricted proceeds from Senior Certificates                                                       -           10,000,000
Proceeds from borrowing                                                                   91,036,000           72,543,000
Payments on borrowing                                                                    (76,214,000)         (34,348,000)
Payments of deferred financing costs                                                        (703,343)            (652,622)
Amortization of deferred costs                                                               464,590              367,169
                                                                                      ----------------     ----------------
Net cash provided by financing activities                                                 58,467,762           47,909,547
                                                                                      ----------------     ----------------

NET INCREASE (DECREASE) IN CASH                                                            2,335,408           (4,928,701)
CASH, BEGINNING OF PERIOD                                                                 28,101,237           20,326,814
                                                                                      ----------------     ----------------

CASH, END OF PERIOD                                                                     $ 30,436,645         $ 15,398,113
                                                                                      ================     ================

SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest                                                              $ 10,788,348         $  8,728,962
                                                                                      ================     ================
Cash payments for income taxes                                                          $          0         $  6,025,000
                                                                                      ================     ================
</TABLE>

          See accompanying notes to consolidated financial statements.



                                       4
<PAGE>   5

                 CAPITAL FACTORS HOLDING, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 1997

NOTE 1: GENERAL
----------------

The accompanying unaudited consolidated financial statements of Capital Factors
Holding, Inc. and Subsidiaries (the "Company") have been prepared on a
consistent basis in conformity with the instructions to Form 10-Q and Article 10
of Regulation S-X and therefore do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the financial statements
reflect all adjustments (principally consisting of normal, recurring accruals)
necessary to present fairly the financial condition of the Company as of June
30, 1997 and December 31, 1996, the results of its operations for the three and
six month periods ended June 30, 1997 and 1996 and its cash flows for the six
months ended June 30, 1997 and 1996. All significant inter-company transactions
and balances have been eliminated. The statements are unaudited except for the
Consolidated Statements of Condition as of December 31, 1996.

The accounting policies followed for interim financial reporting are consistent
with the accounting policies set forth in Note 2 to the Consolidated Financial
Statements appearing in the Company's Form 10-K for the year ended December 31,
1996 as filed with the Securities and Exchange Commission.

NOTE 2: RECEIVABLES
-------------------

Receivables consist of the following:

                                            June 30,         December 31,
                                              1997               1996
                                              ----               ----

Nonrecourse                               $267,905,556      $ 269,812,980
Recourse                                   169,587,870        157,178,312
                                       ----------------     --------------  
Factored accounts receivables              437,493,426        426,991,292
Loans to factoring clients                  48,044,902         27,966,757
Asset based loans                           53,362,168         36,019,543
                                       ----------------     --------------
                                          $538,900,496      $ 490,977,592
                                       ================     ==============


The Company also makes advances to factoring clients. Such advance payments,
which are interest earning, are recorded as reductions to the amounts due to the
factoring clients for the purchase of receivables. Average funds employed
(receivables less amounts due to factoring clients) were $332.6 million and
$286.2 million at June 30, 1997 and December 31, 1996, respectively.


                                       5
<PAGE>   6



Changes in the Company's allowance for credit losses were as follows:
<TABLE>
<CAPTION>

                                                           Six Months Ended                                 Year Ended
                                           -----------------------------------------------------   ------------------------------
                                                               % of                       % of                           % of
                                             June 30,        Factored      June 30,     Factored    December 31,        Factored
                                               1997            Sales         1996         Sales         1996              Sales
                                           -------------     --------   -------------   --------    -------------       --------
<S>                                        <C>                          <C>                         <C>          
Beginning balance                          $  2,993,534                 $   2,980,778               $   2,980,778

Allowance related to acquisition of
TempFunds America, Inc                                                                                    100,000

Provision for credit losses                   2,200,000       .15           2,100,000       .18         3,750,000         .14

Charge-offs                                  (2,256,698)      .15          (2,547,855)      .22        (4,402,745)        .17
Recoveries                                      308,655       .02             270,004       .03           565,501         .02
                                        -----------------              ----------------             ---------------   
Net charge-offs                              (1,948,043)      .13          (2,277,851)      .19        (3,837,244)        .14
                                        -----------------     ---      ----------------     ---     ---------------       ---

Ending balance                               $3,245,491                    $2,802,927                $  2,993,534
                                        =================              ================             ===============   

</TABLE>

The Company specifically considered approximately $973,000 and $660,000 of its
client advances impaired at June 30, 1997 and December 31, 1996, respectively,
and has discontinued the accrual of interest income. The allowance for credit
losses related to these impaired loans for the same periods was $190,000 and
approximately $30,000, respectively.

The adequacy of the provision for credit losses recorded by the Company is
assessed by management based in part on the level of net charge-offs relative to
accounts receivable purchased. These statistics are believed to be significant
indicators of inherent losses because the receivables portfolio turns over
approximately seven times each year. Accounts receivable which are past due will
not be written off if, in the opinion of management, collection is likely from
the customer, client or collateral realization, if any. In making this
determination, management considers the quality of the collateral, the
creditworthiness of the customer and client, economic conditions and other
factors which may be relevant. This statistical assessment is supplemented by a
review of the recorded allowance for credit losses at each month end and
relative to total accounts receivable at month end, taking into consideration
specific potential problem accounts, accounts purchased with recourse where
payment has not been made by the Company to its client, and other factors which
may be relevant.

Historically, the provision for credit losses as a percentage of factored sales
and net charge-offs as a percentage of factored sales ranged from 0.11% to 0.30%
and 0.05% to 0.30%, respectively. The provision for credit losses as a
percentage of factored sales decreased from 0.18% for the six months ended June
30, 1996 to 0.15% for the six months ended June 30, 1997. Net charge-offs as a
percentage of factored sales also decreased from 0.19% to 0.13% for the same six
month periods, respectively. Based on these relationships, and a review of the
recorded allowance and accounts receivable at each period end, management
believes the provisions and allowance to be adequate to absorb known and
inherent losses in the accounts receivable portfolio. Because the assessment of
the adequacy of the allowance and provisions for credit losses involves a
significant degree of estimation and is subject to change, future provisions for
credit losses may be greater or less than actual charge-offs.


                                       6
<PAGE>   7


NOTE 3: BORROWINGS
------------------

Borrowings are summarized as follows:
<TABLE>
<CAPTION>

                                                                               June 30,            December 31,
                                                                                 1997                  1996
                                                                       -------------------     -----------------    
<S>                                                                          <C>                   <C>         
Variable rate asset backed certificates due 1999 through 2001                $218,884,515          $175,000,000
Variable rate revolving credit line due on demand                              73,653,000            70,131,000
Variable rate revolver loan due 1999                                           27,200,000            15,900,000
7.95% subordinated notes due 2001                                              10,000,000            10,000,000
                                                                       -------------------     -----------------    

Total borrowings                                                             $329,737,515         $ 271,031,000
                                                                       ===================     =================    
</TABLE>



NOTE 4:  SUBSEQUENT EVENT
-------------------------

On August 12, 1997, Capital Bancorp ("Bancorp") entered into an Agreement and
Plan of Merger (the "Agreement") with Union Planters Corporation ("UPC"). Under
the Agreement, each share of common stock of Bancorp will be exchanged for .8525
share of UPC common stock. The Agreement is subject to due diligence,
regulatory approval, approval by BanCorp's shareholders and the satisfaction of
certain normal contractual closing conditions.






                                       7
<PAGE>   8

ITEM 2

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                 CAPITAL FACTORS HOLDING, INC. AND SUBSIDIARIES

Introduction

Capital Factors Holding, Inc. ("Holding") is a majority owned subsidiary of
Capital Bank (the "Bank"), a Florida commercial bank. The Bank is a wholly-owned
subsidiary of Capital Bancorp ("Bancorp"). Holding has three wholly-owned
subsidiaries, Capital Factors, Inc. ("Factors"), CF One, Inc. and CF Investor
Corp. Factors has two wholly-owned subsidiaries, CF Funding Corp. and Capital
TempFunds, Inc. Throughout this discussion, Holding, Factors, and their
subsidiaries are collectively referred to as the "Company".

The following discussion and analysis presents the significant changes in the
financial condition and results of operations for the periods indicated. In
addition, this Form 10-Q may contain certain "forward-looking statements" which
represent the Company's expectations or beliefs, including, but not limited to,
statements concerning the Company's operations, performance, financial
condition, and growth. For this purpose, any statements contained in the Form
10-Q that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the generality of the foregoing,
words such as "may," "will," "expect," "believe," "anticipate," "intend,"
"could," "estimate," or "continue," or the negative or other variation thereof
or comparable terminology are intended to identify forward-looking statements.
These statements by their nature involve substantial risks and uncertainties,
such as credit losses, dependence on availability of funding sources, dilution
of receivables, concentration of client base and client customer base,
dependence on management and key personnel, seasonality, and variability of
quarterly results, ability of the Company to continue its growth strategy,
competition, inability to directly collect healthcare receivables from Medicare
and Medicaid, dilution of healthcare receivables, control by majority
shareholder, and regulatory restrictions relating to potential new activities,
Bancorp and Capital Bank litigation, certain of which are beyond the Company's
control, and actual results may differ materially depending on variety of
important factors which are noted herein. The discussion should be read in
conjunction with the consolidated financial statements and notes included in
this report.

On August 12, 1997, Capital Bancorp ("Bancorp") entered into an Agreement and
Plan of Merger (the "Agreement") with Union Planters Corporation ("UPC"). Under
the Agreement, each share of common stock of Bancorp will be exchanged for .8525
share of UPC common stock. The Agreement is subject to due diligence,
regulatory approval, approval by Bancorp's shareholders and the satisfaction of
certain normal contractual conditions.

The Company provides fee-based services to its clients, including credit
protection, collection and management information services, and also makes
advances to many of its clients. Clients are generally manufacturers of goods or
providers of services in various industries. At the time the Company purchases
the factored receivables, the Company records a receivable and an offsetting
liability "due to factoring client." Advances, which are interest earning and
secured by the client's factored receivables, are recorded by the Company as
reductions to the amounts due to the factoring client for factored receivables.
Cash collections from the client's customers are used to repay the client's
loans. If, as a result of financial inability to pay, a client's customer fails
to pay a receivable that was credit-approved by the Company, the Company will
ultimately bear any loss with respect to such receivable. In the event of
dilution in excess of the unfinanced portion of receivables, where factored
receivables are not fully collected for a reason other than the customer's
financial inability to pay, such as breach of warranty, the Company will in
practice typically need to look to newer receivables of the client for the
collection of the outstanding obligation to the Company and may not be repaid.

In contrast to the Company's purchase of factored receivables, when the Company
makes an asset-based loan, a client assigns its collateral (usually account
receivable and inventory) to the Company. Upon request of the client, the
Company may advance funds to the client as a loan in an amount based upon the
eligible collateral. When funds are advanced to the client, a loan receivable
balance is created, and cash is disbursed. Although the Company loans funds to
the client based on 



                                       8
<PAGE>   9


eligible collateral, the Company provides no credit protection and, accordingly,
does not assume the risk of loss from a client's customers' inability to pay,
although the Company may actually suffer a loss if all sources of repayment
fail, including other collateral and guarantees, if any. In connection with
asset-based loans, instead of a factoring fee, the Company earns a facility fee.
Both factored advances and asset-based loans bear interest at a rate tied to the
prime rate.

The Company operates through four regional offices, and in January 1997, it
opened an office in Atlanta which specializes in asset-based loans. In May 1997,
the Company's corporate headquarters and the Florida regional office re-located
to leased office space in Boca Raton. The Company's operations center remains in
Fort Lauderdale. The Company currently has over 400 clients who generate annual
sales from $500,000 to over $100 million, and services over 100,000 customers of
those clients. The majority of the Company's customers are large national or
regional department store chains or specialty retailers. At June 30, 1997, the
largest amount due from any one customer, a national department store chain, was
approximately $25.9 million.

The Company's factored sales volume can be affected in several ways, including
new clients, client retention or losses, inflation and other economic
conditions. Additionally, fluctuations in the sales dollar volume of the
Company's clients, both positive and negative, have a direct impact on the
Company's factored sales volume and factoring fees. In this regard, the Company
has historically experienced seasonal fluctuations in its factored sales volume
and factoring fees as a result of the seasonality of the sales of certain of the
Company's clients, especially those in the apparel industry, who typically ship
more goods during the four-month period of August through November in order to
fill increased customer orders in anticipation of "back to school" and the
ensuing holiday season. The Company realized approximately 40% of its annual
factored sales volume during this 4-month period in 1996 and 1995.

Management believes that one of the essential tools in maintaining and managing
growth of the Company is the monitoring of certain key financial ratios. The
Company monitors the key components of its income statement data, such as
factoring fees, net interest income, other income, provision for credit losses
and operating expenses, as a percentage of its factored sales volume. These key
ratios allow the Company to monitor its performance in achieving its goals of
(i) obtaining higher gross margins on factoring fee income, (ii) increasing fee
income as a percentage of cash employed, (iii) reducing credit losses, (iv)
controlling costs, and (v) maximizing return to its investors. Management also
monitors both accounts receivable turnover and the aging of customers' accounts
receivable, with particular emphasis on amounts greater than 60 days past due.







                                       9
<PAGE>   10

Monitoring Asset Quality and Credit Losses

The monitoring of asset quality is a routine function performed by management to
control credit losses. Monitoring asset quality involves the periodic review,
sometimes daily, of such pertinent financial statistics as the aging of the
accounts receivable portfolio, accounts receivable turnover, dilution and
charge-offs. The Company's allowance for credit losses is determined after
evaluating the receivables portfolio, current market conditions, changes in the
nature and volume of the portfolio, past loss experience and other pertinent
factors.

Set forth below are those ratios and statistics utilized by management in
monitoring asset quality for the six months ended June 30, 1997 and June 30,
1996:
<TABLE>
<CAPTION>

                                                                                 As of June 30,
                                                                      ----------------------------------
                                                                             1997                1996
                                                                             ----                ----
                                                                      (Unaudited, Dollars in Thousands)

<S>                                                                         <C>                 <C>    
Provision for credit losses                                                 $2,200               $2,100
Charge-offs net of recoveries                                                1,948                2,278
Allowance for credit losses-specific                                           672                  646
Allowance for credit losses-general                                          2,573                2,157
                                                                      -------------       --------------

Total allowance for credit losses                                           $3,245               $2,803
Accounts receivable turnover in days                                            54                   51
Accounts receivable past due more
  than 60 days as a percentage of factored receivables                        8.88%               10.47%
Accounts receivable past due more
  than 90 days as a percentage of factored receivables                        5.45%                9.08%
Credit-approved accounts receivable past due more
  than 60 days as a percentage of credit approved  
  receivables (1)                                                             3.77%                7.77%
Credit-approved accounts receivable past due more
  than 90 days as a percentage of credit approved
  receivables (1)                                                             1.77%                4.85%
Net charge-offs to factored sales                                             0.13%                0.19%
Average receivables                                                       $513,811             $385,911
Provision for credit losses as a
  percentage of factored sales                                                0.15%                0.18%
Provision for credit losses as a
  percentage of average receivables                                           0.86% (6)            1.08% (6)
Net charge-offs as a percentage of
  average receivables                                                         0.76% (6)            1.18% (6)
Non-accruing advances                                                         $973                $ 766
Non-accruing advances as a percentage
  of receivables                                                              0.18%                0.18%
Average funds employed (2)                                                $332,600             $258,400
Provision for credit losses as a percentage of average
funds employed (2) (3)                                                        1.32% (6)            1.63% (6)
Net charge-offs as a percentage of
  average funds employed (2) (4)                                              1.17% (6)            1.76% (6)
Non-accruing advances as a percentage
  of funds employed (2) (5)                                                   0.27%                0.27%

</TABLE>



                                       10
<PAGE>   11


(1) Management considers the aging of credit-approved receivables a more
    meaningful measure of exposure to credit risk than the aging of total
    receivables. The Company guarantees payment of receivables which it credit
    approves if the receivable was not paid based solely on the customers
    financial inability to pay.
(2) Funds employed are receivables less amounts due to factoring clients.
(3) Computed by dividing provision for credit losses by average funds employed
    for each period presented. The provision for credit losses as a percentage
    of average funds advanced for each of the periods presented was lower than
    the provision for credit losses as a percentage of average funds employed.
(4) Computed by dividing net charge-offs by average funds employed for each
    period presented. Net charge-offs as a percentage of average advances for
    each of the periods presented was lower than net charge-offs as a percentage
    of average funds employed.
(5) Computed by dividing non-accruing advances by funds employed at the end of
    each respective period indicated. Non-accruing advances as a percentage of
    advances during each period presented was lower than non-accruing advances
    as a percentage of funds employed.
(6) Computed on an annualized basis.

The Company regularly reviews its outstanding accounts receivable and other
extensions of credit, such as advances to clients, to determine the adequacy of
its allowance for credit losses. Factors such as the level of related credit
balances of clients and the impact of economic conditions on the
creditworthiness of the Company's clients and the client's customers are given
significant consideration in determining the adequacy of the Company's allowance
for credit losses. The Company's methodology for calculating its reserve for
doubtful accounts has remained consistent for the periods shown above, and
includes a specific and general component. Specific reserves are established for
receivables and client advances which the Company's management deems to be
wholly or partially uncollectible. The general reserve represents 0.75% of those
receivables (other than healthcare receivables and asset-based loans, which have
a lower general reserve) that are not specifically reserved for but for which
the Company has provided credit guarantees.

The provision for credit losses as a percentage of factored sales decreased from
0.18% for the six months ended June 30, 1996 to 0.15% for the six months ended
June 30, 1997. The provision for credit losses as a percentage of average
receivables and the provision for credit losses as a percentage of average funds
employed decreased from 1.08% and 1.63%, respectively, for the six months ended
June 30, 1996, to 0.86% and 1.32%, respectively, for the six months ended June
30, 1997, reflecting a lower net charge-off rate.

Net charge-offs as a percentage of factored sales decreased from 0.19% for the
period ended June 30, 1996 to 0.13% for the period ended June 30, 1997. Charge
offs consisted primarily of $1,150,000 written off in the six month period due
to a client's bankruptcy filing during the first quarter, and $1,037,000 in
customer bad debts. In 1996, the Company charged off $1.1 million in customer
bad debts, including a charge-off of $600,000 related to the bankruptcy of a
large Northeastern regional chain store customer. Net charge-offs as a
percentage of average receivables and net charge-offs as a percentage of average
funds employed decreased 0.42% and 0.59%, respectively, for the six months ended
June 30, 1997 as compared to the same period in 1996 due primarily to the
$600,000 charge-off described above. Net charge-offs as a percentage of factored
sales ranged from 0.05% to 0.30% in the 1992-1996 period.

Non-accruing advances as a percentage of funds employed have historically
remained below 1.00% and at June 30, 1997 and 1996, were 0.27%. Non-accruing
advances as a percentage of receivables was 0.18% at June 30, 1996 and 1997,
respectively. Management believes that non-accruing advance fluctuations below
1.0% are a normal part of the Company's ongoing business and are not
significant.

Credit-approved accounts receivable past due more than 60 days as a percentage
of credit-approved factored receivables and credit-approved accounts receivable
past due more than 90 days as a percentage of credit-approved factored
receivables equaled 3.77% and 1.57%, respectively, at June 30, 1997 as compared
to 7.77% and 4.85%, respectively, at June 30, 1996. Accounts receivable past 
due more than 60 days as a percentage of total factored receivables and 
accounts receivable past due more than 90 days as a percentage of total 
factored receivables



                                       11


<PAGE>   12

equaled 8.88% and 5.45%, respectively, for the six month period ended June 30,
1997 as compared to 10.47% and 9.08%, respectively, for the six month period
ended June 30, 1996.


Financial Condition - June 30, 1997 as compared to December 31, 1996

Total assets increased to $584.3 million at June 30, 1997 from $530.6 million at
December 31, 1996. The $53.7 million increase was due primarily to a $47.5
million dollar increase in net receivables.

Factored accounts receivables increased $10.5 million primarily as a result of
increased factored sales. The Company's factored accounts receivable are due
from clients' customers geographically located throughout the United States,
principally retailers, manufacturers and distributors. Asset based loans, which
represent loans provided to clients principally collateralized by accounts
receivable, increased $17.3 million from $36.0 million at December 31, 1996 to
$53.4 million at June 30, 1997.

The increase in assets was principally funded by an increase in the debt
outstanding under the Company's variable rate asset backed certificates, the
Securitized Financings and its $40 million revolving credit facility with an
unaffiliated bank. Outstanding debt under the Securitized Financings increased
to $218.9 million at June 30, 1997 from $175.0 million at December 31, 1996 due
to the Company's issuance of a fourth series of variable rate asset-backed
certificates (the "Variable Funding Certificates"). Unlike the previously issued
certificates which were fixed as to principal amount, the Variable Funding
Certificates provide for a monthly settlement of principal, which may increase
or decrease the outstanding amount. Under this series, the senior Variable
Funding Certificates bear interest at LIBOR plus 0.75% and the senior
subordinated Variable Funding Certificates bear interest at LIBOR plus 1.50%,
6.44% and 7.18%, respectively, at June 30, 1997. (See Liquidity and Capital
Resources). At June 30, 1997 and December 31, 1996, the Company had $27.2
million and $15.9 million, respectively, outstanding under its $40 million
facility, which bears interest at LIBOR plus 2.15%. This increase in debt was
collateralized by increased asset-based loans and healthcare receivables.

Stockholders' equity increased approximately $5.5 million during the first six
months of 1997 as a result of net income earned by the Company.


Results of Operations - Three Months Ended June 30, 1997 Compared to Three
Months Ended June 30, 1996.

Net income increased 22.7% to approximately $3.1 million for the three month
period ended June 30, 1997 from approximately $2.6 million for the comparable
period in 1996 due to an increase in operating revenues and a decrease in the
provision for credit losses. Operating revenues increased from approximately
$10.8 million for the three month period ended June 30, 1996 to approximately
$13.6 million for the comparable period in 1997, a 26.1% increase. These
increases were primarily a result of a 21.4% increase in the Company's factored
sales volume from $614.6 million to $746.2 million for the three month period
ended June 30, 1996 and June 30, 1997, respectively, and the resulting increase
in interest income and factoring fees. The factored sales volume increases were
attributable to continued growth of the Company's four regional factoring
offices.

Factoring fee income increased to approximately $7.1 million for the three month
period ended June 30, 1997 as compared to approximately $6.1 million for the
three month period ended June 30, 1996. Factoring fee income as a percentage of
factored sales for the three month periods decreased from 1.00% in 1996 to .95%
in 1997. This decline was the result of lower factoring fees charged to high
volume clients. The Company typically receives lower factoring fees from high
volume clients because, among other reasons, high volume clients do not have
the same servicing needs as smaller clients, requiring less labor intensive
services to be performed by the Company and because there is increased
competition for such clients' business.

Net interest income (interest income less interest expense) increased to
approximately $4.8 million for the three months ended June 30, 1997 from
approximately $3.4 million for the comparable period in 1996, a 39.5% increase,
principally as a


                                       12
<PAGE>   13


result of the $17.6 million of net proceeds raised by the Company's issuance of
common stock in July 1996 and an increase of $74.2 million in average
outstanding funds employed for the three months ended June 30, 1997 as compared
to the same period in the prior year. Net interest income was also favorably
impacted by continued interest expense reductions achieved through the use of
financing programs with lower interest rates. On April 30, 1997, the Company
issued the Variable Funding Certificates which provide for a monthly settlement
of principal, which may increase or decrease the outstanding amount. This fourth
series of variable rate asset backed certificates includes the issuance of
$95.25 million of senior Variable Funding Certificates and $4.75 million of
senior subordinated Variable Funding Certificates. Approximately $41.8 million
and $2.1 million, respectively, were outstanding at June 30, 1997 bearing
interest at LIBOR plus 0.75% and 1.50%, respectively, (6.44% and 7.19%,
respectively, at June 30, 1997). The Company entered into a $40,000,000
revolving loan agreement bearing interest at LIBOR plus 2.15% in April 1995 with
an unaffiliated bank. Average borrowings from the revolving loan during the
three month period ended June 30, 1997 equaled approximately $26.3 million and
had an effective interest rate of 8.1% for the three month period. Additionally,
the Company, through its wholly-owned subsidiary, CF One, issued $10,000,000 in
subordinated notes in May 1996, bearing a fixed annual interest rate of 7.95%.
The funds raised through the above transactions were used to reduce higher
interest debt (8.5% at June 30, 1997) outstanding under the debt facility with
Capital Bank.

Letter of credit and other fee income increased to approximately $1,119,000 for
the three months ended June 30, 1997 from $853,000 for the three months ended
June 30, 1996, a 31.2% increase. Letter of credit fees increased approximately
31.5% or $101,000 during the three month period while other fee income increased
by approximately $165,000 due to the increased, over advance fees, factoring
volume and asset based lending activities.

The provision for credit losses decreased to $800,000 for the three months ended
June 30, 1997 from $1,000,000 for the three months ended June 30, 1996.
Provisions for credit losses as a percentage of factored sales decreased to
0.11% for the three months ended June 30, 1997 as compared to 0.16% for the
comparable period in 1996, reflecting a lower net charge-off rate (see
"Monitoring Asset Quality and Credit Losses").

Operating expenses increased from $5,465,000 to $7,511,000 for the three month
period ended June 30, 1997 as compared to the three months ended June 30, 1996.
This $2.0 million or 37.4% increase is primarily the result of the move of the
corporate headquarters to Boca Raton, expansion in the regional offices and the
healthcare division, start-up costs in the Atlanta office, expenses related to
Capital TempFunds, Inc., which was acquired in August 1996 and compensation
expense related to the compensatory nature of the Company's stock option plan.


Results of Operations - Six Months Ended June 30, 1997 Compared to Six Months
Ended June 30, 1996.

Net income increased 22.4% to approximately $5.5 million for the six months
ended June 30, 1997 from approximately $4.5 million for the comparable period in
1996 due primarily to an increase in operating revenues. Operating revenues
(total revenues less interest expense) increased from approximately $20.4
million for the six month period ended June 30, 1996 to approximately $25.9
million for the comparable period in 1997, a 27% increase. These increases were
primarily a result of a 25.3% increase in the Company's factored sales volume
from $1,178.6 million to $1,476.4 million for the six month period ended June
30, 1996 and June 30, 1997, respectively, and the resulting increase in interest
income and factoring fees. The factored sales volume increases were attributable
to continued growth of the Company's client base, in all four regional offices.

Factoring fee income increased to approximately $13.9 million for the six month
period ended June 30, 1997 as compared to approximately $11.6 million for the
six month period ended June 30, 1996 as a result of a 25.3% increase in factored
sales. Factoring fee income as a percentage of factored sales for the six month
periods decreased from .99% in 1996 to 0.94% in 1997. This decrease was due to
lower factoring commission rates charged due to competitive pricing on larger
clients.


                                       13

<PAGE>   14

Net interest income (interest income less interest expense) increased to
approximately $8.9 million for the six months ended June 30, 1997 from
approximately $6.5 million for the comparable period in 1996, a 35.8% increase.
The increase is principally a result of the $17.6 million of net proceeds
raised by the Company's issuance of common stock in July 1996 and the issuance
of a fourth series of variable rate asset-backed certificates on April 30, 1997
of which approximately $41.8 million of the senior Variable Funding Certificates
and $2.1 million of the senior subordinated Variable Funding Certificates were
outstanding at June 30, 1997 bearing interest at LIBOR plus 0.75% and LIBOR plus
1.50% respectively, (6.44% and 7.19%, respectively, at June 30, 1997). The
proceeds from both transaction were used to reduce the debt outstanding under a
debt facility with Capital Bank. The interest rate on this facility was 8.5% at
June 30, 1997. Additionally, the Company entered into a $40.0 million revolving
loan agreement bearing interest at LIBOR plus 2.15% in April 1996 with an
unaffiliated bank. Average borrowings from the revolving loan during the six
month period ended June 30, 1997 equaled approximately $21.7 million and had an
effective interest rate of 8.03% for the six month period. Interest income also
increased due to an increase of $74.2 million in average outstanding funds
employed for six months ended June 30, 1997 as compared to the same period in
the prior year.

Letter of credit and other fee income increased to approximately $2,071,000 for
the six months ended June 30, 1997 from $1,525,000 for the six months ended June
30, 1996, a 35.8% increase. Letter of credit fees increased approximately 41.1%
or $235,000 and overadvance fees increased 125.4% or $227,000 during the six
month period. Overadvances represent loans to clients in excess of the factored
accounts receivable, substantially all of which are collateralized by assets
other than receivables. Other fee income, such as wire and audit fees, increased
by approximately $84,000 due to the increased factoring volume and
asset-based lending activities.

The provision for credit losses equaled $2.2 million for the six month period
ended June 30, 1997 and $2.1 million for the six month period ended June 30,
1996. Of the year to date provision, $1,150,000 related to amounts charged-off
and reserves established due to a client's bankruptcy filing during the first
quarter. The remainder of the 1997 provision relates primarily to customer
accounts receivable, with net charge-offs of $1.0 million compared to $1.9
million in the second quarter of 1996. Provisions for credit losses as a
percentage of factored sales decreased to 0.15% for the six month period ended
June 30, 1997 as compared to 0.18% for the comparable period in 1996, reflecting
a slightly lower net charge-off rate for the quarter (see "Monitoring Asset
Quality and Credit Losses").

Operating expenses increased from $10.8 million to $14.5 million for the six
month period ended June 30, 1997 as compared to the six month period ended June
30, 1996. This $3.7 million or 34.5% increase is primarily the result of the
move of the Company's corporate headquarters to Boca Raton, expansion in the
regional offices and the healthcare division, start-up costs in the Atlanta
office, expenses related to Capital TempFunds, Inc. which was acquired in August
1996 and compensation expense related to the compensatory nature of the
Company's stock option plan.

Liquidity and Capital Resources

The Company's principal source of funding is its asset securitization program,
the Securitized Financings. This funding is supplemented by the Company's line
of credit with the Bank and a revolving credit facility with an unaffiliated
bank.

Through March 31, 1997, the trust created in connection with the Securitized
Financings (the "Trust") had issued three series of asset-backed certificates
(each, a "Certificate") aggregating $175 million, including $100 million in June
1994, $25 million in December 1994 and $50 million in July 1995. All of the
Certificates were issued to life insurance companies. Initially, the
Certificates were rated "AA" by Duff & Phelps Credit Rating Company and "A" by
Fitch Investors Services, Inc. Approximately one year after its initial rating,
Fitch Investor Services, Inc. upgraded its rating of the Certificates to "AA".
The scheduled maturity date of the Certificates corresponding to each series is
December 1999 ($100 million), June 2000 ($25 million), and January 2001 ($50
million), respectively. The Certificates issued under each series bear interest
at LIBOR plus 1.25% (6.94% at June 30, 1997, excluding annualized transaction
costs of 0.37%). Interest is payable monthly. However, an early amortization
event will occur if the Company fails to satisfy certain financial covenants.
The principal financial covenants contained in the Securitized Financing
agreements that the Company must satisfy include, (i) consolidated net worth in
excess of $18.5 million, (ii) tangible equity ratio of at least 6% (iii)
accounts receivable non-



                                       14

<PAGE>   15

payment percentage of no more than 18%, (iv) 60-day accounts receivable
percentage of no more than 10% of total accounts receivable, (v) 90-day accounts
receivable percentage of no more than 4.5% of total accounts receivable, (vi)
weighted average factoring fee of at least 0.75%, (vii) weighted average
accounts receivable turnover of less than 70 days, (viii) accounts receivable
dilution of no more than 11%, (ix) accounts receivable payment ratio for three
consecutive periods of more than 40%, (x) aggregate amount of subordinated
certificates of no more than 25% of senior certificates, (xi) subordinated
certificates equal to or greater than 7% of total certificates and (xii) value
of accounts receivable transferred to the Trust, of no less than 135% of
aggregate certificates. In addition, there are other covenants relating to the
collateral, including required capital levels, maximum dilution and delinquency
ratios and minimum subordination levels. The Company is in material compliance
with these and all other covenants contained in the Securitized Financing
agreements. The Company may continue to use the Securitized Financings for
funding, provided eligible advances are available for transfer to the Trust.

On April 30, 1997 the Trust issued a fourth series of variable rate asset-backed
certificates (the "Variable Funding Certificates") in connection with the
Securitized Financings. Unlike the previously issued Certificates which were
fixed as to principal amount, the Variable Funding Certificates provide for a
monthly settlement of principal, which may increase or decrease the outstanding
amount. The fourth series includes the issuance of $95.25 million of senior
Variable Funding Certificates and $4.75 million of senior subordinated Variable
Funding Certificates. The Certificates were rated "AAA" and "A", respectively
by Duff & Phelps Credit Rating Company and "AA" and "BBB", respectively by Fitch
Investors Services Inc. Approximately $41.8 million and $2.1 million,
respectively, were funded at June 30, 1997. Management believes that this type
of Certificate will provide a more efficient means of funding the seasonal
fluctuations in the Company's overall funding requirements. Under this series,
the senior Variable Funding Certificates bear interest at LIBOR plus 0.75% and
the senior subordinated Variable Funding Certificates bear interest at LIBOR
plus 1.50% (6.44% and 7.19%, respectively, at June 30, 1997). In connection with
any additional secured indebtedness to be incurred by the Company, the
Securitized Financings require that all additional secured lenders enter into an
intercreditor agreement with the holders of the Certificates and the trustee of
the Trust. The Securitized Financings permit future purchases to the extent that
the Company generates eligible Advances. Generally, all of the client advances
made by the Company, with the exception of these made by its healthcare
division, as well as certain asset-based loans, are eligible for transfer to the
Trust. As of June 30, 1997, the Company had transferred to the Trust client
advances aggregating nearly $299.6 million.

In connection with this transaction, the Company formed a new wholly-owned
subsidiary, CF Investor Corp. CF Investor Corp., through a limited liability
corporation, CF Two, LLC., acquired the junior subordinated certificate issued
by the Trust.

In March 1996, the Company entered into a $40.0 million revolving credit
facility with an unaffiliated bank which was closed in April 1996. The
indebtedness under this facility is secured by advances not transferred to the
Trust or eligible for transfer to the Trust, most of which were made by the
Company's healthcare division or were asset-based loans, as well as all of the
equipment used by the Company in its operations. In order for this facility to
be fully funded, the Company would have to pledge an amount in excess of $57
million in advances. The indebtedness under this facility may not exceed 70% of
the value of the advances pledged by the Company as collateral for such
indebtedness. At June 30, 1997, the Company had outstanding borrowings of $27.2
million. The indebtedness under this revolving facility bears interest at a rate
of LIBOR plus 2.15% (7.84% at June 30, 1997), payable monthly. The indebtedness
under this facility matures upon termination in March 1999, although it will be
automatically renewed for additional one year periods unless the Company or the
lender terminates it. This facility contains certain financial covenants and
ratios, including those relating to the Company's debt to net worth (no less
than 1 to 1), profitability ($5.2 million of annual consolidated net income) and
positive net cash flows (more than $1 per quarter). Funds borrowed under this
facility were used by the Company to pay down indebtedness under the Company's
line of credit with the Bank, and to fund certain of the Company's healthcare
financing activities and asset-based lending activities.

The Company also has a $150.0 million unsecured revolving line of credit with
Capital Bank, pursuant to which the Company had outstanding borrowings of
approximately $73.7 million at June 30, 1997. Amounts borrowed under this
facility are subject to the Bank's overall statutory limitation on investments
in and advances to subsidiaries of 10% of assets.


                                       15
<PAGE>   16

Based on the statutory limitation, the maximum amount which could be outstanding
under this line was approximately $132.2 million at June 30, 1997. Indebtedness
under this facility bears interest at the prime rate, as published in The Wall
Street Journal (8.5% at June 30, 1997), is subject to annual review by the Bank
each June and is due on demand. The Facility has been in place since 1985 and
historically has been renewed for one-year periods in June of each year.
Interest is payable monthly. The Company generally has used the Facility with
the Bank to make advances to its clients.

In May 1996, CF One sold $10 million of subordinated notes (the "CF One Notes"),
which are collateralized by subordinated certificates that were issued in
connection with the Company's Securitized Financings. The CF One Notes, which
are due and payable in July 2001, bear interest at an annual fixed rate of 7.95%
and are rated "BBB" by both Duff & Phelps Credit Rating Company and Fitch
Investors Services, Inc. The principal purpose for the issuance of the CF One
Notes was to allow CF One to obtain additional financing by taking advantage of
the favorable financing terms resulting from an increase in the value of the
subordinated certificates held by CF One which are collateralized by assets held
by the Trust. The increase in the value of the subordinated certificates held by
CF One was the result of the favorable performance of the receivables and other
assets held in the Trust's portfolio.

In addition to the continued availability of the above financing, the Company's
future liquidity will continue to be dependent upon its ability to collect the
accounts receivable purchased from its clients. Of the Company's approximately
$538.9 million of customer accounts receivable outstanding at June 30, 1997,
approximately $270.4 million of customer receivables balances exceeded $1
million. These customers are primarily large national or regional department
store chains or specialty retailers. At June 30, 1997, the largest amount due
from any one customer, a national chain store, was approximately $25.9 million.
In addition, the Company's accounts receivable turned over in an average of 54
days and 51 days during the six months ended June 30, 1997 and 1996,
respectively.

The Company had no material commitments for capital expenditures as of June 30,
1997. Management believes that it has the corporate infrastructure in place to
support its earnings growth for the foreseeable future. Management also believes
that funds available under the Company's current credit facilities (assuming
such facilities are renewed or replaced with similar facilities) and cash flow
from operations will be sufficient to satisfy the Company's working capital
requirements for the next 12 months.

Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share," is effective for financial statements issued for periods ending after
December 15, 1997. This statement requires a dual presentation of basic and
diluted earnings per share on the face of the income statement.  Adoption of
this statement is not expected to have a material adverse impact on the
Company's consolidated financial position or results of operations.

SFAS No. 130, "Reporting Comprehensive Income," is effective for fiscal years
beginning after December 15, 1997. This statement establishes standards for
reporting and display of comprehensive income and its components in a full set
of general-purpose financial statements. Adoption of this statement is not
expected to have a material adverse impact on the Company's consolidated
financial position or results of operations.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," is effective for financial statements for periods beginning after
December 15, 1997. This statement establishes standards for the way that public
companies report selected information about operating segments. Adoption of
this statement is not expected to have a material adverse impact on the
Company's consolidated financial position or results of operations.

Effects of Inflation

The Company believes that inflation has not had a material impact on its results
of operations.

                                       16
<PAGE>   17


                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company

From time to time, the Company has been a party to lawsuits and claims,
including lender liability claims, which management considers incidental to
normal operations. The Company was a party to one lawsuit that was dismissed
after trial. The plaintiff appealed the dismissal. The Court of Appeals affirmed
the dismissal and the Company awaits the finality of this judgment.

Bancorp and Capital Bank Regulatory Matters

On June 16, 1997, the Comptroller (the "Comptroller") of the State of Florida
issued an order denying the application filed by Daniel Holtz, Chairman of the
Board, Chief Executive Officer and President of Bancorp, Fana Holtz, the
Vice-Chairman of the Board, and Javier Holtz, an executive officer of Bancorp,
to acquire and/or maintain a controlling interest in Capital Bank through their
ownership and control of Bancorp. The Comptroller requires that, within 90 days,
the Applicants reduce their ownership of Bancorp below 25% in the aggregate, or
10% in the aggregate if any one of the Applicants remains as a officer of the
Bank. The Applicants beneficially owned approximately 46.4% of Bancorp Common
Stock at June 30, 1997. The Comptroller also requires that the Applicants "take
into appropriate consideration the ownership interest of Abel Holtz" in
determining their aggregate ownership position. Abel Holtz, the former Chairman
of the Board, Chief Executive Officer and President of Bancorp, is the husband
of Fana Holtz and father of Daniel and Javier Holtz. At June 30, 1997, Abel
Holtz beneficially owned approximately 8.9% of Bancorp Common Stock.

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

The Company held its 1997 Annual Meeting of Shareholders on May 23, 1997 (the
"Annual Meeting"), at which all of the Company's ten directors were reelected.
The following sets forth the voting results with respect to each nominee for
director, including votes cast for the nominee and the votes withheld:

      Nominee                    Votes For                Votes Withheld

Stephen N. Ashman                12,090,832                       200
Ronald S. Chase                  12,091,032                         0
Cynthia R. Cohen                 12,090,682                       350
Norman G. Einspruch              12,091,032                         0
Daniel M. Holtz                  12,091,032                         0
Javier J. Holtz                  12,091,032                         0
John W. Kiefer                   12,091,032                         0
Jack D. Listanowsky              11,679,132                   411,900
Harold L. Oshry                  12,091,032                         0
Bruce S. Raiffe                  11,679,132                   411,900

In addition, at the Annual Meeting, the shareholders voted in favor of (i) the
proposal to approve the Capital Factors Holding, Inc. Stock Option Plan, as
amended (the "Plan"), and (ii) the proposal to approve the material terms of the
performance goals (the "Goals") relating to the incentive compensation and
deferred compensation provisions set forth in the Employment Agreement between
the Company and John W. Kiefer, Chief Executive Officer and President of the
Company. Voting on the Plan was 11,018,006 votes for and 413,500 votes against,
with 1,500 votes abstaining and 657,726 broker


                                       17
<PAGE>   18

non-votes. Voting on the Goals was 11,231,165 votes for and 202,341 votes
against, with 1,500 votes abstaining and 655,726 broker non-votes.

Item 6. Exhibits and Reports on Form 8-K

     (a)   Exhibit 10.1 - Series 1997-1 Supplement, dated as of April 1, 1997,
           to Capital Factors Financing Trust Pooling and Servicing Agreement
           dated as of June 1, 1994

           Exhibit 11.1 - Statement re: Calculation of Earnings Per Share

           Exhibit 27.1 - Financial Data Schedule

     (b)   No Current Reports on Form 8-K were filed by the Company during the
           quarter ended June 30, 1997.





                                       18
<PAGE>   19



                                   SIGNATURES

Pursuant to the requirements 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.



Date:  August 14, 1997                             By: /s/ Dennis A. McDermott
                                                      ------------------------
                                                      DENNIS A. MCDERMOTT
                                                      Senior Vice President and
                                                      Chief Financial Officer
                                                      (Principal Financial and
                                                      Accounting Officer)





                                       19