<PAGE>   1

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

[X]   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

                       FOR THE QUARTER ENDED JUNE 30, 1999

[ ]   Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

                          Commission File No. 000-24549

                         TELEBANC FINANCIAL CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                           <C>
            DELAWARE                                   13-3759196
-------------------------------              -------------------------------
(State or other jurisdiction of              (I.R.S. Employer Identification
 incorporation or organization)                           Number)
</TABLE>

           1111 N. HIGHLAND STREET, ARLINGTON, VIRGINIA 22201
           --------------------------------------------------
           (Address of principal executive office) (Zip code)

                             (703) 247-3700
          ----------------------------------------------------
          (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.

                        Yes  X        No
                            ---          ---

Indicate the number of shares outstanding for the issuer's classes of common
stock, as of August 13, 1999.


   common stock, $0.01 par value                       33,608,164
   -----------------------------                       ----------
              (class)                                 (outstanding)



<PAGE>   2

                         TELEBANC FINANCIAL CORPORATION

           CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                      (In Thousands, Except Per Share Data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                   Three Months                 Six Months
                                                      Ended                       Ended
                                                     June 30,                    June 30,
                                                     --------                    --------
                                                  1999          1998         1999         1998
                                                  ----          ----         ----         ----
<S>                                          <C>             <C>          <C>          <C>
Interest income:
   Loans                                      $   24,755     $ 10,790     $ 43,866     $ 21,464
   Mortgage-backed securities                     20,578        5,209       38,883       10,283
   Investment securities                           3,285        1,986        6,676        3,772
   Trading securities                                388          708          595        1,344
   Other                                             826          211        1,504          421
                                                 -------      -------      -------      -------

     Total interest income                        49,832       18,904       91,524       37,284

Interest expense:
   Retail deposits                                19,909        8,757       37,067       16,812
   Brokered callable certificates of deposit       1,110        1,020        2,208        1,394
   Advances from the Federal Home Loan Bank
   of Atlanta                                      6,351        2,813       12,096        5,531
   Repurchase agreements and other
   borrowings                                      6,668        1,805       14,145        4,256
   Subordinated debt                                 591          881        1,475        1,760
                                                 -------      -------      -------      -------

     Total interest expense                       34,629       15,276       66,991       29,753
                                                 -------      -------      -------      -------

     Net interest income                          15,203        3,628       24,533        7,531


Provision for loan losses                            665           75        1,155          325
                                                 -------      -------      -------      -------

     Net interest income after provision
     for loan losses                              14,538        3,553       23,378        7,206

Non-interest income:
   (Loss) gain on sale of
   available-for-sale securities                    (383)         749          638        1,640
   (Loss) gain on sale of loans                     (220)          73        1,613          194
   (Loss) gain on trading securities                (596)          (6)        (446)          56
   Gain (loss) on equity investment                4,136          (77)       4,284          449
   Fees, service charges and other                   631          365        1,161          712
                                                 -------      -------      -------      -------


     Total non-interest income                     3,568        1,104        7,250        3,051
                                                 -------      -------      -------      -------

Non-interest expenses:
   Selling, general and administrative
   expenses:
    Compensation and employee benefits             5,031        1,670        7,568        3,620
    Advertising and marketing                      3,403          576        5,862        1,205
    Loan servicing                                 1,251          323        2,290          632
    Other                                          3,073        1,195        5,430        2,505
                                                 -------      -------      -------      -------

     Total selling, general and
     administrative expenses                      12,758        3,764       21,150        7,962

   Other non-interest expenses:
    Net operating costs of real estate
    acquired through foreclosure                      25          101          (15)         183
    Amortization of goodwill and other
    intangibles                                      565          386        1,174          619
                                                 -------      -------      -------      -------


     Total other non-interest expenses               590          487        1,159          802
                                                 -------      -------      -------      -------


     Total non-interest expenses                  13,348        4,251       22,309        8,764
                                                 -------      -------      -------      -------
     </TABLE>

                                   (continued)


<PAGE>   3

                         TELEBANC FINANCIAL CORPORATION

     CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (CONTINUED)
                      (In Thousands, Except Per Share Data)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                    Three Months                 Six Months
                                                       Ended                       Ended
                                                      June 30,                    June 30,
                                                      --------                    --------
                                                   1999          1998         1999         1998
                                                   ----          ----         ----         ----
<S>                                          <C>             <C>          <C>          <C>
     Income before income tax expense              4,758          406        8,319        1,493

Income tax expense                                 2,528           51        3,811          526

Minority interest in subsidiary, net of tax          539          176        1,100          352
                                                 -------      -------      -------      -------

     Income before extraordinary loss and
      cumulative effect of accounting change       1,691          179        3,408          615

Extraordinary loss on early extinguishment
 of debt, net of tax                               1,987           --        1,987           --
                                                 -------      -------      -------      -------

     Income before cumulative effect of
      accounting change                             (296)         179        1,421          615

Cumulative effect of accounting change, net
 of tax                                               --           --          469           --
                                                 -------      -------      -------      -------

     Net (loss) income                              (296)         179          952          615

Preferred stock dividends                             --          162           --          324
                                                 -------      -------      -------      -------

     Net (loss) income available to common       $  (296)     $    17      $   952      $   291
      shareholders                                 =====           ==          ===          ===


Other comprehensive income, net of tax:
   Unrealized holding (loss) gain on
    securities arising during the period         $(8,071)     $  (644)     $(5,856)     $   170
   Less: reclassification adjustment for
    losses (gains) included in net income            237         (465)        (396)      (1,017)
                                                 -------      -------      -------      -------


     Other comprehensive income, net of tax       (7,834)      (1,109)      (6,252)        (847)
                                                 -------      -------      -------      -------

     Comprehensive income                        $(8,130)     $(1,092)     $(5,300)     $  (556)
                                                 =======      =======      =======      =======

Earnings per share:
   Basic:
     Income before extraordinary loss and
      cumulative effect of accounting change     $  0.04      $  0.00      $  0.11      $  0.03
     Extraordinary loss on early
      extinguishment of debt, net of tax           (0.06)          --        (0.07)          --
                                                 -------      -------      -------      -------
     Income before cumulative effect of
      accounting change                            (0.02)        0.00         0.04         0.03
     Cumulative effect of accounting
      change, net of tax                              --           --        (0.02)          --
                                                 -------      -------      -------      -------
     Net income                                  $ (0.02)     $  0.00      $  0.02      $  0.03
                                                 =======      =======      =======      =======

   Diluted:

     Income before extraordinary loss and
      cumulative effect of accounting change     $  0.04      $  0.00      $  0.09      $  0.03
     Extraordinary loss on early
      extinguishment of debt, net of tax           (0.06)          --        (0.06)          --
                                                 -------      -------      -------      -------
     Income before cumulative effect of
      accounting change                            (0.02)        0.00         0.03         0.03
     Cumulative effect of accounting
      change, net of tax                              --           --        (0.01)          --
                                                 -------      -------      -------      -------
     Net income                                  $ (0.02)     $  0.00      $  0.02      $  0.03
                                                 =======      =======      =======      =======
</TABLE>

            See accompanying notes to consolidated financial statements.

<PAGE>   4
                         TELEBANC FINANCIAL CORPORATION

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998

NOTE 1.  BASIS OF PRESENTATION

      Telebanc Financial Corporation (the "Company" or "Telebanc") is a savings
and loan holding company organized under the laws of Delaware in 1994. The
primary business of the Company is the activities conducted by TeleBank (the
"Bank" or "Telebank") and TeleBanc Capital Markets, Inc. ("TCM"). The Bank is a
federally chartered savings bank that provides deposit accounts insured by the
Federal Deposit Insurance Corporation to customers nationwide. TCM is a funds
manager and registered broker-dealer. TeleBanc Capital Trust I ("TCT I") and
TeleBanc Capital Trust II ("TCT II") are business trusts formed for the purpose
of issuing capital securities and investing the proceeds in junior subordinated
debentures issued by the Company. The Bank, through its wholly owned subsidiary
TeleBanc Servicing Corporation ("TSC"), owns 100% of TeleBanc Insurance
Services, Inc. ("TBIS"), which was formed in May 1998 to offer co-branded
insurance products. Until April 1999, TSC also owned 50% of AGT PRA, LLC ("AGT
PRA"). The primary business of AGT PRA is its two-thirds investment in Portfolio
Recovery Associates, LLC ("PRA"), which acquires and collects delinquent
consumer debt obligations for its own portfolio.

      The financial statements as of June 30, 1999 and for the three and six
months ended June 30, 1999 and 1998 are unaudited but, in the opinion of
management, contain all adjustments, consisting solely of normal recurring
entries, necessary to present fairly the consolidated financial condition as of
June 30, 1999 and the results of consolidated operations for the three and six
months ended June 30, 1999 and 1998. The results of consolidated operations for
the three and six months ended June 30, 1999 are not necessarily indicative of
the results that may be expected for the entire year. The Notes to Consolidated
Financial Statements for the year ended December 31, 1998, included in the
Company's Annual Report to Stockholders for 1998, should be read in conjunction
with these statements.

      Effective June 8, 1999 and June 22, 1998, the Board of Directors of the
Company approved the distribution of two-for-one stock splits of its outstanding
common stock, par value $0.01 (the "Common Stock"). The effects of these stock
splits have been retroactively applied in the consolidated financial statements
for all periods presented.

      Certain prior year's amounts have been reclassified to conform to the
current year's presentation.

      Effective January 1, 1999, the Company changed its method of accounting
for start-up costs to comply with Statement of Position 98-5, Reporting on the
Cost of Start-up Activities ("SOP 98-5"), issued by the American Institute of
Certified Public Accountants in 1998. SOP 98-5 requires that start-up activities
be expensed as incurred rather than capitalized. Therefore, as of January 1,
1999, the Company expensed all previously capitalized start-up costs, reporting
the expense as a cumulative effect of accounting change in the Consolidated
Statement of Operations and Comprehensive Income.


<PAGE>   5

                         TELEBANC FINANCIAL CORPORATION

NOTE 2.     EARNINGS PER SHARE

      Basic earnings per common share, as required by Statement of Financial
Accounting Standards No. 128, is computed by dividing adjusted net income by the
total of the weighted average number of common shares outstanding during the
respective periods. Options and warrants are deemed to be dilutive if the
average market price of the related Common Stock for the period exceeds the
exercise price.

      In February 1997, the Company issued 29,900 shares of 4% Cumulative
Preferred Stock (the "Preferred Stock"), par value $0.01, which was convertible
to 4,798,958 shares of the Company's Common Stock. For purposes of the diluted
earnings per share calculation, the Company assumed that all outstanding shares
of Preferred Stock had converted to Common Stock as of the beginning of the
respective periods. In July 1998, the Preferred Stock converted to Common Stock
and, therefore, was no longer outstanding as of June 30, 1999.

      The Company's year-to-date weighted average number of common shares
outstanding was 28,361,324 at June 30, 1999 and 8,960,032 at June 30, 1998. For
the diluted earnings per share computation, weighted average shares outstanding
also includes potentially dilutive securities.



                                EPS CALCULATION

<TABLE>
<CAPTION>
                                               Income             Shares      Per Share Amount
                                               ------             ------      ----------------

                                            --------------------------------------------------
                                                 For the Quarter Ended June 30, 1999
                                            --------------------------------------------------
<S>                                            <C>             <C>            <C>
Basic earnings per share
Income before extraordinary loss               $ 1,691,000
Premium on redemption of trust preferred
 securities (a)                                   (381,000)
                                                ----------
Adjusted income before extraordinary loss        1,310,000      32,031,870     $     0.04
Extraordinary loss on early extinguishment
 of debt, net of tax                            (1,987,000)                         (0.06)
                                                ----------                     ----------
Adjusted net income                            $  (677,000)                    $    (0.02)
                                                ==========                     ==========

Options issued to management                                     3,383,182
Warrants                                                         1,075,485
                                                                ----------

Diluted earnings per share
Income before extraordinary loss               $ 1,691,000
Premium on redemption of trust preferred
 securities (a)                                   (381,000)
                                                ----------
Adjusted income before extraordinary loss        1,310,000      36,490,537     $     0.04
                                                                ==========

Extraordinary loss on early extinguishment
 of debt, net of tax                            (1,987,000)                         (0.06)
                                                ----------                     ----------
Adjusted net income                            $  (677,000)                    $    (0.02)
                                                ==========                     ==========
</TABLE>


<PAGE>   6
                         TELEBANC FINANCIAL CORPORATION


<TABLE>
<CAPTION>
                                               Income        Shares           Per Share Amount
                                               ------        ------           ----------------

                                            --------------------------------------------------
                                                 For the Quarter Ended June 30, 1998
                                            --------------------------------------------------
<S>                                         <C>             <C>            <C>
Basic earnings per share
Net income                                  $ 179,000
Less: preferred stock dividends              (162,000)
                                            ---------

Income available to common shareholders     $  17,000      8,983,602     $        0.00
                                                                         =============
Options issued to management                       --      1,290,484
Warrants                                           --      1,294,204
Convertible preferred stock                        --             --
                                            -------------------------
Diluted earnings per share                  $  17,000     11,568,290            $ 0.00(b)
                                            ==========================================

</TABLE>

<TABLE>
<CAPTION>
                                            -----------------------------------------------
                                            For the Six Months Ended June 30, 1999
                                            -----------------------------------------------
<S>                                            <C>              <C>            <C>
Basic earnings per share
Income before extraordinary loss and
 cumulative effect of accounting change         $ 3,408,000
Premium on redemption of trust preferred
 securities (a)                                    (381,000)
                                                -----------
Adjusted income before extraordinary loss
 and cumulative effect of accounting change     $ 3,027,000      28,361,324     $     0.11
Extraordinary loss on early extinguishment
 of debt, net of tax                             (1,987,000)                         (0.07)
                                                -----------                     ----------

Adjusted income before cumulative effect
 of accounting change                             1,040,000                           0.04
Cumulative effect of accounting change,
 net of tax                                        (469,000)                         (0.02)
                                                -----------                     ----------
Adjusted net income                             $   571,000                     $     0.02
                                                ===========                     ==========


Options issued to management                                      3,257,014
Warrants                                                          1,217,252
                                                                 ----------

Diluted earnings per share
Income before extraordinary loss and
 cumulative effect of accounting change         $ 3,408,000
Premium on redemption of trust preferred
 securities (a)                                    (381,000)
                                                -----------

Adjusted income before extraordinary loss
 and cumulative effect of accounting change     $ 3,027,000      32,835,590     $     0.09
                                                                 ==========

Extraordinary loss on early extinguishment
 of debt, net of tax                             (1,987,000)                         (0.06)
                                                -----------                     ----------

Adjusted income before cumulative effect
 of accounting change                             1,040,000                           0.03
Cumulative effect of accounting change,
 net of tax                                        (469,000)                         (0.01)
                                                -----------                     ----------
Adjusted net income                             $   571,000                     $     0.02
                                                ============                    ==========

</TABLE>


<PAGE>   7
                         TELEBANC FINANCIAL CORPORATION



<TABLE>
<CAPTION>

                                               Income      Shares      Per Share Amount
                                               ------      ------      ----------------

                                            -------------------------------------------
                                               For the Six Months Ended June 30, 1998
                                            -------------------------------------------
<S>                                         <C>              <C>            <C>
Basic earnings per share
Net income                                  $  615,000
Less: preferred stock dividends               (324,000)
                                            ----------
Income available to common shareholders     $  291,000       8,960,032     $   0.03
                                                                           =============
Options issued to management                        --       1,261,984
Warrants                                            --       1,270,980
Convertible preferred stock                         --              --
                                            -----------------------------
Diluted earnings per share                  $  291,000      11,492,996     $   0.03(b)
                                            ===========================================
</TABLE>

(a) This charge represents costs incurred to purchase certain of the Company's
    trust preferred securities on the open market. The charge was made against
    additional paid-in capital but is assumed to reduce income for earnings per
    share purposes. Refer to Note 3 for further discussion.

(b) The impact of the convertible preferred stock is antidilutive for the three
    and six months ended June 30, 1998.

NOTE 3.  TRUST PREFERRED SECURITIES

         In June 1997, the Company formed TCT I, which in turn sold, at par,
10,000 shares of trust preferred securities, Series A, liquidation amount of
$1,000, for a total of $10.0 million in a private placement. TCT I is a business
trust formed for the purpose of issuing capital securities and investing the
proceeds in junior subordinated debentures issued by the Company. These junior
subordinated debentures, which are the sole assets of TCT I, have a principal
amount of $10.0 million and bear interest at an annual rate of 11.0%. The junior
subordinated debentures mature in 2027.

         In May 1999, the Company purchased $1.0 million face amount of TCT I
trust preferred securities on the open market at a price of 112.5%. The Company
deemed these repurchased securities to be retired and, therefore, wrote off the
resulting premium and a proportionate share of the discount on TCT I securities
against additional paid-in capital. For the three- and six-month periods ended
June 30, 1999, the Company has assumed that this amount, which totals $174,000,
decreases net income for earnings per share purposes.

         In July 1998, the Company formed TCT II, a business trust formed solely
for the purpose of issuing capital securities. TCT II sold, at par, 1,100,000
shares of Beneficial Unsecured Securities, Series A, with a liquidation amount
of $25 per share, for a total of $27.5 million and invested the net proceeds in
the Company's 9.0% Junior Subordinated Deferrable Interest Debentures, Series A.
These Junior Subordinated Deferrable Interest Debentures, Series A, which are
the sole assets of TCT II, have a principal amount of $27.5 million and mature
in 2028.

         In June 1999, the Company purchased $3.6 million face amount of TCT II
trust preferred securities on the open market at par. The Company deemed these
repurchased securities to be retired and, therefore, wrote off $207,000 of the
discount on TCT II securities against additional paid-in


<PAGE>   8
                         TELEBANC FINANCIAL CORPORATION

capital. For the three- and six-month periods ended June 30, 1999, the Company
has assumed that this amount decreases net income for earnings per share
purposes.

NOTE 4.  RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("SFAS 133"). The statement establishes accounting and
reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts, be recorded in the
balance sheet as either an asset or liability measured at fair value. SFAS 133
requires that changes in the derivative instrument's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative instrument's gains and
losses to offset related results on the hedged item in the income statement and
requires that a company formally document, designate and assess the
effectiveness of transactions that receive hedge accounting treatment. SFAS 133
is effective for fiscal years beginning after June 15, 2000, although a company
may implement the statement as of the beginning of any fiscal quarter after
issuance, that is, fiscal quarters beginning June 16, 1999 and after. SFAS 133
cannot be applied retroactively. SFAS 133 must be applied to (a) derivative
instruments and (b) certain derivative instruments embedded in hybrid contracts
that were issued, acquired, or substantively modified after December 31, 1997
and, at the Company's election, before January 1, 1998. The Company plans to
adopt SFAS 133 as of January 1, 2001 but has not yet quantified the impact of
adopting SFAS 133 on its financial statements. However, the statement could
increase volatility in earnings and other comprehensive income.

NOTE 5.  RECENT EVENTS

         In April 1999, the Company sold 7,940,000 shares of its Common Stock to
the public on a post-split basis, raising aggregate net proceeds of $396.0
million. The Company is using the majority of the proceeds to invest as
additional capital of Telebank and for general corporate purposes, which include
funding the Company's continued growth and augmenting working capital.

         In June 1999, the Company used $18.3 million of proceeds from the
equity offering to redeem $17.3 million face amount of subordinated debt,
including a 5.75% premium. This debt bore interest at 11.5% and had an original
maturity date of May 1, 2004. Additionally, the Company used $13.7 million of
proceeds to redeem $13.7 million face amount of subordinated debt, which bore
interest at 9.5% and had an original maturity date of March 31, 2004. The
Company recorded an extraordinary loss of approximately $2.0 million, net of
tax, on the early extinguishment of debt.

         In April 1999, TSC sold its equity investment in AGT PRA for a total of
$9.3 million, which resulted in a $4.1 million gain. In anticipation of the
Company's rapid growth, it made a 50% investment in AGT PRA, which was in a
start-up phase, with the expectation that its two-thirds-owned subsidiary, PRA,
would manage the Company's non-performing assets. Over time, however, PRA began
to focus only on consumer credit. Therefore, the Company determined that its
investment in AGT PRA would not be a part of its core business and, accordingly,
sold its interest in the second quarter of 1999.
<PAGE>   9
                         TELEBANC FINANCIAL CORPORATION

         In May 1999, the Company completed the purchase of the building that
houses its current main headquarters in Arlington, Virginia, for $10.2 million.

         In June 1999, the Company announced an agreement to be acquired by
E*TRADE Group, Inc. ("E*TRADE"), in a stock-for-stock exchange. The acquisition
is subject to approval by Telebanc's stockholders as well as required regulatory
approvals. In connection with the agreement, Telebanc and E*TRADE entered into a
Stock Option Agreement pursuant to which Telebanc granted E*TRADE an option,
exercisable under certain conditions, to purchase a certain number of newly
issued shares of Telebanc's Common Stock. Such option will expire upon
consummation of the merger.

NOTE 6.     COMMITMENTS AND CONTINGENT LIABILITIES

      As of June 30, 1999, we had commitments to purchase $366.4 million in
loans. Also, certificates of deposit that are scheduled to mature in less than
one year as of June 30, 1999 totaled $861.4 million. In the normal course of
business, we make various commitments to extend credit and incur contingent
liabilities that are not reflected in the balance sheets.


<PAGE>   10
                         TELEBANC FINANCIAL CORPORATION


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.


                                        Telebanc Financial Corporation
                                        ------------------------------
                                                 (Registrant)

Date:   August 30, 1999         By:  /s/ Mitchell H. Caplan
       ----------------------        --------------------------------------
                                     Mitchell H. Caplan
                                     President and Chief Executive Officer



Date:   August 30, 1999         By:  /s/ Aileen Lopez Pugh
       ----------------------        --------------------------------------
                                     Aileen Lopez Pugh
                                     Executive Vice President and Chief
                                     Financial Officer