<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             ----------------------

                                   FORM 10-QSB

(MARK ONE)

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

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

            FOR THE TRANSITION PERIOD FROM ___________ TO ___________

                         COMMISSION FILE NUMBER: 0-24220

                             KBK CAPITAL CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

         DELAWARE                                          75-2416103
(STATE OR OTHER JURISDICTION OF                        (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                         IDENTIFICATION NO.)

2200 CITY CENTER II, 301 COMMERCE, FORT WORTH, TEXAS       76102-4122
     (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)               (ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (817) 258-6000


CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION
13 OR 15(d) OF THE EXCHANGE ACT DURING THE PAST 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
     ---------------           -------------

STATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF COMMON
EQUITY, AS OF THE LATEST PRACTICABLE DATE.

COMMON STOCK, $0.01 PAR VALUE                         2,185,086
                                        (SHARES OUTSTANDING AS OF JULY 15, 2002)

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT

YES                 NO     X
    ---------          ---------

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


<PAGE>
        KBK CAPITAL CORPORATION
        FORM 10-QSB-- Quarter Ended June 30, 2002


<Table>
<Caption>
                                                                                                                 Page
                                                                                                                Number
<S>     <C>          <C>                                                                                        <C>
        PART I.      FINANCIAL INFORMATION

        Item 1 -     Financial Statements

                     Consolidated Balance Sheets at June 30, 2002 (unaudited) and December 31, 2001               2

                     Consolidated Statements of Operations for the Three Months Ended June 30, 2002 and
                     2001 (unaudited) and Six Months Ended June 30, 2002 and 2001 (unaudited)                     3

                     Consolidated Statements of Changes in Stockholders' Equity for the Year Ended
                     December 31, 2001 and the Six Months Ended June 30, 2002 (unaudited)                         4

                     Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2002 and 2001        5
                     (unaudited)

                     Notes to Consolidated Financial Statements                                                  6-8

        Item 2 -     Management's Discussion and Analysis of Financial Condition and Results of Operations       9-14

        PART II.     OTHER INFORMATION

        Item 1 -     Legal Proceedings                                                                            14

        Item 4 -     Submission of Matters to a Vote of Security Holders                                          14

        Item 6 -     Exhibits and Reports on Form 8-K                                                             15

                     Exhibit 99.5 Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to
                     Section 906 of the Sarbanes-Oxley Act of 2002                                                15

                     Signatures                                                                                   16
</Table>




                                       1
<PAGE>
PART 1. - ITEM 1 - FINANCIAL STATEMENTS

                    KBK CAPITAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                 JUNE 30, 2002 (UNAUDITED) AND DECEMBER 31, 2001

<Table>
<Caption>
                                                                              JUN. 30, 2002    DEC. 31, 2001
                                                                               (UNAUDITED)
                                                                              -------------    -------------
<S>                                                                           <C>              <C>
                                        ASSETS
Cash                                                                          $   3,541,798    $   8,310,453
Receivables:
     Accounts receivable, net                                                    46,282,518       64,981,840
     Loans receivable, net                                                       45,435,182       52,982,983
     Less allowance for credit losses                                            (2,549,999)      (8,475,641)
                                                                              -------------    -------------
     Total receivables, net                                                      89,167,701      109,489,182
Premises and equipment, net of accumulated depreciation                           1,279,679        1,528,588
Intangible assets, net of accumulated amortization                                2,228,793        2,305,767
Other loan-related assets, net                                                    6,243,995        6,949,269
Income taxes receivable                                                           1,597,074        1,175,840
Deferred tax asset, net                                                           1,048,565        3,817,797
Other assets                                                                      2,234,945        2,000,931
                                                                              -------------    -------------
                        Total assets                                          $ 107,342,550    $ 135,577,827
                                                                              =============    =============

                         LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Bank line of credit                                                           $  69,478,114    $  95,416,050
Mandatorily redeemable preferred securities                                      16,135,694       16,107,974
Due to clients                                                                    8,224,736       10,500,872
Accounts payable and other liabilities
                                                                                    518,821          845,069

Deferred revenue                                                                     68,601          147,836
                                                                              -------------    -------------
                        Total liabilities                                        94,425,966      123,017,801

STOCKHOLDERS' EQUITY:
Preferred stock, $.10 par value.  Authorized 100,000 shares; no
      Shares issued and outstanding                                                      --               --
Common stock, $.01 par value.  Authorized 10,000,000 shares; issued
     3,577,485 shares and outstanding 2,181,956 at June 30, 2002 and issued
      3,577,485 shares and outstanding 2,176,646 at December 31, 2001                35,775           35,775
Additional paid-in capital                                                       16,224,907       16,224,907
Retained earnings                                                                 4,338,738        4,011,438
Treasury stock, at cost, 1,395,529 shares at June 30, 2002 and
     1,400,839 shares at December 31, 2001                                       (7,682,836)      (7,712,094)
                                                                              -------------    -------------
                        Total stockholders' equity                               12,916,584       12,560,026
                                                                              -------------    -------------
                        Total liabilities and stockholders' equity            $ 107,342,550    $ 135,577,827
                                                                              =============    =============
</Table>

See accompanying notes to consolidated financial statements.


                                       2
<PAGE>
                    KBK CAPITAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<Table>
<Caption>
                                                THREE MONTHS ENDED JUN. 30,   SIX MONTHS ENDED JUN. 30,
                                                      (UNAUDITED)                   (UNAUDITED)
                                                --------------------------    -------------------------
                                                   2002           2001           2002          2001
                                                -----------    -----------    -----------   -----------
<S>                                             <C>            <C>            <C>           <C>
Earned discount income                          $ 1,768,509    $ 2,175,133    $ 3,788,270   $ 4,860,673
Interest income - Loans                             946,395      1,653,674      1,987,070     3,770,612
Other income - Fees                                 578,358        677,106      1,003,926     1,300,615
                                                -----------    -----------    -----------   -----------
 Total revenue                                    3,293,262      4,505,913      6,779,266     9,931,900
Interest expense                                  1,200,316      1,982,792      2,492,986     4,438,122
                                                -----------    -----------    -----------   -----------
 Income after interest expense                    2,092,946      2,523,121      4,286,280     5,493,778
Provision for credit losses                        (205,274)     1,100,000         94,726     5,655,104
Losses on other loan-related assets                 705,274             --        705,274     1,635,000
                                                -----------    -----------    -----------   -----------
Income (loss) after interest expense and
 provision for losses                             1,592,946      1,423,121      3,486,280    (1,796,326)
Operating expenses:
 Salaries and employee benefits                   1,279,869      1,593,466      2,638,705     3,117,227
 Occupancy and equipment                            321,108        353,817        657,453       703,484
 Professional fees                                   74,305        122,613        145,305       253,598
 Other                                              498,896        761,024        940,153     1,539,782
                                                -----------    -----------    -----------   -----------
  Total operating expenses                        2,174,178      2,830,920      4,381,616     5,614,091
                                                -----------    -----------    -----------   -----------
Gain on sale of other assets                      1,441,892             --      1,441,892            --
                                                -----------    -----------    -----------   -----------
Income (loss) before income taxes                   860,660     (1,407,799)       546,556    (7,410,417)
Income tax expense (benefit):
 Federal                                            296,021       (443,333)       191,157    (2,441,901)
 State                                                6,135        (13,932)         6,248       (73,755)
                                                -----------    -----------    -----------   -----------
  Total income tax expense (benefit)                302,156       (457,265)       197,405    (2,515,656)
                                                -----------    -----------    -----------   -----------

Net income (loss)                               $   558,504    $  (950,534)   $   349,151   $(4,894,761)
                                                ===========    ===========    ===========   ===========

Net income (loss) per share-basic and diluted   $      0.26    $     (0.36)   $      0.16   $     (1.83)
                                                ===========    ===========    ===========   ===========

Weighted-average common shares
 outstanding-basic and diluted                    2,181,956      2,641,835      2,180,604     2,671,670
                                                ===========    ===========    ===========   ===========
</Table>


See accompanying notes to consolidated financial statements.



                                       3
<PAGE>
                    KBK CAPITAL CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

 YEAR ENDED DECEMBER 31, 2001 AND AND SIX MONTHS ENDED JUNE 30, 2002 (UNAUDITED)



<Table>
<Caption>
                                           Common Stock
                                   ----------------------------   Additional                                         Total
                                      Shares                        paid-in         Retained        Treasury      stockholders'
                                    outstanding       Amount        capital         earnings         stock           equity
                                   ------------    ------------   ------------    ------------    ------------    ------------
<S>                                <C>             <C>            <C>             <C>             <C>             <C>
Balance at December 31, 2000          2,764,404    $     35,775   $ 16,263,709    $ 12,991,900    $ (5,408,883)   $ 23,882,501

Purchase of stock for treasury         (600,255)             --             --              --      (2,381,708)     (2,381,708)

Issuance of common stock from
     treasury                            12,497              --             --         (44,049)         78,497          34,448

Forfeiture of stock options                  --              --        (38,802)             --              --         (38,802)

Net loss                                     --              --             --      (8,936,413)             --      (8,936,413)
                                   ------------    ------------   ------------    ------------    ------------    ------------

Balance at December 31, 2001          2,176,646          35,775     16,224,907       4,011,438      (7,712,094)     12,560,026

Issuance of common stock from
     treasury                             5,310              --             --         (21,851)         29,258           7,407

Net income                                   --              --             --         349,151              --         349,151

                                   ------------    ------------   ------------    ------------    ------------    ------------
Balance at June 30, 2002              2,181,956    $     35,775   $ 16,224,907    $  4,338,738    $ (7,682,836)   $ 12,916,584
                                   ============    ============   ============    ============    ============    ============
</Table>





See accompanying notes to consolidated financial statements.


                                       4
<PAGE>
                    KBK CAPITAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<Table>
<Caption>
                                                                        SIX MONTHS ENDED JUNE 30,
                                                                             (UNAUDITED)
                                                                     ----------------------------
                                                                         2002            2001
                                                                     ------------    ------------
<S>                                                                  <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                                    $    349,151    $ (4,894,761)
Adjustments to reconcile net income (loss) to net cash provided by
 operating activities:
   Depreciation and amortization                                          374,870         511,833
   Accretion on mandatorily redeemable preferred securities                27,720          25,370
   Provision for credit losses                                             94,726       5,655,104
   Losses on other loan-related assets                                    705,274       1,635,000
   Deferred income taxes                                                2,769,232      (1,346,561)
   Changes in operating assets and liabilities:
    Accounts receivable, net                                           18,238,219      28,511,002
    Other assets                                                         (234,014)       (432,808)
    Due to clients                                                     (2,276,136)     (2,794,370)
    Accounts payable and other liabilities                               (326,248)       (545,694)
    Income taxes receivable/payable                                      (421,234)     (1,845,340)
    Deferred revenue                                                      (79,235)         22,458
                                                                     ------------    ------------
    Net cash provided by operating activities                          19,222,325      24,501,233
                                                                     ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Net decrease in loans receivable, net                                1,988,536       7,382,477
   Purchases of premises and equipment                                    (48,987)       (577,352)
                                                                     ------------    ------------
    Net cash provided by investing activities                           1,939,549       6,805,125
                                                                     ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net repayments to the bank                                         (25,937,936)    (35,600,026)
   Repurchase of common stock                                                  --      (1,039,810)
   Forfeiture of stock options                                                 --         (38,802)
   Issuance of common stock                                                 7,407          22,216
                                                                     ------------    ------------
    Net cash used in financing activities                             (25,930,529)    (36,656,422)
                                                                     ------------    ------------
    Net decrease in cash                                               (4,768,655)     (5,350,064)
Cash at beginning of period                                             8,310,453      12,675,230
                                                                     ------------    ------------
Cash at end of period                                                $  3,541,798    $  7,325,166
                                                                     ============    ============
</Table>




       See accompanying notes to consolidated financial statements.


                                       5
<PAGE>
                    KBK CAPITAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. GENERAL. The consolidated financial statements of KBK Capital Corporation
(the "Company") and its wholly owned subsidiaries, KBK Financial, Inc., ("KBK"),
KBK Receivables Corporation, ("SPC"), KBK Capital Trust I, (the "Trust"), and
KBK Acceptance Company LP ("SPV"), included herein, are unaudited as of and for
all periods ended June 30, 2002 and 2001. However, such unaudited statements
reflect all adjustments (consisting of normal recurring adjustments) that are,
in the opinion of management, necessary to fairly depict the results for the
periods presented. Certain information and note disclosures, normally included
in financial statements prepared in accordance with the accounting principles
generally accepted in the United States of America, have been condensed or
omitted pursuant to rules and regulations of the Securities and Exchange
Commission. The Company believes that the disclosures made herein are adequate
to make the information presented not misleading.

The results of operations for the six months ended June 30, 2002 are not
necessarily indicative of the results of operations to be expected for the
remainder of the year. These consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
for the years ended December 31, 2001 and 2000 which are included in the
Company's 2001 annual report.

2. OTHER LOAN-RELATED ASSETS. During 2001, the Company foreclosed on a loan
which was secured by a Boeing 727 jet. As of June 30, 2002, the Company valued
this airplane at approximately $6.2 million and classified it as other
loan-related assets in the consolidated balance sheets. The Company is actively
marketing the airplane for sale.

3. LINE OF CREDIT. During 2000, KBK transferred all its purchased accounts
receivable and loans receivable to SPV on a non-recourse basis. Upon transfer to
SPV, the assets were pledged as security for a $350 million facility
("Facility") to a multi-user conduit sponsored by a bank. This revolving
Facility replaced KBK's "off-balance sheet" securitization as well as the
multi-bank revolving line of credit that was executed in 1993. The new Facility
initially carries a five-year commitment of $200 million, which may be increased
up to $350 million upon request by SPV and consent by the conduit sponsor. The
Facility matures December 15, 2005 and bears interest at the sponsor's
commercial paper rate plus 1.28%. At June 30, 2002, the outstanding indebtedness
under the Facility was approximately $69 million. The terms of the Facility
require SPV and KBK to comply with certain financial covenants including the
maintenance of a certain tangible net worth. The Facility also provides for a
borrowing base against eligible receivables and loans pursuant to the terms of
the Facility. KBK was in compliance with the financial covenants and borrowing
base limitations, and there was approximately $4.7 million in available credit
under this line at June 30, 2002.

4. MANDATORILY REDEEMABLE PREFERRED SECURITIES. In 1998, the Trust issued
1,725,000 shares of mandatorily redeemable Trust Preferred Securities. The
principal assets of the Trust are approximately $16.0 million in subordinated
debentures issued by the Company. The subordinated debentures, which are
eliminated upon consolidation of the Trust with the Company, bear interest at a
rate of 9.50% and mature in 2028, subject to extension or earlier redemption in
certain events. The Company owns all of the common securities of the Trust.

The Preferred Securities are redeemable for cash, at the option of the Trust, in
whole or in part, from time to time on or after November 30, 2001, at a
redemption price of $10.00 per share plus accumulated and unpaid distributions
thereon. The Preferred Securities will also be redeemable upon the repayment
either at maturity of the subordinated debentures



                                       6
<PAGE>

or as a result of the acceleration of the subordinated debentures upon an event
of default. Distributions on the Preferred Securities are cumulative and accrue
at 9.50% per annum on the sum of liquidation value thereof, plus unpaid
distributions, which have been accrued in prior quarters. Accrued and unpaid
distributions are reflected in accounts payable and other liabilities in the
accompanying consolidated balance sheets.

The obligations of the Company with respect to the issuance of the Preferred
Securities constitute an irrevocable guarantee by the Company of the Trust's
obligation with respect to the Preferred Securities. Subject to certain
limitations, the Company may, from time to time, defer subordinated debenture
interest payments to the Trust, which would result in a deferral of distribution
payments on the related Preferred Securities. In such case, the distributions on
the Preferred Securities will accumulate and compound quarterly at 9.50% per
annum. The difference between the carrying value and liquidation value of the
Preferred Securities, $1,114,306 as of June 30, 2002, is being accreted over 15
years by making periodic charges to the Company's operations.

5. NET INCOME (LOSS) PER SHARE. Following is a reconciliation between the
weighted average shares outstanding used in the basic and diluted net income
(loss) per share computations:

<Table>
<Caption>
                                                      Three Months Ended                 Six Months Ended
                                                  June 30, 2002   June 30, 2001    June 30, 2002   June 30, 2001
                                                  -------------   -------------    -------------   -------------
<S>                                               <C>             <C>              <C>             <C>
Net income (loss)                                 $     558,504   $    (950,534)   $     349,151   $  (4,894,761)
                                                  =============   =============    =============   =============
Weighted average shares outstanding - Basic           2,181,956       2,641,835        2,180,604       2,671,670
                                                  =============   =============    =============   =============
Net income (loss)per share - Basic                $        0.26   $       (0.36)   $        0.16   $       (1.83)
                                                  =============   =============    =============   =============

Weighted average shares outstanding - Basic           2,181,956       2,641,835        2,180,604       2,671,670
Effect of dilutive securities
 Assumed exercise of stock options and warrants              --              --               --              --
                                                  -------------   -------------    -------------   -------------
Weighted average shares outstanding - Diluted         2,181,956       2,641,835        2,180,604       2,671,670
                                                  =============   =============    =============   =============
Net income (loss)per share - Diluted              $        0.26   $       (0.36)   $        0.16   $       (1.83)
                                                  =============   =============    =============   =============
</Table>

For the three months ended June 30, 2002 and 2001, zero and 750 stock options,
respectively, and for the six months ended June 30, 2002 and 2001, zero and
2,696, respectively, were excluded from the calculation of diluted weighted
average shares outstanding because their inclusion would have been antidilutive.

6. STOCKHOLDERS' EQUITY. Pursuant to the Stock Repurchase Plan initiated in
1995, the Company held 1,395,529 shares of Treasury Stock at a cost of
$7,682,836 as of June 30, 2002. The Company purchased no shares during the
quarter ended June 30, 2002.

7. NEW ACCOUNTING PRONOUNCEMENTS. In June 2001, the Financial Accounting
Standards Board issued SFAS No. 141, "Business Combinations", and SFAS No. 142.
"Goodwill and Other Intangible Assets". SFAS No. 141 requires that the purchase
method of accounting be used for all business combinations initiated after June
30, 2001. SFAS No. 142 requires that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead tested for
impairment at least annually. The Company adopted the provisions of SFAS No. 141
in 2001 and SFAS No. 142 effective January 1, 2002.



                                       7
<PAGE>
SFAS No. 141 requires upon adoption of SFAS No. 142, that the Company evaluate
its existing intangible assets and goodwill that were acquired in a prior
purchase business combination, and to make any necessary reclassifications in
order to conform with the new criteria in SFAS No. 141 for recognition apart
from goodwill. Upon adoption of SFAS No. 142, the Company was required to
reassess the useful lives and residual values of all intangible assets acquired
in purchase business combinations, and make any necessary amortization period
adjustments by the end of the first interim period after adoption. In addition,
to the extent an intangible asset is identified as having an indefinite useful
life, the Company is required to test the intangible asset for impairment in
accordance with the provisions of SFAS No. 142 within the first interim period.
Any impairment loss will be measured as of the date of adoption and recognized
as the cumulative effect of a change in accounting principle in the first
interim period.

In connection with the transitional goodwill impairment evaluation, SFAS No. 142
required the Company to perform an assessment of whether there is an indication
that goodwill is impaired as of the date of adoption. To accomplish this, the
Company must identify its reporting units and determine the carrying value of
each reporting unit by assigning the assets and liabilities, including the
existing goodwill and intangible assets, to those reporting units as of the date
of adoption. Based upon the results of this assessment, the Company determined
that, as of January 1, 2002, the fair value of the Company exceeded its carrying
value. Therefore, the goodwill of the Company is not impaired.

To the extent a reporting unit's carrying amount exceeds its fair value, an
indication exists that the reporting unit's goodwill may be impaired and the
Company must perform the second step of the transitional impairment test. In the
second step, the Company must compare the implied fair value of the reporting
unit's goodwill, determined by allocating the reporting unit's fair value to all
of its assets (recognized and unrecognized) and liabilities in a manner similar
to a purchase price allocation in accordance with SFAS No. 141, to its carrying
amount, both of which would be measured as of the date of adoption. This second
step is not required for the Company because the goodwill is not impaired.

The Company adopted Statement No. 142, "Goodwill and Other Intangible Assets,"
as of January 1, 2002 and no longer amortizes goodwill. As of the date of
adoption, the Company had unamortized goodwill in the amount of approximately
$1,805,000, which was subject to the transition provisions of Statement No. 142.
There was no amortization expense for the three months ended June 30, 2002
related to the Company's goodwill, whereas this expense amounted to
approximately $59,900 and $119,800 for the quarter and six months ended June 30,
2001. The Company's reported net loss for the three months ended June 30, 2001
adjusted for excluding the effects of goodwill amortization would have been
$890,634 compared to net income of $558,504 for the three months ended June 30,
2002. Likewise, the Company's basic and diluted net loss per share for the three
months ended June 30, 2001 adjusted for excluding the effects of goodwill
amortization would have been ($0.34) compared to basic and diluted net income
per share of $0.26 for the three months ended June 30, 2002. The Company's
reported net loss for the six months ended June 30, 2001 adjusted for excluding
the effects of goodwill amortization would have been $4,774,961 compared to net
income of $349,151 for the six months ended June 30, 2002. Likewise, the
Company's basic and diluted net loss per share for the six months ended June 30,
2001 adjusted for excluding the effects of goodwill amortization would have been
($1.79) compared to basic and diluted net income per share of $0.16 for six
months ended June 30, 2002.

The unamortized non-compete agreement of approximately $500,000 is being
amortized on a straight-line basis over an original life of nine and one-half
years. Upon initial application of Statement No. 142, the Company reassessed the
useful life of its intangible assets and determined that, as of January 1, 2002,
the non-compete agreement had a remaining useful life of three and one-quarter
years, unchanged from previous estimates. The Company will amortize the balance
related to the non-compete over the remaining life.




                                       8
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

GENERAL

The following commentary presents management's discussion and analysis of the
Company's financial condition and results of operations for the periods
presented. Certain of the statements included below, including those regarding
future financial performance or results or those that are not historical facts,
are, or contain, "forward-looking" information as that term is defined in the
Securities Exchange Act of 1934, as amended. The words "expect," "believe,"
"anticipate," "project," "estimate," and similar expressions are intended to
identify forward-looking statements. The Company cautions readers that any such
statements are not guarantees of future performance or events and such
statements involve risks, uncertainties and assumptions, including, but not
limited to, industry conditions, general economic conditions, interest rates,
competition, ability of the Company to successfully manage its growth, and other
factors discussed below and in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2001. Should one or more of these risks or
uncertainties materialize or should the underlying assumptions prove incorrect,
those actual results and outcomes may differ materially from those indicated or
implied in the forward-looking statements. This narrative should be read in
conjunction with information provided in the financial statements and
accompanying notes appearing in this report and the audited financial statements
appearing in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2001.

KBK Capital Corporation is the holding company for KBK Financial, Inc., an
independent financial services company that provides a broad line of financial
products and services to middle market commercial businesses with credit needs
of less than $10 million. KBK was founded in 1962 as a factoring company for
energy-related receivables in Texas. Factoring has served as the cornerstone of
KBK's growth. In 1994, KBK began introducing new products in an effort to expand
its client base and to meet the needs of its existing clients as their credit
quality improves. These products include purchase revolvers, working capital
loans, term loans and mezzanine loans.

KBK's client base consists primarily of businesses with annual revenues ranging
from $1 million to $50 million. The Company's clients typically have rapidly
expanding operations that drive their need for capital. KBK strives to provide
fast, flexible and creative solutions that are tailored to meet these needs.
This approach has provided KBK with a strong reputation in the middle market and
a well-diversified client base. The Company's clients are located in twenty-four
states and Canada and are engaged in a range of businesses, including
energy-related, manufacturing, and wholesale and retail distribution.

KBK's growth strategies include increasing market penetration, extending its
product line, and opportunistically pursuing strategic acquisitions and
partnerships that will complement or leverage the Company's product portfolio or
client relationships.

RESULTS OF OPERATIONS

         Second Quarter 2002 Compared to Second Quarter 2001

The following table sets forth the results of operations and certain other data
of the Company for the second quarter of 2002 and the second quarter of 2001.





                                       9
<PAGE>
<Table>
<Caption>
                                     Quarter Ended               Quarter Ended
                                     June 30, 2002               June 30, 2001
                                      (unaudited)                (unaudited)
                               -----------------------    ------------------------
                                           (dollars in thousands)
<S>                            <C>          <C>           <C>           <C>
Average Net Funds Employed     $   92,283                 $  116,791
Total Revenue                       3,293        100.0%        4,506         100.0%
Interest Expense                    1,200         36.4%        1,983          44.0%
Provision for Credit Losses           500         15.2%        1,100          24.4%
Operating Expenses                  2,174         66.0%        2,831          62.8%
Other Income                        1,442         43.8%           --            --
Income Tax Expense (Benefit)          302          9.2%         (457)        (10.1)%
                               ----------   ----------    ----------    ----------
Net Income (Loss)                     559         17.0%         (951)        (21.1)%
                               ==========   ==========    ==========    ==========
</Table>

Average net funds employed decreased 21.0% to $92.3 million for the quarter
ended June 30, 2002 from $116.8 million for the quarter ended June 30, 2001.
This decrease in average net funds employed resulted in a decrease in revenue of
26.9%, or $1.2 million, to $3.3 million for the quarter ended June 30, 2002 from
the quarter ended June 30, 2001 total revenue of $4.5 million.

Interest expense decreased $783,000 to $1.2 million for the second quarter of
2002 compared with $2.0 million for the second quarter of 2001. This decrease
resulted primarily from the $23.2 million decrease in average funded debt
required to support the funding of the Company's portfolio as well as the
significant decrease in market interest rates. The net effect of the decreased
revenue and decreased interest expense was a decrease of $430,000, or 17.0%, in
income after interest expense for the quarter ended June 30, 2002, compared to
the prior year quarter.

A provision for credit losses of $500,000 was recorded for the second quarter of
2002, compared to $1.1 million for the second quarter of 2001. The $500,000
provision for losses was recorded in consideration of the Company's valuation of
the portfolio as of June 30, 2002. During the second quarter of 2002, the
Company had net chargeoffs of $3.1 million compared to $498,000 of net
chargeoffs for the second quarter of 2001. The increase in chargeoffs resulted
from the final liquidation of assets which became nonperforming during 2001. The
allowance for credit losses of $2.5 million represents 2.8% of total outstanding
loans and accounts receivables and 2.7% of average net funds employed for the
quarter then ended. The allowance for credit losses at June 30, 2001 of $6.9
million represented 5.9% of total outstanding loans and accounts receivables and
5.9% of average net funds employed for the quarter then ended. Management
believes the current allowance is adequate to cover potential losses that might
result from the accounts receivable and loan portfolio at June 30, 2002.

Operating expenses of $2.2 million for the three months ended June 30, 2002
decreased $657,000, or 23.2%, compared with $2.8 million for the three months
ended June 30, 2001. The Company implemented a cost reduction program during the
fourth quarter of 2001 and experienced significant decreases in salaries and
employee benefits, professional fees and marketing expenses.

The Company recognized a gain of approximately $1.4 million included in gain on
sale of other assets related to its warrant position in a client company which
was sold during the second quarter of 2002. An additional gain of approximately
$160,000 related to this transaction may be received on the transaction
anniversary contingent on certain results of operations of the acquisition
company.

The decrease in operating expenses, combined with the decrease in the provision
for credit losses, the gain on the sale of warrants and the $430,000 decrease in
income after interest expense, resulted in a $2.3 million increase in income
before income taxes compared to the prior year quarter.

Income taxes increased to $302,000 for the second quarter of 2002 compared to an
income tax benefit of $457,000 for the second quarter of 2001.



                                       10
<PAGE>
As a result of the foregoing, net income of the Company for the second quarter
of 2002 increased to $559,000 as compared to a net loss of $951,000 for the
second quarter of 2001.

         Six Months Ended June 30, 2002 Compared to Six Months Ended June 30,
2001

         The following table sets forth the results of operations and certain
other data of the Company for the six months ended June 30, 2002 and 2001.

<Table>
<Caption>
                                          Six Months Ended             Six Months Ended
                                           June 30, 2002                June 30, 2001
                                            (unaudited)                  (unaudited)
                                    -------------------------    --------------------------
                                                    (dollars in thousands)
<S>                                 <C>           <C>            <C>            <C>
Average Net Funds Employed          $    97,476                  $   124,885
Total Revenue                             6,779         100.0%         9,932          100.0%
Interest Expense                          2,493          36.8%         4,438           44.7%
Provision for Credit Losses                 800          11.8%         5,655           56.9%
Loss on Other Loan Related Assets            --            --          1,635           16.5%
Other Income                              1,442          21.3%            --             --
Operating Expenses                        4,382          64.7%         5,614           56.5%
Income Tax Expense (Benefit)                197           2.9%        (2,515)         (25.3)%
                                    -----------   -----------    -----------    -----------
Net Income (Loss)                           349           5.1%        (4,895)         (49.3)%
                                    ===========   ===========    ===========    ===========
</Table>

Average net funds employed decreased 21.9% to $97.5 million for the six months
ended June 30, 2002 from $124.9 million for the six months ended June 30, 2001.
This decrease in net funds employed generated a revenue decrease of 31.7%, or
$3.2 million, to $6.8 million for the six months ended June 30, 2002 compared to
$9.9 million for the same period in 2001.

Interest expense decreased 43.8% to $2.5 million for the six months ended June
30, 2002 from $4.4 million for the same period of 2001. This decrease resulted
primarily from the $24.5 million decrease in average funded debt required to
support the funding of Company's portfolio as well as the significant decrease
in market interest rates. The net effect of the decreased revenue and decreased
interest expense was a decrease of $1.2 million, or 22.0%, in income after
interest expense for the six months ended June 30, 2002, compared to the same
period of the prior year.

A provision for credit losses of $800,000 was recorded for the six months ended
June 30, 2002, as compared to $5.7 million for the same period of 2001. The
$800,000 provision for losses was recorded in consideration of the Company's
valuation of the portfolio as of June 30, 2002. The decreased provision returns
the Company to a more normalized provision compared to the prior year charge
which was required by deterioration of the loan portfolio during the first
quarter to 2001. During the six months ended June 30, 2002, the Company had net
charge-offs of $6.0 million compared to $1.2 million of net charge-offs for the
same period of 2001. The increase in chargeoffs resulted from the final
liquidation of assets which became nonperforming during 2001. The allowance for
credit losses at June 30, 2002 of $2.5 million represents 2.8% of total
outstanding loans and accounts receivable and 2.6% of average net funds employed
for the six months then ended. The Company did not record any losses on
investments in other assets during the six months ended June 30, 2002.

The allowance for credit losses at June 30, 2001 of $6.9 million was 5.9% of
total outstanding loans and accounts receivable and 5.5% of average net funds
employed for the six months then ended. Management believes the current
allowance is adequate to cover potential losses which might result from the
accounts receivable and loan portfolio at June 30, 2002.

Operating expenses of $4.4 million for the six months ended June 30, 2002
decreased $1.2 million, or 21.9%, compared with the $5.6 million for the same
period of 2001. The Company implemented a cost reduction program during the




                                       11
<PAGE>
fourth quarter of 2001 and experienced significant decreases in salaries and
employee benefits, professional fees and marketing expenses.

The Company recognized a gain of approximately $1.4 million related to its
warrant position in a client company which was sold during the second quarter of
2002. An additional gain of approximately $160,000 related to this transaction
may be received on the transaction anniversary contingent on certain results of
operations of the acquisition company.

The impact of the gain combined with the decrease in operating expenses and the
decrease in the provision for credit and impairment losses and the decrease in
income after interest expenses, resulted in an 107.4% increase in income before
income tax when compared to the prior year period.

As a result of the foregoing, net income of the Company for the six months ended
June 30, 2002 increased $5.2 million, or 107.1%, to a net income of $349,000
from a net loss of $4.9 million for the same period in 2001.

CHANGES IN FINANCIAL CONDITION

Total assets decreased from $135.6 million at December 31, 2001 to $107.3
million at June 30, 2002. This decrease is primarily related to the $20.3
million decrease in net receivables and $4.8 million decrease in cash from
December 31, 2001 to June 30, 2002 and the corresponding $25.9 million decrease
in the bank line of credit from $95.4 million at December 31, 2001 to $69.5
million at June 30, 2002. Stockholders' equity increased $356,558, from $12.6
million at December 31, 2001 to $12.9 million at June 30, 2002, which was
primarily the result of the net income of $349,151 for the six months ended June
30, 2002. The Company paid no dividends on its common stock during the six
months ended June 30, 2002.

LIQUIDITY AND CAPITAL RESOURCES

The Company's capital requirements generally increase and decrease
proportionately to the change in earning assets. The Company continues to search
for ways to employ its capital and to expand its portfolio through increased
market penetration, expansion of its current product line and pursuit of
strategic acquisitions and partnerships which enable the Company to provide
complete financial services to middle-market businesses.

KBK's financing is provided through a $350 million revolving facility. The
facility has an initial five-year commitment of $200 million, which may be
increased up to $350 million upon request by SPV and consent by the conduit
sponsor. The facility matures December 15, 2005 and bears interest at the
sponsor's commercial paper rate plus 1.28%.

The Company has not paid dividends on its common stock and currently does not
intend to pay cash dividends; rather, it intends to retain its cash for the
continued expansion of its business and the continuation of the stock repurchase
program initiated in 1995.

Under the Company's stock repurchase program, the Company may buy back in open
market transactions, block trades or private transactions, up to an aggregate of
1,500,000 shares (41.9% of the issued shares as of June 30, 2002) of the
Company's common stock at the current market price. At June 30, 2002, 1,395,529
shares of common stock were held in the treasury at a cost of $7.7 million. All
of such purchases have been funded out of the general funds of the Company,
which resulted in an increase in the outstanding balance under the credit
facility.

Future sources of liquidity to fund growth in earning assets are anticipated
from the sale of earning assets, the issuance of unsecured and secured corporate
debt obligations, preferred and common stock issuance, as well as from
traditional bank financing.

CRITICAL ACCOUNTING POLICIES

The Company and its subsidiaries have established various accounting policies
which govern the application of accounting principles generally accepted in the
United States of America in the preparation and presentation of the Company's
consolidated financial statements. The significant accounting policies of the
Company are described in Note 1 of the Company's December 31, 2001 consolidated
financial statements. Certain accounting policies involve



                                       12
<PAGE>

significant judgments, assumptions and estimates by management that have a
material impact on the carrying value of certain assets and liabilities, which
management considers to be critical accounting policies. The judgments,
assumptions and estimates used by management are based on historical experience,
knowledge of the accounts and other factors, which are believed to be reasonable
under the circumstances. Because of the nature of the judgments and assumptions
made by management, actual results could differ from these judgments and
estimates, which could have a material impact on the carrying values of assets
and liabilities and the results of operations of the Company.

Management analyzes the total receivables portfolio and other loan-related
assets to determine the adequacy of the allowance for credit losses and the
carrying value of other loan-related assets and the appropriate provision
required to maintain an adequate allowance. Estimating the allowance for credit
losses is a critical accounting policy. It is subjective in nature and requires
material estimates that may be subject to revision as facts and circumstances
warrant. In assessing the adequacy of the allowance, management reviews the
size, quality and risks of the assets in the portfolio and considers factors
such as specific known risks, past experience, the status and amount of
nonperforming assets and economic conditions. A specific allowance is provided
for individual loans considered to have specific loss potential. In addition,
the Asset Quality Committee of the Board of Directors reviews the assessments of
management in determining the adequacy of the Company's allowance for credit
losses on a quarterly basis. Based on this review, the provision is recorded to
maintain the allowance at a level deemed appropriate by management based on
probable losses in the portfolio. The same process is applied for evaluation of
the carrying value of other loan-related assets as is applied for estimating the
allowance for credit losses. While management uses available information to
recognize losses on assets, there can be no assurance that future additions to
the allowance will not be necessary.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The following table presents contractual cash obligations of the Company as of
June 30, 2002 (dollars in thousands):

<Table>
<Caption>
                                                                             Payments due by Period
                                              ------------------------------------------------------------------------
                                                 Total         Less than       One to       Three to          After
Contractual Cash Obligations                                    One Year    Three Years    Five Years      Five Years
----------------------------                  ------------   ------------   ------------   ------------   ------------
<S>                                           <C>            <C>            <C>            <C>            <C>
Bank Line of Credit                           $     69,478   $         --   $         --   $     69,478   $         --
Mandatorily Redeemable Preferred Securities         17,250             --             --             --         17,250
Operating Leases                                       581            532             49             --
                                              ------------   ------------   ------------   ------------   ------------
     Total Contractual Cash Obligations       $     87,309   $        532   $         49   $     69,478   $     17,250
                                              ============   ============   ============   ============   ============
</Table>

The balance of mandatorily redeemable preferred securities is the fully accreted
amount due at maturity.

The following table presents contractual commercial commitments of the Company
as of June 30, 2002 (dollars in thousands):

<Table>
<Caption>
                                                    Amount of Commitment Expiration Per Period
                                    -----------------------------------------------------------------------------
                                      Unfunded       Less than         One to         Three to          After
Commercial Commitments               Commitments      One Year       Three Years     Five Years       Five Years
----------------------              -------------   -------------   -------------   -------------   -------------
<S>                                 <C>             <C>             <C>             <C>             <C>
Lines of Credit                     $      30,145   $      17,737   $      12,343   $           0   $          65
Standby Letters of Credit                      25              25              --              --              --
                                    -------------   -------------   -------------   -------------   -------------
     Total Commercial Commitments   $      30,170   $      17,762   $      12,343   $           0   $          65
                                    =============   =============   =============   =============   =============
</Table>

EFFECTS OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations", and SFAS No. 142. "Goodwill and Other Intangible
Assets". SFAS No. 141 requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001. SFAS No. 142
requires that goodwill and intangible assets with indefinite useful lives no
longer be amortized, but instead tested for impairment at least annually. The
Company adopted the provisions of SFAS No. 141 in 2001 and SFAS No. 142
effective January 1, 2002.

SFAS No. 141 requires upon adoption of SFAS No. 142, that the Company evaluate
its existing intangible assets and goodwill that were acquired in a prior
purchase business combination, and to make any necessary reclassifications in
order to conform with the new criteria in SFAS No. 141 for recognition apart
from goodwill. Upon adoption of SFAS No. 142, the Company was required to
reassess the useful lives and residual values of all intangible assets acquired
in




                                       13
<PAGE>

purchase business combinations, and make any necessary amortization period
adjustments by the end of the first interim period after adoption. In addition,
to the extent an intangible asset is identified as having an indefinite useful
life, the Company is required to test the intangible asset for impairment in
accordance with the provisions of SFAS No. 142 within the first interim period.
Any impairment loss will be measured as of the date of adoption and recognized
as the cumulative effect of a change in accounting principle in the first
interim period.

In connection with the transitional goodwill impairment evaluation, SFAS No. 142
required the Company to perform an assessment of whether there is an indication
that goodwill is impaired as of the date of adoption. To accomplish this, the
Company must identify its reporting units and determine the carrying value of
each reporting unit by assigning the assets and liabilities, including the
existing goodwill and intangible assets, to those reporting units as of the date
of adoption. Based upon the results of this assessment, the Company determined
that, as of January 1, 2002, the fair value of the Company exceeded its carrying
value. Therefore, the goodwill of the Company is not impaired.

To the extent a reporting unit's carrying amount exceeds its fair value, an
indication exists that the reporting unit's goodwill may be impaired and the
Company must perform the second step of the transitional impairment test. In the
second step, the Company must compare the implied fair value of the reporting
unit's goodwill, determined by allocating the reporting unit's fair value to all
of its assets (recognized and unrecognized) and liabilities in a manner similar
to a purchase price allocation in accordance with SFAS No. 141, to its carrying
amount, both of which would be measured as of the date of adoption. This second
step is not required for the Company because the goodwill is not impaired.

The Company adopted SFAS No. 142 as of January 1, 2002 and no longer amortizes
goodwill. As of the date of adoption, the Company had unamortized goodwill in
the amount of $1.8 million which is subject to the transition provisions of SFAS
Nos. 141 and 142. Amortization expense related to goodwill was $59,900 and
$119,800 for the quarter and six months ended June 30, 2001.

The unamortized non-compete agreement of approximately $500,000 is being
amortized on a straight-line basis over an original life of nine and one-half
years. Upon initial application of Statement No. 142, the Company reassessed the
useful life of its intangible assets and determined that, as of January 1, 2002,
the non-compete agreement had a remaining useful life of three and one-quarter
years, unchanged from previous estimates. The Company will amortize the balance
related to the non-compete over the remaining life.


PART II  - OTHER INFORMATION

ITEM 1  -  LEGAL PROCEEDINGS

The Company is not a party to any litigation other than routine proceedings
incidental to its business and the Company does not expect that these
proceedings will have a material adverse effect on the consolidated financial
position or results of operations of the Company.

ITEM 4  -  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The following items were submitted to the stockholders of the Company at the
Annual Meeting of Stockholders held on May 15, 2002. Of the 2,179,237
outstanding authorized voting shares, there were present by proxy or in person
2,157,491 shares, or 99%, of the voting shares outstanding. The following issues
were presented to the stockholders for approval.

          1.   To elect three directors to serve for a term of three years;

          2.   To ratify the selection by the Board of Directors of KPMG LLP as
               independent auditors for the fiscal year ending December 31,
               2002.



                                       14
<PAGE>
For Item 1, the following votes were cast for each of the nominees proposed by
the Board of the Company.

<Table>
<Caption>
                          Shares          Shares           Shares
         Nominee         Voted For     Voted Against      Withheld      Broker Non-Votes
          ------         ---------     -------------      --------      ----------------
<S>                      <C>           <C>                <C>           <C>
Robert J. McGee          2,111,563       -0-               45,928              -0-
Daniel R. Feehan         2,122,563       -0-               34,928              -0-
Thomas L. Healey         2,122,563       -0-               34,928              -0-
</Table>

For Item 2, shares voted FOR were 2,132,662 shares, 224,729 shares voted
AGAINST, and 100 shares ABSTAINED.

Both items were approved pursuant to the Company's Articles of Incorporation and
By-Laws.


ITEM 6  -  EXHIBITS AND REPORTS ON FORM 8-K

          (a)  EXHIBIT 99.5 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS
               ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


         In connection with the Quarterly Report of KBK Capital Corporation (the
"Company") on Form 10-Q for the quarter ended June 30, 2002, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned hereby certify, pursuant to 18 U.S.C. section 1350, as adopted
pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the
undersigned's best knowledge and belief:

               (a)  the Report fully complies with the requirements of section
                    13(a) or 15(d) of the Securities Exchange Act of 1934; and

               (b)  the information contained in the Report fairly presents, in
                    all material respects, the consolidated financial condition
                    and results of operations of the Company.


Dated this 14th day of August, 2002.

                                   KBK CAPITAL CORPORATION
                                   ("Company")


                                                  /s/ Robert J. McGee
                                   ---------------------------------------------
                                      Robert J. McGee, Chief Executive Officer





                                               /s/ Deborah B. Wilkinson
                                   ---------------------------------------------
                                   Deborah B. Wilkinson, Chief Financial Officer


          (b)  Reports on Form 8-K .

               None




                                       15
<PAGE>
                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



                                        KBK CAPITAL CORPORATION



Date August 14, 2002                             /s/  Deborah B. Wilkinson
     ------------------                 ----------------------------------------
                                                    Deborah B. Wilkinson,
                                                    Executive Vice President and
                                                    Chief Financial Officer





                                       16