<PAGE>   1
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                                  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, 2001

[ ]      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                           2,527,828
                                       (SHARES OUTSTANDING AS OF AUGUST 1, 2001)

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT
YES [ ]    NO [X]

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<PAGE>   2


KBK CAPITAL CORPORATION
FORM 10-QSB -- Quarter Ended June 30, 2001

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

Item 1 -     Financial Statements

             Consolidated Balance Sheets at June 30, 2001 (unaudited) and December 31, 2000               2

             Consolidated Statements of Operations for the Three Months Ended June 30, 2001 and           3
             2000 (unaudited) and Six Months Ended June 30, 2001 and 2000 (unaudited)

             Consolidated Statements of Changes in Stockholders' Equity for the Year Ended
             December 31, 2000 and the Six Months Ended June 30, 2001 (unaudited)                         4

             Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2001 and
             2000 (unaudited)                                                                             5

             Notes to Consolidated Financial Statements                                                  6-9

Item 2 -     Management's Discussion and Analysis of Financial Condition and Results of
             Operations                                                                                10-14

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                                                             14

             Signatures                                                                                   15
</Table>


                                       1

<PAGE>   3
PART 1. -- ITEM 1 -- FINANCIAL STATEMENTS


                    KBK CAPITAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                 JUNE 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000

<Table>
<Caption>
                                                                            JUN. 30, 2001
                                                                             (UNAUDITED)       DEC. 31, 2000
                                                                            -------------      -------------
<S>                                                                         <C>                <C>
                                     ASSETS
Cash                                                                        $   7,325,166      $  12,675,230

Accounts receivable, net                                                       41,230,448         70,089,726

Loans receivable, net                                                          76,027,848         84,219,170

Less allowance for credit losses                                               (6,887,446)        (2,389,463)
                                                                            -------------      -------------
 Total receivables, net                                                       110,370,850        151,919,433

Premises and equipment, net of accumulated depreciation of
 $4,025,246 at June 30, 2001 and $3,730,929 at December 31, 2000,
 respectively                                                                   1,336,729          1,074,454
Intangible assets, less accumulated amortization of $3,255,717
 at June 30, 2001 and $3,058,961 at December 31, 2000, respectively             2,502,524          2,699,280

Other investments, net
                                                                                       --          1,210,000


Income taxes receivable                                                         2,441,044                 --

Other assets                                                                    2,858,131          2,850,323
                                                                            -------------      -------------
                           Total assets                                     $ 126,834,444      $ 172,428,720
                                                                            =============      =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Bank line of credit                                                         $  86,933,428      $ 122,533,454
Mandatorily redeemable preferred securities                                    16,081,431         16,056,061
Due to clients                                                                  5,453,194          8,247,564
Accounts payable and other liabilities
                                                                                  306,568            852,262
Income taxes payable
                                                                                       --            750,857

Deferred revenue                                                                  128,479            106,021
                                                                            -------------      -------------
                           Total liabilities                                  108,903,100        148,546,219

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 2,581,623 at June 30, 2001 and
 issued 3,577,485 shares and outstanding 2,764,404 at December 31, 2000            35,775             35,775
Additional paid-in capital                                                     16,224,907         16,263,709
Retained earnings                                                               8,067,109         12,991,900
Treasury stock, at cost, 995,862 shares at June  30, 2001
 and 813,081 shares at December 31, 2000                                       (6,396,447)        (5,408,883)
                                                                            -------------      -------------
                           Total stockholders' equity                          17,931,344         23,882,501
                                                                            -------------      -------------
                           Total liabilities and stockholders' equity       $ 126,834,444      $ 172,428,720
                                                                            =============      =============
</Table>


See accompanying notes to consolidated financial statements.


                                       2
<PAGE>   4


                    KBK CAPITAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                  THREE MONTHS    THREE MONTHS     SIX MONTHS      SIX MONTHS
                                                     ENDED           ENDED            ENDED           ENDED
                                                 JUN. 30, 2001    JUN. 30, 2000   JUN. 30, 2001    JUN. 30, 2000
                                                  (UNAUDITED)      (UNAUDITED)     (UNAUDITED)      (UNAUDITED)
                                                 -------------    -------------   -------------    -------------
<S>                                              <C>              <C>             <C>              <C>
Earned discount income                            $ 2,175,133      $   489,342     $ 4,860,673      $   918,594
Interest income -- Loans                            1,653,674        2,514,553       3,770,612        5,008,016

Servicing fees                                             --        1,748,912              --        3,463,073
Other income -- Fees                                  677,106          927,205       1,300,615        1,944,348
                                                  -----------      -----------     -----------      -----------
        Total revenue                               4,505,913        5,680,012       9,931,900       11,334,031
Interest expense                                    1,982,792        1,840,853       4,438,122        3,635,629
                                                  -----------      -----------     -----------      -----------
        Income after interest expense               2,523,121        3,839,159       5,493,778        7,698,402
Provision for credit losses                         1,100,000          438,000       5,655,104        1,348,000
Losses on investments in other assets                      --               --       1,635,000           40,000
                                                  -----------      -----------     -----------      -----------
     Income (loss) after interest expense and
     provision for losses                           1,423,121        3,401,159      (1,796,326)       6,310,402

Operating expenses:
    Salaries and employee benefits                  1,593,466        1,538,487       3,117,227        3,030,172
    Amortization of intangible assets                  98,378           98,378         196,756          196,756
    Occupancy and equipment                           353,817          391,991         703,484          771,792
    Professional fees                                 122,613          151,291         253,598          370,708
    Other                                             662,646          601,485       1,343,026        1,196,617
                                                  -----------      -----------     -----------      -----------
        Total operating expenses                    2,830,920        2,781,632       5,614,091        5,566,045
                                                  -----------      -----------     -----------      -----------
Gain on sale of marketable securities                      --               --              --          290,859
                                                  -----------      -----------     -----------      -----------
        Income (loss) before income taxes          (1,407,799)         619,527      (7,410,417)       1,035,216

Income tax expense (benefit):
    Federal                                          (443,333)         208,087      (2,441,901)         366,946
    State                                             (13,932)           6,120         (73,755)          10,790
                                                  -----------      -----------     -----------      -----------
        Total income tax expense (benefit)           (457,265)         214,207      (2,515,656)         377,736
                                                  -----------      -----------     -----------      -----------
        Net income (loss)                         $  (950,534)     $   405,320     $(4,894,761)     $   657,480
                                                  ===========      ===========     ===========      ===========

Earnings (loss) per share-basic                   $     (0.36)     $      0.14     $     (1.83)     $      0.23
                                                  ===========      ===========     ===========      ===========
Weighted-average common shares
outstanding-basic                                   2,641,835        2,883,580       2,671,670        2,907,403
                                                  ===========      ===========     ===========      ===========
Earnings (loss) per share-diluted                 $     (0.36)     $      0.14     $     (1.83)     $      0.23
                                                  ===========      ===========     ===========      ===========
Weighted-average common shares
outstanding-diluted                                 2,641,835        2,883,985       2,671,670        2,907,606
                                                  ===========      ===========     ===========      ===========
</Table>


See accompanying notes to consolidated financial statements.

                                       3

<PAGE>   5



                    KBK CAPITAL CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

   YEAR ENDED DECEMBER 31, 2000 AND SIX MONTHS ENDED JUNE 30, 2001 (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, 1999         2,985,829     $     35,775    $ 16,326,919     $ 11,833,443     $ (4,298,139)    $ 23,897,998


Purchase of stock for treasury        (237,000)              --              --               --       (1,219,360)      (1,219,360)

Issuance of common stock from
     treasury                           15,575               --              --          (79,939)         108,616           28,677


Forfeiture of stock options                 --               --         (63,210)              --               --          (63,210)


Net income                                  --               --              --        1,238,396               --        1,238,396
                                  ------------     ------------    ------------     ------------     ------------     ------------

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        (191,010)              --               --              --       (1,039,810)      (1,039,810)

Issuance of common stock from
     treasury                            8,229               --              --          (30,030)          52,246           22,216

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

Net loss                                    --               --              --       (4,894,761)              --       (4,894,761)
                                  ------------     ------------    ------------     ------------     ------------     ------------

Balance at June 30, 2001             2,581,623     $     35,775    $ 16,224,907     $  8,067,109     $ (6,396,447)    $ 17,931,344
                                  ============     ============    ============     ============     ============     ============
</Table>


See accompanying notes to consolidated financial statements.

                                       4
<PAGE>   6


                    KBK CAPITAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<Table>
<Caption>
                                                                                    SIX MONTHS ENDED
                                                                            -------------------------------
                                                                             JUN. 30, 2001    JUN. 30, 2000
                                                                              (UNAUDITED)      (UNAUDITED)
                                                                            --------------    -------------
<S>                                                                          <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                                            $ (4,894,761)     $   657,480
Adjustments to reconcile net income (loss) to net cash provided by
   (used in) operating activities:
  Depreciation and amortization                                                   511,833          583,809
  Accretion on mandatorily redeemable preferred securities                         25,370           11,725
  Provision for credit losses                                                   5,655,104        1,348,000
  Losses on investments in other assets                                         1,635,000           40,000
  Decrease in accounts receivable, net                                         28,511,002        2,733,814
  Net increase in retained interest in sold assets                                     --       (3,785,993)
  (Increase) decrease in other assets                                            (432,808)         553,332
  Decrease in due to clients                                                   (2,794,370)      (2,726,786)
  (Decrease) increase in accounts payable and other liabilities                  (545,694)           1,034
  Increase in interest payable for the sold assets                                     --            9,165
  Decrease in income taxes payable (increase in income taxes receivable)       (3,191,901)              --
  Increase in deferred revenue                                                     22,458          180,348
                                                                             ------------      -----------
   Net cash provided by (used in) operating activities                         24,501,233         (394,072)
                                                                             ------------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Net decrease (increase) in loans receivable, net                              7,382,477       (3,437,569)
  Purchases of premises and equipment                                            (577,352)         (70,504)
                                                                             ------------      -----------
   Net cash provided by (used in) investing activities                          6,805,125       (3,508,073)
                                                                             ------------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Net (repayments to) borrowings from the banks                               (35,600,026)       3,000,000
  Repurchase of common stock                                                   (1,039,810)        (876,482)
  Forfeiture/issuance of stock options                                            (38,802)              --
  Issuance of common stock                                                         22,216           11,326
                                                                             ------------      -----------
   Net cash provided by (used in) financing activities                        (36,656,422)       2,134,844
                                                                             ------------      -----------
Net decrease in cash                                                           (5,350,064)      (1,767,301)

Cash at beginning of period                                                    12,675,230        4,854,980
                                                                             ------------      -----------
Cash at end of period                                                        $  7,325,166      $ 3,087,679
                                                                             ============      ===========
</Table>


See accompanying notes to consolidated financial statements.


                                       5
<PAGE>   7


                    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, 2001 and 2000. 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, 2001 are not
necessarily indicative of the results of operations to be expected for the
remainder of the year. It is suggested that these consolidated financial
statements be read in conjunction with the audited consolidated financial
statements and notes thereto for the years ended December 31, 2000 and 1999
which are included in the Company's 2000 annual report.

2. OTHER INVESTMENTS. During 1998, a receivable balance of the Company was
deemed non-performing due to allegedly fraudulent invoices being sold to KBK. To
partially offset the unsecured portion of the receivables purchased balance, KBK
was offered and accepted an ownership interest in a newly formed entity, which
took over the operations of the company that sold KBK the invoices. The
ownership interest of this newly formed entity, amounting to $1,750,000, was
included in other investments as an equity investment in the new entity. During
1999, the Company established a $500,000 provision for impairment loss related
to this asset. During 2000, the Company recorded $40,000 in additional provision
related to the asset. During the quarter ended March 31, 2001, the new entity
was dissolved; and the Company charged off the net balance of $1,210,000, which
is included in losses on investments in other assets.

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 1.15%. At June 30, 2001, the outstanding indebtedness
under the Facility was $86,933,428. 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 $6.7 million in available credit under
this line at June 30, 2001.

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


                                       6
<PAGE>   8


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 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, $1,168,569 as of June 30, 2001, is being accreted over 15
years by making periodic charges to the Company's operations.

5. EARNINGS (LOSS) PER SHARE. Following is a reconciliation between the weighted
average shares outstanding used in the basic and diluted earnings per share
computations:

<Table>
<Caption>
                                                                Three Months Ended                    Six Months Ended

                                                       June 30, 2001      June 30, 2000      June 30, 2001       June 30, 2000
                                                      --------------      --------------     --------------      --------------
<S>                                                   <C>                 <C>                <C>                 <C>
Net income (loss)                                     $     (950,534)     $      405,320     $   (4,894,761)     $      657,480
                                                      ==============      ==============     ==============      ==============
Weighted average shares outstanding -- Basic               2,641,835           2,883,580          2,671,670           2,907,403
                                                      ==============      ==============     ==============      ==============
Earnings (loss) per share -- Basic                    $        (0.36)     $         0.14     $        (1.83)     $         0.23
                                                      ==============      ==============     ==============      ==============

Weighted average shares outstanding -- Basic               2,641,835           2,883,580          2,671,670           2,907,403
Effect of dilutive securities
   Assumed exercise of stock options and warrants                 --                 405                 --                 203
                                                      --------------      --------------     --------------      --------------
Weighted average shares outstanding -- Diluted             2,641,835           2,883,985          2,671,670           2,907,606
                                                      ==============      ==============     ==============      ==============
Earnings (loss) per share -- Diluted                  $        (0.36)     $         0.14     $        (1.83)     $         0.23
                                                      ==============      ==============     ==============      ==============
</Table>


For the three and six months ended June 30, 2001, 750 and 2,696 stock options,
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 995,862 shares of Treasury Stock at a cost of $6,396,447
as of June 30, 2001. During October, 1999, the Company entered into an agreement
to repurchase 483,795 shares of its common stock over an 18-month period. The
per share prices are fixed, ranging from $5.00 to $5.53, depending on the timing
of the purchase. The stock is being acquired from the previous shareholders of
Coastal Financial Resources Inc., which was acquired by the Company in December,
1994. Pursuant to the agreement, the Company had repurchased 430,000 shares for
an aggregate cost of $2,242,604


                                       7
<PAGE>   9

through June 30, 2001 (including 55,000 shares purchased in the second quarter
of 2001). The Company also purchased 69,665 shares in the open market during the
quarter ended June 30, 2001.

7. EFFECTS OF RECENTLY ISSUED ACCOUNTING STANDARDS. In June 1998, the Financial
Accounting Standards Board ("FASB") issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which requires derivatives to be
recognized in the consolidated balance sheets at fair value. Changes in such
fair value are required to be recognized in operations to the extent the
derivative is not effective as a hedge. SFAS No. 133 was effective for fiscal
years beginning after June 15, 1999, to be applied prospectively. However, the
FASB subsequently issued SFAS No. 137, "Accounting for Derivative Instruments
and Hedging Activities - Deferral of the Effective Date of FASB Statement No.
133" which postponed initial application until fiscal years beginning after June
15, 2000. In June 2000, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 138, "Accounting for Derivative Instrument and Hedging Activities - an
amendment of FASB Statement No. 133" which amended and superceded certain
provisions of SFAS No. 133. The Company experienced no impact from the adoption
of these standards.

SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," replaces SFAS No. 125, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities," but
carries over most of SFAS 125's provisions without change. SFAS No. 140
elaborates on the qualifications necessary for a special-purpose entity,
clarifies sales accounting criteria in certain circumstances, refines accounting
for collateral, and adds disclosures for collateral, securitizations, and
retained interests in securitized assets. This statement should be applied
prospectively and was effective for transactions occurring after March 31, 2001.
Disclosure requirements of this statement and any changes in accounting for
collateral were effective for fiscal years ending after December 15, 2000 and on
December 31, 2000 for the Company. Adoption of this statement had no impact on
the Company's consolidated financial statements.

In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations", and SFAS No. 142. "Goodwill and Other Intangible
Assets". SFAS 141 requires that the purchase method of accounting be used for
all business combinations initiated after June 30, 2001. SFAS 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 is required to adopt the provisions of SFAS 141 immediately and SFAS
142 effective January 1, 2002.

Statement 141 will require upon adoption of Statement 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 Statement 141 for recognition apart
from goodwill. Upon adoption of Statement 142, the Company will be 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 will be required to test the intangible asset for impairment
in accordance with the provisions of Statement 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.


                                       8
<PAGE>   10


As of the date of adoption, the Company expects to have unamortized goodwill in
the amount of $2.3 million which will be subject to the transition provisions of
Statements 141 and 142. Amortization expense related to goodwill was $394,000
and $197,000 for the year ended December 31, 2000 and the six months ended June
30, 2001, respectively. Because of the detailed assessment required to comply
with adopting Statements 141 and 142, it is not practicable to reasonably
estimate the impact of adopting these Statements on the Company's financial
statements at the date of this report, including whether any transitional
impairment losses will be required to be recognized as the cumulative effect of
a change in accounting principle.



                                       9
<PAGE>   11


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, 2000. 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, 2000.

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 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

         Analysis of Second Quarter 2001 Compared to Second Quarter 2000

The following table sets forth the results of operations and certain other data
of the Company for the second quarter of 2001 and the second quarter of 2000.


                                       10
<PAGE>   12


<Table>
<Caption>
                                       Quarter Ended                   Quarter Ended
                                       June 30, 2001                   June 30, 2000
                                       (unaudited)                      (unaudited)
                                --------------------------       -------------------------
                                                  (dollars in thousands)
<S>                             <C>            <C>               <C>            <C>
Average Net Earning Assets
     Managed and Owned          $  103,892                       $  147,328
     Owned                         103,892                           89,766
Total Revenue                        4,506           100.0%           5,680          100.0%
Interest Expense                     1,983            44.0%           1,841           32.4%
Provision for Credit Losses          1,100            24.4%             438            7.7%
Operating Expense                    2,831            62.8%           2,782           49.0%
Income Taxes                          (457)          (10.1)%            214            3.8%
                                ----------      ----------       ----------     ----------
Net Income (Loss)                     (951)          (21.1)%            405            7.1%
                                ==========      ==========       ==========     ==========
</Table>


Average net earning assets under management decreased 29.5% to $103.9 million
for the quarter ended June 30, 2001 from $147.3 million for the quarter ended
June 30, 2000. This decrease in managed assets resulted in a decrease in revenue
of 20.7%, or $1.2 million, to $4.5 million for the quarter ended June 30, 2001
from the quarter ended June 30, 2000 total revenue of $5.7 million. A component
of this decrease related to the elimination of servicing fees as a result of the
Company's new financing structure executed in December, 2000.

Interest expense increased $142,000 to $2.0 million for the second quarter of
2001 compared with $1.8 million for the second quarter of 2000. This increase
resulted from the $36.0 million increase in average funded debt required to
support the Company's activities; primarily a $14.1 million increase in net
average earning assets owned and a $13.8 million increase in non-performing
assets. The net effect of the decreased revenue and increased interest expense
was a decrease of $1.3 million, or 34.3%, in income after interest expense for
the quarter ended June 30, 2001, compared to the prior year quarter.

A provision for credit losses of $1.1 million was recorded for the second
quarter of 2001, compared to $438,000 for the second quarter of 2000. The $1.1
million provision for losses was recorded in consideration of the Company's
valuation of the portfolio as of June 30, 2001. During the second quarter of
2001 the Company had net chargeoffs of $498,000 compared to $622,000 of net
chargeoffs for the second quarter of 2000. The allowance for credit losses of
$6.9 million represents 5.9% of total outstanding loans and accounts receivables
and 6.6% of average net earning assets owned for the quarter then ended. The
allowance for credit losses at June 30, 2000 of $2.1 million represented 2.0% of
total outstanding loans and accounts receivables (which includes retained
interest in sold assets) and 2.3% of average net earning assets owned for the
quarter then ended. Management believes the current allowance is adequate to
cover potential losses that might result from the purchased accounts receivable
and loan portfolio at June 30, 2001.

Operating expenses of $2.8 million for the three months ended June 30, 2001
increased $49,000, or 1.8%, compared with $2.8 million for the three months
ended June 30, 2000. This increase resulted primarily from marketing expenses.

The increase in operating expenses, combined with the increase in the provision
for credit losses and the $1.3 million decrease in income after interest
expense, resulted in a $2.0 million decrease in income before income taxes.

A tax benefit of $457,000 was reported for the second quarter of 2001 compared
to income taxes of $214,000 for the second quarter of 2000.

As a result of the foregoing, a net loss of $951,000 was reported for the
Company for the second quarter of 2001 as compared to net income of $405,000 for
the second quarter of 2000.


                                       11
<PAGE>   13


         Analysis of Six Months Ended June 30, 2001 Compared to Six Months Ended
June 30, 2000

         The following table sets forth the results of operations and certain
other data of the Company for the six months ended June 30, 2001 and 2000.

<Table>
<Caption>
                                      Six Months Ended                 Six Months Ended
                                       June 30, 2001                    June 30, 2000
                                         (unaudited)                     (unaudited)
                                  --------------------------       -------------------------
                                                    (dollars in thousands)
<S>                               <C>                 <C>            <C>         <C>
Average Net Earning Assets
     Managed and Owned            $  112,900                       $  145,779
     Owned                           112,900                           90,171
Total Revenue                          9,932           100.0%          11,334          100.0%
Interest Expense                       4,438            44.7%           3,636           32.1%
Provision for Credit Losses            5,655            56.9%           1,348           11.9%
Provision for Impairment Loss          1,635            16.5%              40            0.4%
Other Income                              --              --              291            2.6%
Operating Expense                      5,614            56.5%           5,566           49.1%
Income Taxes                          (2,516)          (25.3)%            378            3.3%
                                  ----------      ----------       ----------     ----------
Net Income                            (4,895)          (49.3)%            657            5.8%
                                  ==========      ==========       ==========     ==========
</Table>

Average net earning assets under management decreased 22.6% to $112.9 million
for the six months ended June 30, 2001 from $145.8 million for the six months
ended June 30, 2000. This decrease in managed assets generated a revenue loss of
12.4%, or $1.4 million, to $9.9 million for the six months ended June 30, 2001
compared to $11.3 million for the same period in 2000. A component of this
decrease related to the elimination of servicing fees as a result of the
Company's new financing structure executed in December, 2000.

Interest expense increased 22.1% to $4.4 million for the six months ended June
30, 2001 from $3.6 million for the same period of 2000. This increase resulted
from the $41.7 million increase in average funded debt required to support the
Company's activities, primarily the $22.7 million increase in net average
earning assets owned and a $11.7 million increase in non-performing assets. The
net effect of the decreased revenue and increased interest expense was a
decrease of $2.2 million, or 28.6%, in income after interest expense for the six
months ended June 30, 2001, compared to the same period of the prior year.

A provision for credit losses of $5.7 million was recorded for the six months
ended June 30, 2001, as compared to $1.3 million for the same period of 2000.
The $5.7 million provision for losses was recorded in consideration of the
Company's valuation of the portfolio as of June 30, 2001. The increased
provision relates primarily to deteriorating conditions during the first quarter
with respect to asset-based loans to three customers. During the six months
ended June 30, 2001, the Company had net charge-offs of $1.2 million compared to
$1.3 million of net charge-offs for the same period of 2000. The allowance for
credit losses at June 30, 2001 of $6.9 million represents 5.9% of total
outstanding loans and accounts receivable and 6.1% of average net earning assets
owned for the six months then ended. The Company also recorded losses on
investments in other assets of $1.6 million primarily related to the charge off
of the $1.2 million investment discussed in Note 2 of the Notes to Unaudited
Consolidated Financial Statements herein. The losses also related to the charge
off of an asset obtained through foreclosure at a value of $425,000. During the
first quarter of 2001, the value of these assets deteriorated significantly, and
the Company believes collectibility is doubtful at this time.

The allowance for credit losses at June 30, 2000 of $2.1 million was 2.0% of
total outstanding loans and accounts receivable (which includes retained
interest in sold assets) and 2.3% of average net earning assets owned for the
six


                                       12
<PAGE>   14


months then ended. Management believes the current allowance is adequate to
cover potential losses which might result from the purchased accounts receivable
and loan portfolio at June 30, 2001.

Operating expense of $5.6 million for the six months ended June 30, 2001
increased $48,000, or 0.9%, compared with the $5.6 million for the same period
of 2000.

During the first half of 2001, the Company recorded no gain on the sale of
marketable securities, compared to $291,000 for the same period of 2000. The
decrease in the gain on the sale of marketable securities, combined with the
increase in operating expenses and the increase in the provision for credit and
impairment losses and the decrease in income after interest expenses, resulted
in an 815.8% decrease in income before income tax.

As a result of the foregoing, net income of the Company for the six months ended
June 30, 2001 decreased $5.6 million, or 844.5%, to a net loss of $4.9 million
from net income of $657,000 for the same period in 2000.

CHANGES IN FINANCIAL CONDITION

Total assets decreased from $172.4 million at December 31, 2000 to $126.8
million at June 30, 2001. This decrease is primarily related to the $41.5
million decrease in net receivables and $5.4 million decrease in cash from
December 31, 2000 to June 30, 2001 and the corresponding $35.6 million decrease
in the bank line of credit from $122.5 million at December 31, 2000 to $86.9
million at June 30, 2001. Stockholders' equity decreased $6.0 million, from
$23.9 million at December 31, 2000 to $17.9 million at June 30, 2001, which was
primarily the net result of the net loss of $4.9 million and $1.0 million in
treasury stock purchases. The Company paid no dividends on its common stock
during the six months ended June 30, 2001.

LIQUIDITY AND CAPITAL RESOURCES

The Company's capital requirements generally increase proportionately to the
increase in earning assets. The method of funding the portfolio changed
significantly during 2000 with the implementation of the new financing
structure. Total average net earning assets owned increased by $22.7 million,
from $90.2 million during the first half of 2000 to $112.9 million for the same
period in 2001. 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
that 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 currently 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 1.15%. Prior to execution of this Facility,
KBK maintained a $72,875,000 multi-bank line of credit. Borrowings under the
previous credit facility accrued interest at the agent bank's prime rate or
applicable LIBOR plus 1.75%.

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
500,000 shares (19.4% of the outstanding shares as of June 30, 2001) of the
Company's common stock at the current market price. In addition, the Company
entered into an agreement during 1999 to repurchase an aggregate 483,795 shares
of its common stock over an 18-month period. The per share prices are fixed,
ranging from $5.00 to $5.53, depending on the timing of the purchase. At June
30, 2001, the Company had repurchased 430,000 shares for an aggregate of
$2,242,604 (including 55,000 shares purchased in the second quarter of 2001).
The stock is being acquired from the previous shareholders of Coastal Financial
Resources, Inc., which was acquired by the Company in December, 1994. The
Company also purchased 69,665 shares in the open market during the quarter ended
June 30, 2001. At June 30, 2001, 995,862 shares of


                                       13
<PAGE>   15


common stock were held in the treasury at a cost of $6.4 million. All of such
purchases have been funded out of the general funds of the Company, which may
have had the result of increasing 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.


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, 2001. Of the 2,701,836
outstanding authorized voting shares, there were present by proxy or in person
2,624,821 shares, or 97%, 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, 2001.

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>
Thomas M. Simmons        2,595,621        -0-          29,200         -0-
Harris A. Kaffie         2,595,596        -0-          29,225         -0-
Deborah B. Wilkinson     2,599,021        -0-          25,800         -0-
</Table>

For Item 2, shares voted FOR were 2,606,212 shares, 18,509 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)      Exhibits

                  None

         (b)      Reports on Form 8-K

                  None


                                       14
<PAGE>   16


                                   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 13, 2001                          /s/ Deborah B. Wilkinson
     ---------------                          -----------------------------
                                                  Deborah B. Wilkinson,
                                               Executive Vice President and
                                                 Chief Financial Officer


                                       15