SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-Q


(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30,2002
     OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM__________TO________


Commission file number     1-14103



                             NB CAPITAL CORPORATION
             (Exact name of registrant as specified in its charter)





                  Maryland                                   52-2063921
     (State or other jurisdiction of              (I.R.S. Employer
     incorporation or organization)                       Identification No.)



125 West 55th Street, New York, New York                    10019
(Address of principal executive offices)             (Zip Code)


                                  212-632-8532
              (Registrant's telephone number, including area code)


              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ____

Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the court.
Yes ______  No ______


Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

         Class                         Outstanding at August 14, 2002
     Common Stock
     par value $0.01 per share     100

<PAGE>

                             NB CAPITAL CORPORATION

                                      Index
                                      -----


Page
----

Part I. FINANCIAL INFORMATION:

         Item 1. Financial Statements

                  Balance Sheets -
                     As of  June 30, 2002 and December 31, 2001                1

                  Statements of Income -
                     For the three month and six month periods
                     ended June 30, 2002 and 2001                              2

                  Statements of Stockholders' Equity -
                     For the three month and six month periods
                     ended June 30, 2002 and 2001                              3

                  Statements of Cash Flows -
                     For the six month periods ended June 30, 2002 and 2001    4


                 Notes to the financial statements
5

         Item 2. Management's Discussion and Analysis of Financial Conditions
                  and Results of Operations
8

Part II.  OTHER INFORMATION

         Item 6. Exhibits and Reports on Form 8-K
11


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

This report contains certain forward-looking statements and information relating
to NB Capital  Corporation (the "Company" or "NB Capital") that are based on the
beliefs  of  the  Company's  management  as  well  as  assumptions  made  by and
information currently available to the Company's  management.  When used in this
report,  the words  "anticipate",  "believe",  "estimate",  "expect" and similar
expressions,  as they relate to the  Company or the  Company's  management,  are
intended to identify  forward-looking  statements.  Such statements  reflect the
current view of the Company's  management  with respect to future events and the
Company's future performance and are subject to certain risks, uncertainties and
assumptions.  Should  management's  current  view of the  future  or  underlying
assumptions  prove  incorrect,  actual  results may vary  materially  from those
described herein as anticipated,  believed,  estimated or expected.  The Company
does not intend to update these forward-looking statements.

References to $ are to United States  dollars;  references to C$ are to Canadian
dollars.  As of June 30, 2002, the Canadian  dollar exchange rate was C$1.5162 =
$1.00 and certain amounts stated herein reflect such exchange rate.


<PAGE>



NB CAPITAL CORPORATION

BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                          June 30,                    December 31,
( in U.S. dollars )                                                       2002 (1)                        2001
---------------------------------------------------------------------------------------------------------------------


Assets
<S>                                                            <C>                               <C>
          Cash and cash equivalents                            $            10,012,275           $        53,765,605
          Due from an affiliated company                                     8,260,850                    12,132,195
          Promissory notes                                                 469,028,122                   415,882,966
          Accrued interest on cash equivalents                                   1,208                         6,710
          -----------------------------------------------------------------------------------------------------------
                                                                           487,302,455                   481,787,476
          ===========================================================================================================



Liabilities
          Due to the parent company                                            347,220                        330,731
          Accounts payable                                                      34,718                         48,975
          -----------------------------------------------------------------------------------------------------------
                                                                               381,938                        379,706
          -----------------------------------------------------------------------------------------------------------

    Stockholders' equity
          Preferred stock, $0.01 par value per share;
              10,000,000 shares authorized,
                     110 Senior preferred shares issued and outstanding              1                              1
                 300,000 Series A shares issued and outstanding                  3,000                          3,000


          Common stock, $0.01 par value per share;
                   1,000 shares authorized,
                     100 shares issued and outstanding                               1                              1


          Additional paid-in capital                                       476,761,014                    476,761,014

          Retained earnings                                                 10,156,501                      4,643,754
          -----------------------------------------------------------------------------------------------------------
                                                                           486,920,517                    481,407,770
          -----------------------------------------------------------------------------------------------------------


                                                                           487,302,455                    481,787,476
          ===========================================================================================================


---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Unaudited

See accompanying notes to financial statements.


                                      -1-
<PAGE>

NB CAPITAL CORPORATION

STATEMENTS OF INCOME


(Unaudited)
<TABLE>
<CAPTION>
                                                                    Three month periods ended
                                                                             June 30,
(in U.S. dollars)                                                2002                       2001
----------------------------------------------------------------------------------------------------------

Revenue
     Interest income
<S>                                                        <C>                        <C>
        Cash equivalents                                   $        140,079           $        529,679
        Promissory  notes                                         9,121,284                  8,073,195
----------------------------------------------------------------------------------------------------------
                                                                  9,261,363                  8,602,874
----------------------------------------------------------------------------------------------------------



Expenses
     Servicing and advisory fees                                    347,227                    324,937
     Legal and other professional fees                               45,341                     58,946
----------------------------------------------------------------------------------------------------------
                                                                    392,568                    383,883
----------------------------------------------------------------------------------------------------------

Net income                                                        8,868,795                  8,218,991

Preferred stock dividends                                         6,267,639                  6,270,288

----------------------------------------------------------------------------------------------------------
Income available to common stockholders                           2,601,156                  1,948,703
==========================================================================================================

Weighted average number of common shares outstanding                    100                        100

----------------------------------------------------------------------------------------------------------
Earnings per common share - basic                                    26,012                     19,487
==========================================================================================================
</TABLE>


<TABLE>
<CAPTION>
                                                                     Six month periods ended
                                                                            June 30
(in U.S. dollars)                                               2002                        2001
----------------------------------------------------------------------------------------------------------

Revenue
     Interest income
<S>                                                      <C>                          <C>
        Cash equivalents                                 $          248,842           $        1,125,277
        Promissory  notes                                        18,609,154                   17,099,859
----------------------------------------------------------------------------------------------------------
                                                                 18,857,996                   18,225,136
----------------------------------------------------------------------------------------------------------



Expenses
     Servicing and advisory fees                                    695,017                      673,069
     Legal and other professional fees                              114,952                      100,213
----------------------------------------------------------------------------------------------------------
                                                                    809,969                      773,282
----------------------------------------------------------------------------------------------------------

Net income                                                       18,048,027                   17,451,854

Preferred stock dividends                                        12,535,280                   12,540,576

----------------------------------------------------------------------------------------------------------
Income available to common stockholders                           5,512,747                    4,911,278
==========================================================================================================

Weighted average number of common shares outstanding                    100                          100

----------------------------------------------------------------------------------------------------------
Earnings per common share - basic                                    55,127                       49,113
==========================================================================================================
</TABLE>



--------------------------------------------------------------------------------
See accompanying notes to financial statements.

                                      -2-
<PAGE>

NB CAPITAL CORPORATION

STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

<TABLE>
<CAPTION>
                                                                    Three month periods ended
                                                                             June 30,
( in U.S. dollars )                                              2002                       2001
---------------------------------------------------------------------------------------------------------

PREFERRED STOCK
<S>                                                      <C>                          <C>
     Balance, beginning and end of period                $            3,001           $            3,001
     ----------------------------------------------------------------------------------------------------


COMMON STOCK AND PAID-IN CAPITAL
     Balance, beginning and end of period                       476,761,015                  476,761,015
     ----------------------------------------------------------------------------------------------------


RETAINED EARNINGS
     Balance, beginning of period                                 7,555,345                    6,387,251
     Net income                                                   8,868,795                    8,218,991
     Preferred stock dividends                                   (6,267,639)                  (6,270,288)
     ----------------------------------------------------------------------------------------------------
     Balance, end of period                                      10,156,501                    8,335,954
     ----------------------------------------------------------------------------------------------------


TOTAL STOCKHOLDERS' EQUITY                                      486,920,517                  485,099,970
=========================================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                    Six month periods ended
                                                                           June 30
( in U.S. dollars )                                            2002                        2001
---------------------------------------------------------------------------------------------------------

PREFERRED STOCK

<S>                                                      <C>                          <C>
     Balance, beginning and end of period                $            3,001           $            3,001
     ----------------------------------------------------------------------------------------------------


COMMON STOCK AND PAID-IN CAPITAL
     Balance, beginning and end of period                       476,761,015                  476,761,015
     ----------------------------------------------------------------------------------------------------


RETAINED EARNINGS
     Balance, beginning of period                                 4,643,754                    3,424,676
     Net income                                                  18,048,027                   17,451,854
     Preferred stock dividends                                  (12,535,280)                 (12,540,576)
     ----------------------------------------------------------------------------------------------------
     Balance, end of period                                      10,156,501                    8,335,954
     ----------------------------------------------------------------------------------------------------


TOTAL STOCKHOLDERS' EQUITY                                      486,920,517                  485,099,970
=========================================================================================================
</TABLE>






See accompanying notes to financial statements.
--------------------------------------------------------------------------------


                                      -3-

<PAGE>


NB CAPITAL CORPORATION

STATEMENTS OF CASH FLOWS

(Unaudited)
<TABLE>
<CAPTION>
                                                                               Six month periods ended
                                                                                       June 30
(in U.S. dollars)                                                      2002                               2001
--------------------------------------------------------------------------------------------------------------------

OPERATING ACTIVITIES

<S>                                                            <C>                            <C>
Net income                                                     $        18,048,027            $         17,451,854
  Items not affecting cash resources
         Due from an affiliated company                                  3,871,345                     (10,899,829)
         Due to the parent company                                          16,489                          22,447
         Accounts payable                                                  (14,257)                         (3,387)
         Accrued interest receivable on cash equivalents                     5,502                          74,920

--------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                               21,927,106                       6,646,005
--------------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES

Dividends                                                              (12,535,280)                    (14,040,576)
--------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities                                  (12,535,280)                    (14,040,576)
--------------------------------------------------------------------------------------------------------------------


INVESTING ACTIVITIES

Investment in promissory notes                                        (136,087,443)                   (228,537,191)
Repayments of promissory notes                                          82,942,287                     142,767,073
--------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                  (53,145,156)                    (85,770,118)
--------------------------------------------------------------------------------------------------------------------


Cash position, beginning of period                                      53,765,605                      97,133,758
--------------------------------------------------------------------------------------------------------------------
Cash position, end of period                                            10,012,275                       3,969,069
====================================================================================================================
</TABLE>




--------------------------------------------------------------------------------
See accompanying notes to financial statements.


                                      -4-
<PAGE>


NB CAPITAL CORPORATION

NOTES TO THE FINANCIAL STATEMENTS
June 30, 2002
(unaudited)
(in U.S. dollars)

1) Incorporation and nature of operations

     NB Capital  Corporation  (the  "Company") was  incorporated in the State of
     Maryland  on August  20,  1997.  The  Company's  principal  business  is to
     acquire,  hold,  finance and manage  mortgage  assets.  The Company issued,
     through an  Offering  Circular  dated  August  22,  1997,  $300  million of
     preferred  stock and  simultaneously,  National Bank of Canada,  the parent
     company,  made a capital  contribution  in the amount of $183 million.  The
     Company  used the  aggregate  net of  proceeds  of $477  million to acquire
     promissory notes of NB Finance, Ltd., a wholly-owned subsidiary of National
     Bank of Canada.

2) Significant accounting policies

     Financial statements

     The  financial  statements  are  prepared  in  accordance  with  accounting
     principles  generally  accepted  in the United  States of  America  and are
     expressed in U.S. dollars.

     The interim financial  statements for the three month and six month periods
     are unaudited, however, the financial statements include, in the opinion of
     management,  all  adjustments  necessary  for  a  fair  presentation.   The
     unaudited  financial  statements  should  be read in  conjunction  with the
     audited financial  statements included in the Company's annual report filed
     on form 10-K.  The results of the interim  financial  statements may not be
     indicator of the results anticipated in the full year.

     Promissory notes

     In accordance with Statements of Financial  Accounting  Standards  ("SFAS")
     No.115  "Accounting for certain  Investments in debt and equity Securities"
     and based on the Company's  intentions  regarding  these  instruments,  the
     Company has  classified  the  Promissory  notes as held to maturity and has
     accounted for them at amortized cost.

     Income taxes

     The  Company  has  elected to be taxed as a Real  Estate  Investment  Trust
     ("REIT")  under  the  Internal  Revenue  Code  of  1986,  as  amended,  and
     accordingly,  is generally not subject for United States federal income tax
     to the extent that it distributes at least 90% of its taxable income to its
     stockholders,  maintains  its  qualification  as a REIT and  complies  with
     certain other requirements.

     Per share data

     Basic  earnings per share with  respect to the Company for the  three-month
     periods  ended June 30, 2002 and 2001 are computed  based upon the weighted
     average number of common shares outstanding during the period.

     Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts of assets and liabilities  and disclosure of contingent  assets and
     liabilities  at the  date of the  financial  statements  and  the  reported
     amounts of  revenues  and  expenses  during the  reporting  period.  Actual
     results could differ from those estimates.



                                      - 5 -


<PAGE>


NB CAPITAL CORPORATION

NOTES TO THE FINANCIAL STATEMENTS
June 30, 2002
(unaudited)
(in U.S. dollars)

3) Promissory notes

     The Company entered into loan agreements evidenced by promissory notes with
     NB  Finance,   Ltd.,  an  affiliated  company.  The  promissory  notes  are
     collateralized  only by mortgage  loans  which are  secured by  residential
     first mortgages and insured by the Canada Mortgage and Housing Corporation.

     The promissory  notes have  maturities  ranging from July 2002 to September
     2009, at rates ranging from 7.312% to 10.211%, with a weighted average rate
     of approximately 8.317% per annum.

     These rates  approximate  market interest rates for loans of similar credit
     and maturity  provisions  and,  accordingly,  management  believes that the
     carrying value of the promissory notes receivable  approximates  their fair
     value.

     Promissory notes as of March 31, 2002                  $  441,531,129
     Acquisitions                                               64,221,363
     Principal repayments                                      (36,724,370)
     ----------------------------------------------------------------------
     Promissory notes as of June 30, 2002                   $  469,028,122
     ----------------------------------------------------------------------

     The scheduled principal repayments as of June 30, 2002 are as follows:


                            2002      $13,547,313          2008      26,021,820
                            2003       83,837,861          2009      26,596,199
                            2004      126,681,116
                            2005      100,649,369
                            2006       83,436,369
                            2007        8,258,075

4) Transactions with an affiliated company

     During the  quarters  ended June 30,  2002 and June 30,  2001,  the Company
     earned interest from NB Finance, Ltd. on the promissory notes in the amount
     of $9,121,284 and $8,073,195, respectively (see Note 3).

     The amount of $8,260,850 due from an affiliated company as of June 30, 2002
     and  $12,132,195 as of December 31, 2001  represent  interest and principal
     repayments due on the promissory notes.

5) Transactions with the parent company

     The  Company  entered  into  agreements  with  National  Bank of  Canada in
     relation to the administration of the Company's operations.  The agreements
     are as follows:

     Advisory agreement

     In exchange for a fee equal to $30,000 per year ($25,000 in 2001),  payable
     in equal  quarterly  installments,  National  Bank of Canada  will  furnish
     advice and recommendations  with respect to all aspects of the business and
     affairs of the Company.  During the three-month periods ended June 30, 2002
     and June 30, 2001, fees of $7,500 and $6,250,  respectively were charged to
     the Company.


                                      - 6 -


<PAGE>


NB CAPITAL CORPORATION

NOTES TO THE FINANCIAL STATEMENTS
June 30, 2002
(unaudited)
(in U.S. dollars)

5) Transactions with the parent company (continued)

     Servicing agreement

     National Bank of Canada will service and administer  the  promissory  notes
     and the  collateralized  mortgage  loans  and will  perform  all  necessary
     operations in connection with such servicing and administration.

     The fee  will  equal  to  one-twelfth  (1/12)  of  0.25%  per  annum of the
     aggregate  outstanding  balance of the collateralized  mortgage loans as of
     the last day of each calendar month. For the three-month periods ended June
     30,  2002  and  June 30,  2001,  the  average  outstanding  balance  of the
     collateralized   mortgage  loans  were   $547,208,233   and   $524,873,644,
     respectively.  During the three-month  periods ended June 30, 2002 and June
     30, 2001, fees of $339,727 and $318,687  respectively,  were charged to the
     Company.

     Custodial agreement

     National  Bank  of  Canada  will  hold  all   documents   relating  to  the
     collateralized  mortgage loans.  During the three-month  periods ended June
     30, 2002 and June 30, 2001, no fee was charged to the Company.

6) Stockholders' equity

     Common stock

     The Company is  authorized  to issue up to 1,000 shares of $ 0.01 par value
     common stock.

     Preferred stock

     The Company is  authorized  to issue up to  10,000,000  shares of $0.01 par
     value preferred stock as follows:

     o    300,000  shares   authorized   and  issued  as  8.35%   Non-cumulative
          Exchangeable  Preferred Stock, Series A, non-voting,  ranked senior to
          the common stock and junior to the Adjustable Rate  Cumulative  Senior
          Preferred  Shares,  with a  liquidation  value of  $1,000  per  share,
          redeemable  at the  Company's  option on or after  September  3, 2007,
          except  upon the  occurrence  of  certain  changes  in tax laws in the
          United States of America and in Canada, on or after September 3, 2002.

     o    Each Series A share is  exchangeable,  upon the  occurrence of certain
          events,  for one newly  issue  8.45%  Non-cumulative  First  Preferred
          Share, Series Z, of National Bank of Canada.

     o    These  Series A shares  are traded in the form of  Depositary  Shares,
          each representing a one-fortieth interest therein.

     o    1,000  shares  authorized  and 110 shares  issued as  Adjustable  Rate
          Cumulative Senior Preferred Shares,  non-voting,  ranked senior to the
          common stock and to the 8.35%  Non-cumulative  Exchangeable  Preferred
          Stock,  Series  A,  with a  liquidation  value of  $3,000  per  share,
          redeemable at the Company's  option at any time and retractable at the
          holder's  option on December 30, 2007 and every  ten-year  anniversary
          thereof.





                                      - 7 -


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
        AND RESULTS OF OPERATIONS

The Company's  principal  business  objective is to acquire,  hold,  finance and
manage  assets  consisting  of  obligations  secured by real property as well as
other qualifying REIT assets ("Mortgage Assets").  The Company has elected to be
taxed as a REIT  under  the  Internal  Revenue  Code of 1986,  as  amended  and,
accordingly, is generally not liable for United States federal income tax to the
extent  that it  distributes  at least 90% of its  taxable  income,  subject  to
certain adjustments, to its stockholders.

Critical accounting policies

We believe that there are no critical accounting policies in connection with the
preparation of the financial statements of NB Capital Corporation.


Results of operations:

For the  three-month  periods ended June 30, 2002 and June 30, 2001, the Company
reported net income of $8,868,795 and $8,218,991,  respectively. Revenues, which
were  comprised  entirely of interest  income,  were  $9,261,363  and $8,602,874
respectively, and expenses were $392,568 and $383,883,  respectively.  Since the
Company has elected to be taxed as a REIT, no income tax was recorded during the
period.

Ninety-eight  percent of revenues for the three-month period ended June 30, 2002
and ninety-four  percent of revenues for the  three-month  period ended June 30,
2001 were  derived  from the  Mortgage  Assets  issued by NB Finance,  Ltd.,  an
affiliated company ("NB Finance").  The Mortgage Assets issued by NB Finance are
collateralized  by the  "Mortgage  Loans"  that  consist of  fifty-one  pools of
residential first mortgages  insured by Canada Mortgage and Housing  Corporation
and which are  secured by real  property  located in Canada.  The balance of the
revenues result from interest on cash equivalents.

Expenses  for the  three-month  periods  ended  June 30,  2002 and 2001  totaled
$392,568  and   $383,883,   respectively,   of  which   $347,227  and  $324,937,
respectively,  represent  servicing  and advisory  fees paid to National Bank of
Canada,  the  Company's  direct  parent (the "Bank")  pursuant to the  Servicing
Agreement  between the Bank and the Company (the "Servicing  Agreement") and the
Advisory Agreement between the Bank and the Company  (the"Advisory  Agreement"),
whereby  the  Bank  performs  all  necessary   operations  in  connection   with
administering  the Mortgage  Assets issued by NB Finance and the Mortgage Loans.
Legal and other professional fees include payment to the transfer agent,  annual
fees to Securities Exchange Commission and other professional fees.

During the three-month period ended June 30, 2002, the Board of Directors of the
Company  authorized  dividends,  in the  aggregate,  of  $6,267,639,compared  to
6,270,288 for the three-month period ended June 30, 2001, on its Preferred Stock
(i.e., Adjustable Rate Cumulative Senior Preferred Shares (the "Senior Preferred
Shares") and 8.35%  Non-cumulative  Exchangeable  Preferred Stock, Series A (the
"Series A Preferred  Shares") and,  accordingly,  the Depositary  Shares).  Such
dividends were paid on June 28, 2002.



                                      - 8 -


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
        AND RESULTS OF OPERATIONS (continued)

Capital Resources and Liquidity:

The  Company's  revenues are derived from its  Mortgage  Assets.  As of June 30,
2002,   $469   million  of   Mortgage   Assets   issued  by  NB   Finance   were
over-collaterized  by the C$895 million ($590  million) of Mortgage  Loans.  The
Company  believes  that the amounts  generated  from the payment of interest and
principal on such Mortgage Loans will provide more than sufficient funds to make
full payments with respect to the Mortgage  Assets issued by NB Finance and that
such  payments  will  provide  the  Company  with  sufficient  funds to meet its
operating expenses and to pay quarterly dividends on the Senior Preferred Shares
and the Series A Preferred Shares and,  accordingly,  the Depositary  Shares. To
the extent that the cash flow from its Mortgage  Assets  exceeds those  amounts,
the Company will use the excess to fund the  acquisition of additional  Mortgage
Assets and make distributions on the Common Stock.

The  Company  does not require any capital  resources  for its  operations  and,
therefore,  it is not expected to acquire any capital assets in the  foreseeable
future.

As  of  June  30,  2002,  the  Company  had  cash   equivalents  of  $10,012,275
representing 2.1% of total assets,  compared to $53,765,605,  representing 11.2%
of total  assets,  as of  December  31,  2001.  The  decrease  in  liquidity  is
attributable to investment in Mortgage  Assets.  It is expected that the Company
will invest in  additional  Mortgage  Assets once cash  resources  exceed 20% of
total assets.  While this continues to be the Company's  investment  policy, the
Company  maintains  flexibility  in this regard.  On June 20, 2002,  the Company
bought $64 million in additional  Mortgage  Assets in order to reduce  increased
liquidity.  The liquidity  level is  sufficient  for the Company to pay fees and
expenses pursuant to the Servicing Agreement and the Advisory Agreement.

The Company's  principal  short-term  and long-term  liquidity  needs are to pay
quarterly  dividends on the Senior  Preferred  Shares and the Series A Preferred
Shares and, accordingly,  the Depositary Shares, to pay fees and expenses of the
Bank pursuant to the Servicing Agreement and the Advisory Agreement,  and to pay
franchise fees and expenses of advisors, if any.

The  Company  does not have  any  indebtedness  (current  or  long-term),  other
material capital  expenditures,  balloon payments or other payments due on other
long-term obligations. No negative covenants have been imposed on the Company.



                                      - 9 -


<PAGE>


Disclosure About Market Risk

Any  market  risk to which  the  Company  would be  exposed  would  result  from
fluctuations in (a) interest rates and (b) currency exchange rates affecting the
interest  payments  received  by the Company in respect of the  Mortgage  Assets
issued  by  NB   Finance.   Since  the   Mortgage   Assets   are   significantly
overcollateralized  by the Mortgage Loans, interest rate fluctuations should not
present  significant  market  risk.  The Company  expects  that the interest and
principal  generated  by the  Mortgage  Loans  should  enable full payment by NB
Finance of all of its  obligations  as they became due. Since the Mortgage Loans
are  guaranteed  by a fixed  ratio  of  exchange,  predetermined  on the date of
purchase and applicable until the maturity of the Mortgage Loans pursuant to the
Mortgage Loan  Assignment  Agreement,  fluctuations  in currency  exchange rates
should not present significant market risk.




                                      -10 -


<PAGE>


                           PART II. OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:
                       Exhibit No.         Description

                       11                  Computation of Earnings Per Share
                       27                  Financial Data Schedule


(b)  Reports on Form 8-K:

          No reports on Form 8-K were filed  during the  quarter  for which this
report is filed.




                                     - 11 -


<PAGE>



                                   SIGNATURES

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

                                                  NB CAPITAL CORPORATION

         Date August 14, 2002          /s/ Donna Goral
              ---------------         ------------------------------------------
                                       Donna Goral
                                       Director; Chairman of the Board;
                                       President and Chief Executive Officer




                                     - 12 -


<PAGE>



                                   EXHIBIT 11


                             NB CAPITAL CORPORATION
                        COMPUTATION OF EARNINGS PER SHARE


<TABLE>
<CAPTION>
                                                    Three-month period                  Three-month period
                                                          ended                      ended
                                                           June 30,                   June 30,
                                                           2002                       2001


<S>                                                  <C>                             <C>
         Net income                                  $8,868,795                      $ 8,218,991

         Deduct: Senior preferred stock
                 and series A preferred
                 stock dividends                      6,267,639                        6,270,288
                                                      ---------                        ---------

                                        (A)          $2,601,156                      $ 1,948,703

         Common share outstanding       (B)                 100                             100

         Earning per share              (A/B)          $ 26,012                        $  19,487
</TABLE>




                                     - 13 -


<PAGE>


EXHIBIT 27

                             NB CAPITAL CORPORATION
                             FINANCIAL DATA SCHEDULE

THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NB CAPITAL
CORPORATION'S UNAUDITED BALANCE SHEET AS OF JUNE 30, 2002 AND UNAUDITED
STATEMENT OF INCOME FOR THE QUARTER ENDED JUNE 30, 2002 INCLUDED IN NB CAPITAL
CORPORATION'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2002
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.

                           NB CAPITAL CORPORATION
              Period type                               3-MOS
              Fiscal year end                           DEC-31-2002
              Period start                              JAN-01-2002
              Period end                                JUN-30-2002
              Cash                                        10,012,275
              Securities                                           0
              Receivables                                477,290,180
              Allowances                                           0
              Inventory                                            0
              Current assets                             487,302,455
              PP&E                                                 0
              Depreciation                                         0
              Total assets                               487,302,455
              Current liabilities                            381,938
              Bonds                                                0
              Preferred mandatory                                  0
              Preferred                                        3,001
              Common                                               1
              Other-SE                                   486,917,516
              Total liability and equity                 487,302,455
              Sales                                                0
              Total revenues                               9,261,363
              CGS                                                  0
              Total costs                                          0
              Other expenses                                 392,568
              Loss provision                                       0
              Interest expense                                     0
              Income - pre tax                             8,868,795
              Income - tax                                         0
              Income - continuing                          8,868,795
              Discontinued                                         0
              Extraordinary                                        0
              Changes                                              0
              Net income                                   8,868,795
              EPS - primary                                   26,012
              EPS - diluted                                   26,012



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