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

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

                For the Quarterly Period Ended December 31, 2002

                                       OR

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

                         Commission File Number: 0-26556

                           KLAMATH FIRST BANCORP, INC.
             (Exact name of registrant as specified in its charter)


                     Oregon                                      93-1180440
---------------------------------------------------         -------------------
(State or other jurisdiction of incorporation                 (I.R.S. Employer
or organization)                                                I.D. Number)

540 Main Street, Klamath Falls, Oregon                             97601
---------------------------------------------------         -------------------
 (Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code:           (541) 882-3444
---------------------------------------------------         -------------------

Securities registered pursuant to
  Section 12 (b) of the Act:                                       None
---------------------------------                           -------------------

Securities registered pursuant to
  Section 12 (g) of the Act:             Common Stock, par value $.01 per share
---------------------------------        --------------------------------------
                                                      (Title of Class)


     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 .

     As of  January  29,  2003,  there  were  issued  6,788,478  shares  of  the
Registrant's  Common  Stock.  The  Registrant's  voting  common  stock is traded
over-the-counter  and is listed on the Nasdaq  National  Market under the symbol
"KFBI."
<PAGE>


                   KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS

Part I.    Financial Information
-------    ----------------------
Item 1.    Financial Statements                                         Page
                                                                        ----
           Condensed Consolidated Balance Sheets
           (As of December 31, 2002 and September 30, 2002)               3

           Condensed Consolidated Statements of Earnings
           (For the three months ended December 31, 2002 and 2001)        4

           Condensed Consolidated Statements of Shareholders' Equity
           (For the year ended September 30, 2002 and for
           the three months ended December 31, 2002)                      5

           Condensed Consolidated Statements of Cash Flows
           (For the three months ended December 31, 2002 and 2001)     6 - 7

           Notes to Condensed Consolidated Financial Statements        8 - 11

Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations                        12 - 17

Item 3.    Quantitative and Qualitative Disclosures about Market Risk    17

Item 4.    Controls and Procedures                                       17

Part II.   Other Information
--------   -------------------

Item 1.    Legal Proceedings                                             18

Item 2.    Changes in Securities                                         18

Item 3.    Defaults Upon Senior Securities                               18

Item 4.    Submission of Matters to a Vote of Security Holders           18

Item 5.    Other Information                                             18

Item 6.    Exhibits and Reports on Form 8-K                              18

Signatures                                                               19

Certifications Required by Rules 13a-14 and 15d-14
under the Securities Exchange Act of 1934                              20 - 21

Certification of Chief Executive Officer and Chief Financial
Officer of Klamath First Bancorp, Inc. Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002                            22


                                        2
<PAGE>

<TABLE>
<CAPTION>

                   KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                 AS OF DECEMBER 31, 2002 AND SEPTEMBER 30, 2002
                                   (Unaudited)

                                                                              December 31, 2002     September 30, 2002
ASSETS                                                                      -------------------    -------------------

<S>                                                                         <C>                    <C>
Cash and due from banks .................................................   $        46,276,181    $        38,444,500
Interest bearing deposits with banks ....................................             3,520,716              5,762,373
Federal funds sold and securities purchased under agreements to resell ..             2,635,626              1,584,540
                                                                            -------------------    -------------------
   Total cash and cash equivalents ......................................            52,432,523             45,791,413


Investment securities available for sale, at fair value
  (amortized cost: $110,794,500 and $119,940,845) .......................           109,214,490            119,542,052
Mortgage backed and related securities available for sale, at fair
  value (amortized cost: $620,135,275 and $640,304,722) .................           627,672,709            650,796,164
Loans receivable, net ...................................................           582,961,278            607,464,660
Real estate owned and repossessed assets ................................               754,137                758,663
Premises and equipment, net .............................................            23,197,677             23,410,847
Stock in Federal Home Loan Bank of Seattle, at cost .....................            13,740,200             13,510,400
Accrued interest receivable .............................................             7,171,484              8,177,014
Deferred income taxes ...................................................               278,489                   --
Bank-owned life insurance ...............................................            15,000,000                   --
Core deposit intangible .................................................            16,513,981             17,426,074
Goodwill ................................................................            22,872,915             22,872,915
Other assets ............................................................            14,585,860              3,745,151
                                                                            -------------------    -------------------
   Total assets .........................................................   $     1,486,395,743    $     1,513,495,353
                                                                            ===================    ===================

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
  Deposit liabilities ...................................................   $     1,119,027,569    $     1,142,005,997
  Accrued interest on deposit liabilities ...............................               684,811                721,810
  Advances from borrowers for taxes and insurance .......................               403,597              5,105,955
  Advances from Federal Home Loan Bank of Seattle .......................           208,000,000            205,250,000
  Short term borrowings .................................................             1,700,000              1,700,000
  Accrued interest on borrowings ........................................               913,708                820,975
  Pension liabilities ...................................................               821,493                842,272
  Deferred federal and state income taxes ...............................                  --                1,466,556
  Other liabilities .....................................................             8,438,194              8,438,245
                                                                            -------------------    -------------------
    Total liabilities ...................................................         1,339,989,372          1,366,351,810
                                                                            -------------------    -------------------
Mandatorily redeemable preferred securities issued by subsidiary ........            27,238,657             27,205,507
                                                                            -------------------    -------------------
Commitments and contingencies

SHAREHOLDERS' EQUITY

  Preferred stock, $.01 par value, 500,000 shares authorized; none issued                  --                     --
  Common stock, $.01 par value, 35,000,000 shares authorized,
   December 31, 2002 - 6,789,351 issued, 6,428,726 outstanding
   September 30, 2002 - 6,744,040 issued, 6,366,546 outstanding .........                67,894                 67,440
  Additional paid-in capital ............................................            30,997,460             30,282,059
  Retained earnings-substantially restricted ............................            88,308,691             87,265,334
  Unearned shares issued to ESOP ........................................            (2,690,468)            (2,935,130)
  Unearned shares issued to MRDP ........................................              (926,127)              (999,111)
  Accumulated other comprehensive income ................................             3,410,264              6,257,444
                                                                            -------------------    -------------------
    Total shareholders' equity ..........................................           119,167,714            119,938,036
                                                                            -------------------    -------------------
 Total liabilities and shareholders' equity .............................   $     1,486,395,743    $     1,513,495,353
                                                                            ===================    ===================
<FN>


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

                                        3
<PAGE>
<TABLE>
<CAPTION>
                   KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)





                                                                             Three Months Ended     Three Months Ended
                                                                                   December 31,           December 31,
                                                                                           2002                   2001
                                                                            -------------------    -------------------

INTEREST INCOME
<S>                                                                         <C>                    <C>
  Loans receivable ......................................................   $        11,711,803    $        13,959,972
  Mortgage backed and related securities ................................             5,943,799              6,583,010
  Investment securities .................................................             1,474,531              2,167,245
  Federal funds sold and securities purchased under agreements to resell                 39,239                221,440
  Interest bearing deposits .............................................                57,155                 63,232
                                                                            -------------------    -------------------
    Total interest income ...............................................            19,226,527             22,994,899
                                                                            -------------------    -------------------

INTEREST EXPENSE
  Deposit liabilities ...................................................             5,550,036              9,247,378
  Advances from FHLB of Seattle .........................................             2,650,538              2,430,408
  Other .................................................................                29,489                 41,268
                                                                            -------------------    -------------------
    Total interest expense ..............................................             8,230,063             11,719,054
                                                                            -------------------    -------------------
    Net interest income .................................................            10,996,464             11,275,845

Provision for loan losses ...............................................                  --                  153,000
                                                                            -------------------    -------------------
    Net interest income after provision for
      loan losses .......................................................            10,996,464             11,122,845
                                                                            -------------------    -------------------

NON-INTEREST INCOME
  Fees and service charges ..............................................             2,391,712              1,802,872
  Gain on sale of investments ...........................................               380,068                   --
  Gain on sale of real estate owned .....................................                 6,006                  8,019
  Gain on sale of loans .................................................               404,591                134,395
  Brokerage and annuity commissions .....................................               507,490                241,551
  Other income ..........................................................               251,518                 94,736

                                                                            -------------------    -------------------
    Total non-interest income ...........................................             3,941,385              2,281,573
                                                                            -------------------    -------------------
NON-INTEREST EXPENSE
  Compensation, employee benefits and related expense ...................             5,876,522              5,375,511
  Occupancy expense .....................................................             1,224,446              1,205,745
  Data processing expense ...............................................               345,797                373,088
  Insurance premium expense .............................................                47,733                 32,275
  Amortization of core deposit intangible and other intangible assets ...               912,094              1,378,135
  Mandatorily redeemable preferred securities expense ...................               431,150                301,579
  Other expense .........................................................             3,329,435              3,463,069
                                                                            -------------------    -------------------
    Total non-interest expense ..........................................            12,167,177             12,129,402
                                                                            -------------------    -------------------

Earnings before income taxes ............................................             2,770,672              1,275,016

Provision for income taxes ..............................................               884,995                453,907
                                                                            -------------------    -------------------

Net earnings ............................................................   $         1,885,677    $           821,109
                                                                            ===================    ===================

Earnings per common share - basic .......................................   $              0.29    $              0.13
Earnings per common share - with dilution ...............................   $              0.29    $              0.13
Weighted average common shares outstanding - basic ......................             6,399,299              6,473,649
Weighted average common shares outstanding - with dilution ..............             6,541,255              6,483,860
<FN>


 See notes to consolidated financial statements
</FN>
</TABLE>

                                        4
<PAGE>
<TABLE>
<CAPTION>
                                                     KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
                                             CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 FOR THE YEAR ENDED SEPTEMBER 30, 2002 AND THE THREE MONTHS ENDED DECEMBER 31, 2002
                                                                     (Unaudited)
                                                                                Unearned       Unearned   Accumulated
                                  Common   Common   Additional                    shares         shares         Other         Total
                                   stock    stock      paid-in     Retained       issued         issued comprehensive  shareholders'
                                  shares   amount      capital     earnings      to ESOP        to MRDP income (loss)        equity
                              ----------  -------  -----------  -----------  ------------  ------------   -----------  ------------
<S>                           <C>         <C>      <C>          <C>           <C>           <C>            <C>         <C>
Balance at October 1, 2001    6,561,461   $70,607  $33,926,796  $83,816,307   ($3,913,510)  ($1,298,859)   $1,539,564  $114,140,905

Cash dividends                       --        --           --   (3,339,749            --            --            --    (3,339,749)

Stock repurchased
  and retired                  (345,986)   (3,460)  (4,747,387)          --            --            --            --    (4,750,847)

ESOP contribution                97,865        --      410,593           --       978,380            --            --     1,388,973

MRDP contribution                23,847        --       11,511           --            --       299,748            --       311,259

Exercise of stock options        29,359       293      369,295           --            --            --            --       369,588

Tax benefit of stock
  options                            --        --      311,251                                                              311,251
                              ----------  -------  -----------  -----------  ------------  ------------   -----------  ------------
                              6,366,546    67,440   30,282,059   80,476,558    (2,935,130)     (999,111)    1,539,564   108,431,380
Comprehensive income
  Net earnings                                                    6,788,776                                               6,788,776
  Other comprehensive income:
    Unrealized gain on
    securities, net of tax
    and reclassification
    adjustment   (1)                                                                                        4,717,880     4,717,880
                                                                                                                       ------------
    Total comprehensive income                                                                                           11,506,656
                              ----------  -------  -----------  -----------  ------------  ------------   -----------  ------------
Balance at
  September 30, 2002          6,366,546    67,440   30,282,059   87,265,334    (2,935,130)     (999,111)    6,257,444   119,938,036

Cash dividends                       --        --           --     (842,320)           --            --            --      (842,320)

Stock repurchased
  and retired                    (5,859)      (58)     (90,658)          --            --            --            --       (90,716)

ESOP contribution                    --        --      132,950           --       244,662            --            --       377,612

MRDP contribution                16,869        --        2,108           --            --        72,984            --        75,092

Exercise of stock options        51,170       512      671,001           --            --            --            --       671,513
                              ----------  -------  -----------  -----------  ------------  ------------   -----------  ------------
                              6,428,726    67,894   30,997,460   86,423,014    (2,690,468)     (926,127)    6,257,444   120,129,217
Comprehensive loss
  Net earnings                                                    1,885,677                                               1,885,677
  Other comprehensive loss:
    Unrealized loss on
    securities, net of tax
    and reclassification
    adjustment   (2)                                                                                       (2,847,180)   (2,847,180)
                                                                                                                       ------------
    Total comprehensive loss                                                                                               (961,503)
                              ----------  -------  -----------  -----------  ------------  ------------   -----------  ------------
Balance at
  December 31, 2002           6,428,726   $67,894  $30,997,460  $88,308,691   ($2,690,468)    ($926,127)   $3,410,264  $119,167,714
                              ==========  =======  ===========  ===========  ============  ============   ===========  ============
<FN>
(1)  Net unrealized  holding gain on securities of $5,095,497 (net of $3,123,389
     tax expense) less  reclassification  adjustment  for gains  included in net
     earnings of $377,617 (net of $231,443 tax expense).

(2)  Net unrealized  holding loss on securities of $2,602,330 (net of $1,594,973
     tax benefit) less  reclassification  adjustment  for gains  included in net
     earnings of $244,850 (net of $150,069 tax expense).

  See notes to consolidated financial statements.
</FN>
</TABLE>
                                        5
<PAGE>
<TABLE>
<CAPTION>

                   KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
                                   (Unaudited)

                                                                             Three Months Ended     Three Months Ended
                                                                                   December 31,           December 31,
                                                                                           2002                   2001
                                                                                 --------------         --------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                         <C>                    <C>
    Net earnings ........................................................   $         1,885,677    $           821,109

ADJUSTMENTS TO RECONCILE NET EARNINGS TO
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    Depreciation and amortization .......................................             1,454,311              1,879,032
    Provision for loan losses ...........................................                  --                  153,000
    Compensation expense related to ESOP benefit ........................               377,612                316,832
    Compensation expense related to MRDP Trust ..........................                75,092                 79,759
    Net amortization of premiums (discounts)  paid on
      investment and mortgage backed and related securities .............             2,626,087                646,997
    Increase (decrease) in deferred loan fees, net of amortization ......              (313,625)                24,664
    Accretion of discounts on purchased loans ...........................                  --                    3,802
    Net gain on sale of investment and mortgage
      backed and related securities .....................................              (380,068)                  --
    Gain on sale of real estate owned and fixed assets ..................                (4,819)                (8,019)
    FHLB stock dividend .................................................              (229,800)              (224,000)
CHANGES IN ASSETS AND LIABILITIES
    Accrued interest receivable .........................................             1,005,530               (249,257)
    Other assets ........................................................           (11,304,750)             2,936,778
    Accrued interest on deposit liabilities .............................               (36,999)              (445,211)
    Accrued interest on borrowings ......................................                92,733                 16,434
    Pension liabilities .................................................               (20,779)                32,649
    Other liabilities ...................................................               175,572             (1,350,588)
                                                                            -------------------    -------------------
Net cash provided by (used in) operating activities .....................            (4,598,226)             4,633,981
                                                                            -------------------    -------------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Proceeds from maturity of investment securities available for sale ..               100,000                   --
    Principal repayments received on mortgage backed
       and related securities held to maturity ..........................                  --                  183,645
    Principal repayments received on mortgage backed
       and related securities available for sale ........................            82,960,527             19,546,625
    Principal repayments received on loans ..............................           176,307,625             70,404,303
    Loan originations ...................................................          (177,041,273)           (71,313,970)
    Loans sold ..........................................................            25,457,358              9,511,459
    Purchase of investment securities available
      for sale ..........................................................            (1,013,258)            (3,580,137)
    Purchase of mortgage-backed and related securities
      available for sale ................................................           (65,206,443)           (96,315,809)
    Proceeds from sale of investment securities
      available for sale ................................................            10,228,950                   --
    Proceeds from sale of real estate owned and
      premises and equipment ............................................               102,639                 54,173
    Purchases of premises and equipment .................................              (322,007)            (5,054,069)
    Purchase of bank-owned life insurance ...............................           (15,000,000)                  --
                                                                            -------------------    -------------------
Net cash provided by (used in) investing activities .....................            36,574,118            (76,563,780)
                                                                            -------------------    -------------------
</TABLE>


                                        6
<PAGE>
<TABLE>
<CAPTION>


                   KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
                                   (Unaudited)
                                   (Continued)


                                                                             Three Months Ended     Three Months Ended
                                                                                   December 31,           December 31,
                                                                                           2002                   2001
                                                                                 --------------         --------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase (decrease) in deposit
<S>                                                                                <C>                    <C>
     liabilities ........................................................          ($22,978,428)          $  3,166,798
    Proceeds from FHLB advances .........................................            33,000,000             10,200,000
    Repayments of FHLB advances .........................................           (30,250,000)            (7,775,000)
    Stock repurchase and retirement .....................................               (90,716)            (3,056,850)
    Stock options exercised .............................................               671,513                   --
    Advances from borrowers for taxes and insurance .....................            (4,702,358)            (5,974,636)
    Dividends paid ......................................................              (984,793)              (934,233)
                                                                            -------------------    -------------------
Net cash used in financing activities ...................................           (25,334,782)            (4,373,921)
                                                                            -------------------    -------------------
Net increase (decrease)  in cash and cash
  equivalents ...........................................................             6,641,110            (76,303,720)

Cash and cash equivalents at beginning
  of period .............................................................            45,791,413            118,388,566
                                                                            -------------------    -------------------
Cash and cash equivalents at end of period ..............................           $52,432,523           $ 42,084,846
                                                                            ===================    ===================
SUPPLEMENTAL SCHEDULE OF INTEREST AND
  INCOME TAXES PAID
    Interest paid .......................................................           $ 8,174,329           $ 12,147,830
    Income taxes paid ...................................................               600,000                425,000

SUPPLEMENTAL SCHEDULE OF NONCASH
  INVESTING AND FINANCING ACTIVITIES
    Net unrealized gain on securities
      available for sale, net of tax ....................................          ($ 2,847,180)          ($ 2,111,743)
    Dividends declared and accrued in other
      liabilities .......................................................               987,980                905,927
    Loans transferred to real estate owned ..............................               113,294                 64,322

<FN>


    See notes to consolidated financial statements
</FN>
</TABLE>


                                        7
<PAGE>


                   KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1. BASIS OF PRESENTATION

In the opinion of management,  the accompanying unaudited consolidated financial
statements contain all adjustments  necessary for a fair presentation of Klamath
First Bancorp,  Inc. and subsidiaries' (the "Company") financial condition as of
December 31, 2002, and September 30, 2002,  and the results of their  operations
and cash flows for the three  months ended  December 31, 2002 and 2001.  Certain
information  and note  disclosures  normally  included in  financial  statements
prepared in accordance with generally accepted  accounting  principles have been
omitted  pursuant to the rules and  regulations  of the  Securities and Exchange
Commission. It is suggested that these consolidated financial statements be read
in  conjunction  with the  consolidated  financial  statements and notes thereto
included in the Company's  Annual Report on Form 10-K. The results of operations
for the  three  months  ended  December  31,  2002 and 2001 are not  necessarily
indicative of the results which may be expected for the entire fiscal year.

2. COMPREHENSIVE LOSS

For the three months ended December 31, 2002, the Company's total  comprehensive
loss was $1.0 million compared to total  comprehensive  loss of $1.3 million for
the three months ended December 31, 2001. Total comprehensive loss for the three
months ended  December 31, 2002 was  comprised of net income of $1.9 million and
other  comprehensive loss of $2.8 million,  net of tax. Total comprehensive loss
for the three  months  ended  December  31, 2001 was  comprised of net income of
$821,109  and  other  comprehensive  loss of  $2.1  million,  net of tax.  Other
comprehensive losses consist entirely of unrealized losses on available for sale
securities.

3. ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>

Activity in allowance for loan losses is summarized as follows:
                                                                             Three Months Ended             Year Ended
                                                                                   December 31,          September 30,
                                                                                           2002                   2002
                                                                            -------------------    -------------------
<S>                                                                                  <C>                    <C>
Balance, beginning of period ............................................            $7,375,812             $7,950,680
Charge-offs .............................................................               (77,860)              (747,092)
Recoveries ..............................................................                30,265                 16,224
Additions ...............................................................                  --                  156,000
                                                                            -------------------    -------------------
Balance, end of period ..................................................            $7,328,217             $7,375,812
                                                                            ===================    ===================
</TABLE>

Impaired  loans  totaled  $151,170 at December 31, 2002.  There were no impaired
loans at December 31, 2001 and no specifically  allocated loan loss reserves for
either  period.  The average  investment in impaired  loans for the three months
ended December 31, 2002 and 2001 was $167,283 and zero, respectively.


                                        8
<PAGE>

4.   GOODWILL AND INTANGIBLE ASSETS

On October 1, 2002, the Company  adopted SFAS No. 147,  Acquisitions  of Certain
Financial Institutions, which requires certain intangible assets to be accounted
for under the provisions of SFAS No. 141,  Business  Combinations,  and SFAS No.
142, Goodwill and Other Intangible Assets, which statements were also adopted on
October  1,  2002.  In  accordance  with  these  standards,  goodwill  and other
intangible  assets  with  indefinite  lives are no longer  being  amortized  but
instead will be tested for impairment at least  annually.  Upon adoption of SFAS
No. 147, $22.9 million of intangible assets related to prior branch acquisitions
were  reclassified to goodwill and amortization of these assets ceased.  Expense
related to  amortization  of other  intangibles  totaled  $404,375 for the three
months  ended  December 31,  2002.  A similar  expense is not being  recorded in
fiscal year 2003. Core deposit  intangibles  will continue to be amortized based
on  the  estimated  lives  of  the  underlying  deposits.  The  following  table
summarizes selected information about intangible assets:
<TABLE>
<CAPTION>


                                                 Gross Carrying Amount                        Accumulated Amortization
---------------------------------     --------------------------------------------  --------------------------------------------
Intangible assets                         December 31, 2002     September 30, 2002        December 31, 2002   September 30, 2002
carrying value
---------------------------------     --------------------- ----------------------  ----------------------- --------------------
<S>                                             <C>                    <C>                      <C>                  <C>
Core deposit intangible                         $28,376,467            $28,376,467              $11,862,486          $10,950,393
Mortgage servicing rights (included
in Other Assets)                                  1,820,823              1,820,823                  747,055              604,424
                                      --------------------- ----------------------  ----------------------- --------------------
Total                                           $30,030,297            $30,030,297              $12,442,547          $11,387,824
                                      ===================== ======================  ======================= ====================
</TABLE>
<TABLE>
<CAPTION>

                                               Amortization expense
                                         Three months ended December 31,
                                   --------------------------------------------
Intangible assets amortization             2002                   2001
---------------------------------  --------------------- ----------------------
<S>                                           <C>                    <C>
Core deposit intangible                         $912,094               $973,760
Mortgage servicing rights                        142,631                 89,607
                                   --------------------- ----------------------

Total                                         $1,054,725             $1,063,367
                                   ===================== ======================

Estimated amortization expense
For year ended 9/30/2004                      $3,611,358
For year ended 9/30/2005                      $3,306,403
For year ended 9/30/2006                      $1,648,489
For year ended 9/30/2007                      $1,527,914
For year ended 9/30/2008                      $1,258,079

</TABLE>
                                        9
<PAGE>

5. ADVANCES FROM FEDERAL HOME LOAN BANK

Borrowings at December 31, 2002  consisted of four short term advances  totaling
$26.0 million and 14 long term advances totaling $182.0 million from the Federal
Home Loan Bank of Seattle ("FHLB"). The advances are collateralized in aggregate
by certain  mortgages or deeds of trust,  securities of the U.S.  Government and
agencies thereof.

Scheduled maturities of advances from the FHLB were as follows:

<TABLE>
<CAPTION>

                                             December 31, 2002                                       September 30, 2002
                          ---------------------------------------------------------------------------------------------------------
                                                  Range of        Weighted                                 Range of        Weighted
                                                  interest         average                                 interest         average
                                  Amount             rates   interest rate                 Amount             rates   interest rate
                          --------------       -----------   -------------         --------------       -----------   -------------
<S>                       <C>                  <C>                   <C>           <C>                  <C>                   <C>
Due within one year ...   $   26,000,000       1.61%-2.14%           2.02%         $   31,250,000       1.91%-2.20%           2.09%
After one but within
five years ............       24,000,000       2.22%-3.58%           3.02%             16,000,000       2.48%-3.58%           3.06%
After five but within
ten years .............      158,000,000       4.77%-7.05%           5.86%            158,000,000       4.77%-7.05%           5.86%
                          --------------       -----------   -------------         --------------       -----------   -------------
                          $  208,000,000                                           $  205,250,000
                          ==============                                           ==============
</TABLE>


6. COMMITMENTS AND CONTINGENCIES

In the  ordinary  course  of  business,  the  Company  has  various  outstanding
commitments  and  contingencies  that  are  not  reflected  in the  accompanying
consolidated  financial statements.  In addition,  the Company is a defendant in
certain claims and legal actions arising in the ordinary course of business.  In
the opinion of management,  after consultation with legal counsel,  the ultimate
disposition  of these matters is not expected to have a material  adverse effect
on the consolidated financial condition or cash flows of the Company.

7. EARNINGS PER SHARE

Earnings per share ("EPS") is computed in accordance with Statement of Financial
Accounting  Standards  ("SFAS") No. 128, Earnings per Share.  Shares held by the
Company's  Employee Stock Ownership Plan ("ESOP") that are committed for release
are considered  contingently issuable shares and are included in the computation
of basic EPS.  Diluted EPS is computed using the treasury  stock method,  giving
effect to potential  additional  common shares that were outstanding  during the
period. Potential dilutive common shares include shares awarded but not released
under the Company's  Management  Recognition and Development Plan ("MRDP"),  and
stock options granted under the Stock Option Plan. Following is a summary of the
effect of dilutive securities on weighted average number of shares (denominator)
for the basic and diluted EPS calculations.  There are no resulting  adjustments
to net earnings.
<TABLE>
<CAPTION>
                                                                For the Three Months Ended
                                                               December 31,          December 31,
                                                               2002                  2001
                                                       --------------------  --------------------
Weighted average common
<S>                                                              <C>                    <C>
shares outstanding - basic ..........................            6,399,299              6,473,649
                                                       -------------------    -------------------
Effect of Dilutive Securities on Number of Shares:
MRDP shares .........................................                9,376                      7
Stock options .......................................              132,580                 10,204
                                                       -------------------    -------------------
Total Dilutive Securities ...........................              141,956                 10,211
                                                       -------------------    -------------------
Weighted average common shares

 outstanding - with dilution ........................            6,541,255              6,483,860
                                                       ===================    ===================
</TABLE>
                                       10
<PAGE>

8. REGULATORY CAPITAL

The following table  illustrates the compliance by Klamath First Federal Savings
and Loan Association (the  "Association") with currently  applicable  regulatory
capital requirements at December 31, 2002:

<TABLE>
<CAPTION>

                                                                                                   Categorized as "Well
                                                                                                    Capitalized" Under
                                                                      For Capital                   Prompt Corrective
                                           Actual                  Adequacy Purposes                 Action Provision
                                   ----------------------   ------------------------------  ------------------------------
                                         Amount     Ratio                 Amount     Ratio                Amount     Ratio
                                   ------------     -----           ------------     -----          ------------     -----
<S>                                <C>              <C>              <C>              <C>            <C>             <C>
 Total Capital:                    $106,039,327     14.1%            $60,075,848      8.0%           $75,094,810     10.0%
  (To Risk Weighted Assets)
 Tier I Capital:                     98,825,356     13.2%                    N/A       N/A            45,056,886      6.0%
  (To Risk Weighted Assets)
 Tier I Capital:                     98,825,356      6.9%             57,746,892      4.0%            72,183,615      5.0%
  (To Total Assets)
 Tangible Capital:                   98,825,356      6.9%             21,655,084      1.5%                   N/A       N/A
  (To Tangible Assets)
</TABLE>

9. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December  2002,  the FASB issues SFAS No.  148,  Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure,  an amendment of FASB Statement No.
123. This Statement provides  alternative  methods of transition for a voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation.  It also expands and clarifies the disclosure requirements to make
those  disclosures  more prominent and to require such disclosures in interim as
well as annual  financial  statements.  While the  Company  plans to continue to
account  for  stock-based  compensation  under APB  Opinion  25, the  disclosure
requirements of SFAS No. 148 will be implemented  for interim  reporting for the
quarter ended March 31, 2003.  The Company does not expect  adoption of SFAS No.
148 to have a material impact on its financial statements.


10. SUBSEQUENT EVENT

On January 16, 2003, the Company  announced a five percent stock repurchase plan
to  be  completed   over  a  twelve  month  period.   Five  percent   represents
approximately 339,000 shares.


                                       11
<PAGE>

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

Special Note Regarding Forward-Looking Statements

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations and other portions of this report  contain  certain  "forward-looking
statements"  concerning  the future  operations of Klamath First  Bancorp,  Inc.
Management  desires to take  advantage of the "safe  harbor"  provisions  of the
Private Securities Litigation Reform Act of 1995 and is including this statement
for the express  purpose of availing the Company of the protections of such safe
harbor  with  respect  to all  "forward-looking  statements"  contained  in this
quarterly report. We have used "forward- looking  statements" to describe future
plans  and  strategies,  including  our  expectations  of the  Company's  future
financial  results.  Management's  ability to  predict  results or the effect of
future plans or strategies is inherently  uncertain.  Factors which could affect
actual results include interest rate trends, the general economic climate in the
Company's  market  area  and the  country  as a whole  which  could  affect  the
collectibility  of loan balances,  the ability to increase  non-interest  income
through  expansion  of new lines of  business,  the  ability  of the  Company to
control costs and  expenses,  the success and costs of  integration  of acquired
branches,  competitive products and pricing, loan delinquency rates, and changes
in  federal  and  state  regulation.  These  factors  should  be  considered  in
evaluating the  "forward-looking  statements,"  and undue reliance should not be
placed on such statements.

Critical Accounting Policies and Estimates

The "Management's  Discussion and Analysis of Financial Condition and Results of
Operations,"  as well as disclosures  included  elsewhere in this Form 10-Q, are
based upon our consolidated  financial  statements,  which have been prepared in
accordance with accounting principles generally accepted in the United States of
America.  The preparation of these financial  statements  requires management to
make  estimates  and  judgments  that  affect  the  reported  amounts of assets,
liabilities,  revenues and expenses.  On an ongoing basis,  management evaluates
the  estimates  used,  including  the adequacy of the allowance for loan losses,
impairment of intangible assets, and contingencies and litigation. Estimates are
based upon historical experience,  current economic conditions and other factors
that management  considers  reasonable under the circumstances.  These estimates
result in judgments regarding the carrying values of assets and liabilities when
these values are not readily  available  from other sources as well as assessing
and  identifying  the accounting  treatments of commitments  and  contingencies.
Actual results may differ from these estimates  under  different  assumptions or
conditions.   The  following  critical  accounting  policies  involve  the  more
significant   judgments  and   assumptions   used  in  the  preparation  of  the
consolidated financial statements.

The allowance for loan losses is established to absorb known and inherent losses
attributable to loans outstanding and related off-balance sheet commitments. The
adequacy  of the  allowance  is  monitored  on an ongoing  basis and is based on
management's  evaluation of numerous factors.  These factors include the quality
of the current loan portfolio,  the trend in the loan  portfolio's risk ratings,
current economic conditions,  loan concentrations,  loan growth rates,  past-due
and  non-performing  trends,  evaluation  of  specific  loss  estimates  for all
significant  problem loans,  historical  charge-off and recovery  experience and
other  pertinent  information.  Approximately  81 percent of the Company's  loan
portfolio is secured by real estate, both residential and commercial properties,
and a  significant  depreciation  in real  estate  values in Oregon  would cause
management to increase the allowance for loan and lease losses.

                                       12
<PAGE>


Retained mortgage servicing rights are measured by allocating the carrying value
of the loans  between the assets sold and the  interest  retained,  based on the
relative  fair  value  at the  date of the  sale.  The fair  market  values  are
determined  using a discounted cash flow model.  Mortgage  servicing  assets are
amortized over the expected life of the loan and are evaluated  periodically for
impairment.  The expected life of the loan can vary from management's  estimates
due to prepayments by borrowers. Prepayments in excess of management's estimates
would negatively impact the recorded value of the mortgage servicing rights. The
value of the mortgage  servicing rights is also dependent upon the discount rate
used in the model.  Management  reviews  this rate on an ongoing  basis based on
current  market  rates.  A  significant  increase  in the  discount  rate  would
negatively  impact the value of mortgage  servicing rights. At December 31, 2002
the Company had recorded  impairment of $213,813  related to mortgage  servicing
rights.

At December 31, 2002 the Company had approximately $16.5 million in core deposit
intangibles and $22.9 million of goodwill as a result of business  combinations.
Because these  intangible  assets were  generated by purchases of bank branches,
the  Company  was  originally  required  to account  for them under SFAS No. 72,
Accounting for Certain  Acquisitions of Banking or Thrift  Institutions,  rather
than SFAS No. 142,  Goodwill and Other Intangible  Assets.  The issuance of SFAS
No. 147, Acquisitions of Certain Financial Institutions, in October 2002 removed
such  acquisitions of financial  institutions  from the scope of SFAS No. 72 and
required the  application of SFAS No. 142. The Company  adopted SFAS No. 142 and
SFAS No. 147 as of October 1, 2002. These standards  require that the balance of
goodwill and other intangibles be subjected to impairment  testing on a periodic
basis.  Ongoing analysis of the fair value of recorded core deposit  intangibles
and other  intangibles  for  impairment  will  involve a  substantial  amount of
judgment,   as  will  establishing  and  monitoring  estimated  lives  of  other
amortizable   intangible   assets.

The Company is party to various  legal  proceedings.  These  matters have a high
degree of uncertainty  associated with them.  There can be no assurance that the
ultimate  outcome will not differ  materially from our assessment of them. There
can also be no  assurance  that all matters  that may be brought  against us are
known to us at any point in time.

General

The  Company,  an Oregon  corporation,  is the unitary  savings and loan holding
company  for the  Association.  At  December  31,  2002,  the  Company had total
consolidated  assets of $1.5 billion and  consolidated  shareholders'  equity of
$119.2  million.  The Company is currently not engaged in any business  activity
other than holding the stock of the  Association.  Accordingly,  the information
set forth in this  report,  including  financial  statements  and related  data,
relates primarily to the Association.

The   Association  is  a  progressive,   community-oriented   savings  and  loan
association  that focuses on customer  service  within its primary  market area.
Accordingly,  the Association is primarily  engaged in attracting  deposits from
the general  public  through  its  offices  and using those and other  available
sources of funds to originate  permanent  residential  one- to four-family  real
estate  loans and loans on  commercial  real  estate,  multi-family  residential
properties,  and to consumers and small businesses within its market area. While
the Association has historically  emphasized fixed rate mortgage lending, it has

                                       13
<PAGE>

been  diversifying  its loan  portfolio by focusing on increasing  the number of
originations of commercial real estate loans,  multi- family  residential loans,
residential  construction loans, commercial and industrial loans, small business
loans and non-mortgage consumer loans. A significant portion of these newer loan
products  carry  adjustable  rates,  higher  yields,  or shorter  terms than the
traditional  fixed rate mortgages.  This lending strategy is designed to enhance
earnings,  reduce  interest  rate risk,  and  provide a more  complete  range of
financial  services  to  customers  and  the  local  communities  served  by the
Association.  The  acquisition  of  13  branches  from  Washington  Mutual  Bank
("WAMU"),  which was completed in September 2001,  moved the Company strongly in
this direction.

Net  interest  income,  which is the  difference  between  interest and dividend
income on interest-earning  assets,  primarily loans and investment  securities,
and interest expense on interest-bearing  deposits and borrowings,  is the major
source of profit for the Company.  Because the Company depends  primarily on net
interest  income for its earnings,  the focus of the Company's  management is to
create and  implement  strategies  that will provide  stable,  positive  spreads
between the yield on  interest-earning  assets and the cost of  interest-bearing
liabilities. Such strategies include the Association's expansion of its consumer
and  commercial  loan  products.  To a lesser  degree,  the net  earnings of the
Company  rely  on  the  level  of  its  non-interest   income.  The  Company  is
aggressively  pursuing  strategies to improve its service charge and fee income,
and control its non-interest  expense,  which includes employee compensation and
benefits,  occupancy  and  equipment  expense,  deposit  insurance  premiums and
miscellaneous other expenses.

The Association is regulated by the Office of Thrift Supervision ("OTS") and its
deposits  are insured up to  applicable  limits  under the  Savings  Association
Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation ("FDIC").

The Association is a member of the Federal Home Loan Bank of Seattle, conducting
its  business  through 53 office  facilities,  with the main  office  located in
Klamath Falls, Oregon. The primary market areas of the Association are the state
of Oregon and adjoining areas of California and Washington.

Liquidity and Capital Resources

The Company generates cash through operating  activities,  primarily as a result
of net income.  The  adjustments to reconcile net income to net cash provided by
operations during the periods presented consisted primarily of the provision for
loan losses,  depreciation and amortization,  stock-based  compensation expense,
amortization  of  deferred  loan  origination  fees,  net  gain  on the  sale of
investment  and  mortgage-backed  securities,  increases or decreases in various
escrow accounts and increases or decreases in other assets and liabilities.  The
primary investing  activity of the Association is lending,  which is funded with
cash provided from operations and financing activities, as well as proceeds from
amortization  and  prepayments on existing loans and mortgage backed and related
securities.   For  additional  information  about  cash  flows  from  operating,
financing,  and investing activities,  see the Condensed Consolidated Statements
of Cash Flows.

The  Association is required under  applicable  federal  regulations to maintain
specified levels of "liquid" investments in qualifying types of U.S. government,
federal agency and other  investments  having  maturities of five years or less.
Current OTS  regulations  require  that a savings  association  maintain  liquid
assets of not less than 4.00% of its average daily  balance of net  withdrawable
deposit  accounts and  borrowings  payable in one year or less.  At December 31,
2002, the  Association's  liquidity,  as measured for regulatory  purposes,  was
7.8%. The Company has borrowing agreements with banks that can be used if funds
are needed.

OTS capital  regulations  require the Association to have: (i) tangible  capital
equal to 1.5% of  adjusted  total  assets,  (ii) core  capital  equal to 4.0% of
adjusted  total  assets,  and (iii) total  risk-based  capital  equal to 8.0% of
risk-weighted  assets.  At December 31, 2002, the  Association was in compliance
with  all  regulatory  capital  requirements  effective  as of such  date,  with
tangible,  core and risk- based capital of 6.9%,  6.9% and 14.1%,  respectively.


                                       14
<PAGE>

Changes in Financial Condition

At December  31,  2002,  the  consolidated  assets of the Company  totaled  $1.5
billion, consistent with $1.5 billion at September 30, 2002.

Cash and cash equivalents  increased $6.6 million, or 14.50%, from $45.8 million
at September 30, 2002 to $52.4 million at December 31, 2002. The increase is the
result of routine daily fluctuations in cash balances.

Net loans  receivable  decreased  $17.8 million,  or 2.94%, to $589.6 million at
December  31,  2002,  compared to $607.5  million at  September  30,  2002.  The
decrease is the combined result of continued  prepayment of loan balances due to
refinancing  activity and the  Company's  strategy of selling much of its single
family mortgage loan production,  so those loans are not adding to the portfolio
balance.  The Company sold $25.5  million in single family  mortgage  loans with
servicing released during the quarter ended December 31, 2002.

Investment  securities decreased $10.8 million, or 9.02%, from $119.5 million at
September 30, 2002 to $109.2 million at December 31, 2002. This decrease was the
primarily the result of sale of $10.2  million of securities  during the quarter
ended December 31, 2002.

During the three months ended  December  31,  2002,  $83.0  million of principal
payments were received on MBS and $65.2 million in MBS were purchased, resulting
in a decrease in the balance of MBS from $650.8 million at September 30, 2002 to
$627.7 million at December 31, 2002.

In December  2002,  the  Company  purchased  $15.0  million in  bank-owned  life
insurance.

Other assets  increased from $3.7 million at September 30, 2002 to $14.6 million
at December 31, 2002. The balance at December 31, 2002 included an $11.3 million
receivable from investment  brokers related to the securities  transactions that
had not settled at quarter end.

Deposit  liabilities  decreased $23.0 million,  or 2.01%,  from $1.14 billion at
September 30, 2002 to $1.12 billion at December 31, 2002. The decrease  reflects
run off of time  deposits  in  response  to reduced  interest  rates  offered on
accounts.

Advances  from  borrowers for taxes and  insurance  decreased  $4.7 million from
September 30, 2002 to December 31, 2002. The decrease is the result of using the
reserves to pay the required  real estate taxes due on the  Association's  loans
receivable portfolio in November 2002.

The Company's total borrowings increased $2.7 million from September 30, 2002 to
December  31, 2002.  The  increase is the result of FHLB  borrowing at favorable
rates during the quarter ended December 31, 2002.

Total  shareholders'  equity decreased $770,322 from $119.9 million at September
30, 2002 to $119.2 million at December 31, 2002.  This decrease was the combined
result of $1.9 million in earnings for the quarter,  a $2.8 million  decrease in
unrealized  gains on securities  available for sale, and $842,320  reduction for
payment of dividends on common stock.

Results of Operations

         Comparison of Three Months Ended December 31, 2002 and 2001

General.  Net income  improved for the quarter ended  December 31, 2002 compared
with the same quarter last year. While interest income, interest expense and net
interest income all declined due to the declining rates over the last 12 months,
non-interest  income improved without an increase in non-interest  expense.  The
overall  result was a 129.65%  increase in net  earnings,  from $821,109 for the
quarter ended  December 31, 2001 to $1.9 million for the quarter ended  December
31, 2002.

Interest Income.  The Company  recorded  interest income of $19.2 million in the
first quarter  ended  December 31, 2002, a decrease of 16.39% from $23.0 million
for the same period last year.  Average  interest  earning  assets for the first
quarter increased by $15.4 million, or 1.11%, compared to the first quarter last
year, due to growth throughout the branch network. During the same period, yield
on  interest-earning  assets  decreased  115 basis  points,  from  6.64% for the
quarter ended December 31, 2001 to 5.49% for the same period in 2002.

                                       15
<PAGE>

Interest  Expense.  Total  interest  expense  decreased  $3.5 million from $11.7
million for the quarter ended  December 31, 2001 to $8.2 million for the quarter
ended December 31, 2002.  Average deposits  decreased by $42.7 million comparing
the three months ended  December  31, 2001 to 2002,  while the average  interest
paid on interest-bearing  deposits decreased 134 basis points from 3.58% for the
three months ended December 31, 2001 to 2.24% for the same period ended December
31,  2002.  Again,  the  decrease in interest  rates paid was part of a strategy
adopted by the Company in the fiscal year ended  September 30, 2002. The average
balance of borrowings  increased $35.5 million from $170.0 million for the three
months  ended  December  31, 2001 to $205.5  million  for the same period  ended
December 31, 2002.  However,  the rate paid on borrowings  decreased by 57 basis
points from 5.77% for the quarter ended  December 31, 2001 to 5.20% for the same
period in 2002.

Provision for Loan Losses. The provision for loan losses was zero and there were
$77,860 of charge offs, and $30,265 of recoveries  during the three months ended
December 31, 2002 compared to a $153,000  provision  with $44,230 of charge offs
and no  recoveries  during the three  months ended  December 31, 2001.  Based on
analysis of the loan  portfolio,  it was determined  that the allowance for loan
losses was  adequate  at  December  31,  2002  without  the need for  additional
reserves, thus no provision for loan losses was recorded.

At December 31, 2002, the allowance for loan losses was equal to 548.1% of total
non-performing  assets  compared to 699.6% at December 31, 2001. The decrease in
the coverage ratio was the result of a slight increase in non-performing  assets
and a somewhat  lower  allowance.  The ratio of  non-performing  assets to total
assets remained consistent, with 0.08% at December 31, 2001 to 0.09% at December
31, 2002.

Non-Interest Income.  Non-interest income continues to improve,  increasing $1.7
million, or 72.75%, to $3.9 million for the three months ended December 31, 2002
from $2.3 million for the three months ended December 31, 2001. Income from fees
and service charges  increased by 32.66% from $1.8 million for the quarter ended
December 31, 2001 to $2.4 million for the current quarter. Brokerage and annuity
commissions also showed significant growth,  increasing by 110.10% from $241,551
for the quarter  ended  December  31, 2001 to $507,490 for the same quarter this
year.  This  growth  is a result  of the  expanded  presence  of  Klamath  First
Financial  Services,  making the brokerage and investment  services available to
customers in more of the  Company's  market  areas.  A $380,068  gain on sale of
securities  was recorded in the quarter ended  December 31, 2002 while there was
no corresponding gain in the prior year.

Non-Interest Expense. The Company's continued efforts to control expenses can be
seen in the comparison of non-interest  expense  items  for the  quarters  ended
December 31, 2002 and 2001.  Most  categories of expenses were  consistent  from
year to year. Compensation, employee benefits and related expense showed a 9.32%
increase  due  to  increases  in  number  of  employees  and  salary  increases.
Amortization  of intangibles  decreased as the adoption of SFAS No. 142 and SFAS
No. 147 required the Company to cease amortization of other intangibles  related
to the WAMU branch acquisition  beginning October 1, 2002.  Amortization of core
deposit  intangibles  arising from the branch  acquisitions from Wells Fargo and
WAMU will continue to be recorded.

                                       16
<PAGE>


Income Taxes.  The provision for income taxes  increased  $431,088 for the three
months ended  December 31, 2002 compared with the prior year.  The effective tax
rate was 31.9% for the quarter ended December 31, 2002 compared to 35.6% for the
same period of 2001.  The decrease in effective  tax rate is primarily due to an
increase  in  tax-exempt  securities  and  addition  of low income  housing  tax
credits.

Item 3. Quantitative and Qualitative Disclosures about Market Risk


The  Company's  financial  performance  is  affected  by the  success of the fee
generating products it offers to its customers,  the credit quality of its loans
and securities,  and the extent to which its earnings are affected by changes in
interest  rates.  Credit risk is the risk that  borrowers  will become unable to
repay their debts as they become due. The Company relies on strict  underwriting
standards,  loan review,  and an adequate  allowance for loan losses to mitigate
its credit risk.

Interest  rate risk is the risk of loss in  principal  value and risk of earning
less net interest income due to changes in interest rates.  Put simply,  savings
institutions solicit deposits and lend the funds they receive to borrowers.  The
difference  between the rate paid on deposits and the rate  received on loans is
the interest rate spread. If the rates paid on deposits change, or reprice, with
the same timing and magnitude as the rates change on the loans, there is perfect
matching of interest  rate changes and thus,  no change in interest  rate spread
and no interest rate risk. In  actuality,  interest  rates on deposits and other
liabilities  do not reprice at the same time and/or with the same  magnitude  as
those on loans,  investments  and other  interest-earning  assets.  For example,
historically the Company primarily originated  fixed-rate  residential loans for
its portfolio.  Because fixed-rate loans do not reprice until payoff and because
the  majority of  residential  loans have terms of 15 to 30 years  (with  actual
expected lives of seven to ten years), the interest rate  characteristics of the
loan portfolio do not exactly match the Company's liabilities,  which consist of
deposits with maturities  ranging up to ten years and borrowings which mature or
reprice in five years or less. When interest rates change, this mismatch creates
changes in interest rate spread that influence net interest income and result in
interest rate risk.

Changes  in  interest  rates  also  impact  the  fair  value of the  assets  and
liabilities  on the  Company's  balance  sheet,  expressed as changes in the net
portfolio value ("NPV"). NPV represents the market value of portfolio equity and
is equal to the market  value of assets  minus the market  value of  liabilities
plus or minus the estimated market value of off-balance sheet  instruments.  For
example,  the market  value of  investment  securities  and loans is impacted by
changes  in  interest  rates.  Fixed-rate  loans  and  investments  held  in the
Company's  portfolio  increase  in  market  value  if  interest  rates  decline.
Conversely,  the market value of  fixed-rate  portfolio  assets  decreases in an
increasing  interest rate environment.  It is generally assumed that assets with
adjustable  rates are less subject to market value  changes due to interest rate
fluctuations based on the premise that their rates will adjust with the market.

There has not been any material change in the market risk disclosures  contained
in the Company's  Annual Report on Form 10-K for the fiscal year ended September
30, 2002.

Item 4. Controls and Procedures

     (a) Evaluation of Disclosure Controls and Procedures:  An evaluation of the
Company's  disclosure  controls and  procedures  (as defined in Section  13(a) -
14(c) of the  Securities  Exchange Act of 1934 (the "Act") was carried out under
the  supervision  and with the  participation  of the Company's  Chief Executive
Officer,  Chief  Financial  Officer and several  other  members of the Company's
senior  management  within the 90-day  period  preceding the filing date of this
quarterly  report.  The Company's  Chief  Executive  Officer and Chief Financial
Officer  concluded  that the  Company's  disclosure  controls and  procedures as
currently in effect are effective in ensuring that the  information  required to
be disclosed by the Company in the reports it files or submits  under the Act is
(i) accumulated  and  communicated  to the Company's  management  (including the
Chief  Executive  Officer and Chief Financial  Officer) in a timely manner,  and
(ii)  recorded,  processed,  summarized  and  reported  within the time  periods
specified in the SEC's rules and forms.

     (b) Changes in Internal  Controls:  In the quarter ended December 31, 2002,
the Company  did not make any  significant  changes in, nor take any  corrective
actions   regarding,   its  internal   controls  or  other  factors  that  could
significantly affect these controls.

                                       17
<PAGE>


                           PART II - OTHER INFORMATION

Item 1.           Legal Proceedings

         The Company is involved in various claims and legal actions
         arising in the normal course of business.  Management believes
         that these proceedings will not result in a material loss to the
         Company.


Item 2.           Changes in Securities

         Not applicable.


Item 3.           Defaults Upon Senior Securities

         Not applicable.


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

         Not applicable.


Item 5.           Other Information

         Not applicable.


Item 6.           Exhibits and Reports on Form 8-K

         a)  Not applicable.

         b)  There were no Current Reports on Form 8-K filed during the
         quarter ended December 31, 2002.





                                       18
<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.

                                             KLAMATH FIRST BANCORP, INC.

Date:      February 14, 2003                 By: /s/ Kermit K. Houser
                                             -------------------------------
                                             Kermit K. Houser, President and
                                             Chief Executive Officer


Date:      February 14, 2003                 By: /s/ Marshall Jay Alexander
                                             -------------------------------
                                             Marshall Jay Alexander,
                                             Executive Vice President and
                                             Chief Financial Officer






























                                       19
<PAGE>

                             Certification Required
      by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

I, Kermit K. Houser, certify that:

1.   I have  reviewed  this  quarterly  report  on Form  10-Q of  Klamath  First
     Bancorp, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: February 14, 2003
                                             By: /s/ Kermit K. Houser
                                             -------------------------------
                                             Kermit K. Houser, President and
                                             Chief Executive Officer

                                       20
<PAGE>


                             Certification Required
      by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

I, Marshall J. Alexander, certify that:

1.   I have  reviewed  this  quarterly  report  on Form  10-Q of  Klamath  First
     Bancorp, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

     6.   The  registrant's  other  certifying  officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

Date: February 14, 2003                      By: /s/ Marshall Jay Alexander
                                             -------------------------------
                                             Marshall Jay Alexander,
                                             Executive Vice President and
                                             Chief Financial Officer



                                       21
<PAGE>

      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
                         OF KLAMATH FIRST BANCORP, INC.
            PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     The   undersigned   hereby   certify,   pursuant  to  Section  906  of  the
Sarbanes-Oxley  Act of 2002 and in connection with this Quarterly Report on Form
10-Q, that:

     1.   the report fully complies with the  requirements of Sections 13(a) and
          15(d) of the Securities Exchange Act of 1934, as amended, and

     2.   the  information  contained  in the  report  fairly  presents,  in all
          material respects,  the company's  financial  condition and results of
          operations.



By: /s/ Kermit K. Houser                        By: /s/ Marshall Jay Alexander
--------------------------                      ------------------------------
Kermit K. Houser                                Marshall Jay Alexander
Chief Executive Officer                         Chief Financial Officer

Dated: February 14, 2003

                                       22