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 March 31, 2003

                                       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  April  30,  2003,   there  were  issued  6,924,515  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 SUBSIDIARIES
                                TABLE OF CONTENTS

Part I.  Financial Information
-------  ----------------------
Item 1.  Financial Statements                                               Page
                                                                          ------
         Unaudited Condensed Consolidated Balance Sheets
         (As of March 31, 2003 and September 30, 2002)                         3

         Unaudited Condensed Consolidated Statements of Earnings
         (For the three months and six months ended March 31, 2003
          and 2002)                                                            4

         Unaudited Condensed Consolidated Statements of
         Shareholders' Equity
         (For the year ended September 30, 2002 and for
          the six months ended March 31, 2003)                                 5

         Unaudited Condensed Consolidated Statements of
         Cash Flows
         (For the six months ended March 31, 2003 and 2002)                6 - 7

         Notes to Condensed Consolidated Financial Statements             8 - 13

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                             14 - 19

Item 3.  Quantitative and Qualitative Disclosures about Market Risk           20

Item 4.  Controls and Procedures                                              21

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

Item 1.  Legal Proceedings                                                    22

Item 2.  Changes in Securities                                                22

Item 3.  Defaults Upon Senior Securities                                      22

Item 4.  Submission of Matters to a Vote of Security Holders                  22

Item 5.  Other Information                                                    22

Item 6.  Exhibits and Reports on Form 8-K                                     22

Signatures                                                                    23

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

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




                                        2
<PAGE>
<TABLE>
<CAPTION>


                                                               KLAMATH FIRST BANCORP, INC. AND SUBSIDIARIES
                                                                   CONDENSED CONSOLIDATED BALANCE SHEETS
                                                                AS OF MARCH 31, 2003 AND SEPTEMBER 30, 2002
                                                                               (Unaudited)



                                                                                         March 31, 2003        September 30, 2002
                                                                                        ---------------        ------------------

<S>                                                                                     <C>                       <C>
Cash and due from banks .............................................................   $    36,647,926           $    38,444,500
Interest bearing deposits with banks ................................................        16,109,394                 5,762,373
Federal funds sold and securities purchased under agreements to resell ..............           286,501                 1,584,540
                                                                                        ---------------           ---------------
   Total cash and cash equivalents ..................................................        53,043,821                45,791,413

Investment securities available for sale, at fair value
  (amortized cost: $155,911,802 and $119,940,845) ...................................       153,734,478               119,542,052
Mortgage backed and related securities available for sale, at fair
  value (amortized cost: $587,378,020 and $640,304,722) .............................       592,316,063               650,796,164
Loans receivable, net ...............................................................       573,395,681               607,464,660
Real estate owned and repossessed assets ............................................           656,480                   758,663
Premises and equipment, net .........................................................        23,322,508                23,410,847
Stock in Federal Home Loan Bank of Seattle, at cost .................................        13,968,800                13,510,400
Accrued interest receivable .........................................................         7,468,711                 8,177,014
Deferred income taxes ...............................................................         1,365,730                      --
Bank-owned life insurance ...........................................................        15,137,472                      --
Core deposit intangible, net ........................................................        15,601,887                17,426,074
Goodwill and other intangible assets ................................................        22,872,915                22,872,915
Other assets ........................................................................         4,755,313                 3,745,151
                                                                                        ---------------           ---------------
   Total assets .....................................................................   $ 1,477,639,859           $ 1,513,495,353
                                                                                        ===============           ===============

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
  Deposit liabilities ...............................................................   $ 1,099,727,664           $ 1,142,005,997
  Accrued interest on deposit liabilities ...........................................           677,412                   721,810
  Advances from borrowers for taxes and insurance ...................................         1,580,165                 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 ....................................................           910,280                   820,975
  Pension liabilities ...............................................................           811,347                   842,272
  Deferred income taxes .............................................................              --                   1,466,556
  Other liabilities .................................................................        17,981,527                 8,438,245
                                                                                        ---------------           ---------------
    Total liabilities ...............................................................     1,331,388,395             1,366,351,810
                                                                                        ---------------           ---------------
 Mandatorily redeemable preferred securities issued by subsidiary ...................        27,271,807                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,
   March 31, 2003 - 6,859,405 issued, 6,502,780 outstanding
   September 30, 2002 - 6,744,040 issued, 6,366,546 outstanding .....................            68,594                    67,440
  Additional paid-in capital ........................................................        32,083,743                30,282,059
  Retained earnings-substantially restricted ........................................        88,414,623                87,265,334
  Unearned shares issued to ESOP ....................................................        (2,445,805)               (2,935,130)
  Unearned shares issued to MRDP ....................................................          (853,144)                 (999,111)
  Accumulated other comprehensive income, net of tax ................................         1,711,646                 6,257,444
                                                                                        ---------------           ---------------
    Total shareholders' equity ......................................................       118,979,657               119,938,036
                                                                                        ---------------           ---------------
    Total liabilities and shareholders' equity ......................................   $ 1,477,639,859           $ 1,513,495,353
                                                                                        ===============           ===============
<FN>


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

                                        3
<PAGE>
<TABLE>
<CAPTION>

                                                               KLAMATH FIRST BANCORP, INC. AND SUBSIDIARIES
                                                               CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                                                                (Unaudited)

                                                                        Three             Three               Six               Six
                                                                 Months Ended      Months Ended      Months Ended      Months Ended
                                                                    March 31,         March 31,         March 31,         March 31,
                                                                         2003              2002              2003              2002
                                                              ---------------   ---------------   ---------------   ---------------
INTEREST INCOME
<S>                                                           <C>               <C>               <C>               <C>
  Loans receivable ........................................   $    11,002,022   $    13,329,697   $    22,713,826   $    27,289,669
  Mortgage backed and related securities ..................         5,098,979         6,358,565        11,042,778        12,941,575
  Investment securities ...................................         1,569,610         2,081,079         3,044,141         4,248,324
  Federal funds sold ......................................            36,713            82,122            75,951           303,562
  Interest bearing deposits ...............................            64,367            70,084           121,522           133,316
                                                              ---------------   ---------------   ---------------   ---------------
    Total interest income .................................        17,771,691        21,921,547        36,998,218        44,916,446
                                                              ---------------   ---------------   ---------------   ---------------

INTEREST EXPENSE
  Deposit liabilities .....................................         4,698,399         7,509,908        10,248,435        16,757,286
  FHLB advances ...........................................         2,626,684         2,362,962         5,277,222         4,793,370
  Other ...................................................            23,314            23,693            52,803            64,961
                                                              ---------------   ---------------   ---------------   ---------------
    Total interest expense ................................         7,348,397         9,896,563        15,578,460        21,615,617
                                                              ---------------   ---------------   ---------------   ---------------
    Net interest income ...................................        10,423,294        12,024,984        21,419,758        23,300,829

Provision for loan losses .................................              --               3,000              --             156,000

                                                              ---------------   ---------------   ---------------   ---------------
    Net interest income after provision for
      loan losses .........................................        10,423,294        12,021,984        21,419,758        23,144,829
                                                              ---------------   ---------------   ---------------   ---------------

NON-INTEREST INCOME
  Fees and service charges on deposit accounts ............         1,521,020         1,235,712         3,102,383         2,328,099
  Other fees and service charges ..........................           828,342           750,948         1,638,691         1,461,433
  Gain on sale of investments .............................           504,451           119,101           884,519           119,101
  Gain on sale of real estate owned .......................            10,715             4,433            16,721            12,452
  Brokerage and annuity commissions .......................           400,980           301,352           908,470           542,903
  Gain on sale of mortgage loans ..........................           612,138           329,036         1,016,729           463,431
  Income on bank-owned life insurance .....................           137,472              --             137,472              --
  Other income ............................................           160,956           180,757           412,474           275,493
                                                              ---------------   ---------------   ---------------   ---------------
    Total non-interest income .............................         4,176,074         2,921,339         8,117,459         5,202,912
                                                              ---------------   ---------------   ---------------   ---------------
NON-INTEREST EXPENSE
  Compensation, employee benefits and related expense .....         6,206,153         5,523,630        12,082,675        10,899,141
  Occupancy expense .......................................         1,351,646         1,156,041         2,576,092         2,361,786
  Data processing expense .................................           347,311           406,630           693,107           779,718
  Insurance premium expense ...............................            46,871            51,483            94,604            83,758
  Loss on sale of investments .............................           404,439              --             404,439              --
  Amortization of intangible assets .......................           912,094         1,378,135         1,824,187         2,756,270
  Mandatorily redeemable preferred securities expense .....           403,290           244,911           834,441           546,489
  Other expense ...........................................         3,577,736         3,635,494         6,907,172         7,098,564
                                                              ---------------   ---------------   ---------------   ---------------
    Total non-interest expense ............................        13,249,540        12,396,324        25,416,717        24,525,726
                                                              ---------------   ---------------   ---------------   ---------------

Earnings before income taxes ..............................         1,349,828         2,546,999         4,120,500         3,822,015

Provision for income tax ..................................           388,184           875,894         1,273,179         1,329,801
                                                              ---------------   ---------------   ---------------   ---------------

Net earnings ..............................................   $       961,644   $     1,671,105   $     2,847,321   $     2,492,214
                                                              ===============   ===============   ===============   ===============

Earnings per common share - basic .........................   $          0.15   $          0.26   $          0.44   $          0.39
Earnings per common share - fully diluted .................   $          0.14   $          0.26   $          0.43   $          0.39
Weighted average common shares outstanding - basic ........         6,482,777         6,381,819         6,440,579         6,428,238
Weighted average common shares outstanding -  with dilution         6,657,784         6,402,420         6,592,859         6,447,131
<FN>

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

                                        4

<PAGE>
<TABLE>
<CAPTION>



                                                 KLAMATH FIRST BANCORP, INC. AND SUBSIDIARIES
                                               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                FOR THE YEAR ENDED SEPTEMBER 30, 2002 AND THE SIX MONTHS ENDED MARCH 31, 2003
                                                                   (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 ..............        --         --           --     (1,698,032)        --           --            --     (1,698,032)

Stock repurchased and retired      (7,605)       (76)    (119,232)        --           --           --            --       (119,308)

ESOP contribution ...........        --         --        301,041         --        489,325         --            --        790,366

MRDP contribution ...........      20,869       --          4,217         --           --        145,967          --        150,184

Exercise of stock options ...     122,970      1,230    1,615,658         --           --           --            --      1,616,888

Tax benefit of stock options         --         --           --           --           --           --            --           --
                              ----------- ----------  -----------  -----------  -----------  ----------- -------------  -----------
                                6,502,780     68,594   32,083,743   85,567,302   (2,445,805)    (853,144)    6,257,444  120,678,134

Comprehensive loss
  Net earnings ..............                                        2,847,321                                            2,847,321
  Other comprehensive loss:
    Unrealized loss on
    securities, net of tax
    and reclassification
    adjustment (2) ..........                                                                              (4,545,798)   (4,545,798)
                                                                                                                       ------------
    Total comprehensive loss                                                                                             (1,698,477)
                              ----------- ----------  -----------  -----------  -----------  ----------- ------------- ------------
Balance at March 31, 2003 ...   6,502,780 $   68,594  $32,083,743  $88,414,623  ($2,445,805) ($  853,144)   $1,711,646 $118,979,657
                              =========== ==========  ===========  ===========  ===========  =========== ============= ============
<FN>

(1)         Net unrealized holding gain on securities of $5,095,497 (net of $3,123,389 tax expense) less reclassification adjustment
            for net gains included in net earnings of $377,617 (net of $231,443 tax expense).
(2)         Net unrealized holding loss on securities of $3,018,305 (net of $1,849,922 tax benefit) less reclassification adjustment
            for net gains included in net earnings of $1,527,493 (net of $936,205 tax expense).

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


                  KLAMATH FIRST BANCORP, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (Unaudited)


                                                                                       Six Months Ended          Six Months Ended
                                                                                              March 31,                 March 31,
                                                                                                   2003                      2002
                                                                                        ---------------           ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                        <C>                       <C>
    Net earnings ....................................................................      $  2,847,321              $  2,492,214

ADJUSTMENTS TO RECONCILE NET EARNINGS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
    Depreciation and amortization ...................................................         2,924,997                 3,798,741
    Deferred income taxes ...........................................................           (46,152)                     --
    Provision for loan losses .......................................................              --                     156,000
    Compensation expense related to ESOP benefit ....................................           790,366                   641,858
    Compensation expense related to MRDP Trust ......................................           150,184                   159,518
    Net amortization of premiums (discounts)  paid on
      investment and mortgage backed and related securities .........................         4,986,797                 1,585,035
    Decrease in deferred loan fees, net of amortization .............................          (499,711)                 (189,726)
    Accretion of discounts on purchased loans .......................................              --                       7,149
    Net (gain) loss on sale of real estate owned and
      premises and equipment ........................................................            (8,348)                  (11,459)
    Net gain on sale of investment and mortgage
      backed and related securities .................................................          (480,080)                 (119,101)
    FHLB stock dividend .............................................................          (458,400)                 (415,100)
CHANGES IN ASSETS AND LIABILITIES
    Accrued interest receivable .....................................................           708,303                   358,288
    Other assets ....................................................................        (1,154,675)                3,356,667
    Accrued interest on deposit liabilities .........................................           (44,398)                 (584,549)
    Accrued interest on borrowings ..................................................            89,305                    12,814
    Pension liabilities .............................................................           (30,925)                   65,298
    Other liabilities ...............................................................         9,778,960                 1,050,472
                                                                                        ---------------           ---------------
Net cash provided by operating activities ...........................................        19,553,544                12,364,119
                                                                                        ---------------           ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Proceeds from maturity of investment securities
      available for sale ............................................................         3,862,000                      --
    Principal repayments received on mortgage
       backed and related securities held to maturity ...............................              --                     327,174
    Principal repayments received on mortgage
       backed and related securities available for sale .............................       186,229,080                48,029,224
    Principal repayments received on loans ..........................................       178,858,925               148,325,276
    Loan originations ...............................................................      (195,871,576)             (141,897,739)
    Loans purchased .................................................................        (1,875,225)                     --
    Loans sold ......................................................................        53,304,337                28,478,869
    Purchase of investment securities available
      for sale ......................................................................       (50,136,050)               (7,395,197)
    Purchase of mortgage backed and related
      securities available for sale .................................................      (255,833,371)             (126,729,871)
    Proceeds from sale of investment securities
      available for sale ............................................................        10,228,950                10,040,625
    Proceeds from sale of mortgage backed and related
      securities available for sale .................................................       118,098,423                      --
    Proceeds from sale of real estate owned and
      premises and equipment ........................................................           262,753                   520,782
    Purchases of premises and equipment .............................................        (1,005,430)               (7,435,410)
    Purchase of bank-owned life insurance ...........................................       (15,000,000)                     --
                                                                                        ---------------           ---------------
Net cash provided by (used in) investing activities .................................        31,122,816               (47,736,267)
                                                                                        ---------------           ---------------
</TABLE>


                                        6
<PAGE>
<TABLE>
<CAPTION>


                  KLAMATH FIRST BANCORP, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (Unaudited)
                                   (Continued)

                                                                                       Six Months Ended          Six Months Ended
                                                                                              March 31,                 March 31,
                                                                                                   2003                      2002
                                                                                        ---------------           ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
    Decrease  in deposit liabilities,
<S>                                                                                        <C>                       <C>
      net of withdrawals ............................................................      ($42,278,333)             ($11,259,787)
    Proceeds from FHLB advances .....................................................        69,800,000                10,200,000
    Repayments of FHLB advances .....................................................       (67,050,000)              (10,200,000)
    Proceeds from short term borrowings .............................................              --                     200,000
    Repayments of short term borrowings .............................................              --                    (200,000)
    Stock repurchase and retirement .................................................          (119,308)               (3,468,670)
    Stock options exercised .........................................................         1,616,888                   241,148
    Advances from borrowers for taxes and insurance .................................        (3,525,790)               (4,180,402)
    Dividends paid ..................................................................        (1,867,409)               (1,840,160)
                                                                                        ---------------           ---------------
Net cash used in financing activities ...............................................       (43,423,952)              (20,507,871)
                                                                                        ---------------           ---------------
Net increase (decrease) in cash and cash
  equivalents .......................................................................         7,252,408               (55,880,019)

Cash and cash equivalents at beginning
  of period .........................................................................        45,791,413               118,388,566

                                                                                        ---------------           ---------------
Cash and cash equivalents at end of period ..........................................       $53,043,821               $62,508,547
                                                                                        ===============           ===============
SUPPLEMENTAL SCHEDULE OF INTEREST AND
INCOME
  TAXES PAID
    Interest paid ...................................................................       $15,533,552               $22,187,352
    Income taxes paid ...............................................................         1,775,000                 1,275,000

SUPPLEMENTAL SCHEDULE OF NONCASH
  INVESTING ACTIVITIES
    Net unrealized loss on securities
      available for sale ............................................................       ($4,545,798)              ($3,740,518)
    Dividends declared and accrued in other
      liabilities ...................................................................           891,723                   890,158

<FN>

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


                                        7
<PAGE>

                  KLAMATH FIRST BANCORP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED 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.'s (the "Company")  financial condition as of March 31, 2003
and September 30, 2002,  the results of operations  for the three and six months
ended March 31, 2003 and 2002 and cash flows for the six months  ended March 31,
2003 and 2002.  Certain  information and note disclosures  normally  included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been omitted pursuant to the rules
and regulations of the Securities and Exchange  Commission.  These  consolidated
financial  statements  should  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 and six months ended March
31, 2003 are not necessarily indicative of the results which may be expected for
the entire fiscal year.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December  2002, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards  ("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 the  intrinsic  value
method  presented in APB Opinion 25,  Accounting  for Stock Issued to Employees,
the disclosure  requirements  of SFAS No. 148 have been  implemented for interim
reporting  for the quarter  ended March 31, 2003.  The table below  presents net
earnings  and  earnings  per  share  as  reported,   the  stock-based   employee
compensation cost, net of related tax effects,  that would have been included in
the  determination  of net  earnings  if the fair  value  based  method had been
applied  and pro forma net  earnings  and  earnings  per share  that  would have
resulted if the fair value method had been applied.
<TABLE>
<CAPTION>


                                                                 Three Months      Three Months        Six Months        Six Months
                                                                        Ended             Ended             Ended             Ended
                                                               March 31, 2003    March 31, 2002    March 31, 2003    March 31, 2002
                                                                   ----------        ----------        ----------        ----------
<S>                                                                <C>               <C>               <C>               <C>
Net Earnings as reported ..................................        $  961,644        $1,671,105        $2,847,321        $2,492,214
Less: SFAS 123 Compensation expense, net of tax............           (97,393)         (118,469)         (194,786)         (236,938)
                                                                   ----------        ----------        ----------        ----------
Pro forma net earnings ....................................        $  864,251        $1,552,636        $2,652,535        $2,255,276
                                                                   ==========        ==========        ==========        ==========

Weighted average shares - basic ...........................         6,482,777         6,381,819         6,440,579         6,428,238
Earnings per share - basic
     As reported ..........................................        $     0.15        $     0.26        $     0.44        $     0.39
     Pro forma ............................................        $     0.13        $     0.24        $     0.41        $     0.35

Weighted average shares - with dilution....................         6,657,784         6,402,420         6,592,859         6,447,131
Earnings per share - with dilution
     As reported ..........................................        $     0.14        $     0.26        $     0.43        $     0.39
     Pro forma ............................................        $     0.13        $     0.24        $     0.40        $     0.35

</TABLE>


                                        8

<PAGE>



2. COMPREHENSIVE INCOME

For the three months ended March 31, 2003,  the  Company's  total  comprehensive
loss was  $736,974  compared  to total  comprehensive  income of $42,330 for the
three months ended March 31, 2002. Total comprehensive loss for the three months
ended  March  31,  2003 was  comprised  of net  income  of  $961,644  and  other
comprehensive loss of $1.7 million,  net of tax. Total comprehensive  income for
the three  months  ended  March 31,  2002 was  comprised  of net  income of $1.7
million and other comprehensive loss of $1.6 million, net of tax.

For the six months ended March 31, 2003, the Company's total  comprehensive loss
was $1.7 million  compared to total  comprehensive  loss of $1.2 million for the
six months ended March 31,  2002.  Total  comprehensive  loss for the six months
ended  March 31,  2003 was  comprised  of net income of $2.8  million  and other
comprehensive loss of $4.5 million, net of tax. Total comprehensive loss for the
six months ended March 31, 2002 was  comprised of net income of $2.5 million and
other comprehensive loss of $3.7 million, net of tax.

The significant  fluctuations noted in total comprehensive  income comparing the
periods  ended March 31, 2003 and 2002 resulted from changes in the market value
of investment and  mortgage-backed  securities  available for sale. There was an
unrealized loss on securities  available for sale in 2002 which has increased in
2003.

3. ALLOWANCE FOR LOAN LOSSES

   Activity in the allowance for loan losses is summarized as follows:

<TABLE>
<CAPTION>


                                                              Six Months Ended                  Year Ended
                                                                     March 31,               September 30,
                                                                          2003                        2002
                                                               ---------------             ---------------
<S>                                                                 <C>                         <C>
Balance, beginning of period ...............................        $7,375,812                  $7,950,680
Charge-offs ................................................          (186,412)                   (747,092)
Recoveries .................................................            44,641                      16,224
Provision for loss .........................................              --                       156,000
                                                               ---------------             ---------------
Balance, end of period .....................................        $7,234,041                  $7,375,812

                                                               ===============             ===============
</TABLE>

At  March  31,  2003  and  2002,  impaired  loans  totaled  $195,170  and  zero,
respectively. There were no specifically allocated loan loss reserves related to
these loans.  The average  investment in impaired loans for the three months and
six months  ended March 31, 2003 was $177,347 and  $172,315,  respectively.  The
average  investment in impaired  loans for the three months and six months ended
March 31, 2002 was zero.

At  March  31,  2003,  the  balance  of  loans   resulting  from  troubled  debt
restructurings was $83,860. There were no restructured loans at March 31, 2002.


                                        9

<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 $808,749 for the six months
ended March 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                              March 31, 2003     September 30, 2002         March 31, 2003     September 30, 2002
carrying value
                                              ---------------        ---------------        ---------------        ---------------
<S>                                           <C>                    <C>                    <C>                    <C>
Core deposit intangible ....................  $    28,376,467        $    28,376,467        $    12,774,580        $    10,950,393
Mortgage servicing rights (included
  in Other Assets)..........................        1,820,823              1,820,823                921,733                604,424
                                              ---------------        ---------------        ---------------        ---------------
Total ......................................  $    30,197,290        $    30,197,290        $    13,696,313        $    11,554,817
                                              ===============        ===============        ===============        ===============
</TABLE>
<TABLE>
<CAPTION>

                                                       Amortization expense                         Amortization expense
                                                   Three months ended March 31,                   Six months ended March 31,
                                              --------------------------------------        --------------------------------------
Intangible assets amortization                           2003                   2002                   2003                   2002
--------------------------------------------  --------------------------------------        --------------------------------------
<S>                                           <C>                    <C>                    <C>                    <C>
Core deposit intangible ....................  $       912,094        $       973,761        $     1,824,187        $     1,947,521
Mortgage servicing rights ..................          174,678                107,041                317,309                196,648
                                              ---------------        ---------------        ---------------        ---------------
Total ......................................  $     1,086,772        $     1,080,802        $     2,141,496        $     2,144,169
                                              ===============        ===============        ===============        ===============

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>

                                       10

<PAGE>


5. ADVANCES FROM FEDERAL HOME LOAN BANK

Borrowings  at March 31, 2003  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 Company  has  pledged  mortgage-backed
securities and collateralized mortgage obligations issued by the U.S. Government
and agencies thereof as collateral for the borrowings.

Scheduled maturities of advances from the FHLB were as follows:
<TABLE>
<CAPTION>


                                                March 31, 2003                                     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. SHORT TERM BORROWINGS

Short term borrowings at March 31, 2003 consisted of $1.7 million in credit line
borrowing from a financial institution at a rate of 3.83%.

7. 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 of the Company.

8. SHAREHOLDERS' EQUITY

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. To date, no shares have been repurchased under the
plan.

Shares issued and  outstanding  have increased  since  September 30, 2002 due to
exercise of stock options.

                                       11

<PAGE>



9. EARNINGS PER SHARE

Earnings per share ("EPS") is computed in accordance with 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
                                                                                             March  31,                March 31,
                                                                                                   2003                     2002
                                                                                        ---------------           ---------------
<S>                                                                                           <C>                       <C>
Weighted average common shares outstanding - basic ..................................         6,482,777                 6,381,819
                                                                                        ---------------           ---------------
Effect of Dilutive Securities on Number of Shares:
Stock options .......................................................................           172,266                    12,502
MRDP shares .........................................................................             2,741                     8,099
                                                                                        ---------------           ---------------
Total Dilutive Securities ...........................................................           175,007                    20,601
                                                                                        ---------------           ---------------
 Weighted average common shares outstanding - with dilution .........................         6,657,784                 6,402,420
                                                                                        ===============           ===============
</TABLE>
<TABLE>
<CAPTION>

                                                                                                 For the Six Months Ended
                                                                                             March  31,                 March 31,
                                                                                                   2003                      2002
                                                                                        ---------------           ---------------
<S>                                                                                           <C>                       <C>
Weighted average common shares outstanding - basic ..................................         6,440,579                 6,428,238
                                                                                        ---------------           ---------------
Effect of Dilutive Securities on Number of Shares:
Stock options .......................................................................           147,236                    10,980
MRDP shares .........................................................................             5,044                     7,913
                                                                                        ---------------           ---------------
Total Dilutive Securities ...........................................................           152,280                    18,893
                                                                                        ---------------           ---------------
Weighted average common shares outstanding-with dilution ............................         6,592,859                 6,447,131
                                                                                        ===============           ===============
</TABLE>



                                       12

<PAGE>


10. 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 March 31, 2003:

<TABLE>
<CAPTION>
                                                                                                   Categorized as "Well
                                                                                                    Capitalized" Under
                                                                      For Capital                   Prompt Corrective
                                           Actual                  Adequacy Purposes                 Action Provision
                                   ----------------------   ------------------------------  ------------------------------
                                         Amount     Ratio                 Amount     Ratio                Amount     Ratio
As of March 31, 2003               ------------     -----           ------------     -----          ------------     -----
<S>                                <C>              <C>              <C>              <C>            <C>             <C>
 Total Capital:                    $103,343,358     13.2%            $62,545,328      8.0%           $78,181,660     10.0%
  (To Risk Weighted Assets)
 Tier I Capital:                     96,251,910     12.3%                    N/A       N/A            46,908,996      6.0%
  (To Risk Weighted Assets)
 Tier I Capital:                     96,251,910      6.7%             57,109,645      4.0%            71,387,056      5.0%
  (To Total Assets)
 Tangible Capital:                   96,251,910      6.7%             21,416,117      1.5%                   N/A       N/A
  (To Tangible Assets)
</TABLE>







                                       13
<PAGE>
                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,  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 and lease
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. 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.
Management  believes  the  allowance  for loan losses is  adequate  for the loan
portfolio  as it is  currently  structured.  However,  as the Company  continues
transitioning its loan portfolio to include more commercial  bank-like products,
management  expects the  allowance  will  increase as the risk profile  changes.
Approximately  72  percent  of  the  Company's  loan  portfolio  is  secured  by
residential  and commercial  real estate and a significant  depreciation in real
estate  values in Oregon would cause  management  to increase the  allowance for
loan losses.

                                       14
<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  rights 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.

The extended period of low interest rates has resulted in prepayment of mortgage
loans,  including those related to the mortgage  servicing  rights.  The Company
monitors the value of the mortgage  servicing rights and recognizes  impairment,
when necessary, on a quarterly basis. While management expects that there may be
additional impairment of the value of mortgage servicing rights in the continued
low interest rate environment, the balance of mortgage servicing rights at March
31, 2003 was less than $1 million,  limiting the amount of impairment  which can
be experienced.

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  March  31,  2003,  the  Company  had  total
consolidated  assets of $1.5 billion and  consolidated  shareholders'  equity of
$119.0  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 loans to consumers and small businesses within its market area.
While the Association has historically  emphasized fixed rate mortgage  lending,
it has 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.  Subsequent to the WAMU  acquisition,  the Company has and will
continue to hire commercial  lenders in key market areas to further increase and
enhance the transition from a tradition  single family mortgage lender to a full
service commercial bank lender.

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.

                                       15
<PAGE>

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 57 office  facilities,  with the main  office  located in
Klamath Falls, Oregon. Two additional in-store branches will open this year, one
in Woodburn,  Oregon in April and the other in Grants Pass,  Oregon in July. 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.

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 March 31, 2003, the Association was in compliance with
all regulatory  capital  requirements  effective as of such date, with tangible,
core and risk-based capital of 6.7%, 6.7% and 13.2%, respectively.

Changes in Financial Condition

At March 31, 2003, the consolidated assets of the Company totaled $1.48 billion,
down slightly from $1.51 billion at September 30, 2002.

Net loans  receivable  decreased by $34.1 million to $573.4 million at March 31,
2003,  from $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 $53.3  million in single  family  mortgage  loans with  servicing  released
during the six months ended March 31, 2003.

Investment  securities  increased $34.2 million, or 28.6% from $119.5 million at
September  30, 2002 to $153.7  million at March 31, 2003.  This increase was the
combined  result of  purchase  of $50.1  million  in  securities,  sale of $10.2
million of investment securities available for sale, maturity of $3.9 million of
investment  principal,  and a $1.8  million  decline  in  the  market  value  of
available for sale securities.

During the six months ended March 31, 2003, the Company purchased $255.8 million
of  mortgage-backed  securities  ("MBS")  and sold  $118.1  million  of MBS.  In
addition,  $186.2 million was received in principal repayments on MBS, resulting
in an overall  decrease in the balance of MBS from $650.8  million at  September
30,  2002 to  $592.3  million  at March  31,  2003.  The  on-going  strategy  of
investment in MBS is to maximize income while keeping  maturities and cash flows
short, within two to five years, giving the Company the ability to reinvest this
cash flow in loans and investments over the same period.

In December  2002,  the  Company  purchased  $15.0  million in  bank-owned  life
insurance.  This  insurance  is  used  to  fund  director  benefits,  supplement
executive retirement benefits, and provide life insurance to key employees.

Deposit  liabilities  decreased  $42.3 million,  or 3.7%,  from $1.14 billion at
September 30, 2002 to $1.10 billion at March 31, 2003. The decrease reflects the
Company's  pricing  strategy  in  light of its  high  liquidity  and low loan to
deposit ratio.

Advances  from  borrowers for taxes and  insurance  decreased  $3.5 million from
September  30, 2002 to March 31,  2003.  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 and the overall decrease in the 1-4 family loan
portfolio due to selling of new loan production.

                                       16
<PAGE>

The Company's total  borrowings  remained  consistent from September 30, 2002 to
March  31,  2003.  Note 5 of  the  Notes  to  Condensed  Consolidated  Financial
Statements gives details of the borrowings, indicating that many of the advances
are  longer-term  fixed-rate  notes at higher  rates  which were taken out a few
years ago. Due to their higher rates,  these notes have  substantial  prepayment
penalties.  Accordingly,  it is not cost effective to prepay these borrowings at
this time.

Other  liabilities  increased by $9.6 million from $8.4 million at September 30,
2002 to $18.0 million at March 31, 2003.  The increase  relates to $10.3 million
payable to investment brokers for trades recorded in March that would not settle
until April.

Total shareholders'  equity decreased $0.9 million, or 0.8%, from $119.9 million
at September 30, 2002 to $119.0 million at March 31, 2003. This decrease was the
combined  result of earnings of $2.8  million and  additions  to capital of $1.6
million  related to  exercise of stock  options,  which were more than offset by
payment of $1.7 million in common stock dividends for the six month period and a
$4.5 million unrealized loss on securities available for sale.

Results of Operations

         Comparison of Six Months Ended March 31, 2003 and 2002

General.  Net income  improved for the six months ended March 31, 2003  compared
with the same period last year. While interest income, interest expense, and net
interest  income all declined due to the declining  interest rates over the last
12  months,  non-interest  income  improved  with  only  a  slight  increase  in
non-interest  expense.  The overall result was a 14.3% increase in net earnings,
from $2.5  million for the six months  ended March 31, 2002 to $2.8  million for
the six months ended March 31, 2003.

Interest Income. Interest income decreased by $7.9 million, showing the combined
effects of a $14.8 million increase in average interest earning assets and a 121
basis point  decrease in yield from March 31, 2002 to March 31,  2003.  Interest
income on loans receivable  decreased $4.6 million, or 16.8%, from $27.3 million
for the six months ended March 31, 2002 to $22.7  million for the same period of
2003.  This decrease  resulted  from an $80.4 million  decrease in average loans
receivable  due to prepayments  and sales of new loan  production and a 45 basis
point  decrease in the average yield on loans for the six months ended March 31,
2003 compared to the same period ended March 31, 2002. Interest rate spread (the
difference  between the rates  earned on interest  earning  assets and the rates
paid on interest bearing liabilities) decreased from 2.95% to 2.71% and interest
rate margin (net interest  income divided by average  interest  earning  assets)
decreased from 3.41% to 3.09% comparing the six month periods.

Interest Expense.  Total interest expense decreased $6.0 million,  or 27.9%, for
the six months  ended March 31, 2003  compared to the same period in 2002.  That
decrease  was the  combined  result of a $6.5  million  decrease  in interest on
deposit  liabilities and a $483,852  increase in interest expense on borrowings.
The  average  balance of deposit  liabilities  decreased  $50.7  million and the
average  rate paid on deposits  decreased by 116 basis points from 3.26% for the
six months  ended March 31,  2002 to 2.10% for the same  period  ended March 31,
2003.  The average  balance of  borrowings  increased  $38.0 million from $169.8
million for the six months  ended March 31, 2002 to $207.8  million for the same
period ended March 31, 2003. The average rate paid on borrowings decreased by 58
basis points from 5.69% for the six months ended March 31, 2002 to 5.11% for the
same period in 2003.

                                       17
<PAGE>

Provision for Loan Losses. The provision for loan losses was zero and there were
$186,412 of charge offs and $44,641 of  recoveries  during the six months  ended
March 31, 2003 compared to a $156,000 provision with $117,214 of charge offs and
$3,948 of  recoveries  during  the six months  ended  March 31,  2002.  Based on
analysis of the loan  portfolio,  it was determined  that the allowance for loan
losses was adequate at March 31, 2003 without the need for additional  reserves,
thus no provision for loan losses was recorded.  In accordance with contemporary
regulatory guidance on the allowance for loan losses, the Company is required to
estimate  reserves based on the current inherent risk in the portfolio.  Because
payoffs have  reduced the 1-4 family  mortgage  portfolio  and  historical  loan
losses have been low, the  allowance  required has remained  stable  without the
need for additional provision.

Non-Interest Income.  Non-interest income continues to improve,  increasing $2.9
million,  or 56.0%, to $8.1 million for the six months ended March 31, 2003 from
$5.2  million  for the six months  ended  March 31,  2002.  Income from fees and
service charges on deposit accounts increased by 33.3% from $2.3 million for the
six months  ended March 31, 2002 to $3.1  million for the six months ended March
31, 2003.  Brokerage and annuity  commissions  also showed  significant  growth,
increasing  by 67.3% from  $542,903  for the six months  ended March 31, 2002 to
$908,470 for the same period 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.  With the high loan volume and subsequent  sale of single family mortgage
loan  production,  gain on sale of  mortgage  loans has  increased  119.4%  from
$463,431 for the six months ended March 31, 2002 to $1.0 million for the current
six month period. A $884,519 gain on sale of securities was recorded for the six
months ended March 31, 2003  compared to $119,101  gain on sale  recorded in the
prior year.  Both gain on sale of  securities  and loss on sale, as noted below,
are part of the ongoing  management of the Company's large investment  portfolio
to reposition the portfolio for higher long term yields in the current  interest
rate  environment.  We  expect  similar  sales  activity  as part of the  active
management of investment assets.

Non-Interest Expense. The Company's continued efforts to control expenses can be
seen in the  comparison  of  non-interest  expense  items  year-to-date  for the
periods  ended  March 31,  2003 and  2002.  Most  categories  of  expenses  were
consistent  from  year to year.  Compensation,  employee  benefits  and  related
expense  showed a 10.9%  increase due to  increases  in number of employees  and
salary increases. Occupancy expense increased 9.1% due to the increase in number
of branch locations and additional space leased for back office operations.  The
Company  recorded  $404,439  in  loss  on  sale  of  investments  as part of the
repositioning  of the  investment  portfolio  as noted  above.  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.

Income  Taxes.  The  provision  for income taxes  decreased  $56,622 for the six
months ended March 31, 2003 compared with the prior year. The effective tax rate
was 30.9% for the six months ended March 31, 2003 compared to 34.8% for the same
period of 2002. As part of the overall plan to reduce the effective tax rate and
enhance the level of  investments  qualifying  under the Community  Reinvestment
Act, the Company has increased  investment in low income housing tax credits and
tax-exempt municipal securities. The decrease in effective tax rate is primarily
due to these activities and the effect of tax benefits related to employee stock
plans.

         Comparison of Three Months Ended March 31, 2003 and 2002

General.  As noted for the six months ended March 31, 2003,  declining  interest
rates resulted in decreasing net interest  income,  interest income and interest
expense for the quarter ended March 31, 2003 compared to the same quarter a year
ago.

Interest Income.  The Company  recorded  interest income of $17.8 million in the
second  quarter ended March 31, 2003, a decrease of 18.9% from $21.9 million for
the same period last year.  Average  interest  earning assets increased by $14.2
million, or 1.0% from the prior year. Yield decreased from 6.47% for the quarter
ended March 31, 2002 to 5.19% for the same period of 2003. Yields on loans, MBS,
investment  securities,  and cash balances  decreased as rates declined over the
year.

                                       18
<PAGE>

Interest Expense.  Total interest expense decreased 25.8%, from $9.9 million for
the quarter ended March 31, 2002 to $7.3 million for the quarter ended March 31,
2003.  Average  deposits  decreased by $59.0 million  comparing the three months
ended  March  31,   2002  to  2003,   while  the   average   interest   paid  on
interest-bearing  deposits  decreased  99 basis  points from 2.94% for the three
months  ended March 31, 2002 to 1.95% for the same period  ended March 31, 2003.
The average balance of borrowings  increased $40.6 million,  from $169.7 million
for the three months ended March 31, 2002 to $210.3  million for the same period
ended March 31,  2003,  resulting  in an increase in interest on  borrowings  of
$265,683 for the three months ended March 31, 2003 compared with the same period
ended March 31, 2002.  The rate paid on borrowings  decreased by 58 basis points
from 5.61% for the quarter  ended March 31, 2002 to 5.03% for the same period in
2003.

Provision for Loan Losses. The provision for loan losses was zero and there were
$108,552 of charge offs, and $14,376 of recoveries during the three months ended
March 31, 2003  compared to a $3,000  provision  with $72,984 of charge offs and
$3,948 of recoveries  during the three months ended March 31, 2002. Based on the
Company's  analysis of the allowance for loan losses,  the allowance is adequate
to cover anticipated  losses in the loan portfolio and additional  provision for
losses was not considered necessary.

Non-Interest Income.  Non-interest income continues to improve,  increasing $1.3
million,  or 43.0%,  to $4.2  million for the three  months ended March 31, 2003
from $2.9 million for the three  months  ended March 31, 2002.  Fees and service
charges on deposit accounts increased by 23.1% from $1.2 million for the quarter
ended March 31, 2002 to $1.5  million for the  current  quarter.  Brokerage  and
annuity  commissions also showed  significant  growth,  increasing by 33.1% from
$301,352  for the quarter  ended March 31, 2002 to $400,980 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 $504,451  gain on sale of
securities  was  recorded  in the quarter  ended  March 31,  2003  compared to a
$119,101 gain on sale of securities for the same quarter last year.

Non-Interest  Expense.  Non-interest  expense  increased  a modest 6.9% to $13.2
million for the three  months ended March 31,  2003,  from $12.4  million in the
comparable period in 2002.  Compensation,  employee benefits and related expense
showed an  increase  of 12.4% which  reflects  the  addition of staff and salary
increases.  The number of full-time  equivalent  employees increased from 470 at
March 31, 2002 to 506 at March 31,  2003, a 7.7%  increase,  due to new branches
and expansion of commercial and consumer lending  activities.  Occupancy expense
has increased  16.9% as the Company has added  branches and expanded back office
space. The Company  recorded  $404,439 in loss on sale of investments as part of
the repositioning of the investment portfolio as noted previously.  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.

Income Taxes.  The provision for income taxes  decreased  $487,710 for the three
months ended March 31, 2003 compared with the prior year. The effective tax rate
was 28.8% for the quarter  ended  March 31, 2003  compared to 34.4% for the same
period of 2002. As part of the overall plan to reduce the effective tax rate and
enhance the level of  investments  qualifying  under the Community  Reinvestment
Act, the Company has increased  investment in low income housing tax credits and
tax-exempt municipal securities. The decrease in effective tax rate is primarily
due to these activities and the effect of tax benefits related to employee stock
plans.

                                       19
<PAGE>
       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 six years or less), 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.

                                       20
<PAGE>

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 March 31, 2003, 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.

                                        21
<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

          The Company held an annual  meeting on January 29, 2003.  The election
          of three  directors was brought before the security  holders for vote.
          The  following   three   directors  were  nominated  and  elected  for
          three-year terms:
<TABLE>
<CAPTION>

                                        Vote For             Vote Withheld
                                      ----------             -------------
<S>                                    <C>                         <C>
          Timothy A. Bailey            6,052,339                   120,423
          James D. Bocchi              6,061,048                   111,714
          William C. Dalton            6,015,916                   156,846
</TABLE>

         The following director was nominated and elected for a two year term:
<TABLE>
<CAPTION>

                                       Vote For             Vote Withheld
                                     ----------             -------------
<S>                                   <C>                         <C>
         Donald N. Bauhofer           6,058,042                   114,720
</TABLE>

          The  following  directors  continue  in office  for  their  respective
          remaining  terms:  Rodney N. Murray  (one-year  term),  and Bernard Z.
          Agrons (one-year  term),  Kermit K. Houser (two-year term), and Dianne
          E. Spires (two-year term).

          Approval of the  appointment  of Deloitte & Touche LLP as  independent
          accountants for the fiscal year ending  September 30, 2003 was brought
          before the security  holders for vote. The appointment was approved as
          follows:
<TABLE>
<CAPTION>

                                       Vote For              Vote Against       Vote Withheld
                                     ----------             -------------       -------------
<S>                                   <C>                          <C>                 <C>
                                      6,126,824                    35,017              10,921
</TABLE>

          No  additional  items were on the agenda of the annual  meeting and no
          items were brought to a vote during the meeting.

Item 5.   Other Information

          Not applicable.

Item 6.   Exhibits and Reports on Form 8-K

          a) Not applicable.

          b) During or related to the quarter ended March 31, 2003,  the Company
             filed the following Current Reports on Form 8-K:

               Form 8-K dated  April 24,  2003  announcing  the  issuance of the
               Company's  press  release for the second  quarter ended March 31,
               2003.

               Form 8-K dated  April 25, 2003  correcting  an error in the press
               release for the second quarter ended March 31, 2003.

                                       22
<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:       May 14, 2003                  By:   /s/ Kermit K. Houser
                                                -------------------------------
                                                Kermit K. Houser, President and
                                                Chief Executive Officer


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





                                       23
<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: May 14, 2003

                                                 /s/ Kermit K. Houser
                                                -------------------------------
                                                Kermit K. Houser, President and
                                                Chief Executive Officer
<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: May 14, 2003

                                                /s/ Marshall Jay Alexander
                                                -------------------------------
                                                Marshall Jay Alexander,
                                                Executive Vice President and
                                                Chief Financial Officer

<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.



/s/ Kermit K. Houser                                /s/ Marshall J. Alexander
-----------------------                             ---------------------------
Kermit K. Houser                                    Marshall J. Alexander
Chief Executive Officer                             Chief Financial Officer

Dated: May 14, 2003