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, 2002

                                       OR

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

                         Commission File Number: 0-26556

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

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

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

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

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

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

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

As of April 19, 2002,  there were issued  6,813,054  shares of the  Registrant's
Common Stock.  The Registrant's  voting common stock is traded  over-the-counter
and is listed on the Nasdaq National Market under the symbol "KFBI."
<PAGE>


                   KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS

                         Part I. Financial Information
-------  ----------------------
Item 1.  Financial Statements                                         Page
                                                                    --------
         Unaudited Condensed Consolidated Balance Sheets
         (As of March 31, 2002 and September 30, 2001)                    3

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

         Unaudited Condensed Consolidated Statements of
         Shareholders' Equity (For the year ended September 30, 2001
         and for the six months ended March 31, 2002)                     5

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

         Notes to Condensed Consolidated Financial Statements        8 - 11

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                        12 - 18

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

Item 1.  Legal Proceedings                                               19

Item 2.  Changes in Securities                                           19

Item 3.  Defaults Upon Senior Securities                                 19

Item 4.  Submission of Matters to a Vote of Security Holders             19

Item 5.  Other Information                                               19

Item 6.  Exhibits and Reports on Form 8-K                                19

Signatures                                                               20











                                        2
<PAGE>
<TABLE>
<CAPTION>
                   KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                   AS OF MARCH 31, 2002 AND SEPTEMBER 30, 2001
                                   (Unaudited)


                                                                             March 31, 2002     Sept. 30, 2001
ASSETS                                                                      ---------------    ---------------

<S>                                                                         <C>                <C>
Cash and due from banks .................................................   $    30,636,460    $    40,446,042
Interest bearing deposits with banks ....................................         3,990,075          3,791,252
Federal funds sold and securities purchased under agreements to resell ..        27,882,012         74,151,272
                                                                            ---------------    ---------------
   Total cash and cash equivalents ......................................        62,508,547        118,388,566

Investment securities available for sale, at fair value
  (amortized cost: $153,894,323 and $154,190,612) .......................       148,997,038        154,675,760
Investment securities held to maturity, at amortized cost (fair
  value: $592,694 and $594,429) .........................................           592,100            592,388
Mortgage backed and related securities available for sale, at fair
  value (amortized cost: $496,942,071 and $419,639,650) .................       495,877,819        421,637,670
Mortgage backed and related securities held to maturity, at amortized
  cost (fair value: $1,300,178 and $1,642,174) ..........................         1,288,489          1,620,612
Loans receivable, net ...................................................       644,998,235        679,990,308
Real estate owned and repossessed assets ................................            48,776            445,855
Premises and equipment, net .............................................        23,384,851         16,911,912
Stock in Federal Home Loan Bank of Seattle, at cost .....................        13,113,100         12,698,000
Accrued interest receivable .............................................         8,299,298          8,657,586
Deferred income taxes ...................................................         1,695,231               --
Core deposit intangible and other intangible assets .....................        42,827,325         44,088,926
Other assets ............................................................         3,932,892          8,864,227
                                                                            ---------------    ---------------
   Total assets .........................................................   $ 1,447,563,701    $ 1,468,571,810
                                                                            ===============    ===============

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
  Deposit liabilities ...................................................   $ 1,141,564,357    $ 1,152,824,144
  Accrued interest on deposit liabilities ...............................           990,057          1,574,606
  Advances from borrowers for taxes and insurance .......................         2,457,592          6,637,994
  Advances from Federal Home Loan Bank of Seattle .......................       168,000,000        168,000,000
  Short term borrowings .................................................         1,700,000          1,700,000
  Accrued interest on borrowings ........................................           814,557            801,743
  Pension liabilities ...................................................         1,007,446            942,148
  Deferred income taxes .................................................              --              597,345
  Other liabilities .....................................................         7,653,315          6,799,241
                                                                            ---------------    ---------------
    Total liabilities ...................................................     1,324,187,324      1,339,877,221
                                                                            ---------------    ---------------
 Mandatorily redeemable preferred securities issued by subsidiary .......        14,576,474         14,553,684
                                                                            ---------------    ---------------

    Commitments and contingent liabilities ..............................              --                 --

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, 2002 - 6,817,367 issued, 6,332,363 outstanding
   September 30, 2001 - 7,060,667 issued, 6,561,461 outstanding .........            68,174             70,607
  Additional paid-in capital ............................................        30,861,229         33,926,796
  Retained earnings-substantially restricted ............................        84,641,969         83,816,307
  Unearned shares issued to ESOP ........................................        (3,424,320)        (3,913,510)
  Unearned shares issued to MRDP ........................................        (1,146,195)        (1,298,859)
  Accumulated other comprehensive income (loss), net of tax..............        (2,200,954)         1,539,564
                                                                            ---------------    ---------------
    Total shareholders' equity ..........................................       108,799,903        114,140,905
                                                                            ---------------    ---------------
    Total liabilities and shareholders' equity ..........................   $ 1,447,563,701    $ 1,468,571,810
                                                                            ===============    ===============

<FN>

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

                                        3
<PAGE>
<TABLE>
<CAPTION>


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


                                                       Three Months Ended  Three Months Ended  Six Months Ended  Six Months Ended
                                                           March 31, 2002      March 31, 2001    March 31, 2002    March 31, 2001
                                                          ---------------     ---------------   ---------------   ---------------
INTEREST INCOME
<S>                                                           <C>                 <C>               <C>               <C>
  Loans receivable ........................................   $13,329,697         $11,927,271       $27,289,669       $26,171,302
  Mortgage backed and related securities ..................     6,358,565           3,236,880        12,941,575         4,472,936
  Investment securities ...................................     2,081,079           1,925,899         4,248,324         3,972,434
  Federal funds sold ......................................        82,122             218,545           303,562           403,608
  Interest bearing deposits ...............................        70,084             141,618           133,316           246,282
                                                              -----------         -----------       -----------       -----------
    Total interest income .................................    21,921,547          17,450,213        44,916,446        35,266,562
                                                              -----------         -----------       -----------       -----------

INTEREST EXPENSE
  Deposit liabilities .....................................     7,509,908           7,491,515        16,757,286        15,094,850
  FHLB advances ...........................................     2,362,962           2,533,302         4,793,370         5,142,770
  Other ...................................................        23,693             128,570            64,961           253,988
                                                              -----------         -----------       -----------       -----------
    Total interest expense ................................     9,896,563          10,153,387        21,615,617        20,491,608
                                                              -----------         -----------       -----------       -----------
    Net interest income ...................................    12,024,984           7,296,826        23,300,829        14,774,954

Provision for loan losses .................................         3,000             153,000           156,000           381,000

                                                              -----------         -----------       -----------       -----------
    Net interest income after provision for
      loan losses .........................................    12,021,984           7,143,826        23,144,829        14,393,954
                                                              -----------         -----------       -----------       -----------

NON-INTEREST INCOME
  Fees and service charges ................................     1,986,660             935,358         3,789,532         1,806,014
  Gain on sale of investments .............................       119,101           2,501,874           119,101         2,509,793
  Gain on sale of real estate owned .......................         4,433               1,938            12,452            16,429
  Other income ............................................       811,145             268,203         1,281,827           488,617
                                                              -----------         -----------       -----------       -----------
    Total non-interest income .............................     2,921,339           3,707,373         5,202,912         4,820,853
                                                              -----------         -----------       -----------       -----------
NON-INTEREST EXPENSE
  Compensation, employee benefits and related expense .....     5,523,630           3,121,325        10,899,141         6,030,270
  Occupancy expense .......................................     1,156,041             644,578         2,361,786         1,225,969
  Data processing expense .................................       406,630             257,484           779,718           488,509
  Insurance premium expense ...............................        51,483              33,879            83,758            68,670
  Loss on sale of investments .............................          --                  --                --              30,632
  Amortization of intangible assets .......................     1,378,135             413,169         2,756,270           826,339
  Other expense ...........................................     3,880,405           1,738,165         7,645,053         3,320,898
                                                              -----------         -----------       -----------       -----------
    Total non-interest expense ............................    12,396,324           6,208,600        24,525,726        11,991,287
                                                              -----------         -----------       -----------       -----------

Earnings before income taxes ..............................     2,546,999           4,642,599         3,822,015         7,223,520

Provision for income tax ..................................       875,894           1,687,796         1,329,801         2,583,673
                                                              -----------         -----------       -----------       -----------

Net earnings ..............................................   $ 1,671,105         $ 2,954,803       $ 2,492,214       $ 4,639,847
                                                              ===========         ===========       ===========       ===========

Earnings per common share - basic .........................   $      0.26         $      0.45       $      0.39       $      0.70
Earnings per common share - fully diluted .................   $      0.26         $      0.45       $      0.39       $      0.70
Weighted average common shares outstanding - basic ........     6,381,819           6,567,352         6,428,238         6,610,189
Weighted average common shares outstanding -  with dilution     6,402,420           6,585,719         6,447,131         6,623,185


<FN>

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

                                        4
<PAGE>
<TABLE>
<CAPTION>
                                         KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
                                       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                        FOR THE YEAR ENDED SEPTEMBER 30, 2001 AND THE SIX MONTHS ENDED MARCH 31, 2002
                                                         (Unaudited)
                                                                                Unearned       Unearned
                                  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, 2000     6,692,428  $73,662  $37,701,796  $79,713,255   ($4,893,250)  ($2,498,378)  ($1,372,524) $108,724,561

Cash dividends                        --       --           --   (3,467,950)           --            --            --    (3,467,950)

Stock repurchased and retired   (550,221   (5,502)  (7,393,921)          --            --            --            --    (7,399,423)

ESOP contribution                 97,974       --      396,471           --       979,740            --            --     1,376,211

MRDP contribution                 76,618       --       13,708           --            --     1,199,519            --     1,213,227

Exercise of stock options        244,662    2,447    3,208,742           --            --            --            --     3,211,189
                               ---------  -------  -----------  -----------  ------------  ------------   -----------  ------------
                               6,561,461   70,607   33,926,796   76,245,305    (3,913,510)   (1,298,859)   (1,372,524)  103,657,815

Comprehensive income
     Net earnings                                                 7,571,002                                               7,571,002
   Other comprehensive
      income:
        Unrealized gain
        on securities,
        net of tax and
        reclassification
        adjustment   (1)                                                                                    2,912,088     2,912,088
                                                                                                                       ------------
          Total comprehensive
          income                                                                                                         10,483,090
                               ---------  -------  -----------  -----------  ------------  ------------   -----------  ------------
Balance at September 30, 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                        --       --           --   (1,666,552)           --            --            --    (1,666,552)

Stock repurchased and retired   (262,873)  (2,629)  (3,466,041)          --            --            --            --    (3,468,670)

ESOP contribution                     --       --      152,668           --       489,190            --            --       641,858

MRDP contribution                 14,202       --        6,854           --            --       152,664            --       159,518

Exercise of stock options         19,573      196      240,952           --            --            --            --       241,148
                               ---------  -------  -----------  -----------  ------------  ------------   -----------  ------------
                               6,332,363   68,174   30,861,229   82,149,755    (3,424,320)   (1,146,195)    1,539,564   110,048,207

Comprehensive loss
     Net earnings                                                 2,492,214                                               2,492,214
     Other comprehensive
        loss:
          Unrealized loss on
          securities, net of
          tax and
          reclassification
          adjustment   (2)                                                                                 (3,740,518)   (3,740,518)
                                                                                                                       ------------
          Total comprehensive
          loss                                                                                                           (1,248,304)
                               ---------  -------  -----------  -----------  ------------  ------------   -----------  ------------
Balance at
   March 31, 2002              6,332,363  $68,174  $30,861,229  $84,641,969   ($3,424,320)  ($1,146,195)  ($2,200,954) $108,799,903
                               =========  =======  ===========  ===========  ============  ============   ===========  ============
<FN>

(1)  Net unrealized  holding gain on securities of $2,893,883 (net of $1,773,670
     tax expense) less  reclassification  adjustment for net losses  included in
     net earnings of $18,205 (net of $11,158 tax benefit).

(2)  Net unrealized  holding loss on securities of $3,712,479 (net of $2,275,390
     tax benefit) less reclassification adjustment for net gains included in net
     earnings of $28,039 (net of $17,185 tax expense).

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


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


                                                                        Six Months Ended                         Six Months Ended
                                                                               March 31,                                March 31,
                                                                                    2002                                     2001
                                                                          --------------                           --------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                         <C>                                      <C>
    Net earnings                                                              $2,492,214                               $4,639,847

ADJUSTMENTS TO RECONCILE NET EARNINGS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
    Depreciation and amortization                                              3,798,741                                1,446,629
    Provision for loan losses                                                    156,000                                  381,000
    Disposition of allowance for loan losses                                          --                                 (231,842)
    Compensation expense related to ESOP benefit                                 641,858                                  562,758
    Compensation expense related to MRDP Trust                                   159,518                                  558,312
    Net amortization of premiums (discounts)  paid on
      investment and mortgage backed and related securities                    1,585,035                                   62,488
    Decrease in deferred loan fees, net of amortization                         (189,726)                              (2,547,764)
    Accretion of discounts on purchased loans                                      7,149                                    3,999
    Net (gain) loss on sale of real estate owned and
      premises and equipment                                                     (11,459)                                   3,494
    Net gain on sale of investment and mortgage
      backed and related securities                                             (119,101)                              (2,479,160)
    FHLB stock dividend                                                         (415,100)                                (387,400)
CHANGES IN ASSETS AND LIABILITIES
    Accrued interest receivable                                                  358,288                                   32,816
    Other assets                                                               3,356,667                               (1,896,596)
    Accrued interest on deposit liabilities                                     (584,549)                                  47,504
    Accrued interest on borrowings                                                12,814                                    8,390
    Pension liabilities                                                           65,298                                   65,298
    Other liabilities                                                          1,050,472                                1,194,137
                                                                          --------------                           --------------
Net cash provided by operating activities                                     12,364,119                                1,463,910
                                                                          --------------                           --------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Proceeds from maturity of investment securities
      available for sale                                                              --                               20,000,000
    Principal repayments received on mortgage
       backed and related securities held to maturity                            327,174                                  230,666
    Principal repayments received on mortgage
       backed and related securities available for sale                       48,029,224                               18,006,036
    Principal repayments received on loans                                   148,325,276                               51,021,891
    Loan originations                                                       (141,897,739)                             (48,292,954)
    Loans sold                                                                28,478,869                              200,747,467
    Purchase of investment securities available
      for sale                                                                (7,395,197)                             (47,211,334)
    Purchase of mortgage backed and related
      securities available for sale                                         (126,729,871)                            (259,486,468)
    Proceeds from sale of investment securities
      available for sale                                                      10,040,625                               10,367,746
    Proceeds from sale of mortgage backed and related
      securities available for sale                                                   --                               78,007,947
    Proceeds from sale of real estate owned and
      premises and equipment                                                     520,782                                  347,706
    Investment in real estate owned                                                   --                                  (69,210)
    Purchases of premises and equipment                                       (7,435,410)                              (1,577,305)
                                                                          --------------                           --------------
Net cash provided by (used in) investing activities                          (47,736,267)                              22,092,188
                                                                          --------------                           --------------
</TABLE>


                                                                    6
<PAGE>
<TABLE>
<CAPTION>


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

                                                                        Six Months Ended                        Six Months Ended
                                                                               March 31,                                March 31,
                                                                                    2002                                     2001
                                                                          --------------                           --------------

CASH FLOWS FROM FINANCING ACTIVITIES
<S>                                                                         <C>                                      <C>
    Increase (decrease)  in deposit liabilities,
      net of withdrawals                                                    ($11,259,787)                              $6,419,706
    Proceeds from FHLB advances                                               10,200,000                                       --
    Repayments of FHLB advances                                              (10,200,000)                                      --
    Proceeds from short term borrowings                                          200,000                                3,400,000
    Repayments of short term borrowings                                         (200,000)                              (4,700,000)
    Stock repurchase and retirement                                           (3,468,670)                              (2,011,085)
    Stock options exercised                                                      241,148                                       --
    Advances from borrowers for taxes and insurance                           (4,180,402)                              (7,016,901)
    Dividends paid                                                            (1,840,160)                              (1,914,461)
                                                                          --------------                           --------------
Net cash used in financing activities                                        (20,507,871)                              (5,822,749)
                                                                          --------------                           --------------
Net increase (decrease) in cash and cash
  equivalents                                                                (55,880,019)                              17,733,357

Cash and cash equivalents at beginning
  of period                                                                  118,388,566                               29,946,600

                                                                          --------------                           --------------
Cash and cash equivalents at end of period                                   $62,508,547                              $47,679,957
                                                                          ==============                           ==============
SUPPLEMENTAL SCHEDULE OF INTEREST AND
INCOME
  TAXES PAID
    Interest paid                                                            $22,187,352                              $20,435,714
    Income taxes paid                                                          1,275,000                                1,730,000

SUPPLEMENTAL SCHEDULE OF NONCASH
  INVESTING ACTIVITIES
    Net unrealized gain (loss) on securities
      available for sale                                                     ($3,740,518)                              $2,914,352
    Dividends declared and accrued in other
      liabilities                                                                890,158                                  936,806

<FN>


    See notes to condensed consolidated financial statements

</FN>
</TABLE>

                                                                    7
<PAGE>



                   KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
              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, 2002
and September 30, 2001,  the results of operations  for the three and six months
ended March 31, 2002 and 2001 and cash flows for the six months  ended March 31,
2002 and 2001.  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, 2002 are not necessarily indicative of the results which may be expected for
the entire fiscal year.

2.       COMPREHENSIVE INCOME

For the three months ended March 31, 2002,  the  Company's  total  comprehensive
income was $42,330 compared to $4.7 million for the three months ended March 31,
2001. 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. Total comprehensive income for the three months ended March
31, 2001 was  comprised  of net income of $3.0  million and other  comprehensive
income of $1.7 million, net of tax.

For the six months ended March 31, 2002, the Company's total  comprehensive loss
was $1.2 million compared to total comprehensive  income of $7.6 million for the
six months ended March 31, 2001. Total  comprehensive  income 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. Total comprehensive  income for
the six months ended March 31, 2001 was  comprised of net income of $4.6 million
and other comprehensive income of $2.9 million, net of tax.

The significant  fluctuations noted in total comprehensive  income comparing the
periods  ended March 31, 2002 and 2001 resulted from changes in the market value
of investment and  mortgage-backed  securities  available for sale. There was an
unrealized  gain on  securities  available  for sale in 2001 which  turned to an
unrealized loss in 2002.

3.        ALLOWANCE FOR LOAN LOSSES

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

<TABLE>
<CAPTION>


                                                                    Six Month Ended                          Year Ended
                                                                          March 31,                       September 30,
                                                                               2002                                2001
                                                                     --------------                      --------------
<S>                                                                      <C>                                 <C>
Balance, beginning of period                                             $7,950,680                          $4,082,265
Charge-offs                                                                (117,214)                            (90,173)
Recoveries                                                                    3,948                              42,406
Provision for loss                                                          156,000                             387,000
Acquisitions                                                                     --                           3,761,024
Allowance reclassified with loan securitization                                  --                            (231,842)
                                                                     --------------                      --------------
Balance, end of period                                                   $7,993,414                          $7,950,680

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

At March 31, 2002 and 2001, impaired loans totaled zero.  Specifically allocated
loan loss reserves  related to these loans totaled zero,  for both periods.  The
average  investment in impaired  loans for the three months and six months ended
March 31, 2002 was zero. The average  investment in impaired loans for the three
months  and  six  months   ended  March  31,  2001  was  $52,251  and   $65,983,
respectively.

There were no troubled debt restructurings at March 31, 2002 and 2001 or for the
six months then ended.
                                       8
<PAGE>

4.       ADVANCES FROM FEDERAL HOME LOAN BANK

Borrowings at March 31, 2002 consisted of one short term advance  totaling $10.0
million and six long term advances totaling $158.0 million from the Federal Home
Loan Bank of Seattle ("FHLB").  The advances are  collateralized in aggregate by
certain  mortgages or deeds of trust and  securities of the U.S.  Government and
agencies thereof.

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


                                              March 31, 2002                                      September 30, 2001
                            -------------------------------------------------------------------------------------------------------
                                                    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            $10,000,000             1.89%             1.89%        $10,000,000            3.60%            3.60%

After one but within
five years                              --                --                --                 --               --               --

After five but within
ten years                      158,000,000       4.77%-7.05%             5.86%        158,000,000      4.77%-7.05%            5.86%
                            --------------                                         --------------
                              $168,000,000                                           $168,000,000
                            ==============                                         ==============
</TABLE>


5.       SHORT TERM BORROWINGS

Short term borrowings at March 31, 2002 consisted of $1.7 million in credit line
borrowing from a financial institution at a rate of 3.83%.

6.       COMMITMENTS AND CONTINGENCIES

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

7.       SHAREHOLDERS' EQUITY

On September 27, 2001,  the Company  announced a five percent  stock  repurchase
plan to be  completed  over a  twelve  month  period.  Five  percent  represents
approximately  340,800 shares. As of March 31, 2002, the Company had repurchased
262,000 shares, or 76.88% of the shares to be repurchased, at a weighted average
price per share of $13.19.

                                       9
<PAGE>

8.       EARNINGS PER SHARE

Earnings per share ("EPS") is computed in accordance with Statement of Financial
Accounting  Standards ("SFAS") No. 128, "Earnings per Share." Shares held by the
Company's  Employee Stock Ownership Plan ("ESOP") that are committed for release
are considered  contingently issuable shares and are included in the computation
of basic EPS.  Diluted EPS is computed using the treasury  stock method,  giving
effect to potential  additional  common shares that were outstanding  during the
period. Potential dilutive common shares include shares awarded but not released
under the Company's  Management  Recognition and Development Plan ("MRDP"),  and
stock options granted under the Stock Option Plan. Following is a summary of the
effect of dilutive securities on weighted average number of shares (denominator)
for the basic and diluted EPS calculations.  There are no resulting  adjustments
to net earnings.
<TABLE>
<CAPTION>
                                                                      For the Three Months Ended
                                                                      March 31,         March 31,
                                                                           2002              2001
                                                                      ---------         ---------
<S>                                                                   <C>               <C>
Weighted average common shares outstanding - basic                    6,381,819         6,567,352
                                                                      ---------         ---------
Effect of Dilutive Securities on Number of Shares:
Stock options                                                            12,502                --
MRDP shares                                                               8,099            18,367
                                                                      ---------         ---------
Total Dilutive Securities                                                20,601            18,367
                                                                      ---------         ---------
 Weighted average common shares outstanding - with dilution           6,402,420         6,585,719
                                                                      =========         =========
</TABLE>

<TABLE>
<CAPTION>
                                                                       For the Six Months Ended
                                                                      March 31,         March 31,
                                                                           2002              2001
                                                                      ---------         ---------

<S>                                                                   <C>               <C>
Weighted average common shares outstanding - basic                    6,428,238         6,610,189
                                                                      ---------         ---------
Effect of Dilutive Securities on Number of Shares:
Stock options                                                            11,355                --
MRDP shares                                                               7,913            12,996
                                                                      ---------         ---------
Total Dilutive Securities                                                19,268            12,996
                                                                      ---------         ---------
Weighted average common shares outstanding-with dilution              6,447,131         6,623,185
                                                                      =========         =========
</TABLE>

9.       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, 2002:
<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, 2002:              ------------  ----------         ------------ ----------         ------------ ----------
<S>                                 <C>             <C>              <C>              <C>            <C>             <C>
 Total Capital:                     $85,608,487     11.7%            $58,702,768      8.0%           $73,378,460     10.0%
  (To Risk Weighted Assets)
 Tier I Capital:                     77,622,388     10.1%                    N/A       N/A            44,027,076      6.0%
  (To Risk Weighted Assets)
 Tier I Capital:                     77,622,388      5.5%             56,152,552      4.0%            70,190,690      5.0%
  (To Total Assets)
 Tangible Capital:                   77,622,388      5.5%             21,057,207      1.5%                   N/A       N/A
  (To Tangible Assets)
</TABLE>

                                                        10

<PAGE>



10.      RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
142,  Goodwill and Other Intangible  Assets,  which is effective October 1, 2002
for the Company.  SFAS No. 142 will require that goodwill no longer be amortized
and  instead  be tested for  impairment  at least  annually.  In  addition,  the
standard  includes  provisions  for the  accounting  and  reporting  of  certain
existing recognized intangibles and goodwill. Management is currently evaluating
the effect that SFAS No. 142 may have on its consolidated financial statements.

In August 2001,  the FASB issued SFAS No. 144,  Accounting for the Impairment or
Disposal  of  Long-Lived  Assets,  which is  effective  October  1, 2002 for the
Company. This statement supersedes SFAS No. 121 and the accounting and reporting
provisions of Accounting  Principles  Board Opinion No. 30 for the disposal of a
segment of a  business.  Management  is  currently  evaluating  the effect  that
adoption of SFAS No. 144 may have on its consolidated financial statements.



                                       11
<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 and lease  losses is  established  to absorb  known and
inherent  losses  attributable  to loans  and  leases  outstanding  and  related
off-balance sheet commitments.  The adequacy of the allowance is monitored on an
ongoing basis and is based on management's evaluation of numerous factors. These
factors include the quality of the current loan portfolio, the trend in the loan
portfolio's risk ratings, current economic conditions, loan concentrations, loan
growth rates,  past-due and non-performing  trends,  evaluation of specific loss
estimates for all significant problem loans,  historical charge-off and recovery
experience  and other  pertinent  information.  Approximately  80 percent of the
Company's   loan   portfolio  is  secured  by  real  estate  and  a  significant
depreciation in real estate values in Oregon would cause  management to increase
the allowance for loan and lease losses.

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

                                       12
<PAGE>


current  market  rates.  A  significant  increase  in the  discount  rate  would
negatively impact the value of mortgage servicing rights.

At March 31, 2002 the Company had  approximately  $42.8  million in core deposit
intangibles and other  intangible  assets as a result of business  combinations.
Because these  intangible  assets were  generated by purchases of bank branches,
the Company is required to account for them under SFAS No. 72,  "Accounting  for
Certain  Acquisitions of Banking or Thrift  Institutions,"  rather than SFAS No.
142, "Goodwill and Other Intangible Assets".  Ongoing analysis of the fair value
of recorded core deposit  intangibles and other  intangibles for impairment will
involve a substantial  amount of judgment,  as will  establishing and monitoring
estimated lives of other amortizable intangible assets.

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

General
The  Company,  an Oregon  corporation,  is the unitary  savings and loan holding
company  for  the  Association.  At  March  31,  2002,  the  Company  had  total
consolidated  assets of $1.4 billion and  consolidated  shareholders'  equity of
$108.8  million.  The Company is currently not engaged in any business  activity
other than holding the stock of the  Association.  Accordingly,  the information
set forth in this  report,  including  financial  statements  and related  data,
relates primarily to the Association.

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

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

During the last 12 months,  new  management  has been updating many areas of the
Company  that had  been  negatively  affected  by very  conservative  historical
spending patterns.  Projects to update existing branches and make needed repairs
were  completed.  Programs  necessary for training  employees and updating phone
systems and information technology have been implemented. These initiatives have
resulted in increased  non-interest  expense  comparing the current  period with
that of a year ago. The Company  believes these  improvements in strategic areas
will  contribute  to the  bottom  line in the  future.  The  Company  intends to
continue  to focus on  efficiency  issues  and the effort to  capitalize  on the
training and technology put in place.

                                       13
<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 55 office  facilities,  with the main  office  located in
Klamath Falls, Oregon. The primary market areas of the Association are the state
of Oregon and adjoining areas of California and Washington.

Market Risk and Asset/Liability Management

Because  the  majority of the  Company's  assets  have  historically  been 15 to
30-year fixed rate mortgages which were funded by shorter term liabilities,  the
Company's  interest rate risk sensitivity has been high. In order to reduce that
sensitivity,  the Company completed a loan securitization,  reducing the balance
of long term,  fixed-rate  mortgages in the loan  portfolio.  In  addition,  the
acquisition of 13 WAMU branches added  significant  commercial and consumer loan
balances to the portfolio mix, further  reducing the interest rate  sensitivity.
Both of these  strategies  were  reflected  in the market  risk as  reported  at
September  30, 2001,  and the market risk and  sensitivity  profile at March 31,
2002 is consistent with that reported in the Annual Report.

Changes in Financial Condition

At March 31, 2002, the consolidated  assets of the Company totaled $1.4 billion,
down slightly from $1.5 billion at September 30, 2001.

Net loans  receivable  decreased by $35.0 million to $645.0 million at March 31,
2002,  from $680.0  million at September 30, 2001. The decrease is the result of
sale of $28.5  million in single  family  mortgage  loans  during the six months
ended March 31, 2002 as well as loan repayments exceeding loan originations.

Investment  securities  decreased $5.7 million,  or 3.66% from $155.3 million at
September  30, 2001 to $149.6  million at March 31, 2002.  This decrease was the
combined result of purchase of $7.4 million in securities, sale of $10.0 million
of investment  securities  available for sale and a $3.0 million  decline in the
mark to market adjustment for available for sale securities.

During the six months ended March 31, 2002, the Company purchased $126.7 million
of mortgage-backed  securities ("MBS"). In addition,  $48.3 million was received
in principal  repayments on MBS, resulting in an overall increase in the balance
of MBS from $423.3  million at September 30, 2001 to $497.2 million at March 31,
2002.

Other  assets  decreased  by $4.9  million,  or  55.63%,  from $8.9  million  at
September  30, 2001 to $3.9 million at March 31, 2002.  The balance at September
30, 2001 included a $4.1 million  receivable from Washington Mutual Bank related
to the final settlement for the branch acquisition in September 2001.

Deposit  liabilities  decreased $11.3 million,  or 0.98%,  from $1.15 billion at
September 30, 2001 to $1.14 billion at March 31, 2002. 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  $4.2 million from
September  30, 2001 to March 31,  2002.  The decrease is the result of using the
reserves to pay the required  real estate taxes due on the  Association's  loans
receivable portfolio in November.

The Company's total  borrowings  remained  consistent from September 30, 2001 to
March 31, 2002.


                                       14
<PAGE>


Total shareholders' equity decreased $5.3 million, or 4.68%, from $114.1 million
at September 30, 2001 to $108.8 million at March 31, 2002. This decrease was the
combined  result of  earnings of $2.5  million  which were more than offset by a
$3.5 million  reduction due to repurchase and  retirement of shares,  payment of
$1.7  million  in common  stock  dividends  for the six month  period and a $3.7
million unrealized loss on securities available for sale.

Results of Operations

         Comparison of Six Months Ended March 31, 2002 and 2001

General.
Over the last  twelve  months,  the  Company  has grown from 35  branches  to 55
branches.  The impact of this  growth is seen in interest  income,  non-interest
income, and non-interest expense.

Interest Income.
Interest  income  increased by $9.6 million,  showing the combined  effects of a
$409.0 million  increase in average interest earning assets and a 79 basis point
decrease  in yield from March 31,  2001 to March 31,  2002.  Interest  income on
loans receivable  increased $1.1 million,  or 4.27%,  from $26.2 million for the
six months  ended March 31,  2001 to $27.3  million for the same period of 2002.
This  increase  was a result  of the $8.0  million  increase  in  average  loans
receivable  due to the loans  acquired with  Washington  Mutual Bank branches in
September 2001. The average yield on interest  earning assets decreased 79 basis
points to 6.55% for the six months  ended March 31,  2002  compared to 7.34% for
the same  period  ended March 31,  2001.  Interest  rate spread (the  difference
between  the rates  earned on  interest  earning  assets  and the rates  paid on
interest  bearing  liabilities)  increased from 2.35% to 2.95% and interest rate
margin  (net  interest  income  divided  by  average  interest  earning  assets)
increased from 3.07% to 3.40% comparing the six month periods.  The increases in
interest rate spread and margin are primarily a result of the decreased  cost of
deposits due to the addition of  significant  balances in  non-interest  bearing
accounts with the WAMU acquisition.

Interest Expense.
Total  interest  expense  increased $1.1 million,  or 5.49%,  for the six months
ended March 31, 2002 compared to the same period in 2001.  That increase was the
combined  result of a $1.7 million  increase in interest on deposit  liabilities
and a  $349,400  decrease  in  interest  expense  on  FHLB  advances  and  other
liabilities. The average balance of deposit liabilities increased $385.6 million
and the average rate paid on deposits  decreased by 144 basis points as a result
of the addition of $423.5  million in deposit  liabilities  with the WAMU branch
acquisition in September  2001. The composition of the acquired  deposits,  with
18.38%  non-interest  bearing  demand  deposits  and  an  additional  33.66%  of
interest-  bearing  demand  deposits  with low rates of  interest,  reduced  the
overall  cost of  deposits  significantly.  The  result is evident in the modest
11.01% increase in interest  expense on deposits  coupled with a 60.08% increase
in the average balance of deposits,  comparing the six month periods ended March
31, 2002 and 2001. The average balance of borrowings decreased $8.0 million from
$177.8 million for the six months ended March 31, 2001 to $169.8 million for the
same period  ended March 31,  2002.  In  addition,  the rate paid on  borrowings
decreased  by 34 basis points from 6.03% for the six months ended March 31, 2001
to 5.69% for the same period in 2002.

Provision for Loan Losses.
The  provision  for loan losses was $156,000  and there were  $117,214 of charge
offs and  $3,948 of  recoveries  during  the six  months  ended  March 31,  2002
compared  to a $381,000  provision  with  $47,247 of charge  offs and $34,866 of
recoveries during the six months ended March 31, 2001.

At March 31, 2002,  the  allowance for loan losses was equal to 1233.5% of total
non-performing  assets compared to 297.1% at March 31, 2001. The increase in the
coverage  ratio was the  result of a  decrease  in  non-performing  assets and a
higher  allowance  which  incorporates  the  risk  factors  associated  with the
significant  increase in commercial  and consumer loans over the last 12 months.
The ratio of non-  performing  assets to total  assets  decreased  from 0.14% at
March 31, 2001 to 0.04% at March 31, 2002. The decrease  primarily  relates to a
decrease in real estate owned,  which is included in  non-performing  assets. At
March 31, 2002, the Company had no restructured loans.

                                       15
<PAGE>

Non-Interest Income.
Non-interest  income increased  $382,059,  or 7.93%, to $5.2 million for the six
months ended March 31, 2002 from $4.8 million for the six months ended March 31,
2001.  During the quarter ended March 31, 2001, the Company recorded the sale of
MBS resulting  from the loan  securitization  at a gain of $2.5 million which is
compared to a $119,101 gain on sale of investments  recorded in the period ended
March 31,  2002.  Disregarding  the gains on sales of  securities,  non-interest
income  increased  from $2.3  million for the six months ended March 31, 2001 to
$5.1 million for the same period in 2002, a 119.98%  increase.  Fees and service
charges improved significantly,  increasing by 109.83% over the same period last
year due to the acquisition of deposit  accounts  subject to service charges and
increased loan servicing  income.  Increased  income from sale of mortgage loans
and retail  investment  activities can be seen in the 162.34%  increase in other
non-interest  income from  $488,617  for the six months  ended March 31, 2001 to
$1.3 million for the six months ended March 31, 2002.

Non-Interest Expense.
In large part due to the September  2001 branch  acquisition  and the opening of
seven de novo  branches  during the past year,  non-interest  expense  increased
$12.5 million,  or 104.53%,  to $24.5 million for the six months ended March 31,
2002,  from $12.0  million  for the  comparable  period in 2001.  The growth was
accompanied by an increase in employees from 270 full-time  equivalents at March
31, 2001 to 496 a year later, an 83.70% increase. Correspondingly, compensation,
employee  benefits,  and related expense increased $4.9 million,  or 80.74% from
$6.0  million for the six months  ended March 31, 2001 to $10.9  million for the
same period in 2002.  Occupancy  expense  increased by $1.1 million,  or 92.65%,
comparing  the six months  ended March 31, 2002 with the same period of 2001 due
to the addition of the branches.  Insurance  premium expense increased 21.97% as
expected  due to the increase in deposit  balances on which  premiums are based.
Other expense increased $4.3 million, or 130.18%,  from $3.3 million for the six
months  ended  March 31, 2001 to $7.6  million for the same period in 2002.  The
increase in  branches,  accounts,  and  employees  was  followed by  significant
increases in most  expense  categories,  including  telephone,  postage,  office
supplies,  advertising,  license and maintenance fees, ATM expense, and checking
department expense. Additionally, the increase in loans serviced for FNMA (after
the loan  securitization  in February 2001)  resulted in a $513,000  increase in
expense related to FNMA loan pools sold and amortization of the related mortgage
servicing rights, comparing the six month periods ended March 31 2002 and 2001.

Income Taxes.
The provision for income taxes  decreased  $1.3 million for the six months ended
March 31, 2002 compared  with the prior year.  The effective tax rate was 34.79%
for the six months  ended March 31, 2002  compared to 35.77% for the same period
of 2001.  The decrease in effective  tax rate is primarily due to an increase in
income on tax-exempt municipal securities.

         Comparison of Three Months Ended March 31, 2002 and 2001

General.
As noted for the six months  ended March 31, 2002,  the WAMU branch  acquisition
had  significant  impact on the  results of the  quarter  ended  March 31,  2002
compared to the same quarter a year ago. Net income  decreased $1.3 million,  or
43.44%,  from $3.0  million  for the three  months  ended March 31, 2001 to $1.7
million  for the three  months  ended March 31,  2002.  This  decrease  resulted
primarily  from the $2.5  million  gain on sale of MBS  recorded for the quarter
ended March 31, 2001 which was not repeated in the current quarter.

Interest Income.
The Company  recorded  interest  income of $21.9  million in the second  quarter
ended March 31,  2002,  an  increase  of 25.62% from $17.5  million for the same
period last year.  Average  interest earning assets increased by $396.1 million,
or 41.25%,  due to the branch  acquisition.  Yield  decreased from 7.27% for the
quarter  ended  March  31,  2001 to 6.47% for the same  period  of 2002.  Yields
increased slightly on loans due to the increase in the proportion of higher rate
commercial  and consumer  loans in the portfolio  after the branch  acquisition.
Yields on MBS,  investment  securities,  and cash  balances  decreased  as rates
declined over the year.  Also,  funds obtained in the acquisition  were invested
during a period of low rates,  reducing  the overall  yield of  interest-earning
assets.

                                       16
<PAGE>

Interest Expense.
Total interest expense decreased 2.53%, from $10.2 million for the quarter ended
March 31, 2001 to $9.9  million for the quarter  ended March 31,  2002.  Average
deposits  increased by $380.2 million comparing the three months ended March 31,
2001 to 2002,  while the  average  interest  paid on  interest-bearing  deposits
decreased  173 basis points from 4.67% for the three months ended March 31, 2001
to 2.94% for the same period ended March 31, 2002.  Both the increase in average
balance and the decrease in rate paid resulted from the branch acquisition.  The
average  balance of borrowings  decreased $8.7 million,  from $178.4 million for
the three  months  ended  March 31,  2001 to $169.7  million for the same period
ended March 31,  2002,  resulting  in a decrease in  interest on  borrowings  of
$275,217 for the three months ended March 31, 2002 compared with the same period
ended March 31, 2001.  The rate paid on borrowings  decreased by 33 basis points
from 5.94% for the quarter  ended March 31, 2001 to 5.61% for the same period in
2002.

Provision for Loan Losses.
The  provision for loan losses was $3,000 and there were $72,984 of charge offs,
and $3,948 of  recoveries  during the three months ended March 31, 2002 compared
to a $153,000  provision  with $30,994 of charge offs and $34,089 of  recoveries
during the three months ended March 31, 2001. 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 decreased $786,034, or 21.20%, to $2.9 million for the three
months  ended March 31, 2002 from $3.7  million for the three months ended March
31, 2001.  Again, the $2.5 million gain on sale in the prior year is the primary
cause of the  decrease.  However,  income from fees and service  charges  showed
significant  growth,  increasing  by 112.40% from $935,358 for the quarter ended
March 31, 2001 to $2.0 million for the current quarter.

Non-Interest Expense.
Non-interest expense increased $6.2 million, or 99.66%, to $12.4 million for the
three months ended March 31, 2002, from $6.2 million in the comparable period in
2001. All categories of non- interest  expense  increased due to the WAMU branch
acquisition  and  addition  of seven de novo  branches  over the last 12 months.
Compensation, employee benefits and related expense showed an increase of 76.96%
which  reflects the addition of staff both at the acquired  branches and de novo
branches,  as well as in support and back office areas.  The number of full-time
equivalent  employees  increased  from 296 at March 31, 2001 to 470 at March 31,
2002.  The acquired  and  newly-built  branches  were  operating  for the entire
quarter ended March 31, 2002, pushing occupancy expense up by 79.35% compared to
the same quarter a year ago. Data processing  expense also increased  57.92% due
to the  additional  accounts  and  locations.  Other  expense  increased by $2.1
million,  or  123.25%,  primarily  due to  increased  costs  with the  growth in
branches.

Income Taxes.
The  provision  for income taxes  decreased  $811,902 for the three months ended
March 31, 2002 compared  with the prior year.  The effective tax rate was 34.39%
for the quarter  ended March 31, 2002  compared to 36.35% for the same period of
2001.  The  decrease in effective  tax rate is  primarily  due to an increase in
income on tax-exempt municipal securities.


                                       17
<PAGE>



                           PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

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


Item 2.   Changes in Securities

          Not applicable.


Item 3.   Defaults Upon Senior Securities

          Not applicable.


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

          The Company held an annual  meeting on January 30, 2002.  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>
         Kermit K. Houser                     5,739,075                    548,280
         J. Gillis Hannigan                   5,900,545                    386,810
         Dianne E. Spires                     5,870,705                    416,650
</TABLE>

          The  following  directors  continue  in office  for  their  respective
          remaining terms:  Timothy A. Bailey  (one-year term),  James D. Bocchi
          (one-year term),  William C. Dalton (one-year term),  Rodney N. Murray
          (two-year term), and Bernard Z. Agrons (two-year term).

          Approval of the  appointment  of Deloitte & Touche LLP as  independent
          accountants for the fiscal year ending  September 30, 2002 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>
              6,010,965              241,637                  34,753
</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) No Current Reports on Form 8-K were filed during the quarter
             ended March 31, 2002.

                                       18
<PAGE>


                                   SIGNATURES


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

                                                KLAMATH FIRST BANCORP, INC.

Date:    May 14, 2002                           By: /s/ Kermit K. Houser
                                                -------------------------------
                                                Kermit K. Houser, President and
                                                Chief Executive Officer


Date:    May 14, 2002                           By: /s/ Marshall Jay Alexander
                                                -------------------------------
                                                Marshall Jay Alexander,
                                                Executive Vice President and
                                                Chief Financial Officer





                                       19