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 June 30, 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 July 19, 2002,  there were  issued  6,792,840  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 June 30, 2002 and September 30, 2001)                        3

         Unaudited Condensed Consolidated Statements of Earnings (For
         the three months and nine months ended June 30, 2002 and 2001)      4

         Unaudited Condensed Consolidated Statements of Shareholders'
         Equity For the year ended September 30, 2001 and for
         the nine months ended June 30, 2002)                                5

         Unaudited Condensed Consolidated Statements of Cash Flows
         (For the nine months ended June 30, 2002 and 2001)              6 - 7

         Notes to Condensed Consolidated Financial Statements           8 - 11

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

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

Item 1.  Legal Proceedings                                                  18

Item 2.  Changes in Securities                                              18

Item 3.  Defaults Upon Senior Securities                                    18

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

Item 5.  Other Information                                                  18

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

Signatures                                                                  19











                                        2
<PAGE>
<TABLE>
<CAPTION>


                                         KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
                                            CONDENSED CONSOLIDATED BALANCE SHEETS
                                         AS OF JUNE 30, 2002 AND SEPTEMBER 30, 2001
                                                        (Unaudited)



                                                                                June 30, 2002                September 30, 2001
ASSETS                                                                     ------------------               -------------------

<S>                                                                            <C>                               <C>
Cash and due from banks                                                           $40,153,790                       $40,446,042
Interest bearing deposits with banks                                               15,776,634                         3,791,252
Federal funds sold and securities purchased under agreements to resell             11,883,283                        74,151,272
                                                                           ------------------                ------------------
   Total cash and cash equivalents                                                 67,813,707                       118,388,566

Investment securities available for sale, at fair value
  (amortized cost: $142,212,811 and $154,190,612)                                 141,266,711                       154,675,760
Investment securities held to maturity, at amortized cost (fair
  value: $457,000 and $594,429)                                                       457,000                           592,388
Mortgage backed and related securities available for sale, at fair
  value (amortized cost: $532,363,765 and $419,639,650)                           538,725,516                       421,637,670
Mortgage backed and related securities held to maturity, at amortized
  cost (fair value: $384,874 and $1,642,174)                                          378,288                         1,620,612
Loans receivable, net                                                             626,489,797                       679,990,308
Real estate owned and repossessed assets                                                   --                           445,855
Premises and equipment, net                                                        23,658,860                        16,911,912
Stock in Federal Home Loan Bank of Seattle, at cost                                13,309,200                        12,698,000
Accrued interest receivable                                                         8,144,553                         8,657,586
Core deposit intangible and other intangible assets, net                           41,681,194                        44,088,926
Other assets                                                                        3,958,479                         8,864,227
                                                                           ------------------                ------------------
   Total assets                                                                $1,465,883,305                    $1,468,571,810
                                                                           ==================                ==================
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
<S>                                                                            <C>                               <C>
  Deposit liabilities                                                          $1,148,588,776                    $1,152,824,144
  Accrued interest on deposit liabilities                                             774,721                         1,574,606
  Advances from borrowers for taxes and insurance                                   4,022,853                         6,637,994
  Advances from Federal Home Loan Bank of Seattle                                 158,000,000                       168,000,000
  Short term borrowings                                                             1,700,000                         1,700,000
  Accrued interest on borrowings                                                      774,476                           801,743
  Pension liabilities                                                               1,040,095                           942,148
  Deferred income taxes                                                             1,711,690                           597,345
  Other liabilities                                                                 6,606,701                         6,799,241
                                                                           ------------------                ------------------
    Total liabilities                                                           1,323,219,312                     1,339,877,221
                                                                           ------------------                ------------------
 Mandatorily redeemable preferred securities issued by subsidiary                  27,172,358                        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,
   June 30, 2002 - 6,792,840 issued, 6,317,481 outstanding
   September 30, 2001 - 7,060,667 issued, 6,561,461 outstanding                        67,928                            70,607
  Additional paid-in capital                                                       30,582,242                        33,926,796
  Retained earnings-substantially restricted                                       85,735,578                        83,816,307
  Unearned shares issued to ESOP                                                   (3,179,725)                       (3,913,510)
  Unearned shares issued to MRDP                                                   (1,072,095)                       (1,298,859)
  Accumulated other comprehensive income, net of tax                                3,357,707                         1,539,564
                                                                           ------------------                ------------------
    Total shareholders' equity                                                    115,491,635                       114,140,905
                                                                           ------------------                ------------------
    Total liabilities and shareholders' equity                                 $1,465,883,305                    $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 Nine Months Ended Nine Months Ended
                                                                    June 30,           June 30,          June 30,          June 30,
                                                                        2002               2001              2002              2001
                                                              --------------     --------------    --------------    --------------
INTEREST INCOME
<S>                                                          <C>                <C>               <C>               <C>
  Loans receivable ......................................    $    12,618,019    $    10,638,837   $    39,907,688   $    36,810,139
  Mortgage backed and related securities ................          6,742,373          3,384,061        19,683,948         7,856,997
  Investment securities .................................          2,024,664          2,040,965         6,272,989         6,013,399
  Federal funds sold ....................................             63,912            502,589           367,474           906,197
  Interest bearing deposits .............................             81,474            215,959           214,789           462,241
                                                             ---------------    ---------------   ---------------   ---------------
    Total interest income ...............................         21,530,442         16,782,411        66,446,888        52,048,973
                                                             ---------------    ---------------   ---------------   ---------------

INTEREST EXPENSE
  Deposit liabilities ...................................          6,794,895          7,398,017        23,552,181        22,492,867
  FHLB advances .........................................          2,382,310          2,460,082         7,175,680         7,602,852
  Other .................................................             31,317             58,006            96,278           311,994
                                                             ---------------    ---------------   ---------------   ---------------
    Total interest expense ..............................          9,208,522          9,916,105        30,824,139        30,407,713
                                                             ---------------    ---------------   ---------------   ---------------
    Net interest income .................................         12,321,920          6,866,306        35,622,749        21,641,260

Provision for loan losses ...............................               --                3,000           156,000           384,000

                                                             ---------------    ---------------   ---------------   ---------------
    Net interest income after provision for
      loan losses .......................................         12,321,920          6,863,306        35,466,749        21,257,260
                                                             ---------------    ---------------   ---------------   ---------------

NON-INTEREST INCOME
  Fees and service charges ..............................          1,940,957          1,208,271         5,730,489         3,014,285
  Gain on sale of investments ...........................            435,315          1,681,584           554,416         4,191,377
  Gain on sale of real estate owned .....................             13,400             33,415            25,852            49,843
  Other income ..........................................            664,788            276,456         1,946,615           765,073
                                                             ---------------    ---------------   ---------------   ---------------
    Total non-interest income ...........................          3,054,460          3,199,726         8,257,372         8,020,578
                                                             ---------------    ---------------   ---------------   ---------------
NON-INTEREST EXPENSE
  Compensation, employee benefits and related expense ...          5,724,543          3,423,610        16,623,684         9,453,880
  Occupancy expense .....................................          1,214,810            682,389         3,576,596         1,908,358
  Data processing expense ...............................            382,571            252,267         1,162,289           740,776
  Insurance premium expense .............................             49,700             32,285           133,458           100,955
  Loss on sale of investments ...........................              2,538               --               2,538            30,632
  Amortization of intangible assets .....................          1,382,205            413,169         4,138,475         1,239,508
  Other expense .........................................          3,647,403          2,058,228        11,292,456         5,379,125
                                                             ---------------    ---------------   ---------------   ---------------
    Total non-interest expense ..........................         12,403,770          6,861,948        36,929,496        18,853,234
                                                             ---------------    ---------------   ---------------   ---------------

Earnings before income taxes ............................          2,972,610          3,201,084         6,794,625        10,424,604

Provision for income tax ................................          1,044,375          1,085,447         2,374,176         3,669,120
                                                             ---------------    ---------------   ---------------   ---------------

Net earnings ............................................    $     1,928,235    $     2,115,637   $     4,420,449   $     6,755,484
                                                             ===============    ===============   ===============   ===============

Earnings per common share - basic .......................    $          0.30    $          0.32   $          0.69   $          1.02
Earnings per common share - fully diluted ...............    $          0.30    $          0.31   $          0.68   $          1.02
Weighted average common shares outstanding - basic ......          6,398,027          6,629,275         6,418,168         6,616,551
Weighted average common shares outstanding -  with dilution        6,500,451          6,732,583         6,467,611         6,641,484

<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 NINE MONTHS ENDED JUNE 30, 2002
                                                         (Unaudited)

                                                                                Unearned       Unearned   Accumulated
                                  Common   Common   Additional                    shares         shares         Other         Total
                                   stock    stock      paid-in     Retained       issued         issued comprehensive  shareholders'
                                  shares   amount      capital     earnings      to ESOP        to MRDP income (loss)        equity
                              ----------  -------  -----------  -----------  ------------  ------------   -----------  ------------
<S>                           <C>         <C>      <C>          <C>          <C>           <C>             <C>         <C>

Balance at October 1, 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:
    Net 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 Sept. 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                       --        --           --   (2,501,178)          --            --             --    (2,501,178)

Stock repurchased and retired  (297,186)   (2,972)  (4,006,785)          --           --            --             --    (4,009,757)

ESOP contribution                    --        --      283,534           --      733,785            --             --     1,017,319

MRDP contribution                23,847        --        9,402           --           --       226,764             --       236,166

Exercise of stock options        29,359       293      369,295           --           --            --             --       369,588
                              ----------  -------  -----------  -----------  ------------  ------------   -----------  ------------
                              6,317,481    67,928   30,582,242   81,315,129   (3,179,725)   (1,072,095)     1,539,564   109,253,043

Comprehensive income
  Net earnings                                                    4,420,449                                               4,420,449
  Other comprehensive income:
    Net unrealized gain on
    securities, net of tax
    and reclassification
    adjustment   (2)                                                                                        1,818,143     1,818,143
                                                                                                                       ------------
    Total comprehensive loss                                                                                              6,238,592
                              ----------  -------  -----------  -----------  ------------  ------------   -----------  ------------
Balance at June 30, 2002      6,317,481   $67,928  $30,582,242  $85,735,578  ($3,179,725)  ($1,072,095)    $3,357,707  $115,491,635
                              ==========  =======  ===========  ===========  ============  ============   ===========  ============
<FN>

(1)      Net unrealized holding gain on securities of $2,893,883 (net of $1,773,670 tax expense) adjusted for reclassification
         adjustment for net losses included in net earnings of $18,205 (net of $11,158 tax benefit).
(2)      Net unrealized holding gain on securities of $1,711,506 (net of $1,048,987 tax expense) adjusted for reclassification
         adjustment for net losses included in net earnings of $106,637 (net of $65,358 tax benefit).


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


                                                                    5
<PAGE>
<TABLE>
<CAPTION>
                                               KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
                                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                            FOR THE NINE MONTHS ENDED JUNE 30, 2002 AND 2001
                                                               (Unaudited)


                                                                       Nine Months Ended                        Nine Months Ended
                                                                                June 30,                                 June 30,
                                                                                    2002                                     2001
                                                                          --------------                           --------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                         <C>                                       <C>
    Net earnings                                                              $4,420,449                               $6,755,484

ADJUSTMENTS TO RECONCILE NET EARNINGS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
    Depreciation and amortization                                              5,758,925                                2,198,018
    Provision for loan losses                                                    156,000                                  384,000
    Compensation expense related to ESOP benefit                               1,017,319                                  905,872
    Compensation expense related to MRDP Trust                                   236,166                                1,152,775
    Net amortization of premiums (discounts)  paid on
      investment and mortgage backed and related securities                    2,569,112                                  (17,115)
    Decrease in deferred loan fees, net of amortization                         (424,509)                              (2,670,625)
    Net (gain) loss on sale of real estate owned and
      premises and equipment                                                     (25,081)                                   8,499
    Net gain on sale of investment and mortgage
      backed and related securities                                             (551,879)                              (4,160,745)
    FHLB stock dividend                                                         (611,200)                                (601,400)
CHANGES IN ASSETS AND LIABILITIES
    Accrued interest receivable                                                  513,033                                  271,823
    Other assets                                                               3,055,005                               (2,615,003)
    Accrued interest on deposit liabilities                                     (799,885)                                   6,207
    Accrued interest on borrowings                                               (27,267)                                 (51,689)
    Pension liabilities                                                           97,947                                   97,947
    Other liabilities                                                             36,600                                  207,271
                                                                          --------------                           --------------
Net cash provided by operating activities                                     15,420,735                                1,871,319
                                                                          --------------                           --------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Proceeds from maturity of investment securities
       held to maturity                                                               --                                  130,000
    Proceeds from maturity of investment securities
      available for sale                                                         135,000                               33,000,000
    Principal repayments received on mortgage
       backed and related securities held to maturity                          1,236,726                                  368,568
    Principal repayments received on mortgage
       backed and related securities available for sale                       75,803,542                               33,027,344

    Principal repayments received on loans                                   209,974,397                               84,457,547
    Loan originations                                                       (202,059,567)                             (81,303,592)
    Loans purchased                                                           (1,683,363)                                      --

    Loans sold                                                                47,345,825                               18,834,094
    Purchase of investment securities available
      for sale                                                               (19,389,464)                             (62,725,695)
    Purchase of mortgage backed and related
      securities available for sale                                         (207,107,177)                             (84,359,568)
    Proceeds from sale of investment securities
      available for sale                                                      31,437,125                               10,367,746
    Proceeds from sale of mortgage backed and related
      securities available for sale                                           16,507,507                              144,259,981
    Proceeds from sale of real estate owned and
      premises and equipment                                                     653,574                                  801,610
    Investment in real estate owned                                                   --                                  (86,741)
    Purchases of premises and equipment                                       (8,247,398)                              (2,532,213)
                                                                          --------------                           --------------
Net cash provided by (used in) investing activities                          (55,393,273)                              94,239,081
                                                                          --------------                           --------------
</TABLE>


                                                                    6
<PAGE>
<TABLE>
<CAPTION>


                                               KLAMATH FIRST BANCORP, INC. AND SUBSIDIARY
                                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                            FOR THE NINE MONTHS ENDED JUNE 30, 2002 AND 2001
                                                               (Unaudited)
                                                               (Continued)

                                                                       Nine Months Ended                        Nine Months Ended
                                                                                June 30,                                 June 30,
                                                                                    2002                                     2001
                                                                          --------------                           --------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Increase (decrease)  in deposit liabilities,
<S>                                                                          <C>                                     <C>
      net of withdrawals                                                     ($4,235,368)                             $15,217,371
    Proceeds from FHLB advances                                               52,700,000                                2,000,000
    Repayments of FHLB advances                                              (62,700,000)                              (7,000,000)
    Proceeds from short term borrowings                                          200,000                                3,400,000
    Repayments of short term borrowings                                         (200,000)                              (4,700,000)
    Issuance of mandatorily redeemable preferred securities, net              12,618,674                                       --
    Stock repurchase and retirement                                           (4,009,757)                              (2,284,216)
    Stock options exercised                                                      369,588                                       --
    Advances from borrowers for taxes and insurance                           (2,615,141)                              (4,797,928)
    Dividends paid                                                            (2,730,317)                              (2,851,267)
                                                                          --------------                           --------------
Net cash used in financing activities                                        (10,602,321)                              (1,016,040)
                                                                          --------------                           --------------
Net increase (decrease) in cash and cash
  equivalents                                                                (50,574,859)                              95,094,360

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

                                                                          --------------                           --------------
Cash and cash equivalents at end of period                                   $67,813,707                             $125,040,960
                                                                          ==============                           ==============
SUPPLEMENTAL SCHEDULE OF INTEREST AND
INCOME TAXES PAID
    Interest paid                                                            $31,651,291                              $30,453,195
    Income taxes paid                                                          1,455,000                                3,930,000

SUPPLEMENTAL SCHEDULE OF NONCASH
  INVESTING AND FINANCING ACTIVITIES
    Mortgage loans securitized and classified as
       mortgage-backed securities available for sale                                 $--                             $190,300,518
    Net unrealized gain (loss) on securities
      available for sale                                                      $1,818,143                                ($119,143)
    Dividends declared and accrued in other
      liabilities                                                                891,430                                  932,716

<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 condensed consolidated
financial  statements contain all adjustments  necessary for a fair presentation
of Klamath First Bancorp,  Inc.'s (the "Company") financial condition as of June
30, 2002 and  September 30, 2001,  the results of  operations  for the three and
nine  months  ended June 30,  2002 and 2001 and cash  flows for the nine  months
ended June 30, 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 condensed  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 nine  months  ended  June 30,  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 June 30, 2002,  the  Company's  total  comprehensive
income was $7.5 million compared to $454,666 for the three months ended June 30,
2001.  Total  comprehensive  income for the three months ended June 30, 2002 was
comprised of net earnings of $1.9 million and other comprehensive income of $5.6
million,  net of tax. Total comprehensive income for the three months ended June
30, 2001 was  comprised of net earnings of $2.1 million and other  comprehensive
loss of $1.7 million, net of tax.

For the nine months  ended June 30,  2002,  the  Company's  total  comprehensive
income was $6.2 million compared to total  comprehensive  income of $1.2 million
for the nine months ended June 30, 2001. Total comprehensive income for the nine
months  ended June 30, 2002 was  comprised  of net  earnings of $4.4 million and
other  comprehensive  income of $1.8 million,  net of tax.  Total  comprehensive
income for the nine months ended June 30, 2001 was  comprised of net earnings 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 June 30, 2002 and 2001  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 2001 which  turned to an
unrealized gain in 2002.

3.        ALLOWANCE FOR LOAN LOSSES

         Activity in the allowance for loan losses is summarized as follows:
<TABLE>
<CAPTION>
                                                                  Nine Months Ended                          Year Ended
                                                                           June 30,                       September 30,
                                                                               2002                                2001
                                                                     --------------                      --------------
<S>                                                                      <C>                                 <C>
Balance, beginning of period                                             $7,950,680                          $4,082,265
Charge-offs                                                                (249,417)                            (90,173)
Recoveries                                                                    7,707                              42,406
Provision for loss                                                          156,000                             387,000
Acquisitions                                                                     --                           3,761,024
Allowance reclassified with loan securitization                                  --                            (231,842)
                                                                     --------------                      --------------
Balance, end of period                                                   $7,864,970                          $7,950,680

                                                                     ==============                      ==============
</TABLE>
                                       8
<PAGE>

At June 30, 2002 and 2001, impaired loans totaled zero and $2,812, respectively.
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 nine months ended June 30, 2002 was zero. The average investment in impaired
loans for the three  months and nine  months  ended  June 30,  2001 was $937 and
$44,301, respectively.

At June 30, 2002, troubled debt restructurings  totaled $59,000 and consisted of
one  commercial  loan  and  one  consumer  loan.  There  were no  troubled  debt
restructurings at June 30, 2001 or for the nine months then ended.

4.       ADVANCES FROM FEDERAL HOME LOAN BANK

Borrowings at June 30, 2002 consisted of 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>

                                                June 30, 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            3.60%            3.60%

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


5.       SHORT TERM BORROWINGS

The  Company  had short term  borrowings  of $1.7  million at June 30,  2002 and
September 30, 2001. The  borrowings  consisted of one line of credit at Key Bank
that was fully  disbursed.  This line carries interest based on one-month  LIBOR
plus 1.95% which was 3.83% and 5.58% at June 30, 2002 and  September  30,  2001,
respectively.

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 June 30, 2002, the Company had repurchased
292,000 shares, or 85.68% of the shares to be repurchased, at a weighted average
price per share of $13.49.

                                        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
                                                                             June  30,          June 30,
                                                                                  2002              2001
                                                                          ------------      ------------
<S>                                                                          <C>               <C>
Weighted average common shares outstanding - basic                           6,398,027         6,629,275
                                                                          ------------      ------------
Effect of Dilutive Securities on Number of Shares:
Stock options                                                                   94,584            38,239
MRDP shares                                                                      7,840            65,069
                                                                          ------------      ------------
Total Dilutive Securities                                                      102,424           103,308
                                                                          ------------      ------------
 Weighted average common shares outstanding - with dilution                  6,500,451         6,732,583
                                                                          ============      ============

</TABLE>

<TABLE>

<CAPTION>


                                                                              For the Nine Months Ended
                                                                             June  30,          June 30,
                                                                                  2002              2001
                                                                          ------------      ------------
<S>                                                                          <C>               <C>
Weighted average common shares outstanding - basic                           6,418,168         6,616,551
                                                                          ------------      ------------
Effect of Dilutive Securities on Number of Shares:
Stock options                                                                   41,496                --
MRDP shares                                                                      7,947            24,933
                                                                          ------------      ------------
Total Dilutive Securities                                                       49,443            24,933
                                                                          ------------      ------------
Weighted average common shares outstanding - with dilution                   6,467,611         6,641,484
 outstanding - with dilution                                              ============      ============
</TABLE>



                                                        10
<PAGE>


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 June 30, 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 June 30, 2002:               ------------     -----           ------------     -----          ------------     -----
<S>                                 <C>             <C>              <C>              <C>            <C>             <C>
 Total Capital:                     $99,106,111     13.5%            $58,652,936      8.0%           $73,316,170     10.0%
  (To Risk Weighted Assets)
 Tier I Capital:                     91,241,140     12.4%                    N/A       N/A            43,989,702      6.0%
  (To Risk Weighted Assets)
 Tier I Capital:                     91,241,140      6.5%             56,507,304      4.0%            70,634,130      5.0%
  (To Total Assets)
 Tangible Capital:                   91,241,140      6.5%             21,190,239      1.5%                   N/A       N/A
  (To Tangible Assets)
</TABLE>


10.      RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
142,  Goodwill and Other Intangible  Assets,  which will be 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 will be 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.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities.  The standard requires companies to recognize costs
associated  with exit or disposal  activities when they are incurred rather than
at the date of a commitment to an exit or disposal  plan.  SFAS No. 146 replaces
previous  accounting  guidance  which  was  provided  by EITF  Issue  No.  94-3,
Liability  Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring).

                                       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 losses,
impairment of intangible assets, and contingencies and litigation. Estimates are
based upon historical experience,  current economic conditions and other factors
that management  considers  reasonable under the circumstances.  These estimates
result in judgments regarding the carrying values of assets and liabilities when
these values are not readily  available  from other sources as well as assessing
and  identifying  the accounting  treatments of commitments  and  contingencies.
Actual results may differ from these estimates  under  different  assumptions or
conditions.   The  following  critical  accounting  policies  involve  the  more
significant   judgments  and   assumptions   used  in  the  preparation  of  the
consolidated financial statements.

The allowance for loan losses is established to absorb known and inherent losses
attributable to loans outstanding and related off-balance sheet commitments. The
adequacy  of the  allowance  is  monitored  on an ongoing  basis and is based on
management's  evaluation of numerous factors.  These factors include the quality
of the current loan portfolio,  the trend in the loan  portfolio's risk ratings,
current economic conditions,  loan concentrations,  loan growth rates,  past-due
and  non-performing  trends,  evaluation  of  specific  loss  estimates  for all
significant  problem loans,  historical  charge-off and recovery  experience and
other  pertinent  information.  Approximately  79 percent of the Company's  loan
portfolio is secured by real estate, both residential and commercial properties,
and a  significant  depreciation  in real  estate  values in Oregon  would cause
management to increase the allowance for loan 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 current market rates.  A significant  increase
in the discount  rate would  negatively  impact the value of mortgage  servicing
rights. At June 30, 2002 there was no impairment of value for mortgage servicing
rights.

                                       12
<PAGE>

At June 30, 2002 the Company had  approximately  $41.7  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  June  30,  2002,  the  Company  had  total
consolidated  assets of $1.5 billion and  consolidated  shareholders'  equity of
$115.5  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, business loans
and  non-mortgage  consumer  loans.  A  significant  portion of these newer loan
products  carry  adjustable  rates,  higher  yields,  or shorter  terms than the
traditional  fixed rate mortgages.  This lending strategy is designed to enhance
earnings,  reduce  interest  rate risk,  and  provide a more  complete  range of
financial  services  to  customers  and  the  local  communities  served  by the
Association.  The  acquisition  of  13  branches  from  Washington  Mutual  Bank
("WAMU"),  which was completed in September 2001,  moved the Company strongly in
this direction.

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

                                       13
<PAGE>

During the last 18 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
have been  completed.  Programs  necessary  for training  employees and updating
phone  systems  and  information   technology  have  been   implemented.   These
initiatives and the  significant  growth in the number of branches 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.

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. 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.  The Company has also
been selling the majority of the  fixed-rate  one-to-four  family  mortgage loan
production in the secondary  market.  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.  The effects of
these  strategies were reflected in the market risk as reported at September 30,
2001, and the market risk and sensitivity profile at June 30, 2002 is consistent
with that reported in the Annual Report.

Changes in Financial Condition

At June 30, 2002, the  consolidated  assets of the Company totaled $1.5 billion,
unchanged from $1.5 billion at September 30, 2001.

Net loans  receivable  decreased by $53.5 million to $626.5  million at June 30,
2002,  from $680.0  million at September 30, 2001. The decrease is the result of
sale of $47.3  million in single  family  mortgage  loans during the nine months
ended June 30, 2002 as well as loan repayments exceeding loan originations.

Investment  securities  decreased $13.5 million, or 8.72% from $155.3 million at
September  30, 2001 to $141.7  million at June 30, 2002.  This  decrease was the
combined  result of  purchase  of $19.4  million  in  securities,  sale of $31.4
million of investment  securities available for sale and a $1.4 million increase
in the mark to market  adjustment for available for sale securities.  During the
quarter ended June 30, 2002, the company  restructured the investment  portfolio
by selling  securities whose balances had paid down to the extent that they were
no longer highly liquid.

During the nine months ended June 30, 2002, the Company purchased $207.1 million
of mortgage-backed  securities ("MBS"),  primarily agency-backed  collateralized
mortgage obligations ("CMO's") of short duration. In addition, $77.0 million was
received in principal  repayments on MBS, resulting in a $115.8 million increase
in the  balance of MBS from  $423.3  million  at  September  30,  2001 to $539.1
million at June 30, 2002.

Other  assets  decreased  by $4.9  million,  or  55.34%,  from $8.9  million  at
September  30, 2001 to $4.0 million at June 30,  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.  This
receivable was settled in October 2001, resulting in the decrease in the balance
of other assets.

Deposit  liabilities  remained  unchanged at $1.15 billion at September 30, 2001
and June 30, 2002.


                                       14
<PAGE>


Advances  from  borrowers for taxes and  insurance  decreased  $2.6 million from
September  30, 2001 to June 30,  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  decreased by $10.0 million from  September 30,
2001 to June 30, 2002 due to the maturity of an FHLB advance.

In April  2002,  the  Company  issued  $13  million  of  mandatorily  redeemable
preferred  securities  through a subsidiary  grantor trust. The Trust holds debt
instruments of the parent company  purchased with the proceeds of the securities
issuance.  The capital  qualifying  securities  bear interest at a floating rate
indexed to  six-month  LIBOR and mature in April  2032.  At June 30,  2002,  the
interest rate was 5.92%. The Company has the right to redeem the securities at a
premium  up to five years from  issuance,  and after five years at par.  Certain
changes in tax law or Office of Thrift  Supervision  regulations  regarding  the
treatment  of the  capital  securities  as core  capital  could  result in early
redemption,  at par, or a  shortening  in the  maturity of the  securities.  The
Company had issued $15 million of mandatorily  redeemable  preferred  securities
during the fiscal year ended September 30, 2001.

Total shareholders' equity increased $1.4 million, or 1.18%, from $114.1 million
at September 30, 2001 to $115.5 million at June 30, 2002.  This increase was the
combined  result of earnings  of $4.4  million  and a $1.8  million  increase in
unrealized gain on securities  available for sale which were partially offset by
a $4.0 million  reduction due to repurchase and retirement of shares and payment
of $2.5 million in common stock dividends for the nine month period.

Results of Operations

         Comparison of Nine Months Ended June 30, 2002 and 2001

General.  Over the last 12 months,  the Company has grown from 37 branches to 57
branches.  The impact of this  growth is seen in interest  income,  non-interest
income, and non-interest expense.

Interest  Income.  Interest  income  increased  by $14.4  million,  showing  the
combined effects of a $407.0 million increase in average interest earning assets
and a 75 basis  point  decrease  in yield from June 30,  2001 to June 30,  2002.
Interest income on loans receivable increased $3.1 million, or 8.41%, from $36.8
million  for the nine months  ended June 30, 2001 to $39.9  million for the same
period of 2002.  This  increase  was a result of the $42.6  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  75 basis  points to 6.47% for the nine  months  ended  June 30,  2002
compared to 7.22% for the same period ended June 30, 2001.  Interest rate spread
(the  difference  between the rates  earned on interest  earning  assets and the
rates paid on interest  bearing  liabilities)  increased from 2.29% to 3.03% and
interest rate margin (net interest  income divided by average  interest  earning
assets)  increased  from 3.00% to 3.47%  comparing the nine month  periods.  The
increases  in  interest  rate  spread and margin are  primarily  a result of the
decreased  cost of deposits due to (1) the addition of  significant  balances in
non-interest  bearing  accounts  with the WAMU  acquisition,  (2) the  Company's
strategy to reduce interest rates paid on deposits,  and (3) a general  downward
shift in interest rates from June 2001 to June 2002.

                                       15
<PAGE>

Interest Expense.  Total interest expense increased $416,426,  or 1.37%, for the
nine  months  ended June 30,  2002  compared  to the same  period in 2001.  That
increase  was the  combined  result of a $1.1  million  increase  in interest on
deposit liabilities and a $642,888 decrease in interest expense on FHLB advances
and other  liabilities.  The average  balance of deposit  liabilities  increased
$378.3  million  as a result  of the  addition  of  $423.5  million  in  deposit
liabilities  with the WAMU branch  acquisition in September 2001 and the average
rate paid on deposits  decreased  by 158 basis  points due to the factors  noted
above.  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  4.71%  increase in interest
expense on deposits  coupled  with a 58.48%  increase in the average  balance of
deposits,  comparing the nine month  periods  ended June 30, 2002 and 2001.  The
average balance of borrowings decreased $5.9 million from $175.2 million for the
nine months ended June 30, 2001 to $169.3 million for the same period ended June
30, 2002. In addition,  the rate paid on borrowings decreased by 28 basis points
from 5.97% for the nine months  ended June 30, 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  $249,417  of charge offs and $7,707 of  recoveries  during the nine months
ended June 30, 2002 compared to a $384,000 provision with $75,594 of charge offs
and $42,406 of recoveries during the nine months ended June 30, 2001.

At June 30,  2002,  the  allowance  for loan  losses  was equal to 718% of total
non-performing  assets  compared to 420% at June 30,  2001.  The increase in the
coverage ratio was the result of a constant level of 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 0.10% at June
30, 2001 to 0.07% at June 30, 2002. The decrease primarily relates to a decrease
in real estate owned, which is included in non-performing assets.

Non-Interest Income.  Non-interest income increased $236,794,  or 2.95%, to $8.3
million for the nine months  ended June 30, 2002 from $8.0  million for the nine
months  ended June 30, 2001.  During the nine months  ended June 30,  2001,  the
Company  recorded the sale of MBS resulting  from the loan  securitization  at a
gain of $4.2 million  which is compared to a $554,416 gain on sale of securities
recorded in the period ended June 30, 2002.  Disregarding  the gains on sales of
securities,  non-interest income increased from $3.8 million for the nine months
ended  June 30,  2001 to $7.7  million  for the same  period in 2002,  a 101.16%
increase. Fees and service charges improved significantly,  increasing by 90.11%
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
154.44% increase in other non-interest  income from $765,073 for the nine months
ended June 30, 2001 to $1.9 million for the nine months ended June 30, 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 $18.0 million, or 95.88%, to $36.9 million for the nine months
ended June 30, 2002,  from $18.9 million for the comparable  period in 2001. The
growth  was   accompanied  by  an  increase  in  employees  from  268  full-time
equivalents  at  June  30,  2001  to  515  a  year  later,  a  92.16%  increase.
Correspondingly,  compensation, employee benefits, and related expense increased
$7.2  million,  or 75.84% from $9.5  million for the nine months  ended June 30,
2001 to $16.6 million for the same period in 2002.  Occupancy  expense increased
by $1.7 million,  or 87.42%,  comparing the nine months ended June 30, 2002 with
the same period of 2001 due to the addition of the branches.  Insurance  premium
expense  increased 32.20% as expected due to the increase in deposit balances on
which  premiums are based.  Amortization  of intangible  assets  increased  $2.9
million due to the amortization of intangible  assets related to the WAMU branch
acquisition. Because this transaction was an acquisition of branches rather than
of an  entire  entity,  it  falls  under  the  accounting  guidance  in SFAS 72,
"Accounting for Certain Acquisitions of Banking or Thrift Institutions," instead
of SFAS 142, "Goodwill and Other Intangible  Assets."  Discussions  currently in
process  by the FASB may  result in  changes  to the  guidance  as it applies to
intangibles  acquired in branch  acquisitions,  but the exact  treatment has not
been determined at this time. Other expense increased $5.9 million,  or 109.93%,
from $5.4 million for the nine months  ended June 30, 2001 to $11.3  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.

                                       16
<PAGE>

Income Taxes. The provision for income taxes decreased $1.3 million for the nine
months ended June 30, 2002 compared with the prior year.  The effective tax rate
was 34.94% for the nine months  ended June 30,  2002  compared to 35.20% 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 June 30, 2002 and 2001

General.  As noted for the nine  months  ended June 30,  2002,  the WAMU  branch
acquisition had significant  impact on the results of the quarter ended June 30,
2002 compared to the same quarter a year ago. Net income decreased $187,402,  or
8.86%,  from $2.1  million  for the three  months  ended  June 30,  2001 to $1.9
million  for the three  months  ended  June 30,  2002.  This  decrease  resulted
primarily  from the $1.7  million  gain on sale of MBS  recorded for the quarter
ended June 30, 2001 which  compares  with  $435,315  gain on sale in the current
quarter.

Interest Income.  The Company  recorded  interest income of $21.5 million in the
third  quarter ended June 30, 2002, an increase of 28.29% from $16.8 million for
the same period last year.  Average  interest earning assets increased by $402.1
million,  or 41.83%,  primarily due to the branch  acquisition.  Yield decreased
from 6.98% for the  quarter  ended June 30, 2001 to 6.32% for the same period of
2002. Yields on loans, 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.

Interest Expense.  Total interest expense decreased 7.14%, from $9.9 million for
the quarter  ended June 30, 2001 to $9.2 million for the quarter  ended June 30,
2002.  Average deposits  increased by $365.5 million  comparing the three months
ended June 30, 2001 to 2002, while the average interest paid on interest-bearing
deposits  decreased  188 basis points from 4.56% for the three months ended June
30,  2001 to 2.68% for the same  period  ended June 30,  2002.  The  increase in
average balance resulted primarily from the branch acquisition.  The decrease in
rates paid on deposits is the combined  result of the larger  proportion of non-
interest or low-interest-rate  deposits obtained in the branch acquisition,  the
Company's  strategy to reduce  interest  rates paid on deposits and the downward
shift in the general  interest  rate  environment  over the last 12 months.  The
average  balance of borrowings  decreased $1.7 million,  from $169.8 million for
the three months ended June 30, 2001 to $168.1 million for the same period ended
June 30, 2002,  resulting in a decrease in interest on borrowings of $97,772 for
the three  months ended June 30, 2002  compared  with the same period ended June
30, 2001.  The rate paid on  borrowings  decreased by 15 basis points from 5.86%
for the quarter ended June 30, 2001 to 5.71% for the same period in 2002.

Provision for Loan Losses. The provision for loan losses was zero and there were
$176,433 of charge offs, and $3,759 of recoveries  during the three months ended
June 30, 2002  compared to a $3,000  provision  with  $28,347 of charge offs and
$7,540 of recoveries  during the three months ended June 30, 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 during the current quarter.

Non-Interest Income.  Non-interest income decreased $145,266,  or 4.54%, to $3.1
million for the three months ended June 30, 2002 from $3.2 million for the three
months  ended June 30,  2001.  The $1.7  million  gain on sale in the prior year
compared to the $435,315 gain on sale recorded this quarter caused a decrease in
non-interest  income.  However,  income  from fees and  service  charges  showed
significant growth, offsetting the decrease in the non-recurring gains. Fees and
service charges increased by 60.64% from $1.2 million for the quarter ended June
30, 2001 to $1.9 million for the current  quarter.  Excluding  the effect of the
gain on sale of  investments,  non-interest  income  increased  72.52% from $1.5
million  for the third  quarter of 2001 to $2.6  million  for the same period in
2002.

                                       17
<PAGE>

Non-Interest Expense. Non-interest expense increased $5.5 million, or 80.76%, to
$12.4 million for the three months ended June 30, 2002, from $6.9 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 67.21%  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 268 at June 30, 2001 to
515 at June 30, 2002. The acquired and  newly-built  branches were operating for
the entire quarter ended June 30, 2002,  pushing  occupancy expense up by 78.02%
compared  to the same  quarter a year ago.  Data  processing  expense  increased
51.65% due to the additional accounts and locations.  Other expense increased by
$1.6 million, or 77.21%,  primarily due to increased costs across all categories
with the growth in branches.

Income Taxes. The provision for income taxes was consistent for the three months
ended June 30, 2002  compared  with the prior year.  The  effective tax rate was
35.13% for the  quarter  ended  June 30,  2002  compared  to 33.91% for the same
period of 2001.



                                       18
<PAGE>


                           PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

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


Item 2.   Changes in Securities

          Not applicable.


Item 3.   Defaults Upon Senior Securities

          Not applicable.


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

          Not applicable.


Item 5.   Other Information

          Not applicable.

Item 6.   Exhibits and Reports on Form 8-K

          a)  Not applicable.

          b) No Current Reports on Form 8-K were filed during the quarter
             ended June 30, 2002.


                                       19
<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:    August 14, 2002            By:   /s/ Kermit K. Houser
                                    ----------------------------------
                                    Kermit K. Houser, President and
                                    Chief Executive Officer


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


















                                       20
<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:

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

o    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 Jay Alexander
___________________________________         ___________________________________
Kermit K. Houser                            Marshall J. Alexander
Chief Executive Officer                     Chief Financial Officer

Dated: _____________ ____, 200_