KLAMATH FIRST BANCORP INC
SC 13E4, 1998-10-09
SAVINGS INSTITUTION, FEDERALLY CHARTERED
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As filed with the Securities and Exchange Commission on October 9, 1998
- ------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 SCHEDULE 13E-4
                          ISSUER TENDER OFFER STATEMENT
      (Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
 
                           KLAMATH FIRST BANCORP, INC.
                           ---------------------------
                                (Name of issuer)
 
                           KLAMATH FIRST BANCORP, INC.
                       -----------------------------------
                      (Name of Person(s) Filing Statement)
 
                     Common Stock, $0.01 Par Value Per Share
                     ---------------------------------------
                         (Title of Class of Securities)
 
                                   49842P 10 3
                      -------------------------------------
                      (CUSIP Number of Class of Securities)
 
                                 Gerald V. Brown
                      President and Chief Executive Officer
                           Klamath First Bancorp, Inc.
                                 540 Main Street
                           Klamath Falls, Oregon 97601
                                (541) 882-3444       
              -------------------------------------------------------
          (Name, Address and Telephone Number of Person Authorized to          
     Receive Notices and Communications on Behalf of the Person(s) Filing      
                               Statement)
 
                                   Copies to:
                          John F. Breyer, Jr., Esquire
                         Victor L. Cangelosi, Esquire
                              Breyer & Aguggia LLP
                       1300 I Street, N.W., Suite 470 East
                             Washington, D.C. 20005
                                 (202) 737-7900
                            (202) 797-7979 (Facsimile)

                               October 11, 1998  
                --------------------------------------------------   
              (Date Tender Offer First Published, Sent or Given to             
                      Security Holders)

                            CALCULATION OF FILING FEE      
- ------------------------------------------------------------------------------
                TRANSACTION VALUATION*           AMOUNT OF FILING FEE*
                ----------------------           ---------------------
                    $38,675,384                        $7,736.00
- -----------------------------------------------------------------------------
*      Calculated solely for the purpose of determining the filing fee, based
upon the purchase of 1,983,353 shares at the maximum tender offer price of
$19.50 per share.
 
[ ]    Check box if any of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.

          Amount Previously Paid:   N/A              Filing Party: N/A
          Form or Registration No.: N/A              Date Filed:   N/A

<PAGE>

<PAGE>
ITEM 1.        SECURITY AND ISSUER.
 
      (a)     The issuer of the securities to which this Schedule 13E-4
relates is Klamath First Bancorp, Inc., an Oregon corporation ("Company"), and
the address of its principal executive office, and its mailing address, is 540
Main Street, Klamath Falls, Oregon 97601.
 
      (b)     This Schedule 13E-4 relates to the offer by the Company to
purchase up to 1,983,353 shares (or such lesser number of shares as are
properly tendered) of its common stock, $0.01 par value per share ("Shares"),
9,916,766 of which Shares were outstanding as of June 30, 1998, at prices not
less than $15.50 nor in excess of $19.50 per Share in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October
23, 1998 ("Offer to Purchase"), and in the related Letter of Transmittal
(which together constitute the "Offer"), copies of which are attached as
Exhibits (a)(1) and (a)(2), respectively, and incorporated herein by
reference. Employees, officers and directors of the Company may participate in
the Offer on the same basis as the Company's other shareholders. The
information set forth in "Introduction", "Section 1--Number of Shares;
Proration" and "Section 11--Interest of Directors and Executive Officers;
Transactions and Arrangements Concerning Shares" of the Offer to Purchase is
incorporated herein by reference.
 
      (c)     The information set forth in "Introduction" and "Section
7--Price Range of Shares; Dividends" of the Offer to Purchase is incorporated
herein by reference.
 
      (d)     Not applicable.
 
ITEM 2.       SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
 
      (a)-(b) The information set forth in "Section 10--Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
 
ITEM 3.       PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE
              ISSUER OR AFFILIATE.
 
      (a)-(j) The information set forth in "Introduction" and "Section
10--Source and Amount of Funds," "Section 8--Purpose of the Offer; Certain
Effects of the Offer," "Section 11--Interest of Directors and Executive
Officers; Transactions and Arrangements Concerning Shares" and "Section
12--Effects of the Offer on the Market for Shares; Registration under the
Exchange Act" of the Offer to Purchase is incorporated herein by reference.
 
ITEM 4.       INTEREST IN SECURITIES OF THE ISSUER.
 
      The information set forth in "Section 11--Interest of Directors and
Officers; Transactions and Arrangements Concerning Shares" and "Schedule A" of
the Offer to Purchase is incorporated herein by reference.
 
ITEM 5.       CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
              RESPECT TO THEISSUER'S SECURITIES.
 
      The information set forth in "Introduction" and "Section 10--Source and
Amount of Funds," "Section 8--Purpose of the Offer; Certain Effects of the
Offer," and "Section 11--Interest of Directors and Executive Officers;
Transactions and Arrangements Concerning Shares" of the Offer to Purchase is
incorporated herein by reference.
 
ITEM 6.       PERSONS RETAINED, EMPLOYED, OR TO BE COMPENSATED.
 
      The information set forth in "Introduction" and "Section 16--Fees and
Expenses" of the Offer to Purchase is incorporated herein by reference.

                                 1

<PAGE>

<PAGE>
ITEM 7.       FINANCIAL CONDITION.
 
      (a)-(b) The information set forth in "Section 9--Certain Information
Concerning the Company" of the Offer to Purchase is incorporated herein by
reference.
 
ITEM 8.       ADDITIONAL INFORMATION.
 
      (a)     Not applicable.
 
      (b)     The information set forth in "Section 13--Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
 
      (c)     The information set forth in "Section 12--Effects of the Offer
on the Market for Shares; Registration Under the Exchange Act" of the Offer to
Purchase is incorporated herein by reference.
 
      (d)     Not applicable.
 
      (e)     The information set forth in the Offer to Purchase and Letter of
Transmittal is incorporated herein by reference.
 
ITEM 9.       MATERIAL TO BE FILED AS EXHIBITS.
 
      (a)     (1)     Form of Offer to Purchase, dated October 23, 1998.
 
              (2)     Form of Letter of Transmittal (including
                      Certification of Taxpayer Identification Number on
                      Form W-9).
 
              (3)     Form of Notice of Guaranteed Delivery.
  
              (4)     Form of Letter to Brokers, Dealers, Commercial
                      Banks, Trust Companies and Other Nominees.
 
              (5)     Form of Letter to Clients for Use by Brokers,
                      Dealers, Commercial Banks, Trust Companies and Other
                      Nominees (including the Instruction Form).
 
              (6)     Form of Letter to Shareholders of the Company, dated
                      October 23, 1998, from Gerald V. Brown, President and
                      Chief Executive Officer of the Company.

              (7)     Form of Letter to Participants in Employee Stock
                      Ownership Plan for Employees of Klamath First
                      Bancorp, Inc.
 
              (8)     Form of Memorandum, dated October 23, 1998 to the
                      Company's employees.
 
              (9)     Form of Question and Answer Brochure.
 
              (10)    Form of Instruction Sheet.

              (11)    Text of Press Release issued by the Company, dated
                      October 11, 1998.
 
              (12)    Text of Press Announcement to be published in local
                      and regional newspapers on or about October 11, 1998.

                                   2
<PAGE>

<PAGE>

              (13)    Text of Press Release Announcing 1998 Earnings
                      issued by the Company.*
 
      (b)     Not applicable.

      (c)     Not applicable.

      (d)     Not applicable.

      (e)     Not applicable.
 
      (f)     Not applicable.
 
- --------------
*     To be filed by amendment.

                                 3

<PAGE>

<PAGE>

                              SIGNATURE
 
       After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule 13E-4 is true, complete and
correct.
 
                                        Klamath First Bancorp, Inc.
 
October 9, 1998                         By:  /s/Gerald V. Brown             
                                             -------------------------------
                                             Gerald V. Brown
                                             President and
                                             Chief Executive Officer
 
                                 4

<PAGE>


<PAGE>

                                                               Exhibit (a)(1)
                           KLAMATH FIRST BANCORP, INC.
 
                           OFFER TO PURCHASE FOR CASH
                          UP TO 1,983,353 SHARES OF ITS
                     COMMON STOCK, PAR VALUE $0.01 PER SHARE
 
                    AT A PURCHASE PRICE NOT LESS THAN $15.50
                        NOR IN EXCESS OF $19.50 PER SHARE
                                       
                                 -------------
 
            THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
                AT 5:00 P.M., EASTERN TIME, ON NOVEMBER 19, 1998
                          UNLESS THE OFFER IS EXTENDED.
                                 -------------
                                       
       Klamath First Bancorp, Inc., an Oregon corporation ("Company"), invites
its shareholders to tender shares of its Common Stock, par value $0.01 per
share ("Shares"), at prices, net to the seller in cash, without interest
thereon, not less than $15.50 nor in excess of $19.50 per Share specified by
such tendering shareholders, upon the terms and subject to the conditions set
forth herein and in the related Letter of Transmittal (which together
constitute the "Offer"). The Company will determine a single per Share price
(not less than $15.50 nor in excess of $19.50 per Share) that it will pay for
the Shares validly tendered pursuant to the Offer and not withdrawn ("Purchase
Price"), taking into consideration the number of Shares so tendered and the
prices specified by the tendering shareholders. The Company will select the
Purchase Price that will allow it to purchase 1,983,353 shares (or such lesser
number of Shares as are validly tendered and not withdrawn at prices not less
than $15.50 nor in excess of $19.50 per Share) pursuant to the Offer. The
Company will purchase all Shares validly tendered at prices at or below the
Purchase Price and not withdrawn on or prior to the Expiration Date (as
defined in Section 1), upon the terms and subject to the conditions of the
Offer, including the provisions thereof relating to proration described
herein. The Purchase Price will be paid in cash, net to the seller, without
interest thereon, with respect to all Shares purchased. All Shares tendered at
prices in excess of the Purchase Price and Shares not purchased because of
proration will be returned. Shareholders must complete the section of the
Letter of Transmittal relating to the price at which they are tendering Shares
in order to validly tender Shares.

                                 -------------      
 
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS. SEE SECTION 6.

                                 -------------      
 
                                   IMPORTANT
 
       Any shareholder desiring to tender all or any portion of his or her
Shares should either (1) complete and sign the Letter of Transmittal or a
facsimile thereof in accordance with the instructions in the Letter of
Transmittal, mail or deliver it and any other required documents to Registrar
and Transfer Company ("Depositary"), and either mail or deliver the
certificates representing Shares to be tendered to the Depositary along
with the Letter of Transmittal or deliver such Shares pursuant to the
procedure for book-entry transfer set forth in Section 3 or (2) request his or
her broker, dealer, commercial bank, trust company or nominee to effect the
transaction for him or her. A shareholder whose Shares are registered in the
name of a broker, dealer, commercial bank, trust company or nominee must
contact such broker, dealer, commercial bank, trust company or nominee if he
or she desires to tender such Shares. Shareholders who desire to tender Shares
and whose certificates for such Shares are not immediately available or who
cannot comply with the procedure for book-entry transfer by the expiration of
the Offer must tender such Shares by following the procedures for guaranteed
delivery set forth under "Section 3--Procedure for Tendering Shares."

<PAGE>

<PAGE>
       SHAREHOLDERS MUST PROPERLY COMPLETE THE LETTER OF TRANSMITTAL,
INCLUDING THE SECTION OF THE LETTER OF TRANSMITTAL RELATING TO THE PRICE AT
WHICH THEY ARE TENDERING SHARES, IN ORDER TO EFFECT A VALID TENDER OF THEIR
SHARES.
 
       THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
OFFER. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO ANY  SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES.  EACH
SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY TO TENDER AND AT WHAT PRICE. EMPLOYEES, DIRECTORS AND
EXECUTIVE OFFICERS MAY PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE
COMPANY'S OTHER SHAREHOLDERS.
 
            The Dealer Manager/Information Agent for the Offer is:

                        KEEFE, BRUYETTE & WOODS, INC.
 

            The date of this Offer to Purchase is October 23, 1998

<PAGE>




<PAGE>
       As of June 30, 1998, the Company had issued and outstanding 9,916,766
Shares, and had reserved 361,853 Shares for issuance upon exercise of
currently exercisable stock options under the Company's 1995 Stock Option
Plan. The 1,983,353 Shares that the Company is offering to purchase pursuant
to the Offer represent approximately 20% of the Shares then outstanding. The
Shares are traded on the Nasdaq National Market. The Shares trade under the
symbol "KFBI." On October 8, 1998, the closing price of the Shares as reported
on the Nasdaq National Market was $16.00 per Share. Shareholders are urged to
obtain current market quotations for the Shares.
 
       To tender Shares properly, shareholders must complete the section of
the Letter of Transmittal relating to the price at which they are tendering
Shares.
 
       Questions or requests for assistance regarding this Offer to Purchase,
the Letter of Transmittal or other tender offer materials may be directed to
the Dealer Manager/Information Agent toll free at (877) 298-6520. Additional
copies of these materials will be furnished promptly at the Company's expense.
Shareholders may also contact their local broker, dealer, commercial bank or
trust company for assistance concerning the Offer.
 
       NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
THE COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER SHARES PURSUANT TO THE
OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION
AND SUCH OTHER INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY.

                                       (i)

<PAGE>

<PAGE>

                          TABLE OF CONTENTS
 
Section                                                               Page
- -------                                                               ----

INTRODUCTION

1.   Number of Shares; Proration......................................   2
2.   Tenders by Holders of Fewer Than 100 Shares......................   3
3.   Procedure for Tendering Shares...................................   4
4.   Withdrawal Rights................................................   6
5.   Acceptance for Payment of Shares and Payment of Purchase Price...   7
6.   Certain Conditions of the Offer..................................   8
7.   Price Range of Shares; Dividends.................................  10
8.   Purpose of the Offer; Certain Effects of the Offer...............  10
9.   Certain Information Concerning the Company.......................  12
10.  Source and Amount of Funds.......................................  18
11.  Interest of Directors and Executive Officers;
     Transactions and Arrangements Concerning Shares..................  18
12.  Effects of the Offer on the Market for Shares;
     Registration Under the Exchange Act..............................  20
13.  Certain Legal Matters; Regulatory Approvals......................  20
14.  Certain General Income Tax Consequences                            20
15.  Extension of Tender Period; Termination; Amendments..............  24
16.  Fees and Expenses................................................  24
17.  Additional Information...........................................  25
18.  Miscellaneous....................................................  25

                                      (ii)

<PAGE>

<PAGE>

To the Holders of Shares of Common Stock of Klamath First Bancorp, Inc.:
 
                           INTRODUCTION
 
       Klamath First Bancorp, Inc., an Oregon corporation ("Company"), invites
its shareholders to tender shares of its Common Stock, par value $0.01 per
share ("Shares"), at a price, net to the seller in cash, without interest
thereon, not less than $15.50 nor in excess of $19.50 per Share specified by
such tendering shareholders, upon the terms and subject to the conditions set
forth herein and in the related Letter of Transmittal (which together
constitute the "Offer").
 
       The Company will determine a single per Share price (not less than
$15.50 nor in excess of $19.50 per Share) that it will pay for the Shares
validly tendered pursuant to the Offer and not withdrawn ("Purchase Price"),
taking into account the number of Shares so tendered and the prices specified
by tendering shareholders. The Company will select the Purchase Price that
will allow it to purchase 1,983,353 shares (or such lesser number of Shares as
is validly tendered and not withdrawn at prices not less than $15.50 nor in
excess of $19.50 per Share) pursuant to the Offer. The Company will purchase
all Shares validly tendered at prices at or below the Purchase Price and not
withdrawn on or prior to the Expiration Date (as defined in Section 1), upon
the terms and subject to the conditions of the Offer, including the provisions
relating to proration described below. The Purchase Price will be paid in
cash, net to the seller, without interest thereon, with respect to all Shares
purchased. Shares tendered at prices in excess of the Purchase Price and
Shares not purchased because of proration will be returned.
 
       THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
 
       If more than 1,983,353 shares have been validly tendered at or below
the Purchase Price and not withdrawn on or prior to the Expiration Date, the
Company will purchase Shares first from shareholders who owned beneficially as
of the close of business on September 28, 1998, and continue to own
beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares
who properly tender all their Shares at or below the Purchase Price, and then
on a pro rata basis from all other shareholders who validly tender Shares at
or below the Purchase Price. See Sections 1 and 2. Tendering shareholders will
not be obligated to pay brokerage commissions, solicitation fees or, subject
to the Instructions to the Letter of Transmittal, stock transfer taxes on the
purchase of Shares by the Company. The Company will pay the expenses of Keefe,
Bruyette & Woods, Inc. ("Dealer Manager/Information Agent") and Registrar and
Transfer Company ("Depositary") incurred in connection with the Offer. See
Section 16. ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE AND
SIGN THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE LETTER OF TRANSMITTAL MAY
BE SUBJECT TO UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31%
OF THE GROSS PROCEEDS PAYABLE TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO
THE OFFER. SEE SECTIONS 3 AND 14.
 
       THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. NEITHER THE
COMPANY NOR ITS BOARD OF DIRECTORS, HOWEVER, MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH SHAREHOLDER MUST
MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES TO TENDER AND AT WHAT PRICE. EMPLOYEES, OFFICERS AND DIRECTORS OF
THE COMPANY MAY PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE COMPANY'S
OTHER SHAREHOLDERS.
 
       As of June 30, 1998 the Company had issued and outstanding 9,916,766
Shares, and had reserved 361,853 Shares for issuance upon exercise of
currently exercisable stock options under the Company's 1995 Stock Option
Plan. The 1,983,353 shares that the Company is offering to purchase pursuant
to the Offer represent approximately 20% of the Shares then outstanding.

                                      1

<PAGE>

<PAGE>
       The Shares are traded on the Nasdaq National Market. The Shares trade
under the symbol "KFBI." On October 8, 1998 the closing price of the Shares on
the Nasdaq National Market was $16.00 per Share. See Section 7. SHAREHOLDERS
ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
 
    Questions and requests for assistance may be directed to the Dealer
Manager/Information Agent:
                                 
                    Keefe, Bruyette & Woods, Inc.
                       211 Bradenton Avenue
                      Dublin, Ohio 43017-3541
                    Toll free:  (877) 298-6520

                  1. NUMBER OF SHARES; PRORATION

       Upon the terms and subject to the conditions described herein and in
the Letter of Transmittal, the Company will purchase up to 1,983,353 shares
that are validly tendered on or prior to the Expiration Date (as defined
below) (and not properly withdrawn in accordance with Section 4) at a price
(determined in the manner set forth below) not less than $15.50 nor in excess
of $19.50 per Share. The later of 5:00 p.m., Eastern Time, on November 19,
1998, or the latest time and date to which the Offer is extended pursuant to
Section 15, is referred to herein as the "Expiration Date." If the Offer is
oversubscribed as described below, only Shares tendered at or below the
Purchase Price on or prior to the Expiration Date will be eligible for
proration. The proration period also expires on the Expiration Date.
 
       The Company will determine the Purchase Price taking into consideration
the number of Shares so tendered and the prices specified by tendering
shareholders. The Company will select the Purchase Price that will allow it to
purchase 1,983,353 shares (or such lesser number of Shares as is validly
tendered and not withdrawn at prices not less than $15.50 nor in excess of
$19.50 per Share) pursuant to the Offer. Subject to Section 15, the Company
reserves the right to purchase more than 1,983,353 Shares pursuant to the
Offer, but does not currently plan to do so. THE OFFER IS NOT CONDITIONED ON
ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO
CERTAIN OTHER CONDITIONS. SEE SECTION 6.
 
       In accordance with Instruction 5 of the Letter of Transmittal, each
shareholder who wishes to tender Shares must specify the price (not less than
$15.50 nor in excess of $19.50 per Share) at which such shareholder is willing
to have the Company purchase such Shares. As promptly as practicable following
the Expiration Date, the Company will determine the Purchase Price (not less
than $15.50 nor in excess of $19.50 per Share) that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
shareholders. All Shares purchased pursuant to the Offer will be purchased at
the Purchase Price. All Shares not purchased pursuant to the Offer, including
Shares tendered at prices greater than the Purchase Price and Shares not
purchased because of proration, will be returned to the tendering shareholders
at the Company's expense as promptly as practicable following the Expiration
Date.
 
       Upon the terms and subject to the conditions of the Offer, if 1,983,353
or fewer Shares have been validly tendered at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date, the Company will purchase
all such Shares. Upon the terms and subject to the conditions of the Offer, if
more than 1,983,353 shares have been validly tendered at or below the Purchase
Price and not withdrawn on or prior to the Expiration Date, the Company will
purchase Shares in the following order of priority:
 
       (a)     first, all Shares validly tendered at or below the Purchase
Price and not withdrawn on or prior to the Expiration Date by or on behalf of
any shareholder who owned beneficially, as of the close of business on
September 28, 1998 and continues to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 

                                     2

<PAGE>
<PAGE>
Shares and who validly tenders all of such Shares (partial tenders will not
qualify for this preference) and completes the box captioned "Odd Lots" on the
Letter of Transmittal; and
 
       (b)     then, after purchase of all of the foregoing Shares, all other
Shares validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date on a pro rata basis, if necessary (with
appropriate adjustments to avoid purchases of fractional Shares).
 
       If proration of tendered Shares is required, (i) because of the
difficulty in determining the number of Shares validly tendered and (ii) as a
result of the "odd lot" procedure described in Section 2, the Company does not
expect that it would be able to announce the final proration factor or to
commence payment for any Shares purchased pursuant to the Offer until
approximately seven (7) trading days after the Expiration Date. Preliminary
results of proration will be announced by press release as promptly as
practicable after the Expiration Date. Holders of Shares also may obtain such
preliminary information from the Dealer Manager/Information Agent.
 
       As described under "Section 14--Certain Federal Income Tax
Consequences," the number of Shares that the Company will purchase from a
shareholder may affect the federal income tax consequences to the shareholder
of such purchase and therefore may be relevant to a shareholder's decision
whether to tender Shares.
 
       The Company expressly reserves the right, in its sole discretion, at
any time or from time to time, to extend the period of time during which the
Offer is open by giving oral or written notice of such extension to the
Depositary and making a public announcement thereof. See Section 15. There can
be no assurance, however, that the Company will exercise its right to extend
the Offer.
 
       For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, Eastern Time.
 
       Copies of this Offer to Purchase and the related Letter of Transmittal
are being mailed to record holders of Shares and will be furnished to brokers,
banks and similar persons whose names, or the names of whose nominees, appear
on the Company's shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
 
                  2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES
 
       All Shares validly tendered at or below the Purchase Price and not
withdrawn on or prior to the Expiration Date by or on behalf of any
shareholder who owned beneficially, as of the close of business on September
28, 1998, and continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares, will be accepted for purchase before
proration, if any, of other tendered Shares. Partial tenders will not qualify
for this preference, and it is not available to beneficial holders of 100 or
more Shares, even if such holders have separate stock certificates for fewer
than 100 Shares. By accepting the Offer, a shareholder owning beneficially
fewer than 100 Shares will avoid the payment of brokerage commissions and the
applicable odd lot discount payable in a sale of such Shares in a transaction
effected on a securities exchange.

       As of September 28, 1998, there were approximately 1,644 holders of
record of Shares. Approximately 436 of these holders of record held
individually fewer than 100 Shares and held in the aggregate approximately
15,961 Shares. Because of the large number of Shares held in the names of
brokers and nominees, the Company is unable to determine the exact number of
beneficial owners of fewer than 100 Shares or the aggregate number of Shares
they own. Any shareholder wishing to tender all of his or her Shares pursuant
to this Section should complete the box captioned "Odd Lots" on the Letter of
Transmittal.
 
       The special Odd Lot purchase rules described above do not apply to any
Shares held in the Employee Stock Ownership Plan for Employees of Klamath
First Bancorp, Inc. ("ESOP").

                                    3

<PAGE>

<PAGE>

                  3. PROCEDURE FOR TENDERING SHARES
 
       To tender Shares validly pursuant to the Offer, a properly completed
and duly executed Letter of Transmittal or facsimile thereof, together with
any required signature guarantees and any other documents required by the
Letter of Transmittal, must be received by the Depositary at its address set
forth on the back cover of this Offer to Purchase and either (i) certificates
for the Shares to be tendered must be received by the Depositary at such
address, (ii) such Shares must be delivered pursuant to the procedures for
book-entry transfer described below (and a confirmation of such delivery
received by the Depositary), or (iii) the tendering shareholder must comply
with the guaranteed delivery procedure described below, in each case on or
prior to the Expiration Date.
 
       IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, IN ORDER
TO TENDER SHARES PURSUANT TO THE OFFER, A SHAREHOLDER MUST INDICATE IN THE
SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING
TENDERED" ON THE LETTER OF TRANSMITTAL THE PRICE (IN MULTIPLES OF FIFTY CENTS)
AT WHICH SUCH SHARES ARE BEING TENDERED.
 
       Shareholders wishing to tender Shares at more than one price must
complete separate Letters of Transmittal for each price at which such Shares
are being tendered. The same Shares cannot be tendered at more than one price.
FOR A TENDER OF SHARES TO BE VALID, A PRICE BOX, BUT ONLY ONE PRICE BOX, ON
EACH LETTER OF TRANSMITTAL MUST BE CHECKED.
 
       In addition, Odd Lot Holders who tender all such Shares must complete
the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable,
on the Notice of Guaranteed Delivery, in order to qualify for the preferential
treatment available to Odd Lot Holders as described in Section 2.
 
       The Depositary will establish an account with respect to the Shares at
The Depository Trust Company (hereinafter referred to as the "Book-Entry
Transfer Facility") for purposes of the Offer within two business days after
the date of this Offer to Purchase, and any financial institution that is a
participant in the system of any Book-Entry Transfer Facility may make
delivery of Shares by causing such Book-Entry Transfer Facility to transfer
such Shares into the Depositary's account in accordance with the procedures of
such Book-Entry Transfer Facility. Although delivery of Shares may be effected
through book-entry transfer, a properly completed and duly executed Letter of
Transmittal or a manually signed copy thereof, or an Agent's Message (as
defined below), together with any required signature guarantees and any other
required documents, must, in any case, be transmitted to and received by the
Depositary at its address set forth on the back cover of this Offer to
Purchase on or prior to the Expiration Date. Delivery of required documents to
one of the Book-Entry Transfer Facilities in accordance with its procedures
does not constitute delivery to the Depositary and will not constitute a valid
tender.
 
       The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgement from the participant in such
Book-Entry Transfer Facility tendering the Shares, that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Company may enforce such agreement against the participant.
 
       Except as set forth below, all signatures on a Letter of Transmittal
must be guaranteed by a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc.,
or by a commercial bank, a trust company, a savings bank, a savings and loan
association or a credit union which has membership in an approved Signature
Guarantee Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"). Signatures on a Letter of Transmittal need not be
guaranteed if (a) the Letter of Transmittal is signed by the registered holder
of the Shares (which term, for the purposes of this Section, includes any
participant in any Book-Entry Transfer Facility whose name appears on a
security position listing as the holder of the Shares) tendered therewith and
such holder has not completed the box entitled "Special Payment Instructions"
or the box

                                      4

<PAGE>

<PAGE>

entitled "Special Delivery Instructions" on the Letter of Transmittal or (b)
such Shares are tendered for the account of an Eligible Institution. See
Instructions 1 and 6 of the Letter of Transmittal.
 
       If a shareholder desires to tender Shares pursuant to the Offer and
such shareholder's certificates are not immediately available (or the
procedures for book-entry transfer cannot be completed on a timely basis) or
time will not permit all required documents to reach the Depositary by the
Expiration Date, such Shares may nevertheless be tendered provided that all of
the following conditions are satisfied:
 
       (a)     such tender is made by or through an Eligible Institution;
 
       (b)     the Depositary receives (by hand, mail, telegram or facsimile
transmission), on or prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery substantially in the form the
Company has provided with this Offer to Purchase (indicating the price at
which the Shares are being tendered) and includes a guarantee by an Eligible
Institution in the form set forth in such Notice; and
 
       (c)     the certificates for all tendered Shares in proper form for
transfer (or confirmation of book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities), together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other documents required by the Letter of
Transmittal, are received by the Depositary within three Nasdaq trading days
after the date the Depositary receives such Notice of Guaranteed Delivery.
 
       THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY
DELIVERY.
 
       TO PREVENT UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO
31% OF THE GROSS PAYMENTS MADE PURSUANT TO THE OFFER, EACH TENDERING
SHAREHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH SHAREHOLDER'S CORRECT
TAXPAYER IDENTIFICATION NUMBER AND CERTAIN OTHER INFORMATION BY PROPERLY
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL.
FOREIGN SHAREHOLDERS (AS DEFINED IN SECTION 14) MUST SUBMIT A PROPERLY
COMPLETED FORM W-8 (WHICH MAY BE OBTAINED FROM THE DEPOSITARY) IN ORDER TO
PREVENT BACKUP WITHHOLDING. IN GENERAL, BACKUP WITHHOLDING DOES NOT APPLY TO
CORPORATIONS OR TO FOREIGN SHAREHOLDERS SUBJECT TO 30% (OR LOWER TREATY RATE)
WITHHOLDING ON GROSS PAYMENTS RECEIVED PURSUANT TO THE OFFER (AS DISCUSSED IN
SECTION 14). FOR A DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES TO
TENDERING SHAREHOLDERS, SEE SECTION 14. EACH SHAREHOLDER IS URGED TO CONSULT
WITH HIS OR HER OWN TAX ADVISOR REGARDING HIS, HER OR ITS QUALIFICATION FOR
EXEMPTION FROM BACKUP WITHHOLDING AND THE PROCEDURE FOR OBTAINING ANY
APPLICABLE EXEMPTION.
 
       As of June 30, 1998, a total of 978,650 shares were held by the ESOP,
of which 195,730 were allocated to participant accounts.  An additional 97,865
shares will be allocated to participants' accounts as of June 30, 1998. 
Shares allocated to participants' accounts will, subject to the limitations of
the Employee Retirement Income Security Act of 1974, as amended, and
applicable regulations thereunder ("ERISA"), be tendered by the trustees of
the ESOP according to the instructions of participants. The trustees will make
available to the participants whose accounts hold allocated Shares all
documents furnished to shareholders of the Company in connection with the
Offer generally and will provide additional information in separate letters
with respect to the operations of the Offer to the participants. Each such
participant also will receive a form upon which the participant may instruct
the trustees regarding the Offer. Each participant may direct on a
confidential basis that all or some of the Shares allocated to the
participants' accounts be tendered. Participants also will be afforded
withdrawal rights. See "Section 4--Withdrawal Rights."

                             5

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<PAGE>

       Under ERISA the Company will be prohibited from purchasing any Shares
from the ESOP (including Shares allocated to the accounts of participants) if
the Purchase Price is less than the prevailing market price of the Shares on
the date the Shares are accepted for payment pursuant to the Offer. If Shares
tendered from the ESOP would have been accepted pursuant to the terms of the
Offer except for this prohibition, such Shares shall automatically be deemed
to be withdrawn.

       It is a violation of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), for a person to tender
Shares for his or her own account unless the person so tendering (i) has a net
long position equal to or greater than the amount of (x) Shares tendered or
(y) other securities immediately convertible into, exercisable or exchangeable
for the amount of Shares tendered and will acquire such Shares for tender by
conversion, exercise or exchange of such other securities and (ii) will cause
such Shares to be delivered in accordance with the terms of the Offer. Rule
14e-4 provides a similar restriction applicable to the tender on behalf of
another person. The tender of Shares pursuant to any one of the procedures
described above will constitute the tendering shareholder's representation and
warranty that (i) such shareholder has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Exchange Act,
and (ii) the tender of such Shares complies with Rule 14e-4. The Company's
acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering shareholder and the
Company upon the terms and subject to the conditions of the Offer.
 
       All questions as to the Purchase Price, the form of documents, the
number of Shares to be accepted and the validity, eligibility (including time
of receipt) and acceptance for payment of any tender of Shares will be
determined by the Company, in its sole discretion, which determination shall
be final and binding on all parties. The Company reserves the absolute right
to reject any or all tenders of Shares that it determines are not in proper
form or the acceptance for payment of or payment for Shares that may, in the
opinion of the Company's counsel, be unlawful. The Company also reserves the
absolute right to waive any defect or irregularity in any tender of any
particular Shares. None of the Company, the Dealer Manager/Information Agent,
the Depositary or any other person is or will be under any duty to give notice
of any defect or irregularity in tenders, nor shall any of them incur any
liability for failure to give any such notice.
 
       CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF
TRANSMITTAL (OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE) AND
ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST BE DELIVERED
TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS DELIVERED TO THE
COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT BE
PROPERLY TENDERED.
 
                         4. WITHDRAWAL RIGHTS
 
       Tenders of Shares made pursuant to the Offer may be withdrawn at
anytime prior to the Expiration Date. Thereafter, such tenders are
irrevocable,except that they may be withdrawn after 12:00 midnight, Eastern
Time, December21, 1998 unless theretofore accepted for payment by the Company
as provided in this Offer to Purchase. If the Company extends the period of
time during which the Offer is open, is delayed in purchasing Shares or is
unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, on
behalf of the Company, retain all Shares tendered, and such Shares may not be
withdrawn except as otherwise provided in this Section 4, subject to Rule
13e-4(f)(5) under the Exchange Act, which provides that the issuer making the
tender offer shall either pay the consideration offered, or return the
tendered securities promptly after the termination or withdrawal of the tender
offer.
 
       Tenders of Shares made pursuant to the Offer may not be withdrawn after
the Expiration Date, except that they may be withdrawn after 12:00 midnight,
Eastern Time, December 21, 1998, unless accepted for payment by the Company as
provided in this Offer to Purchase. For a withdrawal to be effective prior to
that time, a shareholder of Shares held in physical form must provide a
written, telegraphic or facsimile transmission notice of withdrawal 

                                 6

<PAGE>
<PAGE>

to the Depositary at its address set forth on the back cover page of this
Offer to Purchase before the Expiration Date, which notice must contain: (A)
the name of the person who tendered the Shares; (B) a description of the
Shares to be withdrawn (including the number of Shares being withdrawn); (C)
the certificate numbers shown on the particular certificates evidencing such
Shares; (D) the signature of such shareholder executed in the same manner as
the original signature on the Letter of Transmittal (including any signature
guarantee (if such original signature was guaranteed)); and (E) if such Shares
are held by a new beneficial owner, evidence satisfactory to the Company that
the person withdrawing the tender has succeeded to the beneficial ownership of
the Shares. A purported notice of withdrawal which lacks any of the required
information will not be an effective withdrawal of a tender previously made.
 
       A shareholder of Shares held with any of the Book-Entry Transfer
Facilities must call such shareholder's broker and instruct such broker to
withdraw such tender of Shares and instruct such broker to provide a written,
telegraphic or facsimile transmission notice of withdrawal to the Depositary
on or before the Expiration Date. A purported notice of withdrawal which lacks
any of the applicable required information noted above will not be an
effective withdrawal of a tender previously made.
 
       Any permitted withdrawals of tenders of Shares may not be rescinded,
and any Shares so withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer; provided, however, that withdrawn Shares may be
re-tendered by following the procedures for tendering prior to the Expiration
Date.
 
       All questions as to the form and validity (including time of receipt)
of any notice of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties.
None of the Company, the Dealer Manager/Information Agent, the Depositary or
any other person is or will be under any duty to give notification of any
defect or irregularity in any notice of withdrawal or incur any liability for
failure to give any such notification.
 
                  5. ACCEPTANCE FOR PAYMENT OF SHARES 
                     AND PAYMENT OF PURCHASE PRICE
 
       Upon the terms and subject to the conditions of the Offer and as
promptly as practicable after the Expiration Date, the Company will determine
the Purchase Price, taking into consideration the number of Shares tendered
and the prices specified by tendering shareholders, announce the Purchase
Price, and (subject to the proration provisions of the Offer) accept for
payment and pay the Purchase Price for Shares validly tendered and not
withdrawn at or below the Purchase Price. Thereafter, payment for all Shares
validly tendered on or prior to the Expiration Date and accepted for payment
pursuant to the Offer will be made by the Depositary by check as promptly as
practicable. In all cases, payment for Shares accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or of a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities), a properly completed and duly executed Letter of
Transmittal or a manually signed copy thereof, with any required signature
guarantees, or, in the case of a book-entry delivery, an Agent's Message, and
any other required documents.
 
       For purposes of the Offer, the Company shall be deemed to have accepted
for payment (and thereby purchased), subject to proration, Shares that are
validly tendered and not withdrawn as of and when it gives oral or written
notice to the Depositary of the Company's acceptance for payment of such
Shares. In the event of proration, the Company will determine the proration
factor and pay for those tendered Shares accepted for payment as soon as
practicable after the Expiration Date. However, the Company does not expect to
be able to announce the final results of any such proration until
approximately seven (7) trading days after the Expiration Date. The Company
will pay for Shares that it has purchased pursuant to the Offer by depositing
the aggregate Purchase Price therefor with the Depositary. The Depositary will
act as agent for tendering shareholders for the purpose of receiving payment
from the Company and transmitting payment to tendering shareholders. Under no
circumstances will interest be paid on amounts to be paid to tendering
shareholders, regardless of any delay in making such payment.
 
       Certificates for all Shares not purchased, including all Shares
tendered at prices greater than the Purchase Price and Shares not purchased
because of proration, will be returned (or, in the case of Shares tendered by

                                   7

<PAGE>
<PAGE>

book-entry transfer, such Shares will be credited to an account maintained
with the Book-Entry Transfer Facility by the participant therein who so
delivered such Shares) as promptly as practicable following the Expiration
Date without expense to the tendering shareholder.
 
       Payment for Shares may be delayed in the event of difficulty in
determining the number of Shares properly tendered or if proration is
required. See Section 1. In addition, if certain events occur, the Company may
not be obligated to purchase Shares pursuant to the Offer. See Section 6.
 
       The Company will pay or cause to be paid any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the Purchase Price is to be made to, or a
portion of the Shares delivered (whether in certificated form or by book
entry) but not tendered or not purchased are to be registered in the name of,
any person other than the registered holder, or if tendered Shares are
registered in the name of any person other than the person signing the Letter
of Transmittal (unless such person is signing in a representative or fiduciary
capacity), the amount of any stock transfer taxes (whether imposed on the
registered holder, such other person or otherwise) payable on account of the
transfer to such person will be deducted from the Purchase Price unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted. See Instruction 7 to the Letter of Transmittal.
 
       ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY
AND SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN
THE CASE OF A FOREIGN INDIVIDUAL, A FORM W-8) MAY BE SUBJECT TO REQUIRED
FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAID TO SUCH
SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 3.
 
                  6. CERTAIN CONDITIONS OF THE OFFER
 
       Notwithstanding any other provision of the Offer, the Company will not
be required to accept for payment or pay for any Shares tendered, and may
terminate or amend and may postpone (subject to the requirements of the
Exchange Act for prompt payment for or return of Shares tendered) the
acceptance for payment of Shares tendered, if at any time after October 23,
1998 and at or before acceptance for payment of any Shares any of the
following shall have occurred:
 
       (a)     there shall have been threatened, instituted or pending any
action or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person, domestic
or foreign, or before any court, authority, agency or tribunal that (i)
challenges the acquisition of Shares pursuant to the Offer or otherwise in any
manner relates to or affects the Offer or (ii) in the sole judgment of the
Company, could materially and adversely affect the business, condition
(financial or other), income, operations or prospects of the Company and its
subsidiary, taken as a whole, or otherwise materially impair in any way the
contemplated future conduct of the business of the Company or its subsidiary
or materially impair the Offer's contemplated benefits to the Company;
 
       (b)     there shall have been any action threatened, pending or taken,
or approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
its subsidiary, by any legislative body, court, authority, agency or tribunal
which, in the Company's sole judgment, would or might directly or indirectly
(i) make the acceptance for payment of, or payment for, some or all of the
Shares illegal or otherwise restrict or prohibit consummation of the Offer,
(ii) delay or restrict the ability of the Company, or render the Company
unable, to accept for payment or pay for some or all of the Shares, (iii)
materially impair the contemplated benefits of the Offer to the Company or
(iv) materially affect the business, condition (financial or other), income,
operations or prospects of the Company and its subsidiary, taken as a whole,
or otherwise materially impair in any way the contemplated future conduct of
the business of the Company or its subsidiary;

                                 8

<PAGE>

<PAGE>
       (c)     there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market, (ii) any significant decline in
the market price of the Shares or in the general level of market prices of
equity securities in the United States or abroad, (iii) any change in the
general political, market, economic or financial condition in the United
States or abroad that could have a material adverse effect on the Company's
business, condition (financial or otherwise), income, operations, prospects or
ability to obtain financing generally or the trading in the Shares, (iv) the
declaration of a banking moratorium or any suspension of payments in respect
of banks in the United States or any limitation on, or any event which, in the
Company's sole judgment, might affect the extension of credit by lending
institutions in the United States, (v) the commencement of a war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States or (vi) in the case of any of the foregoing
existing at the time of the commencement of the Offer, in the Company's sole
judgment, a material acceleration or worsening thereof;
 
       (d)     a tender or exchange offer with respect to some or all of the
Shares (other than the Offer), or a merger, acquisition or other business
combination proposal for the Company, shall have been proposed, announced or
made by another person or group (within the meaning of Section 13(d)(3) of the
Exchange Act);
 
       (e)     there shall have occurred any event or events that has
resulted, or may in the sole judgment of the Company result, directly or
indirectly, in an actual or threatened change in the business, condition
(financial or other), income, operations, stock ownership or prospects of the
Company and its subsidiary; 

and, in the sole judgment of the Company, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance
for payment.
 
       The foregoing conditions are for the sole benefit of the Company and
may be asserted by the Company regardless of the circumstances (including any
action or inaction by the Company) giving rise to any such condition, and any
such condition may be waived by the Company, in whole or in part, at any time
and from time to time in its sole discretion. The failure by the Company at
any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time. Any determination by the
Company concerning the events described above will be final and binding on all
parties.
 
       Acceptance of Shares validly tendered in the Offer is subject to the
condition that, as of the Expiration Date, and after giving pro forma effect
to the acceptance of Shares validly tendered, the Company would continue to
have at least 300 shareholders of record and the Shares would remain listed
for quotation on the Nasdaq National Market. This condition may not be waived.
 
       The Exchange Act requires that all conditions to the Offer must be
satisfied or waived before the Expiration Date.

                                   9

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<PAGE>

                  7. PRICE RANGE OF SHARES; DIVIDENDS
 
       The following table sets forth the high and low sales prices, and
dividends declared, for the shares as reported on the Nasdaq National Market
for the periods indicated.
 
                                                       DIVIDENDS
                             HIGH         LOW          DECLARED
                             ----         ----         ---------     

Fiscal 1996
  1st Quarter               $13.75       $12.06         $0.050
  2nd Quarter                13.75        12.50          0.065
  3rd Quarter                14.63        13.00          0.065
  4th Quarter                14.75        13.38          0.070

Fiscal 1997
  1st Quarter               $16.13       $13.94         $0.070
  2nd Quarter                18.63        15.00          0.075
  3rd Quarter                19.13        16.50          0.075
  4th Quarter                22.50        18.63          0.080

Fiscal 1998
  1st Quarter               $24.25       $20.50         $0.080
  2nd Quarter                23.06        19.50          0.085
  3rd Quarter                23.00        18.63          0.090
  4th Quarter                20.00        14.00          0.090

       On October 8, 1998, the closing price of the Shares on the Nasdaq
National Market was $16.00 per Share. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE SHARES.
 
             8. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
 
       The Company believes that the purchase of Shares is an attractive use
of a portion of the Company's available capital on behalf of its shareholders
and is consistent with the Company's long-term goal of increasing shareholder
value. The Company believes it has adequate sources of capital to complete the
Share repurchase and pursue business opportunities.
 
       Over time, the Company's profitable operations have contributed to the
growth of a capital base that exceeds all applicable regulatory standards and
the amount of capital needed to support the Company's banking business. After
evaluating a variety of alternatives to utilize more effectively its capital
base and to attempt to maximize shareholder value, the Company's management
and its Board of Directors believe that the purchase of Shares pursuant to the
Offer is a positive action that is intended to accomplish the desired
objective of increasing shareholder value.
 
       Other actions previously employed, including an open market purchase of
Shares, have enhanced shareholder value, but capital remains at high levels.
The Offer is designed to restructure the Company's balance sheet in order to
increase return on equity by reducing the amount of equity outstanding. Based
upon the current market price of its Shares, the Company believes that the
purchase of Shares is an attractive use of its funds. Following the purchase
of the Shares, the Company believes funds provided by earnings, combined with
its other sources of liquidity, will be fully adequate to meet its funding
needs for the foreseeable future. Upon completion of the Offer, the Company
expects that the Company and its wholly owned subsidiary federal savings
association, Klamath First Federal Savings and Loan Association
("Association"), will continue to maintain the highest regulatory standard for
capital, which is designated as "well capitalized" under the prompt corrective
action scheme enacted by the Federal Deposit 

                                     10

<PAGE>

<PAGE>

Insurance Corporation Improvement Act of 1991.  Furthermore, the Company is
aware of certain accounting rules applicable to a business combination.  The
ability to enter into a "poolable" transaction in the future pursuant to
applicable accounting rules and standards has also been considered by the
Company as they consider alternative shareholder enhancement vehicles.
 
       The Offer will enable shareholders who are considering the sale of all
or a portion of their Shares the opportunity to determine the price or prices
(not less than $15.50 nor in excess of $19.50 per Share) at which they are
willing to sell their Shares, and, if any such Shares are purchased pursuant
to the Offer, to sell those Shares for cash without the usual transaction
costs associated with open-market sales. The Offer may also give shareholders
the opportunity to sell Shares at prices greater than market prices prevailing
prior to the announcement of the Offer. See Section 7. In addition, qualifying
shareholders owning beneficially fewer than 100 Shares, whose Shares are
purchased pursuant to the Offer, not only will avoid the payment of brokerage
commissions but will also avoid any applicable odd lot discounts to the market
price typically charged by brokers for executing odd lot trades.
 
       Shareholders who do not tender their Shares pursuant to the Offer and
shareholders who otherwise retain an equity interest in the Company as a
result of a partial tender of Shares or a proration pursuant to Section 1 of
the Offer will continue to be owners of the Company with the attendant risks
and rewards associated with owning the equity securities of the Company. As
noted above, the Company, following completion of the Offer, will maintain the
highest regulatory capital ranking. Consequently, the Company believes that
shareholders will not be subject to materially greater risk as a result of the
reduction of the capital base.
 
       Shareholders who determine not to accept the Offer will realize a
proportionate increase in their relative equity interest in the Company and,
thus, in the Company's earnings and assets, subject to any risks resulting
from the Company's purchase of Shares and the Company's ability to issue
additional equity securities in the future. In addition, to the extent the
purchase of Shares pursuant to the Offer results in a reduction of the number
of shareholders of record, the Company's costs for services to shareholders
may be reduced. Finally, the Offer may affect the Company's ability to qualify
for pooling-of-interests accounting treatment for any merger transaction for
approximately the next two years.
 
       If fewer than 1,983,353 shares are purchased pursuant to the Offer, the
Company may repurchase the remainder of such Shares on the open market, in
privately negotiated transactions or otherwise. In the future, the Company may
determine to purchase additional Shares on the open market, in privately
negotiated transactions, through one or more tender offers or otherwise. Any
such purchases may be on the same terms as, or on terms which are more or less
favorable to shareholders than, the terms of the Offer. However, Rule 13e-4
under the Exchange Act prohibits the Company and its affiliates from
purchasing any Shares, other than pursuant to the Offer, until at least ten
business days after the Expiration Date. Any future purchases of Shares by the
Company would depend on many factors, including the market price of the
Shares, the Company's business and financial position, and general economic
and market conditions.
 
       Shares the Company acquires pursuant to the Offer will be restored to
the status of authorized and unissued Shares and will be available for the
Company to issue without further shareholder action (except as required by
applicable law or the rules of the Nasdaq National Market or any other
securities exchange on which the Shares are listed) for purposes including,
but not limited to, the acquisition of other businesses, the raising of
additional capital for use in the Company's business and the satisfaction of
obligations under existing or future employee benefit plans. The Company has
no current plans for reissuance of the Shares repurchased pursuant to the
Offer.
 
       NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO ANY SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH SHAREHOLDER
MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES TO TENDER AND AT WHAT PRICE. EMPLOYEES, OFFICERS AND DIRECTORS OF
THE COMPANY MAY PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE COMPANY'S
OTHER SHAREHOLDERS.

                                      11

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                  9. CERTAIN INFORMATION CONCERNING THE COMPANY
 
General
 
       Klamath First Bancorp, Inc., an Oregon corporation, was organized on
June 16, 1995 for the purpose of becoming the holding company for the
Association upon the Association's conversion from a federal mutual to a
federal stock savings and loan association ("Conversion").  The Conversion was
completed on October 4, 1995.  At June 30, 1998, the Company had total assets
of $1.0 billion, total deposits of $679.3 million and shareholders' equity of
$141.0 million.

       The Association was organized in 1934.  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 also is a
member of the Federal Home Loan Bank ("FHLB") System.

       The Association is a traditional, 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 within its market area and to a lesser extent on commercial
property and multi-family dwellings.  The Association also originates consumer
loans. 
    
              Summary Historical Consolidated Financial Data and
            Summary Unaudited Pro Forma Consolidated Financial Data
 
       The following summary historical consolidated financial data has been
derived from the unaudited supplemental consolidated financial statements of
the Company and, in the opinion of management, include all adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation
of financial position and results of operations for such periods. The data
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998 and the Company's Annual Report on Form 10-K for
the year ended September 30, 1997. Copies of these reports may be obtained as
described in Section 17 of this Offer.
 
       On October 24, 1997, the Company announced earnings results for the
year ended September 30, 1997 of $8.6 million or $0.91 per share as compared
to $6.1 million or $0.56 per share for the year ending September 30, 1996. Net
income for the quarter ending September 30, 1997 was $2.1 million or $0.22 per
share as compared to a net loss of $950,000 or a loss of $0.09 per share for
the same period 1996. A copy of the Company's press release announcing 1997
earnings accompanies this Offer to Purchase.
 
       The following summary unaudited pro forma consolidated financial data
has been derived from the historical consolidated financial statements of the
Company adjusted for certain costs and expenses to be incurred as a result of
the purchase of Shares pursuant to the Offer. The summary unaudited pro forma
consolidated financial data should be read in conjunction with the summary
historical consolidated financial data included herein. The pro forma income
statement data and balance sheet data are not necessarily indicative of the
financial position or results of operations that would have been obtained had
the Offer been completed as of the dates indicated.

                                    12



<PAGE>
<PAGE>

                            Klamath First Bancorp, Inc.
                       Summary Historical Balance Sheet Data

                                          At                   At
                                      September 30,         June 30,
                                          1997               1998
                                          ----               ----
                                            (In thousands)
ASSETS
  Securities........................ $  355,099         $  273,991
  Net loans.........................    551,464            640,760
  Other assets......................     73,515             93,917
                                     ----------         ----------
    Total assets.................... $  980,078         $1,008,668
                                     ==========         ==========

LIABILITIES
  Total deposits.................... $  673,978         $  679,263
  Securities sold under repurchase                                        
    agreements......................     17,078             14,025
  Other liabilities.................    144,560            174,363
                                     ----------         ----------
    Total liabilities...............    835,616            867,651
SHAREHOLDERS' EQUITY................    144,462            141,037
                                     ----------         ----------
    Total liabilities and
     shareholders' equity........... $  980,078         $1,008,688
                                     ==========         ==========

                                    13

<PAGE>

<PAGE>
<TABLE>
                                                Klamath First Bancorp, Inc.
                                     Unaudited Pro Forma Consolidated Balance sheet

                                                         September 30, 1997           June 30, 1998
                                                      -----------------------    ----------------------
                                                        Shares Purchased At        Shares Purchased At
                                                      -----------------------    ----------------------
                                                      $15.50        $19.50       $15.50       $19.50
                                                      Per Share     Per Share    Per Share    Per Share
                                                      ---------     ---------    ---------    ---------
                                                                        (In thousands) 
<S>                                                   <C>           <C>          <C>          <C>
ASSETS
  Cash and due from banks............................ $  1,301       $   500     $  19,757    $   11,822
  Interest-earning deposits with banks...............       --            --            --            --
  Federal funds sold and securities purchased under 
     agreements to resell............................       --            --            --            --  
                                                      --------       -------     ---------    ---------- 
     Total cash and cash equivalents.................    1,301           500        19,757        11,822
  Investment securities available for 
     sale, at fair value.............................  261,846       254,714       219,191       219,191
  Investment securities held to 
     maturity, at amortized cost.....................   22,937        22,937         3,040         3,040
  Mortgage-backed and related securities
     available for sale, at fair value...............   64,869        64,869        47,681        47,681
  Mortgage-backed and related securities 
     held to maturity, at amortized cost.............    5,447         5,447         4,079         4,079
  Loans receivable, net..............................  551,464       551,464       640,760       640,760
  Real estate owned..................................       --            --            --            --
  Premises and equipment, net........................   11,671        11,671        12,206        12,206
  Stock in Federal Home Loan Bank of 
     Seattle, at cost................................    7,150         7,150         8,911         8,911
  Accrued interest receivable........................    7,626         7,626         8,637         8,637
  Core deposit intangible............................   13,084        13,084        11,844        11,844
  Other assets.......................................    1,941         1,941         1,841         1,841
                                                      --------      --------      --------      --------
     Total assets....................................$ 949,336     $ 941,403     $ 977,947     $ 970,012
                                                     =========     =========     =========     =========

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
  Deposit liabilities................................$ 673,978     $ 673,978     $ 679,263     $ 679,263
  Accrued interest on deposits.......................    1,216         1,216         1,185         1,185
  Advances from borrowers for taxes and insurance....    8,915         8,915         6,664         6,664
     
  Advances from Federal Home Loan Bank of Seattle....  129,000       129,000       160,000       160,000
  Short term borrowings..............................   17,077        17,077        14,025        14,025
  Accrued interest on borrowings.....................      513           513           294           294
  Pension liabilities................................      727           727           823           823
  Deferred federal and state income taxes............    1,912         1,912         2,334         2,334
  Other liabilities..................................    2,278         2,278         3,063         3,063
                                                      --------      --------      --------      -------- 
      Total liabilities..............................  835,616       835,616       867,651       867,651
                                                     ---------     ---------     ---------     --------- 
SHAREHOLDERS' EQUITY
  Preferred stock, $.01 par value,
      500,000 shares authorized;
      none issued....................................       --            --            --            --
  Common stock $0.01 par value,
      35,000,000 shares authorized,
      June 30, 1998 - 7,933,413 issued,
      6,817,754 outstanding;
      September 30, 1997 - 8,446,181 issued, 
        7,252,229 outstanding........................       84            84            79            79
  Additional paid in capital.........................   61,879        53,946        51,584        43,649
  Retained earnings-substantially restricted.........   64,745        64,745        69,176        69,176
  Unearned shares issued to ESOP.....................   (7,829)       (7,829)       (7,095)       (7,095)
  Unearned shares issued to MRDP.....................   (5,623)       (5,623)       (4,541)       (4,541)
  Net unrealized gain (loss) on securities
      available for sale, net of tax.................      464           464         1,093         1,093
                                                     ---------     ---------     ---------     ---------
      Total shareholders' equity.....................  113,720       105,787       110,296       102,361
                                                     ---------     ---------     ---------     ---------
      Total liabilities and shareholders' equity.....$ 949,336     $ 941,403     $ 977,947     $ 970,012
                                                     =========     =========     =========     =========
</TABLE>

                                                              14

<PAGE>

<PAGE>
<TABLE>

                                           Klamath First Bancorp, Inc.
                                 Summary Historical Income Statement Data

                                                      Year Ended           Nine Months Ended
                                                     September 30,              June 30,
                                                    --------------         -----------------
                                                    1997      1996          1998       1997
                                                    ----      ----          ----       ----
                                                     (In thousands, except per share data)
<S>                                              <C>         <C>         <C>        <C>
INTEREST INCOME
  Loans receivable.............................  $40,850     $35,262     $36,285    $29,895
  Mortgage backed and related securities ......    4,716       3,137       3,003      3,559
  Investment securities........................    7,343       5,730      11,507      3,985
  Federal funds sold and securities purchased 
    under agreements to resell.................      931         462         564        606
  Interest earning deposits....................      327       1,058         476         49
                                                  ------      ------      ------    -------
    Total interest income......................   54,167      45,649      51,835     38,094
                                                  ------      ------      ------    -------
INTEREST EXPENSE
  Deposit liabilities..........................   22,464      20,251      21,618     15,665
  Advances from FHLB of Seattle................    6,271       2,690       5,648      4,569
  Other........................................    1,121         345         753        784
                                                  ------      ------      ------    -------
  Total interest expense.......................   29,856      23,286      28,019     21,018
                                                  ------      ------      ------    -------
  Net interest income..........................   24,311      22,363      23,816     17,076
  Provision for loan losses....................      370         120         364        315
                                                  ------      ------      ------    -------
  Net interest income after provision for
    loan losses................................   23,941      22,243      23,452     16,761
                                                  ------      ------      ------    -------
NON-INTEREST INCOME
  Fees and service charges.....................      669         261       1,747        232
  Gain on sale of real estate owned............       28          22          --         28
  Gain on sale of investments available for 
    sale.......................................       --          --         189          2
  Other income ................................      114         239         160         55
                                                  ------      ------      ------    -------
  Total non-interest income....................      811         522       2,096        317
                                                  ------      ------      ------    -------
NON-INTEREST EXPENSE
  Compensation, employee benefits
    and related expense........................    7,144       4,476       7,259      4,820
  Occupancy expense............................      920         695       1,545        545
  Data processing expense......................      481         343         720        303
  Insurance premium expense....................      376         908         216        310
  Special SAIF assessment......................       --       2,473          --         --
  Loss on sale of investments
    available for sale ........................       15       1,643          --         15
  Loss on sale of real estate owned............       --           6          --         --
  Amortization of core deposit intangible......      303          --       1,240         --
  Other expense................................    2,526       1,698       3,569      1,497
                                                  ------      ------      ------    -------
  Total non-interest expense...................   11,765      12,242      14,549      7,490
                                                  ------      ------      ------    -------
  Earnings before income taxes.................   12,987      10,523      10,999      9,588
  Provision for income tax.....................    4,429       4,413       4,155      3,144
                                                  ------      ------      ------    -------
  Net earnings.................................  $ 8,558     $ 6,110     $ 6,844    $ 6,444
                                                 =======     =======     =======    =======
  Basic earnings per share.....................    $0.91       $0.56       $0.75      $0.68
  Diluted earnings per share...................    $0.88       $0.55       $0.71      $0.66
  Weighted average number of common shares 
    and common stock equivalents outstanding...9,438,915  11,004,939   9,155,540  9,536,833
  Weighted average number of shares - assuming
    full dilution..............................9,762,459  11,082,361   9,637,894  9,804,425

</TABLE>
                                    15

<PAGE>

<PAGE>

                    Klamath First Bancorp, Inc.
       Unaudited Pro Forma Consolidated Statement of Income

                                         Years Ended       Nine Months Ended
                                      September 30, 1997     June 30, 1998
                                     -------------------  -------------------
                                     Shares Purchased At  Shares Purchased At
                                     -------------------  -------------------
                                     $15.50      $19.50    $15.50     $19.50
                                     Per Share   Per Share Per Share Per Share
                                     ---------   --------- --------- ---------
                                       (In thousands, except per share data)
INTEREST INCOME
  Loans receivable..................$  40,850   $  40,850 $  36,285  $  36,285
  Mortgage-backed and related
    securities......................    4,716       4,716     3,003      3,003
  Investment securities.............    7,343       6,908    11,507     11,507
  Federal funds sold and
    securities purchased 
    under agreements to resell......      607         607        --       . --
  Interest earning deposits.........      250         250        --         --
                                    ---------  ---------- --------- ----------
    Total interest income...........   53,766      53,331    50,795     50,795
                                    ---------  ---------- --------- ----------
INTEREST EXPENSE
  Deposit liabilities...............   22,464      22,464    21,618  . .21,618
  Advances from FHLB of Seattle.....    6,271       6,271     5,648      5,648
  Other.............................    1,121       1,121       753        753
                                    ---------  ---------- --------- ----------
     Total interest expense.........   29,856      29,856    28,019     28,019
                                    ---------  ---------- --------- ----------
     Net interest income............   23,910      23,475    22,776  . .22,776

  Provision for loan losses.........      370         370       364        364
                                    ---------  ---------- --------- ----------
     Net interest income after
       provision for loan losses.....  23,540      23,105    22,412     22,412
                                    ---------  ---------- --------- ----------
NON-INTEREST INCOME
  Fees and service charges..........      669         669     1,747      1,747
  Gain on sale of investments.......        2           2       190       .190
  Gain on sale of real estate
    owned...........................       28          28        --         --
  Other income......................      112         112       160        160
                                    ---------  ---------- --------- ----------

     Total non-interest income......      811         811     2,097      2,097
                                    ---------  ---------- --------- ----------
NON-INTEREST EXPENSE
  Compensation, employee benefits
    and related expense.............    7,144       7,144     7,259      7,259
  Occupancy expense.................      920         920     1,545      1,545
  Data processing expense...........      481         481       720        720
  Insurance premium expense.........      376         376       216        216
  Loss on sale of investments.......       15          15        --         --
  Amortization of core deposit
   intangible.......................      303         303     1,240      1,240
  Other expense.....................    2,526       2,526     3,569      3,569
                                    ---------  ---------- --------- ----------
     Total non-interest expense.....   11,765      11,765    14,549     14,549
                                    ---------  ---------- --------- ----------
  Earnings before income taxes......   12,586      12,151     9,960      9,960
  Provision for income tax..........    4,405       4,253     3,486      3,486
                                    ---------  ---------- --------- ----------
  Net earnings..................... $   8,181  $    7,898 $   6,474 $    6,474
                                    =========  ========== ========= ==========
  Basic earnings per share.........     $1.10       $1.06     $0.90      $0.90
  Diluted earnings per share.......     $1.05       $1.02     $0.85      $0.85
  Weighted average number of
    shares outstanding............. 7,455,562   7,455,562 7,172,187  7,172,187
  Weighted average number of
    shares - assuming full
    dilution....................... 7,779,106   7,779,106 7,654,541  7,654,541

                                    16

<PAGE>

<PAGE>
                    Klamath First Bancorp, Inc.
               Selected Historical Financial Ratios
 
                                      Year Ended     Nine Months Ended
                                     September 30,       June 30,
                                    --------------  -----------------
                                     1997    1996     1998     1997
                                     ----    ----     ----     ----

SELECTED RATIOS:
FINANCIAL PERFORMANCE
  Return on average assets.........  1.14%    0.99%    0.92%   1.24%
  Return on average equity.........  5.85     3.69     6.19    5.85

CAPITAL
  Tangible Capital................. 11.06    19.22    10.92   16.77
  Tier I Risk Based Capital........ 22.83    42.10    21.51   34.90
  Total Risk Based Capital......... 23.12    42.40    21.84   35.32
 
Dividend payout ratio.............. 34.09    44.64    33.33   26.47
Shareholders' equity to total
  assets........................... 14.74    26.83    13.98   19.55
Book value per share...............$15.64   $14.98   $16.02  $15.57

ASSET QUALITY
Allowance for loan losses as
  a percent of loans...............  0.22%    0.19%    0.24%   0.23%
Allowance for loan losses as
  a percent of nonperforming
  loans............................510.24   485.86   356.52  213.23
Nonperforming loans to total
  loans............................  0.04     0.04     0.07    0.11

                       Klamath First Bancorp, Inc.
           Unaudited Selected Pro Forma Financial Ratios
 
                                   September 30, 1997        June 30, 1998
                                 --------------------   ----------------------
                                  Shares Purchased At     Shares Purchased At
                                 --------------------   ----------------------
                                  $15.50     $19.50       $15.50       $19.50
                                 Per Share  Per Share   Per Share    Per Share
                                 ---------  ---------   ---------    ---------

SELECTED RATIOS:
FINANCIAL PERFORMANCE
  Return on average equity......   7.08%        7.34%      7.40%        7.94%
CAPITAL
  Tangible Capital..............   8.59         8.59       8.54         8.54
  Tier I Risk Based Capital.....  17.37        17.37      16.55        16.55
  Total Risk Based Capital......  17.66        17.66      16.89        16.89
Dividend payout ratio...........  27.34        28.32      28.25        28.25
Shareholders' equity to total
 assets.........................  11.98        11.24      11.28        10.55
Book value per share............ $15.68       $14.59     $16.18       $15.01

                                    17

<PAGE>

<PAGE>

                    Klamath First Bancorp, Inc.
        Notes to Unaudited Pro Forma Financial Information

(1)     The pro forma financial information reflects the repurchase of
        1,983,353 Shares at $15.50 and $19.50 per share, as appropriate.

(2)     The balance sheet data give effect to the purchase of Shares as of the
        balance sheet date. The income statement data give effect to the
        purchase of Shares as of the beginning of each period presented.
 
(3)     The funds used to purchase Shares were considered to have been
        provided by liquidation of cash, overnight funds, and the sale of
        securities available for sale.  The pro forma data assumes a rate
        interest of 5.31% on overnight funds, a rate of interest of 6.10% on
        the securities and a statutory tax rate of 35% for the year ended
        September 30, 1997 and a rate of interest of 5.40% on overnight funds,
        a rate of interest of 6.05% on the securities, and a statutory tax
        rate of 35% for the nine months ended June 30, 1998.
 
(4)     No effect has been given to the $250,000 in costs estimated to be
        incurred in connection with the Purchase Offer. Such costs are not
        expected to be material and will be capitalized as part of the cost of
        the stock purchased.

(5)     Tangible Capital and Risk Based Capital ratios are calculated for the
        Association only; thus, pro forma ratios presented reflect the
        anticipated impact of the transaction on the Association rather than
        the consolidated Company.

                  10. SOURCE AND AMOUNT OF FUNDS
 
     Assuming that the Company purchases 1,983,353 Shares pursuant to the
Offer at a price of $19.50 per Share, the total amount required by the Company
to purchase such Shares will be $35,700,354, exclusive of fees and other
expenses. The Company will fund such purchase with dividends from the
Association.  The Association has funds available to fund the proposed
transaction through securities available for sale, cash, or borrowings made in
the ordinary course of business. Any borrowings would be repaid out of normal
cash flows.
 
        11. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; 
          TRANSACTIONS AND ARRANGEMENTS CONCERNING SHARES
 
     As of June 30, 1998, the Company had issued and outstanding 9,916,766
Shares, and had reserved 361,853 Shares for issuance upon exercise of
currently exercisable stock options. The 1,983,353 Shares that the Company is
offering to purchase represent approximately 20% of the outstanding Shares. As
of June 30, 1998, the Company's directors and executive officers as a group
(11 persons) beneficially owned an aggregate of 724,462 Shares (including
327,929 shares covered by currently exercisable options granted under the
Company's 1995 Stock Option Plan) representing approximately 9.7% of the
outstanding Shares, assuming the exercise of the options by such persons. As
of June 30, 1998, the ESOP held 969,666 shares, representing approximately
9.8% of the shares outstanding.

     Neither the Company, nor any subsidiary of the Company nor, to the best
of the Company's knowledge, any of the Company's directors or executive
officers, nor any affiliates of any of the foregoing, had any transactions
involving the Shares during the 40 business days prior to the date hereof.
 
     Executive officers and directors of the Company may participate in the
Offer on the same basis as the Company's other shareholders. The Company has
been advised that two of its directors, one of its executive officers, and a
director emeritus intend to tender Shares pursuant to the Offer.  The table
below identifies the executive officer, directors and director emeritus of the
Company that intend to tender their Shares and sets forth the number of Shares
each expects to tender.

                                    18

<PAGE>

<PAGE>

Name                                     Shares to be tendered
- ----                                     ---------------------
Marshall J. Alexander, Vice President
  and Chief Financial Officer                   10,000
Rodney N. Murray, Director                       5,000
J. Gillis Hannigan, Director                     5,000
Adolph Zamsky, Director Emeritus                 2,000

     The price at which such tenders will be made has not been determined.

     The table below identifies each executive officer and director of the
Company and sets forth the number of Shares owned (including Shares that could
be acquired upon the exercise of currently exercisable stock options and
Shares held under the ESOP) and the percent of Shares owned to the total
number of Shares outstanding. Subject to the terms of the Offer, all or a
portion of such Shares could be tendered. 

                                      Shares  Stock
Name                                  Owned   Options  Total
- ----                                  -----   -------  -----

Directors

Rodney N. Murray                       36,671  24,467  61,138
Gerald V. Brown                        96,346  97,865 194,211
Bernard Z. Agrons                      28,471  18,268  46,739
J. Gillis Hannigan                     27,165  18,268  45,433
Dianne E. Spires                        6,216   4,649  10,865
Timothy A. Bailey                      24,529  18,268  42,797
James D. Bocchi                        41,334  18,268  59,602
William C. Dalton                      17,483  18,268  35,751

Executive Officers                    118,318 109,608 227,926
                                      ------- ------- -------

    Total                             396,533 327,929 724,462
                                      ======= ======= =======

Shares owned as a percent of shares
  outstanding at June 30, 1998           4.00%

Shares owned as a percent of shares 
  outstanding assuming tender and
  purchase of 1,983,353 shares           5.00%

     Decisions as to whether to tender Shares held in the ESOP will be made as
described under "Section 3--Procedure for Tendering Shares."
 
     Except for outstanding options to purchase Shares granted to certain
employees (including executive officers) of the Company, and except as
otherwise described herein, neither the Company nor, to the best of the
Company's knowledge, any of its affiliates, directors or executive officers,
or any of the directors or executive officers of any of its affiliates, is a
party to any contract, arrangement, understanding or relationship with any
other person relating, directly or indirectly, to the Offer with respect to
any securities of the Company including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the
voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss or the giving or
withholding of proxies, consents or authorizations.

                                    19

<PAGE>

<PAGE>

     Except as disclosed in this Offer, the Company has no plans or proposals
which relate to or would result in:  (a) the acquisition by any person of
additional securities of the Company or the disposition of securities of the
Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or its subsidiary; (c) a
sale or transfer of a material amount of assets of the Company or its
subsidiary; (d) any change in the present Board of Directors or management of
the Company; (e) any material change in the present dividend rate or policy,
or indebtedness or capitalization of the Company; (f) any other material
change in the Company's corporate structure or business; (g) any change in the
Company's Articles of Incorporation or Bylaws or any actions which may impede
the acquisition of control of the Company by any person; (h) a class of equity
security of the Company being delisted from a national securities exchange;
(i) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act;
or (j) the suspension of the Company's obligation to file reports pursuant to
Section 15(d) of the Exchange Act.
 
           12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; 
                   REGISTRATION UNDER THE EXCHANGE ACT
 
     The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of shareholders. Nonetheless, the Company anticipates that there will
be a sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of the Nasdaq National Market, the Company
believes that following its purchase of Shares pursuant to the Offer, the
Company's remaining Shares will continue to qualify to be quoted on the Nasdaq
National Market.
 
     The Shares are currently "margin securities" under the rules of The Board
of Governors of the Federal Reserve System ("Federal Reserve Board"). This has
the effect, among other things, of allowing brokers to extend credit to their
customers using such Shares as collateral. The Company believes that,
following the purchase of Shares pursuant to the Offer, the Shares will
continue to be "margin securities" for purposes of the Federal Reserve Board's
margin regulations.
 
     The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its shareholders
and the U.S. Securities and Exchange Commission ("Commission") and comply with
the Commission's proxy rules in connection with meetings of the Company's
shareholders.

             13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
 
     The Company is not aware of any license or regulatory permit that appears
to be material to the Company's business that might be adversely affected by
the Company's acquisition of Shares as contemplated herein or of any approval
or other action by, or any filing with, any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the acquisition or ownership of Shares by the Company as
contemplated herein. Should any such approval or other action be required, the
Company presently contemplates that such approval or other action will be
sought. The Company is unable to predict whether it may determine that it is
required to delay the acceptance for payment of or payment for Shares tendered
pursuant to the Offer pending the outcome of any such matter. There can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that the failure to
obtain any such approval or other action might not result in adverse
consequences to the Company's business. The Company's obligations under the
Offer to accept for payment and pay for Shares is subject to certain
conditions. See Section 6.

                 14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
 
General 

   The following is a discussion of the material United States federal income
tax consequences to shareholders with respect to a sale of Shares pursuant to
the Offer. The discussion is based upon the provisions of the Internal

                                      20

<PAGE>
<PAGE>

Revenue Code of 1986, as amended (the "Code"), U.S. Department of Treasury
regulations, Internal Revenue Service ("IRS") rulings and judicial decisions,
all in effect as of the date hereof and all of which are subject to change
(possibly with retroactive effect) by subsequent legislative, judicial or
administrative action. The discussion does not address all aspects of United
States federal income taxation that may be relevant to a particular
shareholder in light of such shareholder's particular circumstances or to
certain types of holders subject to special treatment under the United States
federal income tax laws (such as certain financial institutions, tax-exempt
organizations, life insurance companies, dealers in securities or currencies,
employee benefit plans or shareholders holding the Shares as part of a
conversion transaction, as part of a hedge or hedging transaction, or as a
position in a straddle for tax purposes). In addition, the discussion below
does not consider the effect of any foreign, state, local or other tax laws
that may be applicable to particular shareholders. The discussion assumes that
the Shares are held as "capital assets" within the meaning of Section 1221 of
the Code. The Company has neither requested nor obtained a written opinion of
counsel or a ruling from the IRS with respect to the tax matters discussed
below.
 
     EACH SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE
PARTICULAR UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THAT SHAREHOLDER
OF TENDERING SHARES PURSUANT TO THE OFFER AND THE APPLICABILITY AND EFFECT OF
ANY STATE, LOCAL OR FOREIGN TAX LAWS AND RECENT CHANGES IN APPLICABLE TAX
LAWS.
 
Characterization of the Surrender of Shares Pursuant to the Offer 

     The surrender of Shares by a shareholder to the Company pursuant to the
Offer will be a taxable transaction for United States federal income tax
purposes. The United States federal income tax consequences to a shareholder
may vary depending upon the shareholder's particular facts and circumstances.
Under Section 302 of the Code, the surrender of Shares by a shareholder to the
Company pursuant to the Offer will be treated as a "sale or exchange" of such
Shares for United States federal income tax purposes (rather than as a
distribution by the Company with respect to the Shares held by the tendering
shareholder) if the receipt of cash upon such surrender (i) is "substantially
disproportionate" with respect to the shareholder, (ii) results in a "complete
redemption" of the shareholder's interest in the Company, or (iii) is "not
essentially equivalent to a dividend" with respect to the shareholder (each as
described below).
 
     If any of the above three tests is satisfied, and the surrender of the
Shares is therefore treated as a "sale or exchange" of such Shares for United
States federal income tax purposes, the tendering shareholder will recognize
gain or loss equal to the difference between the amount of cash received by
the shareholder and the shareholder's tax basis in the Shares surrendered
pursuant to the Offer. Any such gain or loss will be capital gain or loss, and
will be long term capital gain or loss if the Shares have been held for more
than one year.
 
     If none of the above three tests is satisfied, the tendering shareholder
will be treated as having received a distribution by the Company with respect
to such shareholder's Shares in an amount equal to the cash received by the
shareholder pursuant to the Offer. The distribution will be treated as a
dividend taxable as ordinary income to the extent of the Company's current or
accumulated earnings and profits for tax purposes. The amount of the
distribution in excess of the Company's current or accumulated earnings and
profits will be treated as a return of the shareholder's tax basis in the
Shares, and then as gain from the sale or exchange of such Shares. If a
shareholder is treated as having received a distribution by the Company with
respect to his or her Shares, the shareholder's tax basis in his or her
remaining Shares will generally be adjusted to take into account the
shareholder's return of basis in the Shares tendered.

Constructive Ownership 

     In determining whether any of the three tests under Section 302 of the
Code is satisfied, shareholders must take into account not only the Shares
that are actually owned by the shareholder, but also Shares that are
constructively owned by the shareholder within the meaning of Section 318 of
the Code. Under Section 318 of the Code, a shareholder may constructively own
Shares actually owned, and in some cases constructively owned, by

                                      21

<PAGE>

<PAGE>

certain related individuals or entities and Shares that the shareholder has
the right to acquire by exercise of an option or by conversion.

Proration 

     Contemporaneous dispositions or acquisitions of Shares by a shareholder
or related individuals or entities may be deemed to be part of a single
integrated transaction and may be taken into account in determining whether
any of the three tests under Section 302 of the Code has been satisfied. Each
shareholder should be aware that because proration may occur in the Offer,
even if all the Shares actually and constructively owned by a shareholder are
tendered pursuant to the Offer, fewer than all of such Shares may be purchased
by the Company. Thus, proration may affect whether the surrender by a
shareholder pursuant to the Offer will meet any of the three tests under
Section 302 of the Code.
 
Section 302 Tests 

     The receipt of cash by a shareholder will be "substantially
disproportionate" if the percentage of the outstanding Shares in the Company
actually and constructively owned by the shareholder immediately following the
surrender of Shares pursuant to the Offer is less than 80% of the percentage
of the outstanding Shares actually and constructively owned by such
shareholder immediately before the sale of Shares pursuant to the Offer.
Shareholders should consult their tax advisors with respect to the application
of the "substantially disproportionate" test to their particular situation.
 
     The receipt of cash by a shareholder will be a "complete redemption" if
either (i) the shareholder owns no Shares in the Company either actually or
constructively immediately after the Shares are surrendered pursuant to the
Offer, or (ii) the shareholder actually owns no Shares in the Company
immediately after the surrender of Shares pursuant to the Offer and, with
respect to Shares constructively owned by the shareholder immediately after
the Offer, the shareholder is eligible to waive (and effectively waives)
constructive ownership of all such Shares under procedures described in
Section 302(c) of the Code. A director, officer or employee of the Company is
not eligible to waive constructive ownership under the procedures described in
Section 302(c) of the Code.

     Even if the receipt of cash by a shareholder fails to satisfy the
"substantially disproportionate" test or the "complete redemption" test, a
shareholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test if the shareholder's surrender of Shares pursuant to the Offer
results in a "meaningful reduction" in the shareholder's interest in the
Company. Whether the receipt of cash by a shareholder will be "not essentially
equivalent to a dividend" will depend upon the individual shareholder's facts
and circumstances. The IRS has indicated in published rulings that even a
small reduction in the proportionate interest of a small minority shareholder
in a publicly held corporation who exercises no control over corporate affairs
may constitute such a "meaningful reduction."  Shareholders expecting to rely
upon the "not essentially equivalent to a dividend" test should consult their
own tax advisors as to its application in their particular situation.
 
Corporate Shareholder Dividend Treatment 

     If a sale of Shares by a corporate shareholder is treated as a dividend,
the corporate shareholder may be entitled to claim a deduction equal to 70% of
the dividend under Section 243 of the Code, subject to applicable limitations.
Corporate shareholders should, however, consider the effect of Section 246(c)
of the Code, which disallows the 70% dividends received deduction with respect
to stock that is held for 45 days or less. For this purpose, the length of
time a taxpayer is deemed to have held stock may be reduced by periods during
which the taxpayer's risk of loss with respect to the stock is diminished by
reason of the existence of certain options or other transactions. Moreover,
under Section 246A of the Code, if a corporate shareholder has incurred
indebtedness directly attributable to an investment in Shares, the 70%
dividends-received deduction may be reduced.

                                      22

<PAGE>

<PAGE>

     In addition, amounts received by a corporate shareholder pursuant to the
Offer that are treated as a dividend may constitute an "extraordinary
dividend" under Section 1059 of the Code. The "extraordinary dividend" rules
of the Code are highly complicated. Accordingly, any corporate shareholder
that might have a dividend as a result of the sale of shares pursuant to the
Offer should review the "extraordinary dividend" rules to determine the
applicability and impact of such rules to it.

Additional Tax Considerations

     The distinction between long-term capital gains and ordinary income is
relevant because, in general, individuals currently are subject to taxation at
a reduced rate on their "net capital gain" (i.e., the excess of net long-term
capital gains over net short-term capital losses) for the year. Tax rates on
long-term capital gain for individual shareholders vary depending on the
shareholder's income and holding period for the Shares. In particular, reduced
tax rates apply to gains recognized by an individual from the sale of capital
assets held for more than one year (currently 20 percent or less).

     Shareholders are urged to consult their own tax advisors regarding any
possible impact on their obligation to make estimated tax payments as a result
of the recognition of any capital gain (or the receipt of any ordinary income)
caused by the surrender of any Shares to the Company pursuant to the Offer.

Foreign Shareholders 

     The Company will withhold United States federal income tax at a rate of
30% from gross proceeds paid pursuant to the Offer to a foreign shareholder or
his agent, unless the Company determines that a reduced rate of withholding is
applicable pursuant to a tax treaty or that an exemption from withholding is
applicable because such gross proceeds are effectively connected with the
conduct of a trade or business by the foreign shareholder within the United
States. For this purpose, a foreign shareholder is any shareholder that is not
(i) a citizen or resident of the United States, (ii) a domestic corporation or
domestic partnership, (iii) an estate the income of which from sources without
the United States is effectively connected with the conduct of a trade or
business within the United States, or (iv) a trust if a court within the
United States is able to exercise primary supervision over the administration
of the trust, and one or more United States persons have the authority to
control all substantial decisions of the trust. Without definite knowledge to
the contrary, the Company will determine whether a shareholder is a foreign
shareholder by reference to the shareholder's address. A foreign shareholder
may be eligible to file for a refund of such tax or a portion of such tax if
such shareholder (i) meets the "complete redemption," "substantially
disproportionate" or "not essentially equivalent to a dividend" tests
described above, (ii) is entitled to a reduced rate of withholding pursuant to
a treaty and the Company withheld at a higher rate, or (iii) is otherwise able
to establish that no tax or a reduced amount of tax was due. In order to claim
an exemption from withholding on the ground that gross proceeds paid pursuant
to the Offer are effectively connected with the conduct of a trade or business
by a foreign shareholder within the United States or that the foreign
shareholder is entitled to the benefits of a tax treaty, the foreign
shareholder must deliver to the Depositary (or other person who is otherwise
required to withhold United States tax) a properly executed statement claiming
such exemption or benefits. Such statements may be obtained from the
Depositary. Foreign shareholders are urged to consult their own tax advisors
regarding the application of United States federal income tax withholding,
including eligibility for a withholding tax reduction or exemption and the
refund procedures.
 
Backup Withholding 

     See Section 3 with respect to the application of the United States
federal income tax backup withholding.
 
     THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY AND MAY NOT APPLY TO SHARES ACQUIRED IN CONNECTION WITH THE EXERCISE OF
STOCK OPTIONS OR PURSUANT TO OTHER COMPENSATION ARRANGEMENTS WITH THE COMPANY.
THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY


                                      23

<PAGE>
<PAGE>

DEPENDING UPON, AMONG OTHER THINGS, THE PARTICULAR CIRCUMSTANCES OF THE
TENDERING SHAREHOLDER. NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE,
LOCAL OR FOREIGN TAX CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE
OFFER. SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE
THE PARTICULAR FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES TO THEM OF
TENDERING SHARES PURSUANT TO THE OFFER AND THE EFFECT OF THE STOCK OWNERSHIP
ATTRIBUTION RULES DESCRIBED ABOVE.
 
        15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS
 
     The Company expressly reserves the right, in its sole discretion and at
any time or from time to time, to extend the period of time during which the
Offer is open by giving oral or written notice of such extension to the
Depositary and making a public announcement thereof. There can be no
assurance, however, that the Company will exercise its right to extend the
Offer. During any such extension, all Shares previously tendered will remain
subject to the Offer, except to the extent that such Shares may be withdrawn
as set forth in Section 4. The Company also expressly reserves the right, in
its sole discretion, (i) to terminate the Offer and not accept for payment any
Shares not theretofore accepted for payment or, subject to Rule 13e-4(f)(5)
under the Exchange Act, which requires the Company either to pay the
consideration offered or to return the Shares tendered promptly after the
termination or withdrawal of the Offer, to postpone payment for Shares upon
the occurrence of any of the conditions specified in Section 6 hereof, by
giving oral or written notice of such termination to the Depositary and making
a public announcement thereof and (ii) at any time, or from time to time, to
amend the Offer in any respect. Amendments to the Offer may be effected by
public announcement. Without limiting the manner in which the Company may
choose to make public announcement of any extension, termination or amendment,
the Company shall have no obligation (except as otherwise required by
applicable law) to publish, advertise or otherwise communicate any such public
announcement, other than by making a release to the Dow Jones News Service,
except in the case of an announcement of an extension of the Offer, in which
case the Company shall have no obligation to publish, advertise or otherwise
communicate such announcement other than by issuing a notice of such extension
by press release or other public announcement, which notice shall be issued no
later than 9:00 a.m., Eastern Time, on the next business day after the
previously scheduled Expiration Date. Material changes to information
previously provided to holders of the Shares in this Offer or in documents
furnished subsequent thereto will be disseminated to holders of Shares in
compliance with Rule 13e-4(e)(2) promulgated by the Commission under the
Exchange Act.
 
     If the Company materially changes the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(2) under the Exchange Act. Those rules require that
the minimum period during which an offer must remain open following material
changes in the terms of the offer or information concerning the offer (other
than a change in price, change in dealer's soliciting fee or change in
percentage of securities sought) will depend on the facts and circumstances,
including the relative materiality of such terms or information. In a
published release, the Commission has stated that in its view, an offer should
remain open for a minimum of five business days from the date that notice of
such a material change is first published, sent or given. The Offer will
continue or be extended for at least ten business days from the time the
Company publishes, sends or gives to holders of Shares a notice that it will
(a) increase or decrease the price it will pay for Shares or the amount of the
Dealer Manager/Information Agent's soliciting fee or (b) increase (except for
an increase not exceeding 2% of the outstanding shares) or decrease the number
of Shares it seeks.

                            16. FEES AND EXPENSES

     Keefe, Bruyette & Woods, Inc. will act as Dealer Manager/Information
Agent for the Company in connection with the Offer. For its services, the
Company has agreed to pay the Dealer Manager/Information Agent a financial
advisory fee of $25,000 and upon acceptance for and payment of Shares pursuant
to the Offer, a total of $0.085 per Share purchased by the Company pursuant to
the Offer. The Dealer Manager/Information Agent will also 


                                      24

<PAGE>

<PAGE>

be indemnified against certain liabilities, including liabilities under the
federal securities laws, in connection with the Offer.
 
     The Dealer Manager/Information Agent may contact shareholders by mail,
telephone, facsimile, telex, telegraph, or other electronic means and personal
interviews, and may request brokers, dealers and other nominee shareholders to
forward materials relating to the Offer to beneficial owners. The Depositary
and the Dealer Manager/Information Agent will receive reasonable and customary
compensation for their services and will also be reimbursed for certain
out-of-pocket expenses. The Company has agreed to indemnify the Depositary and
the Dealer Manager/Information Agent against certain liabilities, including
certain liabilities under the federal securities laws, in connection with the
Offer. Neither the Dealer Manager/Information Agent nor the Depositary has
been retained to make solicitations or recommendations in connection with the
Offer.

     The Company has retained Registrar and Transfer Company as Depositary.

     The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer (other
than the fee of the Dealer Manager/Information Agent). The Company will, upon
request, reimburse brokers, dealers, commercial banks and trust companies for
reasonable and customary handling and mailing expenses incurred by them in
forwarding materials relating to the Offer to their customers.
 
                      17. ADDITIONAL INFORMATION
 
     The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's regional offices at 7 World Trade Center,
13th Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material may also be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Such information may also be accessed electronically by means of the
Commission's home page on the Internet (http://www.sec.gov).
 
                           18. MISCELLANEOUS
 
     Pursuant to Rule 13e-4 under the Exchange Act, the Company has filed with
the Commission an Issuer Tender Offer Statement on Schedule 13e-4 which
contains additional information with respect to the Offer. Such Schedule
13e-4, including the exhibits and any amendments thereto, may be examined, and
copies may be obtained, at the same places and in the same manner as is set
forth in Section 17 with respect to information concerning the Company.
 
     The Offer is being made to all holders of Shares. The Company is not
aware of any state where the making of the Offer is prohibited by
administrative or judicial action pursuant to a valid state statute. If the
Company becomes aware of any valid state statute prohibiting the making of the
Offer, the Company will make a good faith effort to comply with such statute.
If, after such good faith effort, the Company cannot comply with such statute,
the Offer will not be made to, nor will tenders be accepted from or on behalf
of, holders of Shares in such state. In those jurisdictions whose securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of the Company by the
Dealer Manager/Information Agent or one or more registered brokers or dealers
licensed under the laws of such jurisdictions.
 
                          KLAMATH FIRST BANCORP, INC.




October 23, 1998


                                      25

<PAGE>

<PAGE>

            The Dealer Manager/Information Agent for the Offer is:

                        KEEFE, BRUYETTE & WOODS, INC.
                           211 Bradenton Avenue
                          Dublin, Ohio 43017-3541
                        Toll free:  (877) 298-6520

     Any questions concerning the terms of the Offer, tender procedures or
requests for additional copies of this Offer to Purchase, the Letter of
Transmittal or other tender offer materials may be directed to the Dealer
Manager/Information Agent.

                   The Depositary for the Offer is:
 
                    REGISTRAR AND TRANSFER COMPANY
 
     By Mail:               Overnight Delivery:      By Hand:
 
     10 Commerce Drive      10 Commerce Drive          c/o The Depository
     Cranford, NJ 07016     Cranford, NJ 07016-3572    Trust Co.
                            Attn: Reorganization       Transfer Agent Drop
                            Department                 55 Water Street, 1st
                                                       Floor
                                                       New York, NY 10041-0099
 
           Investor Relations Telephone Number: (800) 368-5948
                      Facsimile Number: (908) 497-2312

                           October 23, 1998

<PAGE>

<PAGE>
                                                               Exhibit (a)(2)
                      KLAMATH FIRST BANCORP, INC.
                        LETTER OF TRANSMITTAL
                                                                               
                  TO ACCOMPANY SHARES OF COMMON STOCK
                                  OF
                      KLAMATH FIRST BANCORP, INC.
                                                                               
             TENDERED PURSUANT TO THE OFFER TO PURCHASE
                         DATED OCTOBER 23, 1998

    THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00
   P.M., EASTERN TIME, ON NOVEMBER 19, 1998, UNLESS THE OFFER IS EXTENDED.

                  To: REGISTRAR AND TRANSFER COMPANY

                                                                               
     By Mail:             Overnight Delivery:        By Hand:
                                                                               
     10 Commerce Drive    10 Commerce Drive          c/o The Depository Trust
     Cranford, NJ 07016   Cranford, NJ 07016-3572      Co.                     
                          Attn: Reorganization       Transfer Agent Drop
                          Department                 55 Water Street, 1st
                                                     Floor
                                                     New York, NY 10041-0099   
                                                                               
           Investor Relations Telephone Number: (800) 368-5948
                      Facsimile Number: (908) 497-2312

                                     1

<PAGE>

<PAGE>

        DESCRIPTION OF SHARES TENDERED (SEE INSTRUCTIONS 3 AND 4)
- ----------------------------------------------------------------------------- 
  NAME(S) AND ADDRESS(ES)
  OF REGISTERED HOLDER(S)
  (PLEASE FILL IN EXACTLY AS                    SHARES TENDERED)
 NAME(S) APPEAR(S) ON CERTIFICATE(S))  (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------ 
                                                TOTAL NUMBER
                                                 OF SHARES         NUMBER
                                CERTIFICATE     REPRESENTED BY     SHARES
                                NUMBER          CERTIFICATE(S)*    TENDERED**
                                -----------     ---------------    ---------- 
                                --------------------------------------------- 
                                --------------------------------------------- 
                                ---------------------------------------------
                                ---------------------------------------------

                                 TOTAL SHARES
- ----------------------------------------------------------------------------- 
*    Need not be completed by shareholders tendering by book-entry transfer.

**   Unless otherwise indicated, it will be assumed that all Shares
     represented by any certificates delivered to the Depositary are being
     tendered. See Instruction 4.                                              
                                                                               
     DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

     THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THE LETTER OF TRANSMITTAL IS COMPLETED.

     Delivery of documents to Klamath First Bancorp, Inc. or to the Book-Entry
Transfer Facility does not constitute a valid delivery. PLEASE DO NOT MAIL OR
DELIVER ANY SHARES TO KLAMATH FIRST BANCORP, INC. DELIVERIES TO KLAMATH FIRST
BANCORP, INC. WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT
CONSTITUTE VALID DELIVERY.

                (BOX BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)

[ ]     CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
        TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY
        AND COMPLETE THE FOLLOWING:

Name of Tendering Institution                                                
                              ----------------------------------------------- 
Account No.                                                                  
           ------------------------------------------------------------------ 
Transaction Code No.                                                         
                    --------------------------------------------------------- 
                                                                               
[ ]     CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED
        PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
        DEPOSITARY AND COMPLETE THE FOLLOWING:

                                      2

<PAGE>

<PAGE>

Name(s) of Registered Owner(s):
                               ----------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
                                                   --------------------------
Name of Institution Which Guaranteed Delivery:
                                              -------------------------------
Check Box and Give Account Number and Transaction Code if Delivered by
Book-Entry Transfer:      

    [ ]
        ------------------------
Account Number:
               -----------------------------------------
Transaction Code Number:
                        --------------------------------
                                                                               
                               ODD LOTS                                        
                          (SEE INSTRUCTION 9)

      This section is to be completed ONLY if Shares are being tendered by or
on behalf of a person owning beneficially, as of the close of business on
September 28, 1998, and who continues to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 Shares.

     The undersigned either (check one box)

[ ]  was the beneficial owner as of the close of business on September 28,
     1998, and continues to be the beneficial owner as of the Expiration Date, 
     of an aggregate of fewer than 100 Shares, all of which are being
     tendered, or

[ ]  is a broker, dealer, commercial bank, trust company or other nominee that 
     (i) is tendering, for the beneficial owners thereof, Shares with respect  
     to which it is the record owner, and (ii) believes, based upon
     representations made to it by each such beneficial owner, that such
     beneficial owner owned beneficially as of the close of business on
     September 28, 1998, and continues to own beneficially as of the
     Expiration Date, an aggregate of fewer than 100 Shares, and is tendering
     all of such Shares.

                      NOTE: SIGNATURES MUST BE PROVIDED BELOW.

               PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

                                      3
<PAGE>



<PAGE>

LADIES AND GENTLEMEN:

     The undersigned hereby tenders to Klamath First Bancorp, Inc., an Oregon
corporation ("Company"), the above-described shares of its Common Stock, par
value $0.01 per share ("Shares"), at a price per Share hereinafter set forth,
pursuant to the Company's offer to purchase up to 1,983,353 Shares, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
October 23, 1998 ("Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together constitute the
"Offer"). 

     Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Company all
right, title and interest in and to all the Shares that are being tendered
hereby or orders the registration of such Shares tendered by book-entry
transfer that are purchased pursuant to the Offer to or upon the order of the
Company and irrevocably constitutes and appoints the Depositary the true and
lawful agent and attorney-in-fact of the undersigned with respect to such
Shares, with full power of substitution(such power of attorney being deemed to
be an irrevocable power coupled with an interest), to (a) deliver certificates
for such Shares, or transfer ownership of such Shares on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of the Company upon receipt by the Depositary, as the undersigned's
agent, of the Purchase Price (as defined below) with respect to such Shares,
(b) present certificates for such Shares for cancellation and transfer on the
books of the Company and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares, all in accordance with the
terms of the Offer.

     The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and that, when and to the extent the same are accepted for
payment by the Company, the Company will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver
any additional documents deemed by the Depositary or the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby.

      The undersigned hereby represents and warrants that the undersigned has
read and agrees to all of the terms of the Offer. All authority herein
conferred or agreed to be conferred shall not be affected by, and shall
survive the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Except as stated
in the Offer, this tender is irrevocable.

      The undersigned understands that tenders of Shares pursuant to any one
of the procedures described in Section 2 or 3 of the Offer to Purchase and in
the Instructions hereto will constitute the undersigned's acceptance of the
terms and conditions of the Offer, including the undersigned's representation
and warranty that (i) the undersigned has a net long position in the Shares
being tendered within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, and (ii) the tender of such
Shares complies with Rule14e-4. The Company's acceptance for payment of Shares
tendered pursuant to the Offer will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of
the Offer. The undersigned understands that the Company will determine a
single per Share price (not less than $15.50 nor in excess of $19.50 per
Share) net to the seller in cash, without interest thereon, ("Purchase Price")
that it will pay for Shares validly tendered and not withdrawn pursuant to the
Offer taking into account the number of Shares so tendered and the prices
specified by tendering shareholders. The undersigned understands that the
Company will select the Purchase Price that will allow it to purchase
1,983,353 shares (or such lesser number of Shares as are validly tendered and
not withdrawn at prices not less than $15.50 nor in excess of $19.50 per
Share) pursuant to the Offer. The undersigned understands that all Shares
properly tendered and not withdrawn at prices at or below the Purchase Price
will be purchased at the Purchase Price, net to the seller in cash, without
interest thereon, upon the terms and

                                     4

<PAGE>

<PAGE>

subject to the conditions of the Offer, including its proration provisions,
and that the Company will return all other Shares, including Shares tendered
and not withdrawn at prices greater than the Purchase Price and Shares not
purchased because of proration. The undersigned understands that tenders of
Shares pursuant to any one of the procedures described in Section 2 or 3 of
the Offer to Purchase and in the instructions hereto will constitute an
agreement between the undersigned and the Company upon the terms and subject
to the conditions of the Offer.

      The undersigned recognizes that, under certain circumstances set forth
in the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may not be required to purchase any of the Shares tendered hereby or may
accept for payment fewer than all of the Shares tendered hereby.

      Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares purchased, and/or return
any Shares not tendered or not purchased, in the name(s) of the undersigned
(and, in the case of Shares tendered by book-entry transfer, by credit to the
account at the Book-Entry Transfer Facility). Similarly, unless otherwise
indicated under "Special Delivery Instructions," please mail the check for the
purchase price of any Shares purchased and/or any certificates for Shares not
tendered or not purchased (and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's signature(s). In the
event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the purchase price of
any Shares purchased and/or return any Shares not tendered or not purchased in
the name(s) of, and mail said check and/or any certificates to, the person(s)
so indicated. The undersigned recognizes that the Company has no obligation,
pursuant to the "Special Payment Instructions," to transfer any Shares from
the name of the registered holder(s) thereof if the Company does not accept
for payment any of the Shares so tendered.

                                     5

<PAGE>

<PAGE>

                     PRICE (IN DOLLARS) PER SHARE
                  AT WHICH SHARES ARE BEING TENDERED
                          (SEE INSTRUCTION 5)
                                                                               
     CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS
       CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS
                BELOW), THERE IS NO VALID TENDER OF SHARES.
                                                                               
    [ ] $15.50     [ ] $16.00     [ ] $16.50     [ ] $17.00     [ ] $17.50
                                                                               
    [ ] $18.00     [ ] $18.50     [ ] $19.00     [ ] $19.50                    
                                                                               
                              IMPORTANT
                                                                               
     (Please Complete Substitute Form W-9 Included in this Letter of
Transmittal)

- -----------------------------------------------------------------------------
                            (SIGNATURE(S) OF OWNER(S))
- -----------------------------------------------------------------------------

- ----------------------------------------------------------------------------- 
                             (PLEASE PRINT NAME(S))
                                                                               
Dated                 , 1998  Capacity (full title)
     -----------------                              ------------------------- 
Address
        --------------------------------------------------------------------- 
                             (INCLUDE ZIP CODE)

Area Code and Telephone No.
                            ------------------------------------------------- 

Tax Identification or Social Security No.
                                          ----------------------------------- 
                                              (see Substitute Form W-9)
                                                                               
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted
herewith.

If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 6.)

                                   6
<PAGE>

<PAGE>

                     GUARANTEE OF SIGNATURE(S)
                     (SEE INSTRUCTIONS 1 AND 6)

Authorized Signature(s)
                        ----------------------------------------------------- 
Name of Firm
             ---------------------------------------------------------------- 
                                     (PLEASE PRINT)
Name and Title
                ------------------------------------------------------------- 
                                     (PLEASE PRINT)
Address
        --------------------------------------------------------------------- 
                                   (INCLUDE ZIP CODE)
Area Code and Telephone Number 
                                ---------------------------------------------

Dated                     , 1998
      --------------------

SPECIAL PAYMENT INSTRUCTIONS          SPECIAL DELIVERY INSTRUCTIONS 
(SEE INSTRUCTIONS 6, 7 AND 8)         (SEE INSTRUCTIONS 6, 7 AND 8)

To be completed ONLY if the check     To be completed ONLY if the check
for the purchase price of Shares      for the purchase price of Shares
purchased and/or certificates for     purchased and/or certificates for Shares
Shares not tendered or not purchased  not tendered or not purchased are to be
are to be issued in the name of       mailed to someone other than the under-
someone other than the undersigned.   signed or to the undersigned at an
                                      address other than that shown below
                                      the undersigned's signature(s).

Issue [ ] check and/or [ ] certificate(s) to:

Name 
      --------------------------
            (PLEASE PRINT)
                                      Mail [ ] check and/or [ ] certificate(s)
                                      to:

Address
        -------------------------
                                      Name
- ---------------------------------          ----------------------------------
       (INCLUDE ZIP CODE)                             (PLEASE PRINT)
                                      Address
                                              ------------------------------- 

- ----------------------------------    --------------------------------------- 
  (TAXPAYER IDENTIFICATION OR                  (INCLUDE ZIP CODE)
      SOCIAL SECURITY NO.)

IF SPECIAL PAYMENT INSTRUCTIONS ARE   IF SPECIAL PAYMENT INSTRUCTIONS ARE
BEING GIVEN, PLEASE REMEMBER TO HAVE  BEING GIVEN, PLEASE REMEMBER TO HAVE  
YOUR SIGNATURE GUARANTEED.            YOUR SIGNATURE GUARANTEED.

                                      7
<PAGE>

<PAGE>

                                 INSTRUCTIONS
               FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

     1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is
a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank, a trust
company, a savings bank, a savings and loan association or a credit union
which has membership in an approved Signature Guarantee Medallion Program (an
"Eligible Institution"). SIGNATURES ON THIS LETTER OF TRANSMITTAL NEED NOT BE
GUARANTEED (A) IF THIS LETTER OF TRANSMITTAL IS SIGNED BY THE REGISTERED
HOLDER(S)OF THE SHARES (which term, for purposes of this document, shall
include any participant in one of the Book-Entry Transfer Facilities whose
name appears on a security position listing as the owner of Shares) tendered
herewith AND SUCH HOLDER(S) HAVE NOT COMPLETED THE BOX ENTITLED "SPECIAL
PAYMENT INSTRUCTIONS" OR THE BOX ENTITLED "SPECIAL DELIVERY INSTRUCTIONS" ON
THIS LETTER OF TRANSMITTAL or (B) if such Shares are tendered for the account
of an Eligible Institution. See Instruction 6.

     2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal or, in the case of a book-entry transfer, an Agent's Message (as
defined below), is to be used either if certificates are to be forwarded
herewith or if delivery of Shares is to be made by book-entry transfer
pursuant to the procedures set forth in Section3 of the Offer to Purchase.
CERTIFICATES FOR ALL PHYSICALLY DELIVERED SHARES, OR A CONFIRMATION OF A
BOOK-ENTRY TRANSFER INTO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY OF ALL SHARES DELIVERED ELECTRONICALLY, AS WELL AS A PROPERLY
COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL (OR MANUALLY SIGNED COPY
THEREOF) AND ANY OTHER DOCUMENTS REQUIRED BY THIS LETTER OF TRANSMITTAL, MUST
BE RECEIVED BY THE DEPOSITARY AT ITS ADDRESS AS SET FORTH ON THE FRONT PAGE OF
THIS LETTER OF TRANSMITTAL ON OR PRIOR TO THE EXPIRATION DATE (as defined in
the Offer to Purchase). The term "Agent's Message" means a message transmitted
by a Book-Entry Transfer Facility to, and received by, the Depositary and
forming a part of a Book-Entry confirmation, which states that such Book-Entry
Transfer Facility has received an express acknowledgment from the participant
in such Book-Entry Transfer Facility tendering the Shares, that such
participant has received and agrees to be bound by the terms of the Offer to
Purchase and the Letter of Transmittal and that the Company may enforce such
agreement against the participant.

     THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING
SHAREHOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY. IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. DO NOT MAIL
OR DELIVER TO KLAMATH FIRST BANCORP, INC.

     No alternative or contingent tenders will be accepted. See Section 1 of
the Offer to Purchase. By executing this Letter of Transmittal (or facsimile
thereof), the tendering shareholder waives any right to receive any notice of
the acceptance for payment of the Shares.

     3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule attached hereto.

     4. Partial Tenders (Not Applicable to Shareholders Who Tender By
Book-Entry Transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares that are to be tendered in the box entitled "Number of Shares
Tendered." In such case, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the "Special Payment
Instructions" or "Special Delivery Instructions"boxes on this Letter of
Transmittal, as promptly as practicable following the expiration or
termination of the Offer. All

                                  8
<PAGE>

<PAGE>

Shares represented by certificates delivered to the Depositary will be deemed
to have been tendered unless otherwise indicated.

     5. Indication of Price at Which Shares Are Being Tendered. FOR SHARES TO
BE VALIDLY TENDERED, THE SHAREHOLDER MUST CHECK THE BOX INDICATING THE PRICE
PER SHARE AT WHICH HE OR SHE IS TENDERING SHARES UNDER "PRICE (IN DOLLARS) PER
SHARE AT WHICH SHARES ARE BEING TENDERED" IN THIS LETTER OF TRANSMITTAL,
except that any shareholder who owned beneficially as of the close of business
on September 28, 1998, and continues to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 Shares, may check the box above in the
section entitled "Odd Lots"indicating that such shareholder is tendering all
Shares at the Purchase Price determined by the Company. Only one box may be
checked. IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED, THERE IS NO
VALID TENDER OF SHARES. A shareholder wishing to tender portions of his or her
Share holdings at different prices must complete a separate Letter of
Transmittal for each price at which he or she wishes to tender each such
portion of his or her Shares. The same Shares cannot be tendered (unless
previously validly withdrawn as provided in Section 4 of the Offer to
Purchase) at more than one price.

     6. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
hereby, the signature(s) must correspond with the name(s) as written on the
face of the certificates without alteration, enlargement or any change
whatsoever.

     If any of the Shares hereby is held of record by two or more persons, all
such persons must sign this Letter of Transmittal.

     If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.

     IF THIS LETTER OF TRANSMITTAL IS SIGNED BY THE REGISTERED HOLDER(S) OF
THE SHARES TENDERED HEREBY, NO ENDORSEMENTS OF CERTIFICATES OR SEPARATE STOCK
POWERS ARE REQUIRED UNLESS PAYMENT OF THE PURCHASE PRICE IS TO BE MADE TO, OR
SHARES NOT TENDERED OR NOT PURCHASED ARE TO BE REGISTERED IN THE NAME OF, ANY
PERSON OTHER THAN THE REGISTERED HOLDER(S). SEE INSTRUCTION 1.

     If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate
stock powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on the certificates for such Shares. Signature(s) on any
such certificates or stock powers must be guaranteed by an Eligible
Institution. See Instruction 1.

     If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of
a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Company of the authority of such person so to act must be
submitted.

     7. Stock Transfer Taxes. The Company will pay or cause to be paid any
stock transfer taxes with respect to the sale and transfer of any Shares to it
or its order pursuant to the Offer. If, however, payment of the purchase price
is to be made to, or Shares not tendered or not purchased are to be registered
in the name of, any person other than the registered holder(s), or if tendered
Shares are registered in the name of any person other than the
person(s)signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s), such other person or
otherwise) payable on account of the transfer to such person will be deducted
from the purchase price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted. See Section 5 of the Offer to
Purchase.  EXCEPT AS PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT BE

                                   9

<PAGE>

<PAGE>

NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES
TENDERED HEREBY.

     8. Special Payment and Delivery Instructions. If the check for the
purchase price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal or if the check and/or
any certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of
Shares Tendered," then the boxes captioned "Special Payment Instructions"
and/or "Special Delivery Instructions" on this Letter of Transmittal should be
completed. Shareholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained
by such shareholder at the Book-Entry Transfer Facility from which such
transfer was made.

     9. Odd Lots. As described in the Offer to Purchase, if fewer than all
Shares validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date are to be purchased, the Shares purchased first
will consist of all Shares tendered by any shareholder who owned beneficially
as of the close of business on September 28, 1998, and continues to own
beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares
and who validly tendered all such Shares at or below the Purchase Price.
Partial tenders of Shares will not qualify for this preference. This
preference will not be available unless the box captioned "Odd Lots" in this
Letter of Transmittal is completed.

     10. Substitute Form W-9 and Form W-8. THE TENDERING SHAREHOLDER IS
REQUIRED TO PROVIDE THE DEPOSITARY WITH EITHER A CORRECT TAXPAYER
IDENTIFICATION NUMBER("TIN") ON SUBSTITUTE FORM W-9, WHICH IS PROVIDED UNDER
"IMPORTANT TAX INFORMATION"BELOW, OR A PROPERLY COMPLETED FORM W-8. FAILURE TO
PROVIDE THE INFORMATION ON EITHER SUBSTITUTE FORM W-9 OR FORM W-8 MAY SUBJECT
THE TENDERING SHAREHOLDER TO31% FEDERAL INCOME TAX BACKUP WITHHOLDING ON THE
PAYMENT OF THE PURCHASE PRICE. The box in Part 3 of Substitute Form W-9 may be
checked if the tendering shareholder has not been issued a TIN and has applied
for a number or intends to apply for a number in the near future. If the box
in Part 3 is checked and the Depositary is not provided with a TIN by the time
of payment, the Depositary will withhold 31% on all payments of the purchase
price thereafter until a TIN is provided to the Depositary.

     11. Requests for Assistance or Additional Copies. Any questions or
requests for assistance may be directed to the Dealer Manager/Information
Agent at its telephone number and address listed below. Requests for
additional copies of the Offer to Purchase, this Letter of Transmittal or
other tender offer materials may be directed to the Dealer Manager/Information
Agent and such copies will be furnished promptly at the Company's expense.
Shareholders may also contact their local broker, dealer, commercial bank or
trust company for assistance concerning the Offer.

     12. Irregularities. All questions as to the Purchase Price, the form of
documents, and the validity, eligibility (including time of receipt) and
acceptance of any tender of Shares will be determined by the Company, in its
sole discretion, and its determination shall be final and binding. The Company
reserves the absolute right to reject any or all tenders of Shares that it
determines are not in proper form or the acceptance for payment of or payment
for Shares that may, in the opinion of the Company's counsel, be unlawful. 
Except as otherwise provided in the Offer to Purchase, the Company also
reserves the absolute right to waive any of the conditions to the Offer or any
defect or irregularity in any tender of Shares and the Company's
interpretation of the terms and conditions of the Offer (including these
instructions) shall be final and binding. Unless waived, any defects or
irregularities in connection with tenders must be cured within such time as
the Company shall determine. None of the Company, the Dealer
Manager/Information Agent, the Depositary or any other person shall be under
any duty to give notice of any defect or irregularity in tenders, nor shall
any of them incur any liability for failure to give any such notice. Tenders
will not be deemed to have been made until all defects and irregularities have
been cured or waived.

                                  10
<PAGE>

<PAGE>

     IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED COPY THEREOF)
TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER(AND ALL
OTHER REQUIRED DOCUMENTS) OR THE NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.

                         IMPORTANT TAX INFORMATION

     Under federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with
such shareholder's correct TIN on Substitute Form W-9 below. If such
shareholder is an individual, the TIN is his or her social security number.
For businesses and other entities, the number is the employer identification
number. If the Depositary is not provided with the correct TIN or properly
completed Form W-8, the shareholder may be subject to a $50 penalty imposed by
the Internal Revenue Service. In addition, payments that are made to such
shareholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding.

      Certain shareholders (including, among others, all corporations and
certain foreign individuals and entities)are not subject to these backup
withholding and reporting requirements. In order for a noncorporate foreign
shareholder to qualify as an exempt recipient, that shareholder must complete
and sign a Form W-8, Certificate of Foreign Status, attesting to that
shareholder's exempt status. The Form W-8 can be obtained from the Depositary.
Exempt shareholders, other than noncorporate foreign shareholders, should
furnish their TIN in Part 1 and check the box in Part 4 of the Substitute Form
W-9 below and sign, date and return the Substitute Form W-9 to the Depositary.
See the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional instructions.

     If federal income tax backup withholding applies, the Depositary is
required to withhold 31% of any payments made to the shareholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may
be obtained.

PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8

     To avoid backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of his or her correct TIN by completing the
Substitute Form W-9 included in this Letter of Transmittal certifying that the
TIN provided on Substitute Form W-9 is correct and that (1) the shareholder
has not been notified by the Internal Revenue Service that he or she is
subject to federal income tax backup withholding as a result of failure to
report all interest or dividends or (2) the Internal Revenue Service has
notified the shareholder that he or she is no longer subject to federal income
tax backup withholding. Foreign shareholders must submit a properly completed
Form W-8 in order to avoid the applicable backup withholding; provided,
however, that backup withholding will not apply to foreign shareholders
subject to 30% (or lower treaty rate) withholding on gross payments received
pursuant to the Offer.

WHAT NUMBER TO GIVE THE DEPOSITARY

     The shareholder is required to give the Depositary the social security
number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.

(See Instruction 10)

                                      11
<PAGE>

<PAGE>

Please fill in your name and address below.

- ----------------------------------------------------------------------------- 
                                    Name

- ----------------------------------------------------------------------------- 
                         Address (number and street)
                             
- ----------------------------------------------------------------------------- 
                          City, State and Zip Code

               PAYER'S NAME: REGISTRAR AND TRANSFER COMPANY

- ----------------------------------------------------------------------------- 
        PART I--PLEASE PROVIDE YOUR                                            
        TIN IN THE BOX AT RIGHT AND                                            
        CERTIFY BY SIGNING AND DATING                                          
        BELOW.

                                           -----------------------------------
SUBSTITUTE                                       Social Security Number

FORM W-9
                                           OR
                                           -----------------------------------
                                             Employer Identification Number

- ----------------------------------------------------------------------------- 
     DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE
        PART II--Certification--Under Penalties of Perjury, I certify that:
        (1) The number shown on this form is my correct Taxpayer
        Identification Number (or I am waiting for a number to be issued to
        me), (2) I am not subject to backup withholding because (a) I am
        exempt from backup withholding, or (b) I have not been notified by
        the Internal Revenue Service ("IRS") that I am subject to backup
        withholding as a result of failure to report all interest or dividends
        or (c) the IRS has notified me that I am no longer subject to backup
        withholding, and (3) all other information provided on this form is
        true, correct and complete.

- ----------------------------------------------------------------------------- 
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN)
        PART III--Awaiting TIN []
- ----------------------------------------------------------------------------- 
FOR PAYEE EXEMPT FROM BACKUP WITHHOLDING
        PART IV--Exempt [ ]

        Certificate Instructions--You must cross out Item (2) in Part II above
        if you have been notified by the IRS that you are currently subject to
        backup withholding because of under reporting interest or dividends on
        your tax return. However, if after being notified by the IRS that you
        were subject to backup withholding, you received another notification
        from the IRS stating that you are no longer subject to backup with- 
        holding, do not cross out Item (2). If you are exempt from backup 
        withholding, check the box in Part IV above.

- -----------------------------------------------------------------------------
        Signature:                                 Date:
                   --------------------------------      --------------------
        Name (Please Print)
                            ------------------------------------------------- 


NOTE:   FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
        WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
        PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
        IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

                                  12
<PAGE>

<PAGE>

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3
OF THE SUBSTITUTE FORM W-9

            CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

     I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number to you by
the time of payment, you are required to withhold 31% of all reportable
payments thereafter made to me until I provide a number.


- ----------------------------------------------   ----------------------------- 
        Signature                                             Date

                                  13
<PAGE>

<PAGE>

                The Dealer Manager/Information Agent:

                    KEEFE, BRUYETTE & WOODS, INC.
                       211 Bradenton Avenue
                     Dublin, Ohio 43017-3514
                    Toll free: (877) 298-6520

                                  14
<PAGE>

<PAGE>

                                                               Exhibit (a)(3)

             NOT VALID UNLESS SIGNED BY AN ELIGIBLE INSTITUTION.

                       KLAMATH FIRST BANCORP, INC.

                      NOTICE OF GUARANTEED DELIVERY
                        OF SHARES OF COMMON STOCK
             OFFER TO PURCHASE FOR CASH UP TO 1,983,353 SHARES
                          OF ITS COMMON STOCK
                   AT A PURCHASE PRICE NOT LESS THAN
               $15.50 NOR IN EXCESS OF $19.50 PER SHARE

        This form or a facsimile copy of it must be used to accept the Offer
(as defined below) if:

(a)   certificates for common stock, par value $0.01 per share (the
      "Shares"), of Klamath First Bancorp, Inc., an Oregon corporation, are
      not immediately available; or                                            
                                                                             
(b)   the procedure for book-entry transfer cannot be completed on a timely
      basis; or

(c)   time will not permit the Letter of Transmittal or other required
      documents to reach the Depositary before the Expiration Date (as
      defined in Section 1 of the Offer to Purchase, as defined below).

      This form or a facsimile of it, signed and properly completed, may be
delivered by hand, mail, telegram or facsimile transmission to the Depositary
by the Expiration Date. See "Section 3--Procedure for Tendering Shares" in the
Offer to Purchase.

                             DEPOSITARY:

                 To: REGISTRAR AND TRANSFER COMPANY

     By Mail:             Overnight Delivery:        By Hand:
                                                                               
     10 Commerce Drive    10 Commerce Drive          c/o The Depository Trust
     Cranford, NJ 07016   Cranford, NJ 07016-3572      Co.                     
                          Attn: Reorganization       Transfer Agent Drop
                          Department                 55 Water Street, 1st
                                                     Floor
                                                     New York, NY 10041-0099

           Investor Relations Telephone Number: (800) 368-5948
                      Facsimile Number: (908) 497-2312

     DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR
TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THOSE LISTED
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.

                                      1
<PAGE>

<PAGE>

Ladies and Gentlemen:

    The undersigned hereby tenders to Klamath First Bancorp, Inc., at the
price per Share indicated below, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October
23, 1998 (the "Offer to Purchase"), and the related Letter of Transmittal
(which together with the Offer to Purchase constitute the "Offer"), receipt of
which is hereby acknowledged, Shares of common stock, par value $0.01 per
share (the "Shares"), pursuant to the guaranteed delivery procedure set forth
under "Section 3--Procedure for Tendering Shares" in the Offer to Purchase.

     Please call the Dealer Manager/Information Agent for assistance in
completing this form toll free at (877) 298-6520.

     PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED.

     By checking one of the boxes below, the undersigned hereby tenders Shares 
at the price checked.

     Price (in dollars) per Share at which Shares are being tendered:

                       [ ] $15.50          [ ] $16.00
                       [ ] $16.50          [ ] $17.00
                       [ ] $17.50          [ ] $18.00
                       [ ] $18.50          [ ] $19.00
                       [ ] $19.50

If you own fewer than 100 shares:

     Complete ONLY if Shares are being tendered by or on behalf of a  person
owning beneficially, as of the close of business on September 28, 1998 and who
continue to own beneficially as of the Expiration Date, an  aggregate of fewer
than 100 Shares.

     The undersigned either (check one):

     [ ]    was the beneficial owners, as of the close of business on
            September 28, 1998 of an aggregate of fewer than 100 Shares, all
            of which are being tendered, or                                    
                                                                               
     [ ]    is a broker, dealer, commercial bank, trust company or other
            nominee which 
                                                                               
            (a) is tendering, for the beneficial owners thereof, Shares with 
            respect to which it is the record owner, and

            (b) believes, based upon representations made to it by such
            beneficial owners, that each such person was the beneficial owner, 
            as of the close of business on September 28, 1998, of an aggregate
            of fewer than 100 Shares and is tendering all of such shares.

- ------------------------------------------------------------------------------
                       Certificate Nos. (if available):
- ------------------------------------------------------------------------------

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

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

     If Shares will be tendered by book-entry transfer, check box below:
[ ] The Depositary Trust Company

Account Number:
                 --------------------------

Name(s):
        ----------------------------------------------------------------------
                                 PLEASE TYPE OR PRINT
Address(es):
            ------------------------------------------------------------------

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

Area Code and Telephone Number:
                                ----------------------------------------------

                                    Sign Here:
                                               -------------------------------
Dated:
       -------------------, 1998

                                  2
<PAGE>

<PAGE>

                             GUARANTEE

              (NOT TO BE USED FOR SIGNATURE GUARANTEE)

     The undersigned, a member firm of a registered national securities 
exchange, a member of the National Association of Securities Dealers, Inc., or
a commercial bank, trust company, savings association or credit union having
an office or correspondent in the United States (each, an "Eligible 
Institution"), hereby (i) represents that the undersigned has a net long 
position in Shares in or equivalent securities within the meaning of Rule 
14e-4 promulgated under the Securities Exchange Act of 1934, as amended, at 
least equal to the shares tendered, (ii)represents that such tender of  Shares
complies with Rule 14e-4 and (iii) guarantees that either the certificates
representing the Shares tendered hereby in proper form for transfer, or timely
confirmation of the book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company (pursuant to the procedures set forth
under "Section 3--Procedure for Tendering Shares" in the Offer to Purchase),
together with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required  signature guarantee and any other
documents required by the Letter of Transmittal, will be received by the
Depositary at one of its addresses set forth above within three Nasdaq trading
days after the date of execution hereof.

Name of Firm:
              -----------------------------  ---------------------------------
                                               Authorized Signature

Address:                                     Name:
         ----------------------------------       ----------------------------

- -------------------------------------------  Title:
                                                    --------------------------

Zip Code:
          ---------------------

Area Code and Telephone Number:
                                -------------------------

Dated:
       -----------------, 1998

DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE
SENT WITH YOUR LETTER OF TRANSMITTAL.

                                  3
<PAGE>

<PAGE>

                                                               Exhibit (a)(4) 

                       KEEFE, BRUYETTE & WOODS, INC.
                          211 BRADENTON AVENUE
                         DUBLIN, OHIO 43017-3514
                       Toll free:  (877) 298-6520

                        KLAMATH FIRST BANCORP, INC.
                    OFFER TO PURCHASE FOR CASH UP TO
                  1,983,353 SHARES OF ITS COMMON STOCK
                AT A PURCHASE PRICE NOT LESS THAN $15.50
                   NOR IN EXCESS OF $19.50 PER SHARE

        THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
                5:00 P.M., EASTERN TIME, ON NOVEMBER 19, 1998,
                        UNLESS THE OFFER IS EXTENDED.

To Brokers, Dealers, Commercial Banks,
  Trust Companies and Other Nominees:

     Klamath First Bancorp, Inc., an Oregon corporation ("Company"), has
appointed us to act as Dealer Manager in connection with its offer to purchase
for cash up to 1,983,353 shares of its Common Stock, $0.01 par value per share
("Shares"), at prices not less than $15.50 nor in excess of $19.50 per Share,
specified by shareholders tendering their Shares, upon the terms and subject
to the conditions set forth in the Company's Offer to Purchase, dated October
23, 1998, and in the related Letter of Transmittal (which together constitute
the "Offer").

     The Company will determine the single per Share price, not less than
$15.50 nor in excess of $19.50 per Share, net to the seller in cash ("Purchase
Price"), that it will pay for Shares validly tendered pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified
by tendering shareholders. The Company will select the Purchase Price that
will allow it to buy 1,983,353 shares (or such lesser number of Shares as are
properly tendered at prices not less than $15.50 nor in excess of $19.50 per
Share). All Shares validly tendered at prices at or below the Purchase Price
and not withdrawn on or prior to the Expiration Date (as defined in Section 1
of the Offer to Purchase) will be purchased at the Purchase Price, subject to
the terms and conditions of the Offer, including the proration provisions. See
Section 1 of the Offer to Purchase.

     Upon the terms and subject to the conditions of the Offer, if, at the
expiration of the Offer, more than1,983,353 shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares (i)
from shareholders who owned beneficially as of the close of business on
September 28, 1998, and continue to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 Shares who properly tender all their
Shares at or below the Purchase Price, and (ii) then, on a pro rata basis,
from all other shareholders who properly tender their Shares at prices at or
below the Purchase Price (and do not withdraw them prior to the expiration of
the Offer). See Sections 1 and 2 of the Offer to Purchase. All Shares not
purchased pursuant to the Offer, including Shares tendered at prices greater
than the Purchase Price and Shares not purchased because of proration will be
returned to the tendering shareholders at the Company's expense as promptly as
practicable following the Expiration Date.

     THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED PURSUANT TO THE OFFER. SEE SECTION 6 OF THE OFFER TO PURCHASE.

     No fees or commissions will be payable to brokers, dealers or any person
for soliciting tenders of Shares pursuant to the Offer other than fees paid to
the Dealer Manager as described in the Offer to Purchase. The Company will,
upon request, reimburse brokers and banks for reasonable and customary
handling and mailing expenses incurred by them in forwarding materials
relating to the Offer to their customers. The Company will pay all stock
transfer taxes applicable to its purchase of Shares pursuant to the Offer,
subject to Instruction 7 of the Letter of Transmittal.

                                  1
<PAGE>

<PAGE>

     No broker, dealer, bank, trust company or fiduciary shall be deemed to be
an agent of the Company, including Keefe, Bruyette & Woods, Inc. as "Dealer
Manager/Information Agent," and Registrar and Transfer Company as
"Depositary," for purposes of the Offer.

     For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are
enclosing the following documents:

     1.   Offer to Purchase, dated October 23, 1998;

     2.   Letter to Clients which may be sent to your clients for whose
          accounts you hold Shares registered in your name or in the name of
          your nominee, with space provided for obtaining such clients'
          instructions with regard to the Offer;

     3.   The Notice of Guaranteed Delivery to be used to accept the Offer if
          shares and all other required documents cannot be delivered to the
          Depositary by the Expiration Date.

     4.   Letter, dated October 23, 1998, from Gerald V. Brown, President and  
          Chief Executive Officer of the Company, to shareholders of the
          Company;

     5.   Letter of Transmittal for your use and for the information of your
          clients (together with substitute Form W-9); and

     6.   A return envelope addressed to Registrar and Transfer Company, as
          Depositary.

     WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME,
ON NOVEMBER 19, 1998, UNLESS THE OFFER IS EXTENDED.

     In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be
sent to the Depositary with either certificate(s) representing the tendered
Shares or confirmation of their book-entry transfer, all in accordance with
the instructions set forth in the Letter of Transmittal and the Offer to
Purchase.

     Any inquiries you may have with respect to the Offer should be addressed
to the Depositary or the Dealer Manager/Information Agent at their respective
addresses and telephone numbers set forth on the back cover page of the Offer
to Purchase.

     Additional copies of the enclosed material may be obtained from the
Dealer Manager/Information Agent by calling, toll free: (877) 298-6520.

                             Very truly yours,



                             KEEFE, BRUYETTE & WOODS, INC.

Enclosures

     NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR ANY OF ITS AFFILIATES,
THE DEALER MANAGER/INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF
THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH
AND THE STATEMENTS CONTAINED THEREIN.

                                  2
<PAGE>

<PAGE>

                                                                Exhibit (a)(5) 

                      KLAMATH FIRST BANCORP, INC.

                   OFFER TO PURCHASE FOR CASH UP TO
                 1,983,353 SHARES OF ITS COMMON STOCK
               AT A PURCHASE PRICE NOT LESS THAN $15.50
                   NOR IN EXCESS OF $19.50 PER SHARE

      THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
             5:00 P.M., EASTERN TIME, ON NOVEMBER 19, 1998,
                     UNLESS THE OFFER IS EXTENDED.

To Our Clients:

     Enclosed for your consideration are the Offer to Purchase, dated October
23, 1998, and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the Offer by Klamath First Bancorp, Inc., an
Oregon corporation ("Company"), to purchase up to 1,983,353 Shares of its
Common Stock, $0.01 par value per share ("Shares"), at prices not less than
$15.50 nor in excess of $19.50 per Share, as specified by tendering
shareholders, upon the terms and subject to the conditions set forth in the
Offer.

     The Company will determine the single per Share price, not less than
$15.50 nor in excess of $19.50 per Share, net to the seller in cash ("Purchase
Price"), that it will pay for Shares validly tendered pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified
by tendering shareholders. The Company will select the Purchase Price that
will allow it to buy 1,983,353 Shares (or such lesser number of Shares as are
validly tendered at prices not less than $15.50 nor in excess of $19.50 per
Share). All Shares properly tendered at prices at or below the Purchase Price
and not withdrawn on or prior to the Expiration Date (as defined in Section 1
of the Offer to Purchase) will be purchased at the Purchase Price, subject to
the terms and conditions of the Offer, including the proration provisions. See
Section 1 of the Offer to Purchase.

     Upon the terms and subject to the conditions of the Offer, if, at the
expiration of the Offer, more than1,983,353 Shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares (i)
from shareholders who owned beneficially as of the close of business on
September 28, 1998, and continue to own beneficially as of the Expiration Date
an aggregate of fewer than 100 Shares who properly tender all their Shares at
prices at or below the Purchase Price, and (ii) then, on a pro rata basis,
from all other shareholders who properly tender at or below the Purchase Price
(and do not withdraw them prior to the expiration of the Offer).See Sections 1
and 2 of the Offer to Purchase. All Shares not purchased pursuant to the
Offer, including Shares tendered at prices greater than the Purchase Price and
Shares not purchased because of proration will be returned to the tendering
shareholders at the Company's expense as promptly as practicable following the
Expiration Date.

     We are the owner of record of Shares held for your account. As such, we
are the only ones who can tender your Shares, and then only pursuant to your
instructions. We are sending you the Letter of Transmittal for your
information only; you cannot use it to tender Shares we hold for your account. 

     Please instruct us as to whether you wish us to tender any or all of the
Shares we hold for your account on the terms and subject to the conditions of
the Offer.

     We call your attention to the following:

     1.   You may tender all or a portion of your Shares at prices not less
          than $15.50 nor in excess of $19.50 per Share as indicated in the
          attached Instruction Form, net to you in cash.

                                  1
<PAGE>

<PAGE>

     2.   The Offer is not conditioned on any minimum number of Shares being
          tendered pursuant to the Offer.

     3.   The Offer, proration period and withdrawal rights will expire at
          5:00 p.m., Eastern Time, on November 19, 1998, unless the Company
          extends the Offer.

     4.   The Offer is for 1,983,353 shares, constituting approximately 20% of
          the Shares outstanding as of June 30, 1998.

     5.   Tendering shareholders will not be obligated to pay any stock
          transfer taxes on the Company's purchase of Shares pursuant to the
          Offer, subject to Instruction 7 of the Letter of Transmittal.

     6.   If you beneficially held, as of the close of business on September
          28, 1998, an aggregate of fewer than 100 Shares and you continue to
          beneficially own as of the Expiration Date an aggregate of fewer
          than 100 Shares, and you instruct us to tender on your behalf all
          such Shares at or below the Purchase Price before the Expiration
          Date (as defined in the Offer to Purchase) and complete the box
          captioned "Odd Lots" in the attached Instruction Form, the Company,
          upon the terms and subject to the conditions of the Offer, will
          accept all such Shares for purchase before proration, if any, of the
          purchase of other Shares validly tendered at or below the Purchase
          Price.

     7.   If you wish to tender portions of your Shares at different prices,
          you must complete a separate Instruction Form for each price at
          which you wish to tender each such portion of your Shares. We must
          submit separate Letters of Transmittal on your behalf for each price
          you will accept.

     If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing, detaching and returning to us the
attached Instruction Form. An envelope to return your Instruction Form to us
is enclosed. If you authorize us to tender your Shares, we will tender all
such Shares unless you specify otherwise on the attached Instruction Form.   

     YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT
US TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION DATE OF THE
OFFER. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON NOVEMBER 19, 1998, UNLESS THE COMPANY EXTENDS THE OFFER.

     As described in Section 1 of the Offer to Purchase, if more than
1,983,353 Shares have been validly tendered at prices at or below the Purchase
Price and not withdrawn on or prior to the Expiration Date (as defined in the
Offer to Purchase), the Company will purchase properly tendered Shares on the
basis set forth below:

     (a)  first, all Shares validly tendered and not withdrawn on or prior to
     the Expiration Date by or on behalf of any shareholder who owned
     beneficially, as of the close of business on September 28, 1998 and
     continues to own beneficially as of the Expiration Date, an aggregate of
     fewer than 100 Shares who:

          (1)   validly tender all of such Shares at a price at or below the
                Purchase Price (partial tenders will not qualify for this
                preference); and

          (2)   completes the box captioned "Odd Lots" on the Letter of
                Transmittal; and

     (b)  second, after purchase of all of the foregoing Shares, and all other
          Shares validly and tendered at or below the Purchase Price and not
          withdrawn on or prior to the Expiration Date on a pro rata basis
          with appropriate adjustments to avoid purchases of fractional
          Shares) as described in Section 1 of the Offer to Purchase.

                                  2
<PAGE>

<PAGE>

     The Offer is being made to all holders of Shares. The Company is not
aware of any jurisdiction where the making of the Offer is not in compliance
with applicable law. If the Company becomes aware of any jurisdiction where
the making of the Offer is not in compliance with any valid applicable law,
the Company will make a good faith effort to comply with such law. If, after
such good faith effort, the Company cannot comply with such law, the Offer
will not be made to, nor will tenders be accepted from or on behalf of,
holders of Shares residing in such jurisdiction. In any jurisdiction the
securities or blue sky laws of which require the Offer to be made by a
licensed broker or dealer, the Offer is being made on the Company's behalf by
the Dealer Manager/Information Agent or one or more registered brokers or
dealers licensed under the laws of such jurisdiction.

                                  3
<PAGE>

<PAGE>

                             INSTRUCTION FORM
           FOR SHARES HELD BY BROKERS, DEALERS, COMMERCIAL BANKS,
                     TRUST COMPANIES AND OTHER NOMINEES.

                     INSTRUCTIONS FOR TENDER OF SHARES
                        OF KLAMATH FIRST BANCORP, INC.

     Please tender to Klamath First Bancorp, Inc. ("Company"), on (our) (my)
behalf, the number of Shares indicated below, which are beneficially owned by
(us) (me) and registered in your name, upon terms and subject to the
conditions contained in the Offer to Purchase of the Company dated October 23,
1998, and the related Letter of Transmittal, the receipt of both of which is
acknowledged.

     The undersigned hereby instruct(s) you to tender to the Company the
number of Shares indicated below, at the price per Share indicated below,
pursuant to the terms and subject to the conditions of the Offer.

     Aggregate number of Shares to be tendered by you for us:        Shares.
                                                             -------   
     By checking one of the boxes below, the undersigned understands that none
of my Shares will be purchased if the Purchase Price is less than the price
checked.

     Price (in dollars) per Share at which Shares are being tendered (See
Instruction 5 on the Letter of Transmittal):

                   [ ] $15.50          [ ] $16.00
                   [ ] $16.50          [ ] $17.00
                   [ ] $17.50          [ ] $18.00
                   [ ] $18.50          [ ] $19.00
                   [ ] $19.50

                              ODD LOTS
          (SEE INSTRUCTION 9 ON THE LETTER OF TRANSMITTAL)

[ ]   Check here ONLY if I was the beneficial owner as of the close of
      business on September 28, 1998, and continue to be the beneficial
      owner as of the Expiration Date, of an aggregate of fewer than 100
      Shares, all of which are being tendered.

      THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.

     THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS, HOWEVER, MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES.
EACH SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY TO TENDER AND AT WHAT PRICE. EMPLOYEES, OFFICERS
AND 

                                   4
<PAGE>

<PAGE>

DIRECTORS OF THE COMPANY MAY PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE
COMPANY'S OTHER SHAREHOLDERS.


Signature(s):                                Address:
              -----------------------------           ------------------------

- -------------------------------------------           ------------------------ 
                                                       (Including Zip Code)

Name(s):
         ---------------------------------------------------------------------
                                (Please Print)

      ------------------------------------------------------------------------ 
                                (Please Print)

Area Code and Telephone Number:
                                ----------------------------------------------

Date:
      --------------------------------------------, 1998

      --------------------------------------------------
      (Employer Identification or Social Security Number)

     IMPORTANT: SHAREHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED FORM W-9
WITH THEIR INSTRUCTION FORM. 

                                  5
<PAGE>

<PAGE>

                                                                Exhibit (a)(6) 

                       KLAMATH FIRST BANCORP, INC.

October 23, 1998

Dear Shareholders:

     Over time, the profitable operations of Klamath First Bancorp, Inc.
("Company") have contributed to the growth of a capital base that, when
coupled with the substantial proceeds from our conversion to a stock company
in October 1995, exceeds all applicable regulatory standards. This
exceptionally strong capital base exceeds the amount of capital needed to
support the Company's banking business. After evaluating a variety of
alternatives to utilize this strong capital base more effectively and to
maximize value to our shareholders, we have determined that a repurchase of
our own shares is currently the best alternative to accomplish those
objectives. The Board of Directors has approved a repurchase of 1,983,353
shares of the Company's common stock, or approximately 20 percent of our
9,916,766 outstanding shares. A copy of the Offer to Purchase is enclosed.   

     The Company is conducting the offer through a procedure referred to as a
"Modified Dutch Auction." This procedure allows you to select the price at
which you are willing to sell, or tender, all or part of your shares within a
price range of not less than $15.50 per share nor in excess of $19.50 per
share. Upon expiration of the offer, we will select the purchase price from
those shares tendered that will allow us to buy 1,983,353 shares. All shares
purchased in the offer will receive the same purchase price, even those shares
that are tendered below the purchase price. In addition, if you own less than
100 shares and tender all of your shares at or below the purchase price, you
will receive priority and have all of your shares purchased even if more than
1,983,353 shares are tendered.

     We encourage each shareholder to read carefully the Offer to Purchase and
related materials. Neither Klamath First Bancorp, Inc. nor our Board of
Directors makes any recommendation whether to tender shares to the Company.
You should make your decision independently after consulting with your
advisors.

     To assist us with this offer, we have engaged Keefe, Bruyette & Woods,
Inc. to serve as Dealer Manager/Information Agent. Representatives from this
firm may contact you by phone to make sure you have received the Offer to
Purchase and related materials and to answer any questions you may have. If
you need information or additional forms, please call toll free the Dealer
Manager/Information Agent at (877) 298-6520.

     Unless otherwise extended, the offer will expire at 5:00 p.m., Eastern
Time, on November 19, 1998. We again encourage you to read carefully the
enclosed material.

     As always, we appreciate your interest in Klamath First Bancorp, Inc.     

                                     Sincerely,



                                     Gerald V. Brown
                                     President and Chief Executive Officer 

                                  1
<PAGE>



                                                                Exhibit (a)(7) 

                        KLAMATH FIRST BANCORP, INC.

                       IMMEDIATE ATTENTION REQUIRED

                                                              October 23, 1998 

                 RE: DIRECTION CONCERNING TENDER OF SHARES

To: Participants in the ESOP of Klamath First Federal Savings and Loan     
Association

     Enclosed are materials that require your immediate attention. They
describe matters directly affecting your interest in the ESOP maintained by
Klamath First Federal Savings and Loan Association ("Association"). Read all
the materials carefully. You will need to complete the enclosed Direction Form
and return it to the Human Resources Department in the envelope provided. THE
DEADLINE FOR RECEIPT OF YOUR COMPLETED DIRECTION FORM IS 5:00 P.M., EASTERN
TIME, ON NOVEMBER 19, 1998 (UNLESS EXTENDED).

     The remainder of this letter summarizes the transaction and your rights
and options under the ESOP, but you also should review the more detailed
explanation provided in the other materials.

Background

     The Company has made a tender offer to purchase up to 1,983,353 shares of
its Common Stock ("Offer").The objectives of the purchase, and financial and
other information relating to the Offer, are described in detail in the
enclosed Offer to Purchase, which is being provided to all shareholders of the
Company.

     As a participant who has shares of common stock of the Company allocated
to your account under the ESOP, you are affected because the Company's Offer
to Purchase extends to the approximately 293,595 shares of the Company's
Common Stock currently held by the ESOP and allocated to participants'
accounts. Only the Trustees of the ESOP actually can tender these shares for
sale. However, as a participant, you have the right to direct the Trustees
whether to tender your shares of Company Common Stock allocated to your
accounts as of September 30, 1998. If you elect to have the Trustees tender
these shares, you also are entitled to specify the number of shares and price
or prices at which they should be tendered.

     To ensure the confidentiality of your decision, the Trustees will
tabulate the directions of all participants in the ESOP. Your Direction Forms
are to be returned to the Trustees. You should note that the Trustees will
determine whether the implementation of any participant directions or
adherence to any ESOP provisions would be a violation of the Employee
Retirement Income Security Act of 1974 ("ERISA"). Although it is not
anticipated that any direction will violate ERISA, such that the direction
would have to be reversed or ignored, the Department of Labor requires that
the Trustees, as the fiduciaries for participants, retain this discretion.

How the Offer to Purchase Works

     The details of the Offer to Purchase are described in the enclosed
materials, which you should review carefully. However, in broad outline, the
transaction will work as follows with respect to ESOP participants.

     .    The Company has offered to purchase up to 1,983,353 of its shares
          of Common Stock at a price between $15.50 and $19.50 per share.
      
     .    If you want any of the shares that are allocated to your account
          sold, you need to direct that they be offered (or "tendered") for
          sale.

                                  1
<PAGE>

<PAGE>

     .    You may specify the price at which you want the shares tendered,
          which must be between the two limits above.

     .    After the deadline for the tender of shares by all shareholders,
          the Depositary for the Offer, will tabulate all directions, and the
          Company will determine the price, between the two limits, at which
          it can purchase up to 1,983,353 shares. This is referred to as the
          Purchase Price.

     .    Unless the Offer is voided or discontinued in accordance with its
          terms, the Company then will buy all the shares that were tendered
          at the Purchase Price or below. However, all sellers will receive
          the same Purchase Price, even if they tendered below the Purchase
          Price.

     .    If you have specified a price in excess of the Purchase Price as
          finally determined, those shares will not be purchased, and they
          will remain allocated to your account.

     If you do not want to sell any shares allocated to your account, you do
not need to take any action with respect to this Offer. Shares of Common Stock
allocated to your account will remain in your account. 

     The Trustees may override any direction that it determines is in
violation of ERISA, as previously described. In particular, the Company will
be prohibited from purchasing shares from the ESOP if the Purchase Price, as
finally determined, is less than the prevailing market price of the shares on
the date the shares are accepted for purchase.

     Finally, the Company will prorate the number of shares purchased from
shareholders if there is an excess of shares over the exact number desired at
the Purchase Price as ultimately determined.

Procedure for Directing Trustees

     A Direction Form for giving your instructions to the Trustees is enclosed
for each participant in the ESOP. You must complete this form and return it in
the included envelope in time to be received no later than 5:00 p.m.,Eastern
Time, on November 19, 1998 (unless the Offer to Purchase is extended or
amended). If your form is not received by this deadline, or if it is not fully
and properly completed, the shares in your account will not be tendered. 
Please note that your instructions will be maintained on a confidential basis
by the Trustees.

     To properly complete your Direction Form, you must do the following:

     (1)  On the face of the form, specify the number of shares that you want
          to tender at each price indicated. Typically, you would elect to
          have all of your shares tendered at a single price. However, the
          form gives you the option of splitting your shares among several
          prices. You must state the number of shares to be sold at each
          indicated price by filling in the number of shares in the box
          immediately below the price.

     (2)  Date and sign the Direction Form in the spaces provided.            

     (3)  Return the Direction Form in the included envelope to the Trustees
          no later than 5:00 p.m., Eastern Time, on November 19, 1998 (unless
          this deadline is extended).

     Your direction will be deemed irrevocable unless withdrawn by 5:00 p.m.,
Eastern Time, on November 19,1998 (unless this deadline is extended). To be
effective, you must contact the Trustees and instruct the Trustees to withdraw
such tender of shares. Only the Trustees can actually withdraw your tender of
shares.

     Upon receipt of your notice, your previous direction will be deemed
canceled. You may direct the retendering of any shares in your account by
repeating the procedures set forth in this letter.

                                  2
<PAGE>

<PAGE>

Investment of Tender Proceeds

     INDIVIDUAL PARTICIPANTS IN THE ESOP WILL NOT RECEIVE ANY PORTION OF THE
TENDER PROCEEDS. ALL SUCH PROCEEDS AND THE ASSETS WILL REMAIN IN THE PLAN AND
MAYBE WITHDRAWN ONLY IN ACCORDANCE WITH THE TERMS OF THE PLAN. NO GAIN OR LOSS
WILL BE RECOGNIZED BY PARTICIPANTS IN THE ESOP FOR FEDERAL INCOME TAX PURPOSES
IN CONNECTION WITH THE TENDER OR SALE OF SHARES HELD IN THE PLAN.

No Recommendation

     THE COMPANY'S BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MAKING OF
THE OFFER TO PURCHASE. HOWEVER, NEITHER THE COMPANY, ITS BOARD OF DIRECTORS,
THE TRUSTEES, THE DEALER MANAGER/INFORMATION AGENT, OR ANY OTHER PERSON MAKES
ANY RECOMMENDATION TO PARTICIPANTS AS TO WHETHER TO TENDER SHARES, THE PRICE
AT WHICH TO TENDER, OR WHETHER TO REFRAIN FROM TENDERING SHARES. EACH
PARTICIPANT MUST MAKE HIS OR HER OWN DECISION ON THESE MATTERS.

Confidentiality

     YOUR DECISION WILL NOT BE DISCLOSED TO ANY DIRECTOR, OFFICER, OR EMPLOYEE
OF KLAMATH FIRST BANCORP, INC. OR KLAMATH FIRST FEDERAL SAVINGS AND LOAN
ASSOCIATION, EXCEPT FOR THE PURPOSE OF ALLOCATING PROCEEDS TO YOUR ACCOUNT IN
THE EVENT THAT ALL OR A PORTION OF YOUR SHARES ARE SOLD.

Further Information

     Although Keefe, Bruyette & Woods, Inc. ("Dealer Manager/Information
Agent") has no recommendation and cannot advise you what to do, its
representatives are prepared to answer any question that you may have on the
procedures involved in the Offer and your direction. The Dealer
Manager/Information Agent also can help you complete your Direction Form.   
For this purpose, you may contact the Dealer Manager/Information Agent at the
following number between8:30 a.m. and 5:30 p.m., Eastern Time, Monday through
Friday:

                        Keefe Bruyette & Woods, Inc.
                          211 Bradenton Avenue
                         Dublin, Ohio 43017-3541
                       Toll free:  (877) 298-6520

     Your ability to instruct the Trustees concerning whether to tender shares
allocated to your account is an important part of your rights as a ESOP
participant. Please consider this letter and the enclosed materials carefully
and then return your Direction Form promptly if you desire to tender.

                                   Sincerely,



                                   Gerald V. Brown                           
                                   President and Chief Executive Officer

                                  3
<PAGE>

<PAGE>

                    KLAMATH FIRST BANCORP, INC.
                               ESOP
                          DIRECTION FORM

                   BEFORE COMPLETING THIS FORM,
       PLEASE READ CAREFULLY THE ACCOMPANYING OFFER TO PURCHASE

               SEE THE ADDRESS LABEL BELOW FOR THE
             NUMBER OF SHARES ALLOCATED TO YOUR ACCOUNT
                                 
     In accordance with the Klamath First Bancorp, Inc. ("Company") Offer to
Purchase dated October 23,1998, a copy of which I have received and read, and
pursuant to the pass-through provisions of the Klamath First Federal Savings
and Loan ESOP, I hereby direct the Plan's Trustees:

     To tender the number of shares allocated to my account at the price or
prices indicated below:

PRICE:  $15.50  $16.00  $16.50  $17.00  $17.50  $18.00  $18.50  $19.00  $19.50 
NUMBER OF
SHARES
TENDERED: -----  -----   -----  ------  ------  ------  ------  ------  ------

                             INSTRUCTIONS

     Carefully complete the Direction Form above. Then insert today's date and
sign your name in the space provided below. Enclose the form in the included
envelope and return it promptly to the Human Resources Department. Your
Direction Form must be received no later than 5:00 p.m., Eastern Time, on
November 19, 1998.Direction Forms that are not fully or properly completed,
dated, and signed, or that are received after the deadline, will be ignored,
and the shares allocated to your account will not be tendered. Note that the
Trustees also have the right to ignore any direction that it determines cannot
be implemented without violation of ERISA.

     Neither the Company, its Board of Directors, the Trustees, nor any other
party makes any recommendation to participants as to whether to tender shares,
the price at which to tender, or to refrain from tendering shares. Each
participant must make his or her own decision on these matters.

     As of September 30, 1998, there were allocated to your account the number
of shares of common stock on the label below.

                             Date:                    , 1998
                                  -------------------

                            ----------------------------------------
                            Your Signature
                            (Please sign as your name appears below) 

                                  4
<PAGE>

<PAGE>

                                                                Exhibit (a)(8) 

                                MEMORANDUM

TO:    ALL STAFF

FROM:  Gerald V. Brown
       President and Chief Executive Officer 

DATE:  October 23, 1998

RE:    TENDER OFFER FOR THE COMMON STOCK OF KLAMATH FIRST BANCORP, INC.

     The Board of Directors of Klamath First Bancorp, Inc. has approved the
purchase of 1,983,353 shares of our common stock by means of what is termed a
"Modified Dutch Auction Tender." We have made every effort to communicate this
action to you as quickly as possible. Below you will find the answers to some
questions that are likely to arise from our public announcement, which was
made this morning. We will provide further information if additional questions
come up.

QUESTION:    Why is Klamath First Bancorp, Inc. offering to repurchase its
             stock?

ANSWER:      Over time, Klamath First Bancorp's profitable operations have
             contributed to the growth of a capital base that, when coupled
             with the substantial proceeds from our conversion to a stock
             company in October 1995, exceeds all regulatory standards. This
             exceptionally strong capital base exceeds the amount of capital
             to support our banking business. After evaluating a variety of
             alternatives to utilize this strong capital base more effectively
             and to attempt to maximize shareholder value, management and its
             Board of Directors determined that a purchase of our shares is
             currently the best alternative to accomplish these objectives.

QUESTION:    What is a "Modified Dutch Auction"?

ANSWER:      A Modified Dutch Auction is a process whereby a company makes a
             direct tender offer to its own shareholders to purchase a
             specified number of shares of its stock within a specified price
             range per share, and pays the highest price at which it accepts
             shares to all shareholders whose shares are accepted. In this
             case, the Company is making a direct offer to all of its
             shareholders to purchase in the aggregate 1,983,353 shares of
             common stock at a price not less than $15.50 nor in excess of
             $19.50 per share. This process allows each shareholder to elect
             whether to sell stock, and the price the shareholder is willing
             to sell at within the given price range. After receiving tenders
             of shares, at the termination of the Offer, the Company will
             choose the price within the specified range that will permit it
             to purchase the amount of securities sought, and this price will
             become the Purchase Price.

QUESTION:    How should I respond to questions?

ANSWER:      Klamath First Bancorp, Inc. has hired a special Dealer Manager/
             Information Agent to handle all questions. The Dealer Manager/
             Information Agent is Keefe, Bruyette & Woods, Inc., and their
             toll free telephone number is (877) 298-6520. Because Klamath
             First Bancorp, Inc. is the purchaser of the shares, and because
             securities laws are involved, it is very important that all
             questions be referred to the Dealer Manager/Information Agent. No
             staff member of Klamath First Bancorp, Inc. is allowed to answer
             any questions or give any advice regarding the tender offer.  We
             are aware that many shareholders are customers of Klamath First
             Federal Savings and Loan Association and have ties or relation- 
             ships with staff members. You should handle these situations as
             diplomatically
                                    1
<PAGE>

<PAGE>

            as possible, but in any event, all questions must be referred
            either to the Dealer Manager/Information Agent or the holder's
            broker or investment advisor.

QUESTION:   What do I say if a shareholder asks, "Should I sell (tender) my
            stock?"

ANSWER:     Members of the Klamath First Bancorp, Inc. staff must not give any
            investment advice to shareholders. The shareholder must make his
            or her own investment decision. You should not express an opinion
            as to whether you think the tender offer is a "good deal" or a
            "bad deal." While the shareholder may call the Dealer Manager/
            Information Agent, they will not receive investment advice from
            such organization. They should be directed to contact their broker
            or investment advisor.

QUESTION:   What do I do if someone brings a Letter of Transmittal to me or my 
            office or sends it to our office by mail?

ANSWER:     Because tenders must be received by Registrar and Transfer
            Company, within a limited amount of time, we cannot take the
            responsibility for having any shareholder's tender delivered by
            mail or by hand. Shareholders must send tenders directly to
            Registrar and Transfer Company at the address provided in the
            tender offer documents. That address is:

                       REGISTRAR AND TRANSFER COMPANY

By Mail:             Overnight Delivery:       By Hand:                    

10 Commerce Drive    10 Commerce Drive         c/o The Depository Trust Co.    
Cranford, NJ 07016   Cranford, NJ 07016-3572   Transfer Agent Drop             
                     Attn: Reorganization      55 Water Street, 1st Floor      
                           Department          New York, NY 10041-0099


QUESTION:   May employees of Klamath First Bancorp, Inc. tender shares in the
            offer?

ANSWER:     Yes. Employees who own shares of Klamath First Bancorp, Inc.
            common stock are eligible to tender their shares. You will receive
            a complete copy of the same documents that are being provided to
            other shareholders.

QUESTION:   May employees tender shares they own in the ESOP?

ANSWER:     Yes. We are enclosing a complete copy of all of the documents from
            the ESOP Trustees. Just as you vote your shares through the proxy
            process at the annual meeting, you have to instruct the Trustees
            if you want to tender some or all of your ESOP shares. Remember,
            if you do tender, to provide the Trustees with a subsequent form
            of how to reallocate your investments, i.e., direction on how you
            want this cash reinvested. The Trustees will deliver this form to
            the ESOP Committee.  Your decision will be kept confidential. 

                                  2
<PAGE>

<PAGE>

                                                                Exhibit (a)(9) 

                       KLAMATH FIRST BANCORP, INC.                       
  
                         QUESTIONS AND ANSWERS
                           ABOUT THE OFFER OF
                       KLAMATH FIRST BANCORP, INC.

              TO PURCHASE FOR CASH UP TO 1,983,353 SHARES
                 OF COMMON STOCK AT A PURCHASE PRICE OF
                      $15.50 TO $19.50 PER SHARE

                           October 23, 1998
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
                QUESTIONS AND ANSWERS ABOUT THE OFFER OF
                      KLAMATH FIRST BANCORP, INC.
                       TO PURCHASE ITS STOCK

     The following information is designed to answer frequently asked
questions about the offer by Klamath First Bancorp, Inc. ("Company") to
purchase shares of its common stock. Shareholders are referred to the Offer to
Purchase and Letter of Transmittal for a detailed description of the terms and
conditions of the offer.

Q.     WHY IS THE COMPANY MAKING THIS OFFER?
A.     The Company believes it has a strong and more than adequate capital
       base which will allow them to   continue to grow their business and
       using the additional capital to buy back stock will allow them to
       increase shareholder value.  The repurchasing of stock is designed to
       increase the Company's return on   equity by reducing the amount of
       equity outstanding.

Q.     WHAT IS THIS OFFER TO PURCHASE?
A.     The Company is inviting its shareholders to tender shares of its common
       stock at prices not less than $15.50 nor in excess of $19.50 per Share
       in cash, as specified by shareholders tendering their Shares. The 
       Company will determine the single per Share price, not less than $15.50
       nor in excess of $19.50 per Share, net to the seller in cash ("Purchase
       Price"), that it will pay for Shares validly tendered pursuant to the
       Offer, taking into account the number of Shares so tendered and the
       prices specified by tendering shareholders. The Company will select the
       Purchase Price that will allow it to buy 1,983,353 Shares (or such
       lesser number of Shares as are properly tendered at prices not less
       than $15.50 nor in excess of $19.50 per Share). This type of issuer
       tender offer is commonly referred to as a "Modified Dutch Auction."

Q.     WHAT IS A "MODIFIED DUTCH AUCTION?"
A.     In a Modified Dutch Auction  a company makes a direct tender offer to
       its own shareholders to purchase a specified number of shares of its
       stock within a specified price range per share, and pays the highest
       price at which it accepts shares to all shareholders whose shares are
       accepted. In this case, the Company is making a direct offer to all of
       its shareholders to purchase in the aggregate 1,983,353 Shares of its
       common stock at a price not less than $15.50 nor in excess of $19.50
       per Share. This process allows each shareholder to elect whether to
       sell stock, and the price the shareholder is willing to sell at within
       the given price range. After receiving tenders of Shares, at the
       termination of the Offer, the Company will choose the price within the
       specified range that will permit it to purchase the amount of
       securities sought and this price will become the Purchase Price.

                                  1
<PAGE>

<PAGE>

Q.     WHAT WILL BE THE FINAL PURCHASE PRICE?
A.     All Shares acquired in the Offer will be acquired at the Purchase
       Price. The Company will select the Purchase Price that will allow it to
       buy up to 1,983,353 Shares. All shareholders tendering at or below the
       Purchase Price will receive the same amount.

Q.     WHAT WILL HAPPEN IF MORE THAN 1,983,353 SHARES ARE TENDERED AT OR BELOW 
       THE PURCHASE PRICE?
A.     In the event more than 1,983,353 Shares are tendered at or below the
       Purchase Price, Shares tendered at or below the Purchase Price will be
       acquired by the Company (i) first from any shareholder who owned 
       beneficially, as of the close of business on September 28, 1998 and
       continues to own beneficially as of the termination of the Offer, an
       aggregate of fewer than 100 Shares and who validly tenders all of such
       Shares, and (ii) then from all other tendering shareholders subject to
       proration.

Q.     AT WHAT PRICE MAY I TENDER MY SHARES?
A.     Shareholders may elect to tender their Shares in increments of fifty
       cents ($0.50) starting at $15.50 per Share up to and including $19.50
       per Share. The election as to the number of Shares and the price a
       shareholder is willing to tender are to be indicated on the Letter of
       Transmittal.

Q.     HOW DO I TENDER MY SHARES?
A.     If you hold your Shares in certificate form, you must return a properly
       completed Letter of Transmittal (the blue form) and any other documents
       required by the Letter of Transmittal, together with the certificates
       for the Shares being tendered, to the Depositary, Registrar and
       Transfer Company, which must be received by them by 5:00 p.m., Eastern
       Time, on November 19, 1998.

       Please do not endorse your certificate(s).

Q.     HOW DO I TENDER MY SHARES IF MY SHARES ARE HELD BY MY BROKER?
A.     If your Shares are registered in street name with a broker, dealer,
       commercial bank, trust company or other nominee, you will need to
       contact your broker, bank or other nominee and instruct the nominee to
       make the tender of your Shares for you. You cannot tender such Shares
       using the Letter of Transmittal even though you may have received one
       for your information.

       If you are a broker and are tendering Shares in book-entry form for
       your customers, you must comply with the Book-Entry Delivery procedure
       described in Section 3 of the Offer to Purchase.

Q.     WHAT DO I DO IF I HAVE LOST MY CERTIFICATES, OR IF THEY HAVE BEEN
       MUTILATED, DESTROYED OR STOLEN, BUT I STILL WANT TO TENDER THEM?
A.     Call the Depositary at (800) 368-5948 for instructions for tendering
       Shares in such circumstances.

Q.     I WANT TO TENDER BUT I CANNOT GET MY STOCK TO THE DEPOSITARY ON TIME.
       WHAT CAN I DO?
A.     If you cannot submit a valid tender by the expiration date but want to
       tender, you may complete the guaranteed delivery instructions which
       gives you three days to produce the certificates. Have an eligible
       institution help you fill out the form as instructed in Section 3 of
       the Offer to Purchase.

Q.     DO I HAVE TO SELL MY STOCK TO THE COMPANY?
A.     No. A shareholder is not required to tender any stock.

Q.     WHAT HAPPENS IF I DO NOT TENDER MY STOCK TO THE COMPANY TO PURCHASE?
A.     Nothing will happen if you do not tender any or all of your Shares.
       Your Shares will remain outstanding without a change in the terms or
       ownership rights. You will continue to own the same number of Shares

                                  2
<PAGE>

<PAGE>

       without any adjustment, and you will continue to receive the same
       dividend and voting rights. However, since the Company will purchase up
       to 1,983,353 of its outstanding Shares, the percentage of the
       outstanding stock which you own will increase since the number of
       outstanding Shares will be reduced.

Q.     IF I DO TENDER MY SHARES, WHEN WILL I RECEIVE THE MONEY?
A.     As soon as practicable after the Expiration Date. If you are a
       registered shareholder, you will receive a check from the Depositary or
       if you hold your stock with a bank or broker your account will be
       credited.

Q.     WHAT IF THE TERMS OF THE OFFER CHANGE?
A.     In the event the Expiration Date is extended or if the terms of the
       Offer are materially changed, the Company will generally give notice of
       the change and, under certain circumstances, shareholders will be
       able to change or withdraw their tender for at least 10 business days
       from such notice.

Q.     CAN I TENDER PART OF MY STOCK AT DIFFERENT PRICES?
A.     Yes, you can elect to tender part of your stock at one price and an
       additional amount at a second price. For example, if you owned 1,500
       Shares, you could tender 500 Shares at one price, 500 Shares at another
       and keep the remaining 500 Shares. However, you cannot tender the same
       stock at different prices. In the prior example, the shareholder owning
       1,500 Shares cannot tender 1,500 at one price and 1,500 at another
       price. If you tender some Shares at one price and other Shares at a
       different price, you must use a separate Letter of Transmittal for each
       price. You may make a copy of the Letter of Transmittal if you need
       additional forms.

Q.     IS THERE ANY BROKERAGE COMMISSION?
A.     No. The Company will purchase stock directly from each shareholder at
       the Purchase Price without the use of a broker.

Q.     CAN I CHANGE OR CANCEL MY TENDER?
A.     You may increase or decrease the number of Shares indicated in the
       Letter of Transmittal or withdraw it entirely up until 5:00 p.m.,
       Eastern Time, on November 19, 1998. Generally after November 19, 1998,
       you cannot withdraw your tender. If you desire to change or withdraw
       your tender, you are responsible to make certain that a valid
       withdrawal is received by the November 19, 1998 deadline. Except as
       discussed in the Offer to Purchase, tenders are irrevocable after the
       November 19, 1998 deadline.

Q.     CAN YOU SUMMARIZE THE PROCESS BY WHICH SHARES ARE VALIDLY TENDERED?  
A.     Generally, for certificated Shares you must complete the Letter of
       Transmittal (the blue form) as set forth below. Please follow these
       instructions carefully to assure a valid tender.

       .    List the certificates and the number of Shares that you are
            tendering in the box captioned "Description of Shares Tendered".
       .    Check the box specifying the price at which you are tendering in 
            the box captioned "Price (in Dollars) Per Share at Which Shares
            are Being Tendered".                                               
       .    If you want to give us special payment instructions, complete the
            box captioned "Special Payment Instructions".                      
       .    If you want to give us special delivery instructions, complete
            the box captioned "Special Delivery Instructions".                 
       .    If you are an Odd Lot Holder (i.e., you hold fewer than 100
            Shares) who is tendering all your shares, complete the box 
            captioned "Odd Lots".                                              
       .    If your Shares are being delivered by book-entry, complete the
            box captioned "Box Below for Use By Eligible Institutions Only".   
       .    Complete the substitute Form W-9 to certify your tax
            identification number.                                             
       .    Sign the Letter of Transmittal in the box captioned "Sign Here"
            (in certain circumstances, signatures must be guaranteed in this
            Box, see Instructions 1 and 6 in the Letter of Transmittal).

                                  3
<PAGE>

<PAGE>

             You must deliver your Share certificates or comply with the
             book-entry delivery requirements. See Section 3 of the Offer to
             Purchase. These documents must be received by the Depositary,
             Registrar and Transfer Company, no later than 5:00 p.m., Eastern
             Time, on November 19, 1998. If you are tendering Shares held by a
             broker, commercial bank, trust company or other nominee, your
             instructions must be given to your nominee who will, on the basis
             of your instructions, tender Shares for you. Please see Section 3
             and the Letter of Transmittal for more details about how to
             tender Shares.

Q.     HOW CAN I GET MORE INFORMATION?
A.     If you have a question, please call our Dealer Manager/Information
       Agent, Keefe, Bruyette & Woods, Inc., toll free at (877) 298-6520 from
       8:30 a.m. to 5:30 p.m., Eastern Time, Monday through Friday.

THIS BROCHURE IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SECURITIES. THE OFFER TO PURCHASE THE STOCK OF THE COMPANY IS MADE
ONLY BY THE KLAMATH FIRST BANCORP, INC. OFFER TO PURCHASE DOCUMENT DATED
OCTOBER 23, 1998 AND THE ACCOMPANYING LETTER OF TRANSMITTAL.

                                  4
<PAGE>

<PAGE>

                                                               Exhibit (a)(10) 


                               INSTRUCTION SHEET

Shareholders who hold their own stock certificate(s) and wish to tender shares
must:

 .    Completely fill out  the Letter of Transmittal (blue document).  If you
     want to tender your shares at more than one price, then you must complete
     a separate Letter of Transmittal for each price.  Please make additional
     copies of the Letter of Transmittal if you need them.

 .    FOR THE TENDER TO BE VALID, A PRICE BOX MUST BE CHECKED ON THE LETTER OF
     TRANSMITTAL (blue document).

 .    Send stock certificate along with Letter of Transmittal to the Depositary
     at the address on the back cover of the Offer to Purchase (white booklet)
     and NOT to Klamath First Bancorp, Inc.

 .    Odd Lot Holders (holders of fewer than 100 shares) must complete the box
     captioned "Odd Lots" on the Letter of Transmittal (blue document).

 .    If a shareholder wishes to tender shares but will not have access to the
     stock certificate(s) by the Expiration Date, the tender can still be made
     by completely filling out the Letter of Transmittal (blue document), and
     the Notice of Guaranteed Delivery (gray document).

 .    Complete the Substitute W-9 form on the Letter of Transmittal (blue
     document) to prevent the withholding of 31% of your gross payments.

 .    Signatures need not be guaranteed if being signed by the registered
     holder(s) of the shares.


Shareholders who do not hold their stock certificate(s) (held by broker) and
wish to tender shares must:

 .    Contact your broker to coordinate the completion of the appropriate
     documents.

 .    Completely fill out the Letter of Transmittal (blue document).  If you
     want to tender your shares at more than one price, then you must complete
     a separate Letter of Transmittal for each price. Please make additional
     copies of the Letter of Transmittal if you need them.

 .    FOR THE TENDER TO BE VALID, A PRICE BOX MUST BE CHECKED ON THE LETTER OF
     TRANSMITTAL (blue document).

 .    Contact your broker and have the broker deliver your Shares pursuant to
     the procedures for book-entry transfer as described on page 4 of the
     introduction, along with the Letter of Transmittal to the Depositary at
     the address on the back cover of the Offer to Purchase (white booklet)
     and NOT to Klamath First Bancorp, Inc.

 .    If a shareholder wishes to tender shares but will not have access to the
     stock certificate(s) by the Expiration Date, the tender can still be made
     by completely filling out the Letter of Transmittal (blue document), and
     the Notice of Guaranteed Delivery (gray document).

 .    Complete the Substitute W-9 form on the Letter of Transmittal (blue
     document) to prevent the withholding of 31% of your gross payments.

 .    Signatures need not be guaranteed if being signed by the registered
     holder(s) of the shares.

FOR MORE INFORMATION, A HELPFUL QUESTIONS & ANSWERS BROCHURE IS INCLUDED IN
THIS MATERIAL.  IF YOU STILL HAVE QUESTIONS REGARDING THIS TENDER OFFER,
INCLUDING HOW TO COMPLETE THE NECESSARY FORMS, PLEASE CALL TOLL FREE AT (877)
298-6520.

<PAGE>

<PAGE>

                                                               Exhibit (a)(11)

FOR IMMEDIATE RELEASE
Date: October 11, 1998

Contact:     Gerald V. Brown
             President and Chief Executive Officer
             (541) 882-3444, extension 133

             Marshall J. Alexander
             Vice President and Chief Financial Officer
             (541) 882-3444, extension 120

                     KLAMATH FIRST BANCORP, INC.
                             ANNOUNCES
         OFFER TO BUY UP TO 1,983,353 SHARES OF ITS COMMON STOCK

     Klamath Falls, Oregon (Nasdaq NMS: KFBI)--Klamath First Bancorp, Inc.
announced today that its Board of Directors has authorized the repurchase of
up to 1,983,353 shares of its common stock, which represents approximately 20
percent of its outstanding shares as of June 30, 1998. The repurchase will be
made through a"Modified Dutch Auction Tender." Under this procedure, Klamath
First Bancorp, Inc. shareholders will be given the opportunity to sell part or
all of their shares to the Corporation at a price of not less than $15.50 per
share and not more than $19.50 per share. The offer to purchase shares will
commence on October 23, 1998 and will expire at5:00 p.m., Eastern Time, on
November 19, 1998 unless extended by Klamath First Bancorp, Inc.

     Under the procedures for a Modified Dutch Auction Tender, shareholders
may offer to sell all or a portion of the shares they own within a price range
of not less than the minimum price of $15.50 and not in excess of the maximum
price of $19.50 specified in the tender. Upon the expiration of the offer,
Klamath First Bancorp, Inc. will select the purchase price that will allow it
to buy 1,983,353 shares. All shares purchased in the offer will receive the
same price. If the number of shares tendered is equal to or less than
1,983,353 shares, the purchase price will be the highest price specified by
tendering shareholders. If the number of shares tendered is greater than the
number sought, the Corporation will select the lowest price that will allow it
to buy the number of shares it seeks.  Klamath First Bancorp has retained
Keefe, Bruyette & Woods, Inc. as dealer manager/information agent and
financial advisor for this transaction.

     Gerald V. Brown, President and Chief Executive Officer of Klamath First
Bancorp, Inc., stated, "Klamath First Bancorp, Inc. is announcing this tender
offer because the Board of Directors believes that the purchase of shares
pursuant to the offer should have beneficial effects on shareholder value
while maintaining a strong capital base to support the needs of our business
and our customers. After studying a number of alternatives, we selected the
Modified Dutch Auction Tender because it is a positive action that has the
potential for improving shareholder returns in an expeditious manner. If the
tender offer is successful, it is expected to improve our return on equity, as
well as our earnings per share."

     At June 30, 1998, Klamath First Bancorp, Inc. had assets of $1.0 billion
and shareholders' equity of $141.0 million.

     Headquartered in Klamath Falls, Oregon, Klamath First Federal Savings and
Loan Association, the principal subsidiary of Klamath First Bancorp, Inc., has
a state-wide presence currently operating out of 35 offices covering 22 Oregon
counties.

     This announcement is neither an offer to purchase nor a solicitation of
an offer to sell shares of Klamath First Bancorp, Inc. common stock. The offer
may be made solely by the Offer to Purchase and the related Letter of
Transmittal, which will be sent to all shareholders upon commencement of the
offer on or about October 23, 1998.


<PAGE>

<PAGE>

                                                               Exhibit (a)(12) 

     This announcement is neither an Offer to Purchase nor a solicitation of
an offer to sell shares of Klamath First Bancorp, Inc. common stock. The offer
is made solely by the Offer to Purchase, to be dated October 23, 1998, and the
related Letter of Transmittal, copies of which may be obtained from the Dealer
Manager/Information Agent.

                     KLAMATH FIRST BANCORP, INC.
                             OFFERS TO
          PURCHASE FOR CASH UP TO 1,983,353 SHARES OF ITS
                           COMMON STOCK
     AT A PURCHASE PRICE NOT LESS THAN $15.50 NOR IN EXCESS OF
                         $19.50 PER SHARE

     THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
          5:00 P.M., EASTERN TIME, ON NOVEMBER 19, 1998,
                   UNLESS THE OFFER IS EXTENDED.

        THE DEALER MANAGER/INFORMATION AGENT FOR THE OFFER IS:


                    KEEFE, BRUYETTE & WOODS, INC.
                       211 BRADENTON AVENUE
                      DUBLIN, OHIO 43017-3514
                    Toll free:  (877) 298-6520


October 11, 1998

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