FOR IMMEDIATE RELEASE                                    July 21, 1997

     CONTACTS: Frank X. Hernandez                      Marshall J. Alexander
               Investor Relations                      Vice President and CFO
               (541) 882-3444 x113                     (541) 882-3444 x120



            KLAMATH FIRST BANCORP, INC. SUBSIDIARY COMPLETES PURCHASE
                           OF 25 WELLS FARGO BRANCHES

     KLAMATH  FALLS,  OREGON -- July 21,  1997 -- Klamath  First  Bancorp,  Inc.
     (NASDAQ NMS: KFBI) Gerald V. Brown,  president and chief executive  officer
     of Klamath First Bancorp, Inc. ("KFBI"), and its subsidiary,  Klamath First
     Federal Savings and Loan Association, ("the association"),  announced today
     that  the  association  has  completed  its  purchase  of 25  former  First
     Interstate  Bank-Oregon branches from Wells Fargo Bank. The transaction was
     previously disclosed on March 7, 1997.

     "We are very pleased to be able to bring our brand of traditional home-town
     banking to these communities  located throughout Oregon," Brown stated. "We
     believe  these new  customers  will be very  pleased with our staff and our
     commitment to become their 'family financial center'," he added.

     The acquired branches are located in the following Oregon towns: Brookings,
     Burns, Carlton,  Condon,  Coquille,  Enterprise,  Fossil,  Garibaldi,  Gold
     Beach,  Heppner,  Hermiston,  John Day, Lakeview,  Merrill,  Monroe,  Moro,
     Nyssa, Oakridge, Pilot Rock, Port Orford, Prairie City, Riddle, Scio, Union
     and Yamhill.


     Deposits as a result of the  acquisition  increased  from $418.2 million to
     $659.0 million. Customer accounts grew from 40,000 to 82,000.



     Wells Fargo Branches
     Page 2
                                     (more)


     Product  lines in  lending  have been  expanded  to include a full range of
     consumer and small  business  loans.  Deposit  product  offerings have also
     increased  and now include four new consumer  checking  accounts,  four new
     business checking  accounts,  a business sweep account and an indexed money
     market account.  ATM locations owned by the association  will increase from
     seven to a state-wide network of 22 machines. A 24-hour,  automated account
     information  system has been installed  enabling  customers to obtain basic
     information and conduct routine transactions  around-the-clock.  With these
     changes,  the  association  expects to  continue  its  emphasis on customer
     service  through its hands on banking  style which  Klamath  First  Federal
     Savings and Loan  Association has exhibited  throughout its 62 year history
     of service to Southern and Central  Oregon.  This is one area that will not
     change with our new statewide presence.

     Safe Harbor  Clause:  Except for the  historical  information  in this news
     release, the matters described herein are forward-looking statements within
     the meaning of the Private Securities Litigation Reform Act of 1995 and are
     subject to risks and  uncertainties  that  could  cause  actual  results to
     differ  materially.  Such risks and uncertainties  include those related to
     the economic  environment,  particularly  in the region where Klamath First
     Bancorp,  Inc.  operates,  competitive  products  and  pricing,  fiscal and
     monetary policies of the U.S. government,  acquisitions and the integration
     of  acquired  businesses,  credit  risk  management,  change in  government
     regulations   affecting  financial   institutions,   and  other  risks  and
     uncertainties  discussed from time to time in Klamath First Bancorp, Inc.'s
     SEC filings  including  its 1996 Form 10-K.  Klamath  First  Bancorp,  Inc.
     disclaims any obligation to publicly announce future events or developments
     which affect the forward-looking statements herein.

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