__________, 2004

Dear Prospective Investor:

We are pleased to announce that K-Fed Bancorp, the holding company for Kaiser
Federal Bank, is offering shares of its common stock in a subscription offering
pursuant to a Plan of Stock Issuance.

We have enclosed the following materials that will help you learn more about the
merits of K-Fed Bancorp common stock as an investment. Please read and review
the materials carefully.

PROSPECTUS: This document provides detailed information about Kaiser
Federal Bank's operations and the proposed offering of K-Fed Bancorp common
stock

STOCK ORDER AND CERTIFICATION FORM: This form is used to purchase stock by
returning it with your payment in the enclosed business reply envelope. The
deadline for ordering stock is 12:00 Noon, Pacific Standard Time, on
________, 2004.

We invite you and certain depositors to become stockholders of K-Fed Bancorp.
Through this offering, you have the opportunity to buy stock directly from K-Fed
Bancorp without a commission or a fee.

If you have additional questions regarding the stock issuance, please call us at
(___) ___-____, Monday through Friday, 8:30 a.m. to 4:00 p.m., or stop by our
Stock Information Center located at 1359 North Grand Avenue in Covina,
California.

Sincerely,

K. M. Hoveland
President and Chief Executive Officer

THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT DEPOSITS OR ACCOUNTS AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.

THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK.
THE OFFER IS MADE ONLY BY THE PROSPECTUS.

[LOGO] KEEFE, BRUYETTE & WOODS, INC.

_________, 2004

TO DEPOSITORS AND FRIENDS
OF KAISER FEDERAL BANK
- --------------------------------------------------------------------------------
Keefe, Bruyette & Woods, Inc., a member of the National Association of
Securities Dealers, Inc., is assisting K-Fed Bancorp, the holding company for
Kaiser Federal Bank, in offering shares of its common stock in a subscription
offering pursuant to a Plan of Stock Issuance.

At the request of K-Fed Bancorp, we are enclosing materials explaining this
process and your options, including an opportunity to invest in the shares of
K-Fed Bancorp common stock being offered to customers of Kaiser Federal Bank and
various other persons until 12:00 Noon, Pacific Standard Time, on _________ ,
2004. Please read the enclosed offering materials carefully, including the
prospectus, for a description of the stock offering. K-Fed Bancorp has asked us
to forward these documents to you in view of certain requirements of the
securities laws in your state.

If you have any questions, please visit our Stock Information Center located at
1359 North Grand Avenue in Covina, California, Monday through Friday, 8:30 a.m.
to 4:00 p.m., or feel free to call the Stock Information Center at (___)
___-____.

Very truly yours,

Keefe, Bruyette & Woods, Inc.

THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT DEPOSITS OR ACCOUNTS AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.

THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK.
THE OFFER IS MADE ONLY BY THE PROSPECTUS.

_________, 2004

Dear Depositor:

We are pleased to announce that K-Fed Bancorp, the holding company for Kaiser
Federal Bank, is offering shares of its common stock in a subscription offering
pursuant to a Plan of Stock Issuance.

Unfortunately, K-Fed Bancorp is unable to either offer or sell its common stock
to you because the small number of eligible subscribers in your jurisdiction
makes registration or qualification of the common stock under the securities
laws of your jurisdiction impractical, for reasons of cost or otherwise.
Accordingly, this letter should not be considered an offer to sell or a
solicitation of an offer to buy the common stock of K-Fed Bancorp.

Sincerely,

K. M. Hoveland
President and Chief Executive Officer

THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT DEPOSITS OR ACCOUNTS AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.

THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK.
THE OFFER IS MADE ONLY BY THE PROSPECTUS.

________, 2004

Dear Friend:

We are pleased to announce that K-Fed Bancorp, the holding company for Kaiser
Federal Bank, is offering shares of its common stock in a subscription offering
pursuant to a Plan of Stock Issuance.

Because we believe you may be interested in learning more about the merits of
K-Fed Bancorp common stock as an investment, we are sending you the following
materials which describe the offering:

PROSPECTUS: This document provides detailed information about Kaiser
Federal Bank's operations and the proposed offering of K-Fed Bancorp common
stock.

As a friend of Kaiser Federal Bank, you will have the opportunity to buy common
stock directly from K-Fed Bancorp in the offering without paying a commission or
fee. If you have additional questions regarding the stock issuance, please call
us at (___) ___-____, Monday through Friday from 8:30 a.m. to 4:00 p.m., or stop
by the Stock Information Center located at 1359 North Grand Avenue in Covina,
California.

We are pleased to offer you this opportunity to become a stockholder of K-Fed
Bancorp.

Sincerely,

K. M. Hoveland
President and Chief Executive Officer

THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT DEPOSITS OR ACCOUNTS AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.

THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK.
THE OFFER IS MADE ONLY BY THE PROSPECTUS.

FACTS ABOUT STOCK ISSUANCE no impact on his or her standing as a for the amount of funds you specify for
customer of Kaiser Federal Bank. The payment. You will not have access to
stock issuance will allow depositors of these funds from the day we receive your
The Board of Directors of K-Fed Bancorp, Kaiser Federal Bank an opportunity to order until completion or termination of
the holding company for Kaiser Federal buy common stock and become stockholders the stock issuance. THERE IS NO PENALTY
Bank, unanimously adopted a Plan of of K-Fed Bancorp. FOR WITHDRAWAL FROM A CERTIFICATE OF
Stock Issuance to issue stock to certain DEPOSIT.
Kaiser Federal Bank depositors. WHO IS ELIGIBLE TO PURCHASE COMMON
SHARES IN THE SUBSCRIPTION OFFERING? CAN I PURCHASE STOCK USING FUNDS IN MY
This brochure answers some of the most ---------------------------------------- KAISER FEDERAL BANK IRA ACCOUNT?
frequently asked questions about the Certain past and present depositors of ----------------------------------------
stock issuance and about your Kaiser Federal Bank are eligible to Federal regulations do not permit the
opportunity to invest in the common purchase common stock in the purchase of common stock in connection
stock of K-Fed Bancorp. subscription offering. with the conversion from your existing
Kaiser Federal Bank IRA account. To
Investment in the common stock of K-Fed HOW MANY COMMON SHARES ARE BEING OFFERED accommodate our depositors, we have made
Bancorp involves certain risks. For a AND AT WHAT PRICE? arrangements with an outside trustee to
discussion of these risks and other ---------------------------------------- allow such purchases. Please call our
factors, including a description of the K-Fed Bancorp is offering up to Stock Information Center at (___)
offering, PROSPECTIVE INVESTORS ARE 4,562,625 shares of common stock, ___-____ for additional information.
URGED TO READ THE ACCOMPANYING subject to adjustment as described in
PROSPECTUS, especially the discussion the prospectus, at a price of $10.00 per WILL DIVIDENDS BE PAID ON THE COMMON
under the heading "Risk Factors." share through the prospectus. STOCK?
----------------------------------------
WHAT EFFECT WILL THE STOCK ISSUANCE HAVE HOW MANY SHARES MAY I BUY? The Board of Directors of K-Fed Bancorp
ON EXISTING DEPOSIT AND LOAN ACCOUNTS ---------------------------------------- anticipates paying a cash dividend in
AND CUSTOMER RELATIONSHIPS? The minimum order is 25 shares. The the future. However, the timing and
- ---------------------------------------- maximum individual purchase is 15,000 amount of such dividends is currently
The stock issuance will have no effect shares. No person, together with undetermined.
on existing deposit or loan accounts and associates of, and persons acting in
customer relationships. Deposits will concert with that person, may purchase HOW WILL THE COMMON STOCK BE TRADED?
continue to be federally insured by the more than 5% of the shares offered, as ----------------------------------------
Federal Deposit Insurance Corporation to further discussed in the prospectus. K-Fed Bancorp's stock is expected to
the maximum legal limit. Interest rates trade on the NASDAQ National Market
and existing terms and conditions on WILL THE COMMON STOCK BE INSURED? under the ticker symbol "KFED." However,
deposit accounts will remain the same ---------------------------------------- no assurance can be given that an active
upon completion of the stock issuance. No. Like any other common stock, K-Fed and liquid market will develop.
Contractual obligations of borrowers of Bancorp's common stock will not be
Kaiser Federal Bank will not change and insured. ARE EXECUTIVE OFFICERS AND DIRECTORS OF
there will be no change in the amount, KAISER FEDERAL BANK PLANNING TO PURCHASE
interest rate, maturity, security or any HOW DO I ORDER THE COMMON STOCK? STOCK?
other condition relating to the ---------------------------------------- ----------------------------------------
respective loans of customers. You must complete the enclosed Stock Yes! The executive officers and
Order and Certification Form. directors of Kaiser Federal Bank plan to
WILL KAISER FEDERAL BANK'S DEPOSITORS BE Instructions for completing your Stock purchase, in the aggregate, $2,550,000
REQUIRED TO PURCHASE STOCK IN THE STOCK Order and Certification Form are worth of stock or approximately 6.3% of
ISSUANCE? contained in this packet. Your order the common stock offered at the maximum
- ---------------------------------------- must be received by 12:00 Noon, Pacific of the offering range.
No depositor or other person is required Standard Time, on _________, 2004.
to purchase stock. However, depositors MUST I PAY A COMMISSION?
and other eligible persons will be HOW MAY I PAY FOR MY COMMON STOCK? ----------------------------------------
provided the opportunity to purchase ---------------------------------------- No. You will not be charged a commission
stock consistent with the established First, you may pay for common stock by or fee on the purchase of common stock
priority of subscription rights, should check, money order or cash. Interest in the subscription offering.
they so desire. The decision to purchase will be paid by Kaiser Federal Bank on
stock will be exclusively that of each these funds at the regular savings rate
person. Whether an individual decides to from the day the funds are received
purchase stock or not will have until the completion or termination of
the stock issuance. Second, you may
authorize us to withdraw funds from your
deposit account or certificate of
deposit at Kaiser Federal Bank

----------------------------------------
QUESTIONS
FOR ADDITIONAL INFORMATION, YOU MAY
VISIT OR CALL OUR STOCK INFORMATION AND
CENTER MONDAY THROUGH FRIDAY, 8:30 A.M.
TO 4:00 P.M. LOCATED IN KAISER FEDERAL ANSWERS
BANK'S OFFICE AT 1359 NORTH GRAND ----------------------------------------
AVENUE, COVINA, CALIFORNIA.
INSERT LOGO
STOCK INFORMATION CENTER

(---) --------
HOLDING COMPANY FOR
Kaiser Federal Bank
1359 North Grand Avenue KAISER FEDERAL BANK
Covina, California 91724

THE SHARES OF COMMON STOCK BEING OFFERED
ARE NOT DEPOSITS OR ACCOUNTS AND ARE NOT
INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.

THIS IS NOT AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY COMMON
STOCK. THE OFFER IS MADE ONLY BY THE
PROSPECTUS.