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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2002

or

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

For the transition period from                 to

Commission File Number 0-27404

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

350 South Garey Avenue, Pomona, California 91766
(Address of principal executive offices)

(909) 623-2323
(Registrant's telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

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

The registrant had 13,062,289 shares of common stock, par value $.01 per share, outstanding as of August 12, 2002.

Item 1. Financial Statements.

PFF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
(Unaudited)

PFF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share data)
(Unaudited)

4

PFF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)

6

PFF BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

(1) Basis of Consolidation

The accompanying consolidated financial statements include the accounts of PFF Bancorp, Inc. (the "Bancorp") and its subsidiaries PFF Bank & Trust and Glencrest Investment Advisers, Inc. (collectively, "the Company"). The Company's business is conducted primarily through PFF Bank & Trust and its subsidiary, Pomona Financial Services, Inc (collectively, "the Bank"). Pomona Financial Services, Inc. includes the accounts of Diversified Services, Inc. and PFF Financial Services, Inc. All material intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation have been included. Certain reclassifications have been made to the consolidated financial statements for the prior period to conform to the current presentation.

The results of operations for the three months ended June 30, 2002 are not necessarily indicative of results that may be expected for the entire fiscal year ending March 31, 2003.

(2)  New Accounting Pronouncements

In June, 2001 the FASB issued Statement of Financial Accounting Standards No. 143 "Accounting for Asset Retirement Obligations" which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This Statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. It is anticipated that the financial impact of this Statement will not have a material effect on the Company.

In April 2002, the FASB issued Statement of Financial Accounting Standards No. 145, "Rescission of SFAS Statements No. 4, 44, and 64, Amendment of SFAS Statement No. 13, and Technical Corrections" ("SFAS 145"), which updates, clarifies and simplifies existing accounting pronouncements. SFAS 145 rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt." SFAS 145 amends SFAS No. 13, "Accounting for Leases," to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. The provisions of SFAS 145 related to SFAS No. 4 and SFAS No. 13 are effective for fiscal years beginning and transactions occurring after May 15, 2002, respectively. It is anticipated that the financial impact of SFAS 145 will not have a material effect on the Company.

In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146"), which requires the recognition of costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. SFAS 146 replaces Emerging Issues Task Force ("EITF") Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring )." The provisions of SFAS 146 are to be applied prospectively to exit or disposal activities initiated after December 31, 2002. It is anticipated that the financial impact of this statement will not have a material effect on the Company.

7

PFF BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
(Continued)

(3) Earnings per share

Basic EPS excludes dilution and is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted from issuance of common stock that then shared in earnings.

The following table is a reconciliation of the numerators and denominators of the basic and diluted EPS computations for net earnings for PFF Bancorp, Inc.

(1) The exercise price of all options was less than the average market price of the common shares outstanding during the three month period ending June 30, 2002. As a result, all options to purchase shares of common stock were included in the computation of diluted EPS.

(2) Options to purchase 2,612 shares of common stock at a weighted average price of $21.88 per share were outstanding during the three month period ending June 30, 2001 but were not included in the computation of diluted EPS because the options' exercise price was greater than the average market price of the common shares. The options, which expire on November 23, 2004, were still outstanding at June 30, 2001.

(3) Diluted and basic weighted average shares and per-share amounts for the three months ended June 30, 2001, have been restated to reflect the correction of an error in previous periods. Diluted and basic weighted average shares as previously presented were 13,122,552 and 11,721,986, respectively as of June 30, 2001. Diluted and basic EPS amounts as previously presented were $0.60 and $0.68, respectively as of June 30, 2001. The increase to diluted EPS resulted from the appropriate inclusion of the tax benefits associated with non-qualified stock options in the computation of diluted weighted average shares under the treasury stock method. The impact of these tax benefits was erroneously excluded from the previous computations of diluted weighted average shares. The adjustments to basic weighted average shares relate to the vesting of stock awards over a five-year period following the March 1996 IPO. These shares were correctly included in the calculation of diluted EPS, but were erroneously excluded from the calculation of basic EPS over the last four fiscal years.

8

PFF BANCORP, INC. AND SUBSIDIARIES
Item 2: Management's Discussion and Analysis of Financial Condition and Operations

Average Balance Sheets

The following table sets forth certain information relating to the Company for the three months ended June 30, 2002 and 2001. The yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods shown. Average balances are derived from average daily balances. The yields and costs include fees that are considered adjustments to yields.

9

PFF BANCORP, INC. AND SUBSIDIARIES
Management's Discussion and Analysis
(Continued)

Rate/Volume Analysis

The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected the Company's interest income and interest expense during the periods indicated. Information is provided in each category with respect to: (i) changes attributable to changes in volume (changes in volume multiplied by prior rate); (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume); (iii) changes attributable to changes in rate/volume (change in rate multiplied by change in volume); and (iv) the net change.

Forward-Looking Statements

Except for historical information contained herein, the matters discussed in this report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that involve substantial risks and uncertainties. When used in this report, or in the documents incorporated by reference herein, the words "anticipate," "believe," "estimate," "may," "intend," "expect" and similar expressions identify certain of such forward-looking statements. Actual results could differ materially from such forward-looking statements contained herein. Factors that could cause future results to vary from current expectations include, but are not limited to, the following: changes in economic conditions (both generally and more specifically in the markets in which the Company operates); changes in interest rates, deposit flows, loan demand, real estate values and competition; changes in accounting principles, policies or guidelines and in government legislation and regulation (which change from time to time and over which the Company has no control); other factors affecting the Company's operations, markets, products and services; and other risks detailed in this Form 10-Q and in the Company's other Securities and Exchange Commission filings. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

Critical Accounting Policies

Note 1 to the Unaudited Consolidated Financial Statements for the quarter ended June 30, 2002, contains a summary of significant accounting policies. The Company believes the policies with respect to the methodology for determination of the allowance for loan losses, the valuation of mortgage servicing rights and asset impairment judgments, including the recoverability of goodwill and other than temporary declines in the value of our securities, involve a higher degree of complexity and require management to make difficult and subjective judgments which often require assumptions or estimates about highly uncertain matters. Changes in these judgments, assumptions or estimates could cause reported results to differ materially. These critical policies and their application are periodically reviewed with the Audit Committee and the Board of Directors.

Comparison of Operating Results for the Three Months Ended June 30, 2002 and 2001

General

The following discussion compares the results of operations for the three month period ended June 30, 2002 with the same period ended June 30, 2001 and our consolidated financial condition at June 30, 2002 to March 31, 2002. This discussion should be read in conjunction with the consolidated financial statements and footnotes included herein.

The Company recorded net earnings of $8.9 million or $0.68 per diluted share for the three months ended June 30, 2002 compared to net earnings of $7.9 million or $0.61 per diluted share for the comparable period of 2001.

Net interest income increased 12 percent or $3.1 million from $25.1 million for the three months ended June 30, 2001 to $28.2 million for the comparable period of 2002. The increase in net interest income reflects a 39 basis point increase in net interest spread from 3.17% for the three months ended June 30, 2001 to 3.56% for the comparable period of 2002. Average interest-earning assets increased 4 percent or $115.1 million from $2.84 billion for the three months ended June 30, 2001 to $2.95 billion for the comparable period of 2002.

11

PFF BANCORP, INC. AND SUBSIDIARIES
Management's Discussion and Analysis
(Continued)

Provision for loan losses was $1.0 million for the three months ended June 30, 2002 compared to $1.3 million for the comparable period of 2001.

Total non-interest income, was $4.3 million for both the three months ended June 30, 2001 and 2002. Total non-interest expense increased from $14.5 million for the three months ended June 30, 2001 to $16.4 million for the comparable period of 2002.

Interest Income

Interest income decreased $8.3 million from $57.0 million for the three months ended June 30, 2001 to $48.6 million for the comparable period of 2002. The decrease in interest income was attributable to a 144 basis point decrease in average yield on interest-earning assets from 8.03 percent for the three months ended June 30, 2001 to 6.59 percent for the comparable period of 2002.

Reflecting a dramatically lower interest rate environment during the past year, the average yield on loans receivable, net decreased 143 basis points from 8.42% for the three months ended June 30, 2001 to 6.99% for the comparable period of 2002. Approximately 89 percent of the Company's loans receivable are adjustable rate. This does not include approximately 23 percent of the portfolio comprised of hybrid adjustable rate mortgages that are still in their initial fixed rate periods. The average yield on the aggregate balance of mortgage-backed securities, collateralized mortgage obligations and investment securities (collectively "securities") fell 164 basis points from 6.50% for the three months ended June 30, 2001 to 4.87% for the comparable period of 2002. The decrease in the average yield on securities also reflects the impact on the decrease in the general level of interest rates.

The downward influence on average yield on interest-earning assets exerted by the decrease in the general level of interest rates was partially mitigated by the following two factors.

(1) The proportion of average interest-earning assets comprised by loans receivable, net increased from 81 percent for the three months ended June 30, 2001 to 84 percent for the comparable period of 2002. The average balance of loans receivable, net, increased $189.8 million from $2.30 billion for the three months ended June 30, 2001 to $2.49 billion for the comparable period of 2002. These increases were offset by a corresponding $67.8 million decrease in securities from $429.4 million for the three months ended June 30, 2001 to $361.6 million for the comparable period of 2002.

(2) Between the quarters ended June 30, 2001 and 2002, the average balance of construction, commercial business, commercial real estate and consumer loans (the "Four-Cs") increased from 39 percent to 42 percent of average loans receivable, net. This represents a $164.8 million increase in the Four-Cs from $892.6 million for the three months ended June 30, 2001 to $1.06 billion for the comparable period of 2002. Originations of the Four-Cs represented 82% and 87% of total loan originations for the three months ended June 30, 2002 and 2001, respectively.

Interest Expense

Interest expense decreased $11.5 million from $31.8 million for the three months ended June 30, 2001 to $20.4 million for the comparable period of 2002. The decrease in interest expense was attributable to a 183 basis point decrease in the average cost of interest-bearing liabilities during the 2002 period, which was offset by an increase in average interest-bearing liabilities of $64.7 million from $2.63 billion for the three months ended June 30, 2001 to $2.69 billion for the comparable period of 2002.
The 183 basis point decrease in the average cost of interest-bearing liabilities reflects a 188 basis point decrease in the average cost of deposits, and a 134 basis point decrease in the average cost of FHLB advances and other borrowings. Strong growth in deposits resulted in an increase in the proportion of total interest-bearing liabilities comprised by deposits from 77% for the three months ended June 30, 2001 to 81% for the comparable period of 2002. The average balance of total deposits increased $154.1 million from $2.03 billion for the three months ended June 30, 2001 to $2.18 billion for the comparable period of 2002. The average balance of FHLB advances decreased $89.4 million from $600.9 million for the three months ended June 30, 2001 to $511.5 million for the comparable period of 2002.

12

PFF BANCORP, INC. AND SUBSIDIARIES
Management's Discussion and Analysis
(Continued)

The average cost of deposits decreased from 4.59% for the three months ended June 30, 2001 to 2.71% for the comparable period of 2002 reflecting strong growth in the lower cost categories of deposits coupled with the decrease in the general level of market interest rates experienced during the respective time periods. The average balances of money market, savings and NOW accounts (collectively, "core deposits") increased $334.1 million from $814.2 million or 40% of average total deposits of $2.03 billion for the three months ended June 30, 2001 to $1.15 billion or 53% of average total deposits of $2.18 billion for the comparable period of 2002. The average cost of core deposits was 1.89% for the three months ended June 30, 2002 compared to 2.60% for the comparable period of 2001.

Provision for Loan Losses

Provision for loan losses was $1.0 million for the three months ended June 30, 2002 compared to $1.3 million for the comparable period of 2001. Although there have been no significant increases in payment delinquencies or non-performing assets, the Company believes that the additional provision for loan losses is prudent, given the weaknesses in the general economic environment and to reflect the general growth in loan portfolio balances during the 2002 period.

The provision for loan losses is a result of management's periodic analysis of risks inherent in our loan portfolio from time to time, as well as the adequacy of the allowance for loan losses. It is our policy to provide valuation allowances for estimated losses on loans based upon past loss experience, current trends in the level of delinquent and specific problem loans, loan concentrations to single borrowers, adverse situations that may affect the borrower's ability to repay, the estimated value of any underlying collateral, and current and anticipated economic conditions in the Company's market area. Accordingly, the calculation of the adequacy of the allowance for loan losses is not based directly on the level of non-performing assets. For additional discussion on our allowance for loan losses, see "Comparison of Financial Condition at June 30, 2002 and March 31, 2002."

Non-Interest Income

Non-interest income was $4.3 million for both the three months ended June 30, 2001 and 2002. As a result of the growth in core deposits, deposit and related fees increased $365,000 from $2.4 million for the three months ended June 30, 2001 to $2.7 million for the comparable period of 2002. During the three months ended June 30, 2002, the Company incurred a net loss of $209,000 on trading securities activity compared to a net gain of $93,000 for the comparable period of 2001.

13

PFF BANCORP, INC. AND SUBSIDIARIES
Management's Discussion and Analysis
(Continued)

Non-Interest Expense

Non-interest expense increased from $14.5 million for the three months ended June 30, 2001 to $16.4 million for the comparable period of 2002. General and administrative expense increased from $14.5 million or 1.98%, on an annualized basis, of average assets for the three months ended June 30, 2001 to $16.5 million or 2.19%, on an annualized basis, of average assets for the comparable period of 2002.

Compensation and benefits expense accounted for $1.8 million of the $2.0 million increase in general and administrative expense between the three months ended June 30, 2001 and 2002. The increase in compensation and benefits from $7.8 million for the three months ended June 30, 2001 to $9.7 million for the comparable period of 2002 reflects increases in staff necessary to handle higher volumes of the Four-Cs and core deposits. The Company's opening of a registered investment advisor, Glencrest Investment Advisors, Inc. (Glencrest) in April 2002 also contributed to the increase in operating expenses. During the three months ended June 30, 2002, operating expenses associated with Glencrest totaled $475,000, of which $240,000 was attributable to compensation and benefits expense.

Income Taxes

Income taxes were $6.3 million for the three months ended June 30, 2002 compared to $5.8 million for the comparable period of 2001. The effective tax rates were 41.7% and 42.1% for the three months ended June 30, 2002 and 2001, respectively.

Comparison of Financial Condition at June 30, 2002 and March 31, 2002

Total assets decreased $30.4 million from $3.04 billion at March 31, 2002 to $3.01 billion at June 30, 2002. Loans receivable, net increased $40.2 million from $2.49 billion at March 31, 2002 to $2.53 billion at June 30, 2002. The aggregate balance of securities decreased $14.3 million from $353.9 million at March 31, 2002 to $339.6 million at June 30, 2002. The $52.1 million decrease in cash and cash equivalents during the quarter reflects the utilization of excess liquidity to fund loan growth and pay down FHLB advances.

The Company's level of non-performing assets continued to improve from the level of March 31, 2002. Non-accrual loans decreased to $3.7 million or 0.13 percent of gross loans at June 30, 2002, from $4.5 million or 0.16 percent of gross loans at March 31, 2002. At June 30, 2002, the allowance for loan losses was $32.0 million or 1.11 percent of gross loans and 862.28 percent of non-accrual loans compared to $31.4 million or 1.11 percent of gross loans and 697.80 percent of non-accrual loans at March 31, 2002. The growth in the loan portfolio and an assessment of current asset quality resulted in a provision for loan losses of $1.0 million for the quarter ended June 30, 2002, compared to $1.3 million for the comparable period of 2001.

The progress of the 296 home residential development project in Castaic, California on which the Bank has loans outstanding at June 30, 2002, aggregating $23.8 million continues to meet or exceed recent projections. As of June 30, 2002, 214 of the 296 homes have been sold and closed with an additional 43 homes in escrow. The additional 43 homes in escrow are currently under construction. The remaining 36 unsold production homes are expected to be built and sold during calendar year 2002 or the beginning of 2003, along with the sale of the three existing models. During the quarter ended June 30, 2002, 20 homes closed escrow, and an additional 33 homes entered escrow. The $18.2 million loan to a business equipment leasing company that was classified as "substandard" at March 31, 2002 has continued to perform in accordance with its original contractual terms and continues to exhibit no evidence of impairment.

14

PFF BANCORP, INC. AND SUBSIDIARIES
Management's Discussion and Analysis
(Continued)

The allowance for loan losses is maintained at an amount management considers adequate to cover losses on loans receivable, which are deemed probable and estimable. The allowance is based upon a number of factors, including current economic conditions, actual loss experience, industry trends and the composition of the loan portfolio by type. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank's allowance for loan losses. Such agencies may require the Bank to make additional provisions for loan losses based upon information available at the time of the review. The Company will continue to monitor and modify its allowance for loan losses as economic conditions, loss experience, changes in portfolio composition and other factors dictate. The following table sets forth activity in the Bank's allowance for loan losses.