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 December 31, 2000
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 0-27404PFF BANCORP, INC.(exact name of registrant as specified in its charter)

DELAWARE
      95-4561623(State or other jurisdiction of
        incorporation or organization)
      (I.R.S. Employer I.D. No.)


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 13,218,931 shares of common stock, par
value $.01 per share, outstanding as of February 9, 2001.

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PFF BANCORP, INC. AND SUBSIDIARY
Form 10-Q
Index

|PART I     | FINANCIAL INFORMATION (Unaudited)                                                                                        | PAGE
|---------- | ------------------------------------------------------------------------------------------------------------------------ | ----
|Item 1     | Financial statementsConsolidated Balance Sheets as of
    December 31, 2000 and March 31, 2000                           | 1   
|           | Consolidated Statements of
    Earnings for the three and nine months ended December 31, 2000 and 1999                   | 2   
|           | Consolidated
    Statements of Comprehensive Earnings for the three and nine months ended
    December 31, 2000 and 1999 | 3   
|           | Consolidated Statement of Stockholders'
    Equity for the nine months ended December 31, 2000                           | 4   
|           | Consolidated Statements of Cash Flows
    for the nine months ended December 31, 2000 and 1999                           | 5   
|           | Notes to Unaudited Consolidated Financial
    Statements                                                                 | 7   
|Item 2     | Management's Discussion and Analysis of
    Financial Condition and Results of Operations                                | 11  
|Item 3     | Qualitative and Quantitative Disclosures
    about Market Risk                                                           | 23  
|PART II    | OTHER INFORMATION                                                                                                        |     
|Item 1     | Legal Proceedings                                                                                                        | 24  
|Item 2     | Changes in Securities                                                                                                    | 24  
|Item 3     | Defaults Upon Senior
      Securities                                                                                    | 24  
|Item 4     | Submission of Matters to
    a Vote of Security Holders                                                                  | 24  
|Item 5     | Other Information                                                                                                        | 24  
|Item 6     | Exhibits and Reports on Form 8-K                                                                                         | 25  
|SIGNATURES |                                                                                                                          |     



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PART 1 - FINANCIAL INFORMATION (Unaudited)

Item 1. Financial Statements.

PFF BANCORP, INC. AND SUBSIDIARYCONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)

|                                                                                                                                                                                                | December 31,
      2000 | March 31,
      2000
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | --------------------
|Assets                                                                                                                                                                                          |                         |                     
|Cash and cash equivalents                                                                                                                                                                       | $ 56,306                | $ 35,131            
|Loans held for sale at lower of cost or fair value (net of valuation
      allowance)                                                                                                           | 1,642                   | 7,362               
|Investment securities held-to-maturity (estimated fair value
      of $754 at December 31, 2000 and $719 at March 31, 2000)                                                                     | 702                     | 701                 
|Investment securities available-for-sale, at fair value                                                                                                                                         | 87,917                  | 87,810              
|Mortgage-backed securities available-for-sale, at fair value                                                                                                                                    | 316,982                 | 381,277             
|Collateralized mortgage obligations available-for-sale, at fair value                                                                                                                           | 82,974                  | 85,653              
|Trading securities, at fair value                                                                                                                                                               | 2,835                   | 4,318               
|Investments in real estate                                                                                                                                                                      | -                       | 4,928               
|Loans receivable, net                                                                                                                                                                           | 2,332,009               | 2,326,702           
|Federal Home Loan Bank (FHLB) stock, at cost                                                                                                                                                    | 47,090                  | 44,550              
|Accrued interest receivable                                                                                                                                                                     | 19,843                  | 18,584              
|Real estate acquired through foreclosure, net                                                                                                                                                   | 774                     | 1,466               
|Property and equipment, net                                                                                                                                                                     | 22,807                  | 22,374              
|Prepaid expenses and other assets                                                                                                                                                               | 13,226                  | 13,167              
|Total assets                                                                                                                                                                                    | $ 2,985,107             | $ 3,034,023         
|                                                                                                                                                                                                |                         |                     
|Liabilities and Stockholders' Equity                                                                                                                                                            |                         |                     
|Liabilities:                                                                                                                                                                                    |                         |                     
|Deposits                                                                                                                                                                                        | $ 1,960,399             | $ 1,906,534         
|FHLB advances                                                                                                                                                                                   | 745,000                 | 884,000             
|Accrued expenses and other liabilities                                                                                                                                                          | 32,494                  | 21,658              
|Total liabilities                                                                                                                                                                               | 2,737,893               | 2,812,192           
|Commitments and contingencies                                                                                                                                                                   | -                       | -                   
|Stockholders' equity:                                                                                                                                                                           |                         |                     
|Preferred stock, $.01 par value. Authorized 2,000,000
      shares; none issued                                                                                                                 | -                       | -                   
|Common stock, $.01 par value. Authorized 59,000,000 shares; issued
      20,061,496 and 20,012,972; outstanding 13,218,029 and 13,314,505 at
      December 31 and March 31, 2000, respectively | 200                     | 200                 
|Additional paid-in capital                                                                                                                                                                      | 131,224                 | 131,370             
|Retained earnings, substantially restricted                                                                                                                                                     | 131,287                 | 113,521             
|Unearned stock-based compensation                                                                                                                                                               | (10,097)                | (13,303)            
|Treasury stock (6,843,467 at December 31 and 6,698,467
      at March 31, 2000)                                                                                                                 | (68)                    | (67)                
|Accumulated other comprehensive loss                                                                                                                                                            | (5,332)                 | (9,890)             
|Total stockholders' equity                                                                                                                                                                      | 247,214                 | 221,831             
|Total liabilities and stockholders' equity                                                                                                                                                      | $ 2,985,107             | $ 3,034,023         

See accompanying notes to the unaudited consolidated financial statements.

1

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

|                                                                                     | For the Three Months Ended
      December 31, | For the Nine Months Ended
      December 31,
|------------------------------------------------------------------------------------ | --------------------------------------------- | --------------------------------------------
|                                                                                     | 2000                                          | 1999                                        
|Interest income:                                                                     |                                               |                                             
|Mortgage loans                                                                       | $ 43,828                                      | $ 39,253                                    
|Non-mortgage loans                                                                   | 7,584                                         | 4,699                                       
|Mortgage-backed securities                                                           | 5,390                                         | 6,700                                       
|Collateralized mortgage obligations                                                  | 1,629                                         | 1,493                                       
|Investment securities and deposits                                                   | 3,109                                         | 2,546                                       
|Total interest income                                                                | 61,540                                        | 54,691                                      
|Interest expense:                                                                    |                                               |                                             
|Interest on deposits                                                                 | 24,646                                        | 19,725                                      
|Interest on borrowings                                                               | 12,238                                        | 12,392                                      
|Total interest expense                                                               | 36,884                                        | 32,117                                      
|Net interest income                                                                  | 24,656                                        | 22,574                                      
|Provision for loan losses                                                            | 1,251                                         | 1,000                                       
|Net interest income after provision for loan losses                                  | 23,405                                        | 21,574                                      
|Non-interest income:                                                                 |                                               |                                             
|Deposit and related fees                                                             | 2,178                                         | 2,233                                       
|Loan and servicing fees                                                              | 822                                           | 1,152                                       
|Trust fees                                                                           | 237                                           | 541                                         
|Gain on sales of assets, net                                                         | 120                                           | (173)                                       
|Gain(loss) on trading securities, net                                                | (773)                                         | 777                                         
|Other non-interest income                                                            | 11                                            | 1,492                                       
|Total non-interest income                                                            | 2,595                                         | 6,022                                       
|Non-interest expense:                                                                |                                               |                                             
|General and administrative:                                                          |                                               |                                             
|Compensation and benefits                                                            | 7,882                                         | 7,360                                       
|Occupancy and equipment                                                              | 3,071                                         | 2,889                                       
|Marketing and professional services                                                  | 1,728                                         | 1,202                                       
|Other non-interest expense                                                           | 2,012                                         | 2,472                                       
|Total general and administrative                                                     | 14,693                                        | 13,923                                      
|Foreclosed real estate operations, net                                               | (320)                                         | (51)                                        
|Total non-interest expense                                                           | 14,373                                        | 13,872                                      
|Earnings before income taxes                                                         | 11,627                                        | 13,724                                      
|Income taxes                                                                         | 4,908                                         | 5,880                                       
|Net earnings                                                                         | $ 6,719                                       | $ 7,844                                     
|                                                                                     |                                               |                                             
|Basic earnings per share                                                             | $ 0.57                                        | $ 0.65                                      
|Weighted average shares outstanding for basic
      earnings per share calculation   | 11,692,108                                    | 12,095,794                                  
|Diluted earnings per share                                                           | $ 0.52                                        | $ 0.59                                      
|Weighted average shares outstanding for diluted
      earnings per share calculation | 12,909,442                                    | 13,324,001                                  

See accompanying notes to
the unaudited consolidated financial statements.

2

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PFF BANCORP, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF
COMPREHENSIVE EARNINGS
(Dollars in thousands)
(Unaudited)



|                                                                                                            | For the Three Months Ended
      December 31, | For the Nine Months Ended
      December 31,
|----------------------------------------------------------------------------------------------------------- | --------------------------------------------- | --------------------------------------------
|                                                                                                            | 2000                                          | 1999                                        
|Net earnings                                                                                                | $ 6,719                                       | $ 7,844                                     
|Other comprehensive earnings (losses), net of
      income taxes                                            |                                               |                                             
|Unrealized gains (losses) on securities
      available-for-sale:                                           |                                               |                                             
|U.S. Treasury and agency securities and other
      investment securities available-for-sale, at fair value | 140                                           | 25                                          
|Collateralized mortgage obligations available-for-sale,
      at fair value                                 | 291                                           | (41)                                        
|Mortgage-backed securities available-for-sale, at fair value                                                | 1,167                                         | (966)                                       
|Reclassification of realized (gains)losses included
      in earnings                                       | 156                                           | 57                                          
|Other comprehensive earnings (losses)                                                                       | 1,754                                         | (925)                                       
|Comprehensive earnings                                                                                      | $ 8,473                                       | $ 6,919                                     

See
accompanying notes to the unaudited consolidated financial statements.

3

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PFF BANCORP, INC. AND SUBSIDIARYCONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Dollars in thousands)
(Unaudited)

|                                                                         | Number of
      Shares | Common
      Stock | Additional
      Paid-in
      Capital | Retained
      Earnings,
      Substantially
      Restricted | Unearned
      Stock-based
      Compensation | Treasury
      Stock | Accumulated
      Other
      Comprehensive
      Earnings(Loss) | Total    
|------------------------------------------------------------------------ | ---------------------- | ------------------ | -------------------------------------- | ------------------------------------------------------------- | --------------------------------------------- | -------------------- | ---------------------------------------------------------------- | ---------
|Balance at March 31, 2000                                                | 13,314,505             | $ 200              | $ 131,370                              | $ 113,521                                                     | $ (13,303)                                    | $ (67)               | $ (9,890)                                                        | $ 221,831
|Net earnings                                                             | -                      | -                  | -                                      | 21,163                                                        | -                                             | -                    | -                                                                | 21,163   
|Purchase of treasury stock                                               | (145,000)              | -                  | (1,449)                                | (1,117)                                                       | -                                             | (1)                  | -                                                                | (2,567)  
|Amortization of shares under stock-based
      compensation plans        | -                      | -                  | 920                                    | -                                                             | 3,206                                         | -                    | -                                                                | 4,126    
|Stock options exercised                                                  | 48,524                 | -                  | 383                                    | -                                                             | -                                             | -                    | -                                                                | 383      
|Dividends                                                                | -                      | -                  | -                                      | (2,280)                                                       | -                                             | -                    | -                                                                | (2,280)  
|Changes in unrealized losses on
      securities available for sale, net | -                      | -                  | -                                      | -                                                             | -                                             | -                    | 4,558                                                            | 4,558    
|Balance at December 31, 2000                                             | 13,218,029             | $ 200              | $ 131,224                              | $ 131,287                                                     | $ (10,097)                                    | $ (68)               | $ (5,332)                                                        | $ 247,214

See
accompanying notes to the unaudited consolidated financial statements.

4

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

|                                                                                                                     | Nine Months Ended
      December 31,
|-------------------------------------------------------------------------------------------------------------------- | ------------------------------------
|                                                                                                                     | 2000                                
|Cash flows from operating activities:                                                                                |                                     
|Net earnings                                                                                                         | $ 21,163                            
|Adjustments to reconcile net earnings to net cash
      provided by operating activities:                            |                                     
|Amortization of premiums net of discount accretion on
      loans and securities                                     | 1,081                               
|Amortization of deferred loan origination fees                                                                       | 40                                  
|Loan fees collected                                                                                                  | 215                                 
|Dividends on FHLB stock                                                                                              | (2,540)                             
|Provisions for losses on loans                                                                                       | 3,753                               
|Gains on sales of loans, mortgage-backed securities
      available-for-sale, real estate and property and equipment | (474)                               
|Proceeds from sale of trading securities                                                                             | 476                                 
|(Gains) losses on trading securities                                                                                 | 1,020                               
|Depreciation and amortization of property and equipment                                                              | 2,616                               
|Loans originated for sale                                                                                            | (13,700)                            
|Proceeds from sale of loans held-for-sale                                                                            | 19,649                              
|Amortization of unearned stock-based compensation                                                                    | 4,126                               
|Increase in accrued expenses and other liabilities                                                                   | 7,802                               
|Increase in:                                                                                                         |                                     
|Accrued interest receivable                                                                                          | (1,259)                             
|Prepaid expenses and other assets                                                                                    | (59)                                
|Net cash provided by operating activities                                                                            | 43,909                              
|Cash flows from investing activities:                                                                                |                                     
|Loans originated for investment                                                                                      | (820,366)                           
|Increase in construction loans in process                                                                            | 28,999                              
|Purchases of loans held for investment                                                                               | (256)                               
|Principal payments on loans                                                                                          | 781,220                             
|Principal payments on mortgage-backed securities
    held-to-maturity                                                | -                                   
|Principal payments on mortgage-backed securities
    available-for-sale                                              | 67,427                              
|Principal payments on collateralized mortgage obligations
    available-for-sale                                     | 3,443                               
|Purchases of investment securities available-for-sale                                                                | -                                   
|Purchases of FHLB stock                                                                                              | -                                   
|Redemption of FHLB stock                                                                                             | -                                   
|                                                                                                                     | (Continued)                         

5

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

|                                                                                      | Nine Months Ended
      December 31,
|------------------------------------------------------------------------------------- | ------------------------------------
|                                                                                      | 2000                                
|Proceeds from maturities of investment securities
      available-for-sale            | $          -                        
|Proceeds from sale of investment securities available-for-sale                        | 1,951                               
|Proceeds from sale of real estate                                                     | 2,341                               
|Investment in or proceeds from real estate held for investment                        | 5,155                               
|Purchases of property and equipment                                                   | (3,049)                             
|Proceeds from sale of property and equipment                                          | -                                   
|Net cash (used in) provided by investing activities                                   | 66,865                              
|Cash flows from financing activities:                                                 |                                     
|Proceeds from FHLB advances                                                           | 494,800                             
|Repayment of FHLB advances                                                            | (633,800)                           
|Net change in deposits                                                                | 53,865                              
|Proceeds from exercise of stock options                                               | 383                                 
|Cash dividends                                                                        | (2,280)                             
|Purchase of treasury stock                                                            | (2,567)                             
|Net cash (used in) provided by financing activities                                   | (89,599)                            
|Net increase (decrease) in cash and cash equivalents                                  | 21,175                              
|Cash and cash equivalents, beginning of period                                        | 35,131                              
|Cash and cash equivalents, end of period                                              | $ 56,306                            
|Supplemental information:                                                             |                                     
|Interest paid, including interest credited                                            | $ 106,691                           
|Income taxes paid                                                                     | 13,900                              
|Non-cash investing and financing activities:                                          |                                     
|Change in unrealized gain (loss) on securities                                        |                                     
|available-for-sale                                                                    | 7,873                               
|Net transfers from loans receivable to real estate acquired through
      foreclosure | 1,613                               

See accompanying notes to the unaudited consolidated
financial statements.

6

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(1) Basis of ConsolidationThe accompanying consolidated financial statements include the accounts
of PFF Bancorp, Inc. (the "Bancorp") and its subsidiary PFF Bank &
Trust (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 generally accepted accounting principles 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 generally accepted accounting principles 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 prior period
consolidated financial statements to conform to the current presentation.The results of operations for the nine months ended December 31, 2000 are
not necessarily indicative of results that may be expected for the entire fiscal
year ending March 31, 2001.(2) New Accounting PronouncementsIn June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS No. 133"). SFAS No. 133 establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the balance sheet and measure
those instruments at fair value. If certain conditions are met, a derivative may
be specifically designated as (a) a hedge of the exposure to changes in the fair
value of a recognized asset or liability or an unrecognized firm commitment, (b)
a hedge of the exposure to variable cash flows of a forecasted transaction, or
(c) a hedge of the foreign currency exposure of a net investment in a foreign
operation, an unrecognized firm commitment, an available-for-sale security, or a
foreign-currency-denominated forecasted transaction.Under SFAS No. 133, an entity that elects to apply hedge accounting is
required to establish at the inception of the hedge the method it will use for
assessing the effectiveness of the hedging derivative and the measurement
approach of determining the ineffective aspect of the hedge. Those methods must
be consistent with the entity's approach to managing risk.This statement was to be effective for all quarters of fiscal years
beginning after June 15, 1999 however, the FASB issued SFAS No. 137 which has
delayed the implementation by one year. In June 2000, SFAS No. 133 was further
amended by SFAS No. 138. SFAS No. 138 addresses a limited number of issues
causing implementation difficulties for numerous entities that apply SFAS No.
133. SFAS No. 138 also amends SFAS No. 133 for the decisions reached by the
Derivatives Implementation Group Process. Management does not expect any impact
from implementation of SFAS No. 133.
In September 2000, the FASB issued Statement of Financial Accounting Standards
No. 140 ("SFAS No. 140") to replace SFAS No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities". SFAS No. 140 provides the accounting and reporting guidance
for transfers and servicing of financial assets and extinguishments of
liabilities. SFAS No. 140 will be the authoritative accounting literature for:
(1) securitization transactions involving financial assets; (2) sales of
financial assets (including loan participations); (3) factoring transactions;
(4) wash sales; (5) servicing assets and liabilities; (6) collateralized
borrowing

7

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arrangements; (7) securities lending transactions; (8) repurchase
agreements; and (9) extinguishment of liabilities. Management plans to implement
the disclosure requirements of SFAS No. 140 in 2001 and is currently evaluating
the impact of implementation of SFAS No. 140 on the Company's financial
position and results of operations.
In March 2000, the FASB issued Interpretation No. 44 "Accounting for
Certain Transactions Involving Stock Compensation an interpretation of APB
Opinion No. 25" ("FIN 44"). This interpretation clarifies the
definition of an employee for purposes of applying Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB
25"), the criteria for determining whether a plan qualifies as a
noncompensatory plan, the accounting consequence of various modifications to the
terms of a previously fixed stock option or award, and the accounting for an
exchange of stock compensation awards in a business combination. This
interpretation is effective July 1, 2000, but certain conclusions in this
interpretation cover specific events that occur after either December 15, 1998
or January 12, 2000. Management plans to implement the disclosure requirements
of FIN 44 in 2001 and is currently evaluating the impact of implementation of
FIN 44 on the Company's financial position and results of operations.

8

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PFF BANCORP, INC. AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements - Continued

(3) Earnings per shareBasic 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.



|                                                                        | For the Three Months Ended December 31,      
|----------------------------------------------------------------------- | ---------------------------------------------
|                                                                        | 2000(1)                                      
|                                                                        | Earnings
      (Numerator)                   
|                                                                        | (Dollars in thousands, except per share data)
|Net Earnings                                                            | $ 6,719                                      
|Basic EPS                                                               |                                              
|Earnings available to common stockholders                               | 6,719                                        
|Effect of Dilutive Securities                                           |                                              
|Options and Stock Awards                                                | -                                            
|Diluted EPS                                                             |                                              
|Earnings available to common stockholders
      and assumed conversions | $ 6,719                                      

(1)Options to purchase 10,094
shares of common stock at a weighted average price of $20.93 per share were
outstanding during the three month period ending December 31, 2000 but were not
included in the computation of diluted EPS because the options' exercise
prices were greater than the average market price of the common shares. The
options, which expire between October 22, 2002 and November 23, 2004, were still
outstanding at December 31, 2000.(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
December 31, 1999 but were not included in the computation of diluted EPS
because the options' exercise prices were greater than the average market
price of the common shares. The options, which expire on November 23, 2004, were
still outstanding at December 31, 1999.

> 9

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PFF BANCORP, INC. AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements - Continued

|                                                                        | For the Nine Months Ended December 31,       
|----------------------------------------------------------------------- | ---------------------------------------------
|                                                                        | 2000(1)                                      
|                                                                        | Earnings
      (Numerator)                   
|                                                                        | (Dollars in thousands, except per share data)
|Net Earnings                                                            | $ 21,163                                     
|Basic EPS                                                               |                                              
|Earnings available to common stockholders                               | 21,163                                       
|                                                                        |                                              
|Effect of Dilutive Securities                                           |                                              
|Options and Stock Awards                                                | -                                            
|                                                                        |                                              
|Diluted EPS                                                             |                                              
|Earnings available to common stockholders
      and assumed conversions | $ 21,163                                     



10

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PFF BANCORP, INC. AND SUBSIDIARYItem 2: Management's Discussion and Analysis of Financial
Condition and Operation

Average Balance SheetsThe following table sets forth certain information relating to the Company for
the three months ended December 31, 2000 and 1999. 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.

|                                                                     | Three Months Ended December 31,
|-------------------------------------------------------------------- | -------------------------------
|                                                                     | 2000                           
|                                                                     | Average
      Balance          
|                                                                     | (Dollars in thousands)         
|Assets:                                                              |                                
|Interest-earning assets:                                             |                                
|Interest-earning deposits and short-term investments                 | $ 29,566                       
|Investment securities, net                                           | 95,692                         
|Loans receivable, net                                                | 2,331,794                      
|Mortgage-backed securities, net                                      | 326,110                        
|Collateralized mortgage obligations, net                             | 85,442                         
|FHLB stock                                                           | 46,829                         
|Total interest-earning assets                                        | 2,915,433                      
|Non-interest-earning assets                                          | 69,305                         
|Total assets                                                         | $2,984,738                     
|                                                                     |                                
|Liabilities and Stockholders' Equity:                                |                                
|Interest-bearing liabilities:                                        |                                
|Savings accounts                                                     | $ 126,480                      
|Money market accounts                                                | 388,767                        
|NOW and other demand deposit accounts                                | 244,690                        
|Certificate accounts                                                 | 1,178,254                      
|Total                                                                | 1,938,191                      
|FHLB advances and other                                              | 760,688                        
|Total interest-bearing liabilities                                   | 2,698,879                      
|Non-interest-bearing liabilities                                     | 41,248                         
|Total liabilities                                                    | 2,740,127                      
|Stockholders' equity                                                 | 244,611                        
|Total liabilities and stockholders' equity                           | $2,984,738                     
|Net interest income                                                  |                                
|Net interest spread                                                  |                                
|Effective interest spread                                            |                                
|Ratio of interest-earning assets to interest-bearing
    liabilities | 108.02%                        

11

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PFF BANCORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis of Financial Condition and Operation -
Continued

Average Balance Sheets
The following table sets forth certain information relating to the Company for
the nine months ended December 31, 2000 and 1999. 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.

|                                                                     | Nine Months Ended December 31,
|-------------------------------------------------------------------- | ------------------------------
|                                                                     | 2000                          
|                                                                     | Average
      Balance         
|                                                                     | (Dollars in thousands)        
|Assets:                                                              |                               
|Interest-earning assets:                                             |                               
|Interest-earning deposits and short-term investments                 | $ 26,112                      
|Investment securities, net                                           | 95,484                        
|Loans receivable, net                                                | 2,326,782                     
|Mortgage-backed securities, net                                      | 348,697                       
|Collateralized mortgage obligations, net                             | 86,833                        
|FHLB stock                                                           | 46,033                        
|Total interest-earning assets                                        | 2,929,941                     
|Non-interest-earning assets                                          | 66,172                        
|Total assets                                                         | $2,996,113                    
|                                                                     |                               
|Liabilities and Stockholders' Equity:                                |                               
|Interest-bearing liabilities:                                        |                               
|Savings accounts                                                     | $ 130,749                     
|Money market accounts                                                | 381,467                       
|NOW and other demand deposit accounts                                | 235,050                       
|Certificate accounts                                                 | 1,171,605                     
|Total                                                                | 1,918,871                     
|FHLB advances and other                                              | 806,580                       
|Total interest-bearing liabilities                                   | 2,725,451                     
|Non-interest-bearing liabilities                                     | 35,726                        
|Total liabilities                                                    | 2,761,177                     
|Stockholders' equity                                                 | 234,936                       
|Total liabilities and stockholders' equity                           | $2,996,113                    
|Net interest income before provision for loan losses                 |                               
|Net interest spread                                                  |                               
|Effective interest spread                                            |                               
|Ratio of interest-earning assets to interest-bearing
    liabilities | 107.50%                       

12

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Rate/Volume AnalysisThe 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.

|                                                           | Three Months Ended December 31, 2000
      Compared to
      Three Months Ended December 31, 1999 | Nine Months Ended December 31, 2000
      Compared to
      Nine Months Ended December 31, 1999
|---------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------
|                                                           | Increase (Decrease)
      Due to                                                                  | Increase (Decrease)
      Due to                                                               
|                                                           | Volume                                                                                            | Rate                                                                                           
|                                                           | (Dollars in thousands)                                                                           
|Interest-earning assets:                                   |                                                                                                   |                                                                                                
|Interest-earning deposits and short-term
      investments | $ 7                                                                                               | 121                                                                                            
|Investment securities, net                                 | (54)                                                                                              | 256                                                                                            
|Loans receivable, net                                      | 2,180                                                                                             | 5,030                                                                                          
|Mortgage-backed securities, net                            | (1,460)                                                                                           | 191                                                                                            
|Collateralized mortgage obligations, net                   | (74)                                                                                              | 221                                                                                            
|FHLB stock                                                 | 64                                                                                                | 157                                                                                            
|Total interest-earning assets                              | 663                                                                                               | 5,976                                                                                          
|Interest-bearing liabilities:                              |                                                                                                   |                                                                                                
|Savings accounts                                           | (75)                                                                                              | (13)                                                                                           
|Money market accounts                                      | (176)                                                                                             | 722                                                                                            
|NOW and other demand deposit
      Accounts                | 45                                                                                                | 153                                                                                            
|Certificate accounts                                       | 1,132                                                                                             | 2,909                                                                                          
|FHLB advances                                              | (1,585)                                                                                           | 1,602                                                                                          
|Total interest-bearing liabilities                         | (659)                                                                                             | 5,373                                                                                          
|Change in net interest income                              | $1,322                                                                                            | 603                                                                                            

13

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Forward-Looking StatementsExcept 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.

Comparison of Operating Results for the Three Months Ended
December 31, 2000 and 1999

General
The Company recorded net earnings of $6.7 million or $0.52 per diluted share for
the three months ended December 31, 2000 compared to net earnings of $7.8
million or $0.59 per diluted share for the comparable period of 1999. Net
earnings for the three months ended December 31, 1999 include an after tax gain
of approximately $845,000 or $0.06 per diluted share from the Bank's sale of
one of its full service banking branches along with $45.9 million of deposits
domiciled therein. The Company's core earnings (defined as net earnings
excluding the after tax impact of gain on branch sale and trading portfolio
activity) improved to $7.2 million or $0.56 per diluted share for the three
months ended December 31, 2000 from $6.6 million or $0.49 per diluted share for
the comparable period of 1999.
Net interest income was $24.7 million for the three months ended December 31,
2000 compared to $22.6 million for the comparable period of 1999. The increase
in net interest income was attributable to a 15 basis point increase in net
interest spread from 2.87% for the three months ended December 31, 1999 to 3.02%
for the comparable period of 2000 coupled with a $17.1 million increase in
average interest-earning assets.
Provision for loan losses was $1.3 million for the three months ended December
31, 2000 compared to $1.0 million for the comparable period of 1999.
Total non-interest income was $2.6 million for the three months ended December
31, 2000 compared to $6.0 million for the comparable period of 1999.
Non-interest income excluding the gain on branch sale and trading portfolio
activity ("core non-interest income") was $3.4 million for the three
months ended December 31, 2000 compared to $3.8 million for the comparable
period of 1999. Total non-interest expense was $14.4 million for the three
months ended December 31, 2000 compared to $13.9 million for the comparable
period of 1999.

14

---

Interest Income
Interest income was $61.5 million for the three months ended December 31, 2000
compared to $54.7 million for the comparable period of 1999. The $6.8 million
increase in interest income was attributable to a 89 basis point increase in
average yield on interest-earning assets from 7.55% for the three months ended
December 31, 1999 to 8.44% for the comparable period of 2000 coupled with a
$17.1 million increase in average interest-earning assets. The increase in
average yield on interest-earning assets reflects the positive impact of the
Company's strategy of emphasizing the origination of tract construction,
commercial business, commercial real estate and consumer loans (collectively the
"Four-C's"), de-emphasizing traditional 1-4 family residential
mortgage lending and allowing mortgage-backed securities, collateralized
mortgage obligations and other investment securities (collectively
"securities") to pay down. The increase in average yield on
interest-earning assets also reflects an increase in the general level of
interest rates.
The average yield on loans receivable, net increased 91 basis points from 7.91%
for the three months ended December 31, 1999 to 8.82% for the comparable period
of 2000. The increase in the average yield on loans receivable, net was
attributable principally to a $243.1 million increase in the average aggregate
disbursed balance of construction, commercial business, commercial real estate
and consumer loans (the Four-C's) from $614.1 million or 28 percent of average
loans receivable, net for the three months ended December 31, 1999 to $864.8
million or 37 percent of loans receivable, net for the comparable period of
2000. An increase in the general level of interest rates also contributed to the
increase in loan yields.
The average yield on securities was 7.00% for the three months ended December
31, 2000 compared to 6.50% for the comparable period of 1999. The increase in
the average yield on securities reflects the impact of an increase in the
general level of interest rates. The one-year Constant Maturity Treasury (CMT)
and one month London Inter Bank Offered Rate (LIBOR) averaged approximately
5.90% and 6.67% respectively for the three months ended December 31, 2000
compared to approximately 5.61% and 5.58%, respectively for the comparable
period of 1999. Amortization of premiums net of accretion of discounts was
$184,000 (15 basis points) for the three months ended December 31, 2000 compared
to $249,000 (16 basis points) for the comparable period of 1999.
The increase in average interest-earning assets was due to a $110.2 million
increase in the average balance of loans receivable, net from $2.22 billion for
the three months ended December 31, 1999 to $2.33 billion for the comparable
period of 2000. The average aggregate balance of securities decreased $98.5
million from $605.8 million for the three months ended December 31, 1999 to
$507.2 million for the comparable period of 2000.Interest Expense
Interest expense was $36.9 million for the three months ended December 31, 2000
compared to $32.1 million for the comparable period of 1999. The $4.8 million
increase in interest expense was attributable to a 74 basis point increase in
the average cost of interest-bearing liabilities from 4.68 % for the three
months ended December 31, 1999 to 5.42 % for the comparable period of 2000
partially offset by a $26.3 million decrease in average interest-bearing
liabilities from $2.73 billion for the three months ended December 31, 1999 to
$2.70 billion for the comparable period of 2000. The 74 basis point increase in
the average cost of interest-bearing liabilities reflects an 82 basis point
increase in the average cost of deposits and a 73 basis point increase in the
cost of FHLB advances. The proportion of total interest-bearing liabilities
comprised by deposits increased from 68% for the three months ended December 31,
1999 to 72% for the comparable period of 2000.

15

---

The increase in the average cost of deposits from 4.22% for
the three months ended December 31, 1999 to 5.04% for the comparable period of
2000 reflects an increase in the general level of interest rates. The average
balances of money market, savings and NOW accounts (collectively, "core
deposits") decreased $1.7 million from $761.6 million or 41% of average
total deposits for the three months ended December 31, 1999 to $760.0 million or
39% of average total deposits for the comparable period of 2000. The average
balance of total deposits increased $84.9 million from $1.85 billion for the
three months ended December 31, 1999 to $1.94 billion for the comparable period
of 2000. The average costs of core deposits and C.D.'s were 3.18% and 6.25%
for the three months ended December 31, 2000 compared to 2.84% and 5.19% for the
comparable period of 1999.
The average cost of FHLB advances and other increased from 5.65% for the three
months ended December 31, 1999 to 6.38% for the comparable period of 2000
reflecting an increase in the general level of interest rates coupled with the
Bank's utilization of putable fixed rate advances. Under the putable advance
program, in exchange for a favorable interest rate on the borrowing, the Bank
granted to the FHLB an option to "put" the advance back to the Bank at
specified "put" dates prior to maturity but after the conclusion of a
specified lock out period. Under the putable advance program, the Bank obtained
funds below the cost of non-putable FHLB advances of comparable final maturity.
In exchange for this favorable funding rate, the Bank is exposed to the risk
that the advance is put back to the Bank following an increase in the general
level of interest rates causing the Bank to initiate a borrowing at a less
advantageous cost. Between December 31, 1999 and December 31, 2000, $160.0
million of putable FHLB advances with a weighted average interest rate of 5.56%
were put back to the Bank. Of the $160.0 million put back, $105.0 million was
"rolled" into non-putable advances at a weighted average interest rate
of 6.34%. The Bank has not initiated any new putable borrowings since May 1998.
At December 31, 2000 the Bank's putable borrowings totaled $165.0 million.Provision for Loan Losses
Provision for loan losses was $1.3 million for the three months ended December
31, 2000 compared to $1.0 million for the comparable period of 1999. See
"Comparison of Financial Condition at December 31, 2000 and March 31,
2000".Non-Interest Income
Core non-interest income was $3.4 million for the three months ended December
31, 2000, compared to $3.8 million for the comparable period of 1999. Loan and
servicing fees of $1.2 million for the three months ended December 31, 1999
includes a $446,000 prepayment fee received on a commercial loan payoff. Deposit
and related fees were $2.2 million for both the three months ended December 31,
1999 and 2000. The decrease in trust fees from $541,000 for the three months
ended December 31, 1999 to $237,000 for the comparable period of 2000 reflects a
$291,000 downward fee adjustment recorded during December 2000 applicable to
fees charged between March 1998 and September 2000. Assets under custody or
management decreased from $261.6 million at December 31, 1999 to $258.4 million
at December 31, 2000. Excluding the large non-recurring loan prepayment fee and
the trust fee adjustment, core non-interest income would have increased $328,000
between the three months ended December 31, 1999 and 2000.Non-Interest Expense
Non-interest expense was $14.4 million for the three months ended December 31,
2000, compared to $13.9 million for the comparable period of 1999. General and
administrative expense was $14.7 million or, on an annualized basis, 1.97% of
average assets for the three months ended December 31, 2000 compared to $13.9
million or, on an

16

---

annualized basis, 1.86% of average assets for the comparable
period in 1999.
Included in compensation and benefits expense are non-cash charges associated
with the amortization of shares under the Company's Employee Stock Ownership
Plan (ESOP) and 1996 Incentive Plan of $1.4 million for the three months ended
December 31, 2000 compared to $986,000 for the comparable period of 1999.
Amortization of goodwill associated with the Bank's acquisition of its trust
and investment services department in January 1995 was $81,000 for both the
three months ended December 31, 2000 and 1999. At December 31, 2000, the
unamortized goodwill balance is $1.7 million.
Foreclosed real estate operations, net for the three months ended December 31,
2000, includes a $315,000 judgement received from a borrower reimbursing the
Bank for losses sustained in prior years upon sale of several multi-family
property foreclosures.Income Taxes
Income taxes were $4.9 million for the three months ended December 31, 2000,
compared to $5.9 million for the comparable period of 1999. The effective tax
rate was 42.2% for the three months ended December 31, 2000, and 42.8% for the
comparable period of 1999.Comparison of Operating Results for the Nine Months Ended December 31, 2000
and 1999

General
The Company recorded net earnings of $21.2 million or $1.66 per diluted share
for the nine months ended December 31, 2000 compared to net earnings of $20.6
million or $1.54 per diluted share for the comparable period of 1999. Net
earnings for the nine months ended December 31, 1999 included the after tax gain
of approximately $845,000 or $0.06 per diluted share from the branch sale
discussed earlier. The Company's core earnings improved to $21.6 million or
$1.69 per diluted share for the nine months ended December 31, 2000 from $19.2
million or $1.44 per diluted share for the comparable period of 1999.
Net interest income was $71.9 million for the nine months ended December 31,
2000, compared to $66.0 million for the comparable period of 1999. The increase
in net interest income was attributable to $92.3 million increase in average
interest earning-assets coupled with a 7 basis point increase in net interest
spread from 2.85% for the nine months ended December 31, 1999 to 2.92% for the
comparable period of 2000.
Provision for loan losses was $3.8 million for the nine months ended December
31, 2000 compared to $3.0 million for the comparable period of 1999.
Total non-interest income was $10.3 million for the nine months ended December
31, 2000, compared to $13.8 million for the comparable period of 1999. Core
non-interest income was $11.4 million for the nine months ended December 31,
2000 compared to $11.5 million for the comparable period of 1999. Total
non-interest expense was $41.7 million for the nine months ended December 31,
2000, compared to $40.7 million for the comparable period of 1999.

17

---

Interest Income
Interest income was $180.7 million for the nine months ended December 31, 2000,
compared to $158.6 million for the comparable period of 1999. The $22.1 million
increase in interest income was attributable to a 77 basis point increase in
average yield on interest-earning assets from 7.45% for the nine months ended
December 31, 1999 to 8.22% for the comparable period of 2000, coupled with a
$92.3 million increase in average interest-earning assets.
The average yield on loans receivable, net increased 69 basis points from 7.88%
for the nine months ended December 31, 1999 to 8.57% for the comparable period
of 2000. The increase in the average yield on loans receivable, net was
attributable to a $250.7 million increase in the average aggregate disbursed
balance of the Four-C's coupled with an increase in the general level of
interest rates. Originations of the Four-C's accounted for 92% and 62% of
total loan originations for the nine months ended December 31, 2000 and 1999,
respectively.
The average yield on securities was 6.83% for the nine months ended December 31,
2000, compared to 6.35% for the comparable period of 1999. The increase in the
average yield on securities reflects the impact of an increase in the general
level of interest rates. The one-year CMT and one-month LIBOR averaged
approximately 6.08% and 6.60% respectively for the nine months ended December
31, 2000 compared to approximately 5.22% and 5.30% respectively for the
comparable period of 1999. Amortization of premium, net of accretion of
discounts was $641,000 (16 basis points) for the nine months ended December 31,
2000 compared to $1.1 million (24 basis points) for the comparable period of
1999.
During April 2000, the Bank received a $329,000 special dividend from the FHLB
of San Francisco. This special dividend increased the average yields on FHLB
stock and total interest-earning assets for the nine months ended December 31,
2000 by 95 basis points and 1 basis point, respectively.
The average balance of loans receivable, net increased $209.6 million from $2.12
billion for the nine months ended December 31, 1999 to $2.33 billion for the
comparable period of 2000. The aggregate average disbursed balance of the Four-C's
was $808.1 million or 35% of average total loans receivable, net for the nine
months ended December 31, 2000 compared to $551.3 million or 26% of average
total loans receivable, net for the comparable period of 1999. The average
aggregate balance of securities decreased $105.4 million from $636.4 million for
the nine months ended December 31, 1999 to $531.0 million for the comparable
period of 2000 reflecting the Company's strategy of utilizing paydowns and
payoffs from securities to repay FHLB advances and fund growth in loans
receivable.Interest Expense
Interest expense was $108.8 million for the nine months ended December 31, 2000,
compared to $92.5 million for the comparable period of 1999. The $16.2 million
increase in interest expense was attributable to a 70 basis point increase in
the average cost of interest-bearing liabilities from 4.60% for the nine months
ended December 31, 1999 to 5.30% for the comparable period of 2000, coupled with
a $53.5 million increase in average interest-bearing liabilities from $2.67
billion for the nine months ended December 31, 1999 to $2.73 billion for the
comparable period of 2000. The 70 basis point increase in the average cost of
interest-bearing liabilities reflects a 70 basis point increase in the average
cost of deposits, a 73 basis point increase in the average cost of FHLB advances
and other, and an increase in the proportion of total interest-bearing
liabilities comprised by deposits from 69% for the nine months ended December
31, 1999 to 70% for the comparable period of 2000.
The increase in the average cost of deposits from 4.19% for the nine months
ended December 31, 1999 to 4.89%

18

---

for the comparable period of 2000 reflects an increase in the
general level of interest rates. The average balance of core deposits decreased
$16.7 million from $764.0 million, or 41% of average total deposits, for the
nine months ended December 31, 1999 to $747.3 million, or 39% of average total
deposits, for the comparable period of 2000. The average balance of total
deposits increased $67.0 million from $1.85 billion for the nine months ended
December 31, 1999 to $1.92 billion for the comparable period of 2000. The
changes in deposit balances are net of $45.9 million of deposits (including
$12.6 million of core deposits) sold in October 1999. The average costs of core
deposits and C.D.'s were 3.12% and 6.02% for the nine months ended December
31, 2000, compared to 2.91% and 5.08% for the comparable period of 1999.
The average cost of FHLB advances and other increased from 5.53% for the nine
months ended December 31, 1999, to 6.26% for the comparable period of 2000
reflecting the impact of renewals or puts of advances coupled with an increase
in the general level of interest rates.Provision for Loan Losses
Provision for loan losses was $3.8 million for the nine months ended December
31, 2000 compared to $3.0 million for the comparable period of 1999. See
"Comparison of Financial Condition at December 31, 2000 and March 31,
2000."Non-Interest Income
Non-interest income was $10.3 million for the nine months ended December 31,
2000 compared to $13.8 million for the comparable period of 1999. Excluding the
$1.5 million gain on branch sale in October 1999 and trading portfolio activity
($905,000 of net gains in 1999 and $1.0 million of net losses in 2000), core
non-interest income was $11.4 million for the nine months ended December 31,
2000, compared to $11.5 million for the comparable period of 1999. Deposit and
related fees decreased $230,000 from $7.0 million for the nine months ended
December 31, 1999 to $6.7 million for the comparable period of 2000. The
decrease in deposit and related fees reflects the decrease in income from the
sale of non-deposit investments from $1.1 million for the nine months ended
December 31, 1999 to $820,000 for the comparable period of 2000. The decrease in
trust fees from $1.6 million for the nine months ended December 31, 1999 to $1.3
million for the comparable period of 2000 reflects the $291,000 non-recurring
downward fee adjustment noted earlier. Excluding the $446,000 loan prepayment
fee received during the nine months ended December 31, 1999 and the trust fee
adjustment, core non-interest income would have increased $646,000 between the
nine months ended December 31, 1999 and 2000.Non-Interest Expense
Non-interest expense was $41.7 million for the nine months ended December 31,
2000, compared to $40.7 million for the comparable period of 1999. General and
administrative expense was $42.1 million or, on an annualized basis, 1.87% of
average assets for the nine months ended December 31, 2000 compared to $40.9
million or, on an annualized basis, 1.85% of average assets for the comparable
period in 1999. Included in compensation and benefits expense are non-cash
charges associated with the amortization of shares under the ESOP and 1996
Incentive Plan of $4.1 million and $3.5 million for the nine months ended
December 31, 2000 and December 31, 1999, respectively. Foreclosed real estate
operations net for the nine months ended December 31, 2000 includes the $315,000
recovery noted earlier.Income Taxes
Income taxes were $15.6 million for both the nine months ended December 31, 1999
and 2000. The effective tax

19

---

rate was 42.5% for the nine months ended December 31, 2000, compared to 43.1%
for the comparable period of 1999.Comparison of Financial Condition at December 31, 2000 and March 31, 2000

Total assets decreased $48.9 million from $3.03 billion at
March 31, 2000 to $2.99 billion at December 31, 2000. Loans receivable, net
increased $5.3 million to $2.33 billion at December 31, 2000. Securities
decreased $66.9 million from $555.4 million at March 31, 2000 to $488.6 million
at December 31, 2000 reflecting the strategy discussed above of utilizing
paydowns on securities to fund loan growth and paydown FHLB advances. The $5.3
million increase in loans receivable, net included a $153.5 million increase in
the aggregate disbursed balance of the Four C's and a $149.5 million decrease
in 1-4 family residential mortgages
Loan originations for the nine months ended December 31, 2000 were $834.1
million, compared to $962.5 million for the comparable period of 1999. Loan
principal payoffs and paydowns were $781.2 million for the nine months ended
December 31, 2000, compared to $631.8 million for the comparable period of 1999.
Non-accrual loans increased from $5.4 million, or 0.21% of gross loans, at March
31, 2000 to $10.9 million, or 0.42% of gross loans, at December 31, 2000.
Expressed in dollars and as a percent of the gross balance of each loan
category, the distribution of non-accrual loans by type as of December 31, 2000
is as follows: 1-4 family residential $6.8 million or 0.49%, construction and
land $3.0 million or 0.52%, commercial real estate zero, commercial business
$263,000 or 0.20% and consumer $890,000 or 0.55%. The primary reason for the
increase in non-accrual loans at December 31, 2000 is one $3.0 million
construction loan that was placed on non-accrual status during the current
quarter. The Company has a total of $29.0 million in loans outstanding on a 296
home residential development project in northern Los Angeles County with an
aggregate commitment of $34.6 million. The phased build-out and sale of the
project is expected to be completed in the fourth quarter of calendar 2002. The
project has incurred cost overruns and construction delays, which have caused
the Company to determine that one of its outstanding loans in the amount of $3.0
million is impaired. Management has determined that given the current status of
the project and the structure of this loan, it is doubtful that the Company will
collect all principal and interest due in accordance with the contractual terms
of this loan. Therefore, it has placed this loan on non-accrual status and
considered the effect of its impairment in determining the allowance for loan
losses as of December 31, 2000. The Company has determined that it is still
probable that it will collect all amounts contractually due on the remaining
$26.0 million of loans outstanding on this project. Management is continuing to
closely monitor the status of these loans. Non-performing assets, which includes
non-accrual loans, and foreclosed real estate, net of specific allowances,
increased from $6.9 million, or 0.23% of total assets, at March 31, 2000 to
$11.7 million, or 0.39% of total assets, at December 31, 2000.
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. At December 31, 2000, the Company's allowance for loan losses was
$30.2 million or 1.17% of gross loans and 276.04% of non-accrual loans compared
to $27.8 million or 1.09% of gross loans and 512.96% of non-accrual loans at
March 31, 2000. The Bank 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 for the three and nine months ended
December 31, 2000.

20

---

|                          | Nine Months EndedDecember
      31,
|------------------------- | -----------------------------------
|                          | 2000                               
|Beginning balance         | $ 27,838                           
|Provision for loan losses | 3,753                              
|Charge-offs               | (1,451)                            
|Recoveries                | 28                                 
|Ending balance            | $ 30,168                           

Total liabilities decreased $74.3 million from $2.81 billion at March 31, 2000
to $2.74 billion at December 31, 2000. Deposits increased $53.9 million from
$1.91 billion at March 31, 2000 to $1.96 billion at December 31, 2000. Core
deposits increased $26.5 million from $739.2 million at March 31, 2000 to $765.6
million at December 31, 2000. FHLB advances were paid down by $139.0 million to
$745.0 million at December 31, 2000 utilizing the cash flows arising from the
planned net reduction in 1-4 family residential mortgages coupled with paydowns
of securities and deposit inflows.
Total stockholders' equity was $247.2 million at December 31, 2000 compared to
$221.8 million at March 31, 2000. The $25.4 million increase in total
stockholders' equity is comprised principally of a $146,000 net decrease in
additional paid-in-capital, a $17.8 million increase in retained earnings,
substantially restricted, a $3.2 million decrease in unearned stock-based
compensation and a $4.6 million decrease in accumulated other comprehensive
loss.
During the nine months ended December 31, 2000, the Company repurchased 145,000
shares of its common stock at a weighted average price of $17.70 per share. The
$146,000 decrease in additional paid-in-capital was attributable to the removal
from additional paid-in-capital of $1.4 million representing the original amount
of additional paid-in-capital recorded upon the March 1996 initial issuance of
the 145,000 shares repurchased ($9.99 per share, net of the $.01 per share
credited to common stock) substantially offset by amortization of ESOP shares
($920,000) and the exercise of stock options ($383,000). The $17.8 million
increase in retained earnings, substantially restricted reflects the $21.2
million of net earnings for the nine months ended December 31, 2000 partially
offset by the $1.1 million difference between the $10.00 per share original
issuance price of the 145,000 shares repurchased and the weighted average price
per share of $17.70 paid to repurchase the shares and a $2.3 million reduction
applicable to the Company's May 24, August 23 and November 22, 2000
declarations of quarterly cash dividends of $0.06 per common share paid on June
30, September 30 and December 30, 2000. The $3.2 million decrease in unearned
stock-based compensation reflects the amortization of shares under the Company's
ESOP ($1.3 million) and 1996 Incentive Plan ($1.9 million). The $4.6 million
increase in accumulated other comprehensive loss was attributable principally to
the change in the unrealized loss, net of tax on securities available-for-sale.Liquidity and Capital ResourcesThe Company's primary sources of funds are deposits, principal and
interest payments on loans and securities, FHLB advances and other borrowings,
proceeds from the maturation of securities and, to a lesser extent, proceeds
from the sale of loans and securities. While maturities and scheduled
amortization of loans and securities are predictable sources of funds, deposit
flows and mortgage and security prepayments are greatly influenced by the
general level of interest rates, economic conditions and competition. The Bank
has maintained the required minimum levels of liquid assets as defined by OTS
regulations. This requirement, which may be varied at the direction of the

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OTS depending upon economic conditions and deposit flows, is
based upon a percentage of deposits and short-term borrowings. Effective with
the quarter ended December 31, 1997 the required ratio is 4%. Prior to that the
requirement was 5%. The Bank's average liquidity ratio was 4.926% for the nine
months ended December 31, 2000. Management attempts to maintain a liquidity
ratio no higher than approximately 1% above the regulatory requirement. This
reflects management's strategy of investing excess liquidity in higher
yielding interest-earning assets, such as loans or other investments, depending
on market conditions. The Bank invests in corporate securities when the yields
thereon are more attractive than U.S. government and federal agency securities
of similar maturity. While corporate securities are not backed by any government
agency, the maturity structure and credit quality of all corporate securities
owned by the Bank meet the minimum standards set forth by the OTS for regulatory
liquidity-qualifying investments. The Bank invests in callable debt issued by
Federal agencies of the U.S. government when the yields thereon to call date(s)
and maturity exceed the yields on comparable term and credit quality
non-callable investments by amounts which management deems sufficient to
compensate the Bank for the call options inherent in the securities. The Bancorp
has invested and will from time to time continue to invest in
"non-rated" corporate debt and equity securities. Investments held at
the Bancorp are not subject to the OTS regulatory restrictions applicable to the
Bank.
The Company's cash flows are comprised of three primary classifications: cash
flows from operating activities, investing activities and financing activities.
Cash flows provided by operating activities were $43.9 million and $20.0 million
for the nine months ended December 31, 2000 and 1999, respectively. Net cash
used in investing activities consisted primarily of disbursements for loan
originations and purchases of mortgage-backed and other investment securities,
offset by principal collections on loans and proceeds from maturation of
investments and paydowns on mortgage-backed securities. Principal payments on
loans were $781.2 million and $631.8 million for the nine months ended December
31, 2000 and 1999, respectively. Loans originated and purchased were $834.3
million and $962.5 million for the nine months ended December 31, 2000 and 1999,
respectively. Disbursements for purchases of mortgage-backed and other
investment securities were zero and $28.1 million for the nine months ended
December 31, 2000 and 1999, respectively. Proceeds from the maturation of
investment securities, paydowns of mortgage-backed securities and collateralized
mortgage obligations were $70.9 million and $141.2 million for the nine months
ended December 31, 2000 and 1999, respectively. Net cash provided by financing
activities consisted primarily of net activity in deposit accounts and FHLB
advances and other borrowings. The net increases in deposits were $53.9 million
and $8.8 million for the nine months ended December 31, 2000 and 1999,
respectively. FHLB advances decreased $139.0 million and increased $100.0
million for the nine months ended December 31, 2000 and 1999, respectively.
At December 31, 2000, the Bank exceeded all of its regulatory capital
requirements with a tangible capital level of $228.1 million, or 7.68% of
adjusted total assets, which is above the required level of $44.6 million, or
1.5%; core capital of $228.1 million, or 7.68 % of adjusted total assets, which
is above the required level of $118.9 million, or 4.0%, and total risk-based
capital of $254.3 million, or 12.03% of risk-weighted assets, which is above the
required level of $169.1 million, or 8.0%.
The Company's most liquid assets are cash and short-term investments. The
levels of these assets are dependent on the Company's operating, financing,
lending and investing activities during any given period. At December 31, 2000,
cash and short-term investments totaled $56.3 million. The Company has other
sources of liquidity if a need for additional funds arises, including the
utilization of reverse repurchase agreements and FHLB advances. At December 31,
2000, the Bank has $745.0 million of FHLB advances outstanding. Other sources of
liquidity include investment securities maturing within one year.

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The Company currently has no material contractual obligations
or commitments for capital expenditures. At December 31, 2000, the Bank had
outstanding commitments to originate and purchase loans of $267.5 million and
zero, respectively, compared to $390.6 million and zero, respectively, at
December 31, 2000 and 1999. At December 31, 2000 and 1999, the Company had no
outstanding commitments to purchase mortgage-backed securities and other
investment securities. The Company anticipates that it will have sufficient
funds available to meet these commitments. Certificate accounts that are
scheduled to mature in less than one year from December 31, 2000 totaled $1.07
billion. The Bank expects that a substantial portion of the maturing certificate
accounts will be retained by the Bank at maturity.Segment ReportingThe Company, through the branch network of the Bank, provides a broad
range of financial services to individuals and companies located primarily in
Southern California. These services include demand, time, and savings deposits;
real estate, business and consumer lending; ATM processing; cash management; and
trust services. While the Company's chief decision-makers monitor the revenue
streams of the various Company products and services, operations are managed and
financial performance is evaluated on a Company-wide basis. Accordingly, all of
the Company's banking operations are considered by management to be aggregated
in one reportable operating segment.Item 3. Qualitative and Quantitative Disclosures about
Market RiskReaders should refer to the qualitative disclosures (consisting primarily of
interest rate risk) in the Company's March 31, 2000 Form 10-K, as there has
been no significant changes in these disclosures during the nine months ended
December 31, 2000.

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PART II - OTHER INFORMATIONPFF BANCORP, INC. AND SUBSIDIARY

Item
1.         Legal ProceedingsThe Company and subsidiary have been named as defendants in various lawsuits
arising in the normal course of business. The outcome of the lawsuits cannot be
predicted, but the Company intends to vigorously defend the actions and is of
the opinion that the lawsuits will not have a material adverse effect on the
Company.Item
2.         Changes in Securities
               
NoneItem
3.         Defaults Upon Senior
Securities
               
NoneItem
4.         Submission of Matter to a
Vote of Security Holders
               
NoneItem
5.            Other
Information
               
None

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Item
6.         Reports on Form 8-K.

(a)    Exhibit 3(I) - Certificate of Incorporation of PFF
Bancorp, Inc. *

Exhibit 3(ii) - Bylaws of PFF Bancorp, Inc. *

(b)    Reports on form 8-K

None

_________________________
*Incorporated herein by reference to Form S-1, Registration Statement, as
amended, filed on December 8, 1995, SEC Registration Number 33-94860.

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PFF BANCORP, INC. AND SUBSIDIARYSIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

PFF BANCORP, INC.DATED: February 9, 2001
        BY:/s/ LARRY M. RINEHARTLarry M. RinehartPresident, Chief Executive
          Officerand DirectorDATED: February 9, 2001
        BY:/s/ GREGORY C. TALBOTTGregory C. TalbottExecutive Vice President,
          ChiefFinancial Officer and
          Treasurer


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