UNITED
      STATESSECURITIES AND EXCHANGE COMMISSIONWashington, DC
      20549
      FORM
      10-Q(Mark One)[ X ] QUARTERLY REPORT PURSUANT
      TO SECTION 13 OR 15(d) OF THE
                   
      SECURITIES EXCHANGE ACT OF 1934For the quarterly
      period ended June 30, 2004or[    ] TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
                    
      SECURITIES EXCHANGE ACT OF 1934For the transition period
      from                             
      toCommission File Number
      0-27404PFF BANCORP,
      INC.(Exact name of registrant as specified in its
      charter)DELAWARE
    95-4561623(State or other
      jurisdiction ofincorporation 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
      
      .Indicate by check mark whether the registrant is an accelerated filer (as
      defined in rule 12b-2 of the Exchange Act).Yes
      X    No
      
      .The registrant had 16,815,723
      shares of common stock, par value $.01 per share, outstanding as
      of July 31, 2004.


---



PFF BANCORP, INC. AND
SUBSIDIARIESForm 10-QTable of Contents PART I
    FINANCIAL INFORMATION
      (Unaudited)
    PAGEItem 1
    Financial
      StatementsConsolidated Balance Sheets as ofMarch 31, 2004 and June
      30, 2004
    1Consolidated Statements of Earnings
      for the three months ended June 30, 2004 and 2003
    2Consolidated Statements of
      Comprehensive Earningsfor the three months ended June 30, 2004 and
      2003
    3Consolidated Statement of
      Stockholders' Equityfor the three months ended June 30,
    2004
    4Consolidated Statements of Cash
      Flows for thethree months ended June 30, 2004 and 2003
    5Notes to Unaudited Consolidated
      Financial Statements
    7Item 2
    Management's Discussion and
      Analysis ofFinancial Condition and Results of Operations
    10Item 3
    Qualitative and Quantitative
      Disclosures aboutMarket Risk
    21Item 4
    Controls and
      Procedures
    21PART II
    OTHER
    INFORMATIONItem 1
    Legal Proceedings
    22Item 2
    Changes in Securities and Use of
      Proceeds
    22Item 3
    Defaults Upon Senior
      Securities
    22Item 4
    Submission of Matters to a Vote of
      Security Holders
    22Item 5
    Other Information
    22Item 6
    Exhibits and Reports on Form
      8-K
    23SIGNATURES
    
    24


---



PART I --FINANCIAL
INFORMATION Item 1. Financial
Statements. PFF BANCORP, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Dollars
in thousands, except per share data)(Unaudited) June
      30,2004
    
    March
      31,2004AssetsCash and cash
    equivalents
    $      45,256
    
    $     60,151Investment securities
      held-to-maturity (estimated fair value
      of           $5,777
      at June 30, 2004, and $5,979 at March 31, 2004)
    5,739
    
    5,742Investment securities
      available-for-sale, at fair value
    58,722
    
    62,957Mortgage-backed securities
      available-for-sale, at fair value
    258,785
    
    292,888Loans held-for-sale
    4,172
    
    2,119Loans and leases receivable,
      net
    3,163,454
    
    3,149,318Federal Home Loan Bank (FHLB)
      stock, at cost
    42,894
    
    42,500Accrued interest
      receivable
    14,246
    
    14,752Assets acquired through
      foreclosure, net
    606
    
    683Property and equipment,
      net
    28,288
    
    27,430Prepaid expenses and other
      assets
    22,055
    
    19,154Total assets
    $3,644,217
    
    $3,677,694Liabilities and
      Stockholders' EquityLiabilities:Deposits
    $2,503,941
    
    $2,455,046FHLB advances and other
      borrowings
    771,000
    
    851,600Accrued expenses and other
      liabilities
    46,184
    
    54,677Total liabilities
    3,321,125
    
    3,361,323Commitments 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 17,198,863 and 16,894,697;
      outstanding
            16,785,063 and 16,614,997 at June 30, 2004
      and
            March 31, 2004,
      respectively
    171
    
    168Additional paid-in
      capital
    152,485
    
    144,585Retained earnings, substantially
      restricted
    176,709
    
    173,188Unearned stock-based
      compensation
    (1,660
    )
    (2,121
    )Treasury stock (413,800 and 279,700
      at June 30, 2004, and        March 31, 2004, respectively)
    (5
    )
    (3
    )Accumulated other comprehensive
      income (losses)
    (4,608
    )
    554Total stockholders'
      equity
    323,092
    
    316,371Total liabilities
      and stockholders' equity
    $3,644,217
    
    $3,677,694
 See accompanying notes to the unaudited
consolidated financial statements. 1  PFF BANCORP, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
EARNINGS(Dollars in thousands, except per share
data)(Unaudited) For the
      Three Months EndedJune 30,2004
    
    2003Interest income:Loans and leases
      receivable
    $44,541
    
    $41,090Mortgage-backed
      securities
    2,548
    
    1,932Collateralized
      mortgage obligations
    -
    
    (294
    )Investment
      securities and deposits
    1,034
    
    1,076Total interest
      income
    48,123
    
    43,804Interest expense:Deposits
    8,639
    
    10,291Borrowings
    3,566
    
    3,465Total interest
      expense
    12,205
    
    13,756Net interest income
    35,918
    
    30,048Provision for loan and lease
      losses
    524
    
    660Net interest
      income after provision for loan   and lease
      losses
    35,394
    
    29,388Non-interest income:Deposit and related
      fees
    2,875
    
    2,831Loan and servicing
      fees
    1,614
    
    1,593Trust and investment
      fees
    755
    
    557Gain on sale of loans,
      net
    43
    
    375Gain on sale of
      securities, net
    1,439
    
    117Other
      non-interest income
    130
    
    134Total non-interest income
    6,856
    
    5,607Non-interest expense:General and
      administrative:Compensation and
      benefits
    12,411
    
    10,673Occupancy and
      equipment
    3,339
    
    3,059Marketing and
      professional services
    2,315
    
    2,088Other non-interest
      expense
    3,806
    
    3,015Total general and administrative
    21,871
    
    18,835Foreclosed asset operations,
      net
    76
    
    (1
    )Total non-interest
      expense
    21,947
    
    18,834Earnings before income
      taxes
    20,303
    
    16,161Income taxes
    9,528
    
    6,829Net
      earnings
    $10,775
    
    $9,332Basic earnings per
    share
    $0.66
    
    $0.59Weighted average shares outstanding
      for basic    earnings per share
    calculation
    16,306,134
    
    15,820,220Diluted earnings per
      share
    $0.64
    
    $0.57Weighted average
      shares outstanding for diluted  earnings per share
      calculation
    16,885,402
    
    16,502,133
 See accompanying notes to the unaudited
consolidated financial statements.2   PFF BANCORP, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS
OF COMPREHENSIVE EARNINGS(Dollars in
thousands)(Unaudited) For the
      Three Months EndedJune 30,2004
    
    2003Net earnings
    $10,775
    
    $9,332Other comprehensive earnings, net
      of income taxes      of $ (4,004) and $1,609 at June 30,
      2004 and      2003, respectively:Unrealized gains (losses) on
      securities       available-for-sale:U.S. Treasury and agency
      securities and other        investment
      securities available-for-sale, at fair value
    (890
    )
    2,199Collateralized mortgage obligations
      available-for-       
      sale, at fair value
    -
    
    193Mortgage-backed securities
      available-for-sale,         at
      fair value
    (3,281
    )
    (96
    )Reclassification of realized gains (losses)
      included          in earnings
    (1,358
    )
    (104
    )(5,529
    )
    2,192Tax benefit on minimum pension liability
    367
    
    -Other comprehensive gains
      (losses)
    (5,162
    )
    2,192Comprehensive
earnings
    $5,613
    
    $11,524
 See accompanying notes to the unaudited consolidated financial
statements.


3

---

PFF BANCORP, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY(Dollars in thousands, except per share
data)(Unaudited) Number
      ofShares
    
    CommonStock
    AdditionalPaid-inCapital
    
    RetainedEarnings,SubstantiallyRestricted
    
    UnearnedStock-basedCompensation
    
    TreasuryStock
    
    AccumulatedOtherComprehensiveLosses
    
    TotalBalance at March 31,
    2004
    16,614,997
    
    $   
      168
    $ 
      144,585
    
    $  
      173,188
    
    $   
      (2,121
    )
    $         (3
    )
    $         554
    
    $ 316,371Net earnings
    -
    
    -
    -
    
    10,775
    
    -
    
    -
    
    -
    
    10,775Purchases of treasury
      stock
    (134,100
    )
    -
    (956
    )
    (3,941
    )
    -
    
    (2
    )
    -
    
    (4,899
    )Amortization under stock-based
         compensation
      plans
    -
    
    -
    1,844
    
    -
    
    461
    
    -
    
    -
    
    2,305Stock options
    exercised
    304,166
    
    3
    3,196
    
    -
    
    -
    
    -
    
    -
    
    3,199Dividend ($0.20 per share paid for
      June 2004)
    -
    
    -
    -
    
    (3,313
    )
    -
    
    -
    
    -
    
    (3,313
    )Change in unrealized
      losses on   securities available-for-sale, net
    -
    
    -
    -
    
    -
    
    -
    
    -
    
    (5,529
    )
    (5,529
    )Tax benefit from
      stock    options/minimum pension liability
    -
    
    -
    3,816
    
    -
    
    -
    
    -
    
    367
    
    4,183Balance at June 30,
    2004
    16,785,063
    
    $   
    171
    $  152,485
    
    $   176,709
    
    $   
      (1,660
    )
    $         (5
    )
    $    
      (4,608
    )
    $ 323,092
 See accompanying notes to the unaudited consolidated financial
statements. 4


PFF BANCORP, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(Dollars in thousands)(Unaudited) Three Months
      EndedJune 30,2004
    
    2003Cash flows from operating
      activities:Net earnings
    $            
      10,775
    
    $       9,332Adjustments to reconcile net
      earnings to net cash (used in)     provided by
      operating activities:Amortization of
      premiums, net of discount accretion,
      on         loans, leases and
      securities
    447
    
    934Amortization of deferred loan origination fees
    320
    
    89Loan and
      lease fees collected
    142
    
    253Dividends
      on FHLB stock
    (394
    )
    (314
    )Provisions
      for losses on:Loans and
      leases
    524
    
    660Real
      estate
    77
    
    -Gains on sales of loans, securities
      available-for-sale,         
      real estate and property and equipment
    (1,465
    )
    (363
    )Depreciation and amortization of property and equipment
    826
    
    743Loans
      originated for sale
    (5,809
    )
    (12,303
    )Proceeds
      from sale of loans held-for-sale
    3,779
    
    14,364Amortization of
      unearned stock-based compensation
    2,305
    
    1,565Decrease in
      accrued expenses and other liabilities
    (307
    )
    (26,441
    )(Increase)
      decrease in:Accrued interest
      receivable
    506
    
    928Prepaid expenses and other
      assets
    (2,901
    )
    (967
    )Net cash provided by (used in) operating activities
    8,825
    
    (11,520
    )Cash flows from investing
      activities:Loans and
      leases originated for investment
    (660,658
    )
    (496,248
    )Increase
      in construction loans in process
    16,327
    
    18,880Purchases
      of loans held-for-investment
    (72,043
    )
    (93,262
    )Principal
      payments on loans and leases
    701,169
    
    573,675Principal
      payments on mortgage-backed
      securities       
      available-for-sale
    28,089
    
    21,921Principal
      payments on collateralized mortgage
      obligations       
      available-for-sale
    -
    
    14,373Purchases
      of investment securities available-for-sale
    -
    
    (6
    )Purchases
      of mortgage-backed securities available-for-sale
    -
    
    (45,333
    )(Continued)
 5   PFF BANCORP, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in
thousands)(Unaudited)  Three
      Months EndedJune 30,2004
    
    2003Proceeds
      from sale of investment securities available-for-sale
    1,795
    
    35,968Proceeds
      from sale of property and equipment
    3
    
    -Purchases
      of property and equipment
    (1,684
    )
    (984
    )Net cash provided by
      investing activities
    12,998
    
    28,984Cash flows from financing
      activities:Proceeds
      from long-term FHLB advances and other borrowings
    86,000
    
    89,000Repayment
      of long-term FHLB advances and other borrowings
    (189,000
    )
    (135,000
    )Net change
      in short-term FHLB advances and other borrowings
    22,400
    
    3,615Net change
      in deposits
    48,895
    
    15,768Proceeds
      from exercise of stock options
    3,199
    
    1,045Cash
      dividends
    (3,313
    )
    (1,142
    )Purchases
      of treasury stock
    (4,899
    )
    (560
    )Net cash
      used in financing activities
    (36,718
    )
    (27,274
    )Net decrease
      in cash and cash equivalents
    (14,895
    )
    (9,810
    )Cash and cash equivalents,
      beginning of period
    60,151
    
    50,323Cash and cash equivalents, end of
      period
    $         
      45,256
    
    $       40,513Supplemental
    information:Interest
      paid, including interest credited
    $         
      12,433
    
    $       14,332Income
      taxes paid
    $       
           6,316
    
    $        
    1,200Non-cash investing and financing
      activities:Net transfers
      from loans and leases receivable to assets acquired
               through
      foreclosure
    $                    
      -
    
    $            634
 See accompanying notes to the unaudited consolidated financial statements.


6

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PFF BANCORP, INC. AND SUBSIDIARIES
                                        
Notes to Unaudited Consolidated Financial Statements 
(1) Basis of Consolidation The accompanying unaudited consolidated
financial statements include the accounts of PFF Bancorp, Inc. and its
subsidiaries PFF Bank & Trust, Glencrest Investment Advisors, Inc. and
Diversified Builder Services, Inc. ("Bancorp", "we", "us" and "our").  Our
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.
Glencrest Investment Advisors, Inc. includes the accounts of Glencrest Insurance
Services, Inc.  All material intercompany balances and transactions have
been eliminated in consolidation. Our unaudited consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X. 
Accordingly, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States of America for
complete financial statements.  In our opinion, all adjustments (consisting
principally of normal recurring accruals) necessary for a fair presentation have
been included.  We have made certain reclassifications to the prior year's
consolidated financial statements to conform to the current
presentation. The results of operations for the three
months ended June 30, 2004 are not necessarily indicative of results that may be
expected for the entire fiscal year ending March 31, 2005. These interim consolidated financial
statements should be read in conjunction with our consolidated financial
statements, and the notes thereto, for the year ended March 31, 2004, which are
incorporated by reference in our Form 10-K for the year ended March 31,
2004. (2) New Accounting Pronouncements In March 2004, the FASB issued
Emerging Issues Task Force ("EITF") Issue No. 03-1, "The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain
Investments".  This EITF describes a model involving three steps: (1)
determine whether an investment is impaired, (2) determine whether the
impairment is other-than-temporary, and (3) to recognize the impairment loss in
earnings.  The EITF also requires several additional disclosures for
cost-method investments.  The EITF's impairment accounting guidance is
effective for reporting periods beginning after June 15, 2004.  The
financial impact of this EITF is not expected to have a material impact on our
consolidated financial statements. 7  PFF BANCORP, INC. AND SUBSIDIARIES
                                        
Notes to Unaudited Consolidated Financial Statements
                                                                           
(Continued) 
(3) Stock Option Plans We apply APB 25 in accounting for our
stock options and, accordingly, under the intrinsic value method no compensation
cost has been recognized for these stock options in our consolidated financial
statements.  Had we determined compensation cost based on the fair value at
the grant date for our stock options exercisable under SFAS 123, our results of
operations would have been adjusted to the pro forma amounts for the periods
indicated below:  Three Months
      EndedJune 30,2004
    2003(Dollars in
      thousands, except per share data)Net
    earnings:As reported
    $10,775
    
    $     9,332Add: Stock-based employee
      compensation          expense included in reported net
      income,          net of related tax effects
    2,185
    
    1,374Deduct: Total stock-based
      employee          compensation expense determined
      under          fair value based method for all
      awards,          net of related tax effects
    (2,249
    )
    (1,774
    )Pro forma net
      earnings
    $10,711
    
    $    
      8,932Earnings per shareBasic - as
      reported
    $       0.66
    
    $       0.59Basic - pro
      forma
    $       0.66
    
    $       0.56Diluted - as
      reported
    $       0.64
    
    $       0.57Diluted - pro
      forma
    $       0.63
    
    $       0.54             8


PFF BANCORP, INC. AND SUBSIDIARIES
                                   
Notes to Unaudited Consolidated Financial Statements
                                                                     
(Continued) (4) Earnings per share We calculate our basic and diluted
earnings per share in accordance with SFAS No. 128 "Earnings Per Share." 
Basic earnings per share is calculated by dividing net earnings available to
common shares by the average common shares outstanding during the period. 
Diluted earnings per share includes the potential dilution resulting from the
assumed exercise of stock options, including the effect of shares exercisable
under our stock-based compensation plans. The following table is a reconciliation
of the numerators and denominators of the basic and diluted EPS computations for
the three months ended June 30, 2004 and 2003. For the Three
      Months Ended June 30,2004
      (a)
    
    2003
      (b)Earnings(Numerator)
    Shares(Denominator)
    Per-ShareAmount
    
    Earnings 
      (Numerator)
    Shares(Denominator)
    Per-ShareAmount(Dollars in
      thousands, except per share data)Net Earnings
    $   
      10,775
    
    
    
    $   
      9,332Basic EPSEarnings available to common
      stockholders
    10,775
    16,306,134
    $   
    0.66
    
    9,332
    15,820,220
    $       
    0.59Effect of Dilutive
      SecuritiesOptions and stock
    awards
    
    579,268
    
    
    
    681,913Diluted EPSEarnings available to
      common stockholders    and assumed conversions
    $    10,775
    16,885,402
    $     0.64
    
    $    9,332
    16,502,133
    $       
  0.57
 (a) Options to purchase 2,279 shares of common stock at a weighted average
price of $39.16 per share   were  outstanding during the three
month period ending June 30, 2004, but were not included in the computation of
diluted EPS because the options' exercise prices were greater than the average
market price of common shares.  The options, which expire on January 28,
2014, were outstanding at June 30, 2004.  9


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Item 2.  Management's Discussion
and Analysis of Financial Condition and Results of Operations Average Balance Sheets The following table sets forth certain
information relating to our average balances of assets, liabilities and equity
for the three months ended June 30, 2004 and 2003.  The yields and costs
are derived by dividing interest income or expense by the average balance of
interest-earning assets or interest-bearing liabilities, respectively, for the
periods shown.  Average balances are generally derived from average daily
balances.  The yields and costs include fees that are considered
adjustments to yields. Three Months Ended
      June 30,2004
    
    2003Average
      Balance
    Interest
    
    AverageYield/Cost
    
    AverageBalance
    Interest
    
    AverageYield/Cost(Dollars in
      thousands)Assets:Interest-earning
    assets:Interest-earning deposits and
      short-term investments
    $   
      27,687
    $        79
    
    1.14
    %
    $     38,240
    $72
    
    0.76
    %Investment securities,
      net
    66,485
    550
    
    3.32
    
    76,321
    751
    
    3.95Mortgage-backed securities,
      net
    272,613
    2,548
    
    3.74
    
    215,561
    1,932
    
    3.59Collateralized mortgage
      obligations, net
    -
    -
    
    -
    
    9,853
    (294
    )
    (11.94
    )Loans and leases receivable,
      net
    3,112,687
    44,541
    
    5.73
    
    2,686,677
    41,090
    
    6.12FHLB stock
    42,686
    405
    
    3.81
    
    26,752
    253
    
    3.79Total interest-earning
      assets
    3,522,158
    48,123
    
    5.47
    
    3,053,404
    43,804
    
    5.74Non-interest-earning
      assets
    132,011
    
    
    
    
    85,121Total assets
    $3,654,169
    
    
    
    
    $3,138,525Liabilities and Stockholders'
      Equity:Interest-bearing
      liabilities:Passbook accounts
    $  
      167,328
    123
    
    0.29
    
    $  
      146,764
    170
    
    0.46Money market savings
      accounts
    619,761
    2,109
    
    1.36
    
    479,409
    1,760
    
    1.47NOW and other demand deposit
      accounts
    778,200
    1,099
    
    0.57
    
    805,591
    1,894
    
    0.94Certificate accounts
    882,711
    5,308
    
    2.41
    
    909,602
    6,467
    
    2.85Total
    2,448,000
    8,639
    
    1.42
    
    2,341,366
    10,291
    
    1.76FHLB advances and other
      borrowings
    814,362
    3,566
    
    1.76
    
    466,735
    3,465
    
    2.98Total interest-bearing
      liabilities
    3,262,362
    12,205
    
    1.50
    
    2,808,101
    13,756
    
    1.96Non-interest-bearing
      liabilities
    70,029
    
    
    
    
    48,307Total liabilities
    3,332,391
    
    
    
    
    2,856,408Stockholders' equity
    321,778
    
    
    
    
    282,117Total liabilities and stockholders'
      equity
    $3,654,169
    
    
    
    
    $3,138,525Net interest income
    
    $    
      35,918
    
    
    
    
    $    
      30,048Net interest spread
    
    
    
    3.97
    
    
    
    
    3.78Net interest margin
    
    
    
    4.08
    
    
    
    
    3.94Ratio of interest-earning assets to
      interest-bearing liabilities
    107.96%
    
    
    
    
    108.74%


10

---

Rate/Volume Analysis The following table presents the extent
to which changes in interest rates and changes in the volume of interest-earning
assets and interest-bearing liabilities have affected our 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
      June 30, 2004Compared toThree Months Ended June 30,
      2003Increase
      (Decrease)Due toVolume
    
    Rate
    
    Rate/Volume
    
    Net(Dollars in
      thousands)Interest-earning
      assets:Interest-earning deposits and short-term investments
    $ (20
    )
    37
    
    (10
    )
    7Investment securities,
      net
    (97
    )
    (120
    )
    16
    
    (201
    )Mortgage-backed securities,
      net
    512
    
    80
    
    24
    
    616Collateralized mortgage
      obligations, net
    294
    
    294
    
    (294
    )
    294Loans and leases receivable,
      net
    6,518
    
    (2,626
    )
    (441
    )
    3,451FHLB
      stock
    151
    
    1
    
    -
    
    152Total
      interest-earning assets
    7,358
    
    (2,334
    )
    (705
    )
    4,319Interest-bearing
      liabilities:Passbook accounts
    24
    
    (60
    )
    (11
    )
    (47
    )Money market savings
      accounts
    514
    
    (126
    )
    (39
    )
    349NOW and other demand deposit
      accounts
    (64
    )
    (750
    )
    19
    
    (795
    )Certificate
      accounts
    (191
    )
    (993
    )
    25
    
    (1,159
    )FHLB advances and
      other
    2,583
    
    (1,424
    )
    (1,058
    )
    101Total
      interest-bearing liabilities
    2,866
    
    (3,353
    )
    (1,064
    )
    (1,551
    )Change in net
      interest income
    $   4,492
    
    1,019
    
    359
    
    5,870                    11  Forward-Looking
Statements "Safe Harbor" statement under the Private
Securities Litigation Reform Act of 1995: This Form 10-Q contains
forward-looking statements that are subject to risks and uncertainties,
including, but not limited to, changes in economic conditions in our market
areas, changes in policies by regulatory agencies, the impact of competitive
loan and deposit products, the quality or composition of our loan or investment
portfolios, fluctuations in interest rates and changes in the relative
differences between short and long-term interest rates, levels of nonperforming
assets and operating results, the impact of domestic or world events on our loan
and deposit inflows and outflows and other risks detailed from time to time in
our filings with the Securities and Exchange Commission. We caution readers not
to place undue reliance on forward-looking statements.  We do not undertake
and specifically disclaim any obligation to revise or update any forward-looking
statements to reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements.  These risks could cause
our actual results for fiscal year 2005 and beyond to differ materially from
those expressed in any forward-looking statements by, or on behalf of,
us. As used throughout this report, the terms
"we", "our", or "us" refer to PFF Bancorp, Inc. and its consolidated
subsidiaries. Critical Accounting
Policies Our management has established various
accounting policies, which govern the application of accounting principles
generally accepted in the United Sates of America in the preparation of our
consolidated financial statements.  The significant accounting policies are
described in our Annual Report on Form 10-K for the year ended March 31, 2004
and there has not been any material change in those policies since that date,
other than changes discussed in this report.  Certain accounting policies
require significant estimates and assumptions which have a material impact on
the carrying value of certain assets and liabilities, and these are considered
to be critical accounting policies.  The estimates and assumptions used are
based on historical experience and other factors, which we believe are
reasonable under the circumstances.  Actual results could differ
significantly from these estimates and assumptions which could have a material
impact on the carrying values of assets and liabilities at the balance sheet
dates and on the results of operations for the reporting periods.  The
following represents critical accounting policies that require the most
significant estimates and assumptions that are particularly susceptible to
significant change in the preparation of the consolidated financial
statements: Allowance for loan and lease
  losses.  For further information, see "Comparison of Financial Condition
  at June 30, 2004 and March 31, 2004" in this report and "Item 1 - Lending
  Activities - Allowance for Loan and Lease Losses" in our Company's March 31,
  2004 Annual Report on Form 10-K.Mortgage Servicing Rights.  For further information, see "Item 1 -
  Lending Activities - Loan Servicing" and "Note 10 to the Consolidated
  Financial Statements" in our March 31, 2004 Annual Report on Form 10-K.Pension Accounting.  For further information, see "Note 14 to the
  Consolidated Financial Statements" in our March 31, 2004 Annual Report on Form
  10-K.Other-Than-Temporary-Impairment.  For further information,
  see "Item 1 - Investment Activities" in our March 31, 2004 Annual Report on
  Form 10-K.12 Comparison of Operating Results for
the Three Months Ended June 30, 2004 and 2003 Overview The following discussion compares the
results of operations for the three months ended June 30, 2004, with the
corresponding period of 2003. This discussion should be read in conjunction with
the consolidated financial statements and footnotes included therein. We recorded net earnings of $10.8 million
or $0.64 per diluted share for the three months ended June 30, 2004 compared to
net earnings of $9.3 million or $0.57 per diluted share for the comparable
period of 2003 (adjusted for the 40 percent stock split effected in the form of
a stock dividend paid on September 5, 2003 to shareholders of record on August
15, 2003). Earnings before income taxes were $20.3
million for the current quarter, an increase of 26 percent or $4.1 million from
the comparable period of 2003.  As discussed in our press release of June
9, 2004, provided under a Form 8-K filing on June10, 2004, we will be
experiencing a temporary increase in our effective income tax rate during the
current fiscal year.  Therefore, we believe it's appropriate to use
earnings before income taxes as an important basis for comparing operating
results for the current fiscal year with those of the prior year. The increase in our net income between
the quarters ended June 30, 2003 and 2004 reflected the following: Increase in net interest income
  arising from a combination of increases in net interest spread and growth in
  average interest-earning assets.Decreases in provision for loan and
  lease losses attributable to an improvement in the level of asset
  quality.Increases in non-interest income
  arising from:
  Increases in trust and investment
    fees resulting from growth in trust assets under custody or
    management.Increase in gain on sale of
    securities partially offset by a decrease in gain on sale of
    loans.The above favorable items were partially offset by increases in general
  administrative expense attributable principally to increases in compensation
  and benefits and other non-interest expense. Our focus is on maintaining asset growth
in our portfolio of higher yield construction, commercial real estate,
commercial business and consumer loans (the "Four-Cs").  The aggregate
disbursed balance of the Four-Cs increased $129.9 million during the current
quarter to $1.51 billion or 48 percent of loans and leases receivable, net,
compared to $1.38 billion or 44 percent at March 31, 2004.  One year ago
the Four-Cs were $1.28 billion or 48 percent of loans and leases receivable,
net. Our Four-C originations increased to $552.5 million or 83
percent of total originations for the current quarter compared to $416.4 million
or 82 percent of total originations for the comparable period of the prior
year. On the liability side of our
balance sheet, we continued to focus our deposit gathering activities on our
lower cost deposits, which are comprised of passbook, money market, NOW and
other demand accounts ("core deposits").  The growth of our core deposits
is essential to the increase in our net interest spread, whereby we can maintain
a lower cost of funds while originating Four-Cs loans with higher market
interest rates.  Core deposits increased $65.8 million during the current
quarter to $1.63 billion or 65 percent of total deposits while certificates of
deposit ("CDs") decreased $16.9 million.  This pattern of activity is
consistent with the same quarter of the prior year, in which core deposits
increased $39.3 million while CDs decreased $23.5
million. 13  The significant funding cost advantage to
core deposits over CDs continues to play a significant role in our increasing
net interest spread and profitability. The average balance of Federal Home Loan
Bank ("FHLB") advances and other borrowings increased to $814.4 million for the
three months ended June 30, 2004 from $466.7 million for the comparable period
of 2003.  While deposits continue to be our preferred vehicle for funding
asset growth, the pricing of FHLB advances and other borrowings, at times,
provides a more cost effective means of funding incremental asset growth than
would increasing deposit pricing to levels that would exceed prevailing market
rates. Non-accrual loans were $11.9 million or
0.32 percent of gross loans and leases at June 30, 2004 compared to $13.6
million or 0.37 percent of gross loans and leases at March 31, 2004, and $22.3
million or 0.71 percent of gross loans and leases at June 30, 2003.  The
non-accrual loan balance of $11.9 million as of June 30, 2004 primarily consists
of two loans, a construction loan totaling $9.8 million located in Murrieta,
California and a commercial business loan totaling $1.0 million. During the current quarter, we
repurchased 134,100 shares of our common stock at a weighted average price of
$36.53 per share.  At June 30, 2004, 377,480 shares remain under an 840,000
share repurchase authorization adopted by our Board of Directors on March 26,
2003. At June 30, 2004, our consolidated
capital to assets ratio was 8.87%.  The Bank's core and risk-based capital
ratios were 7.89% and 11.23%, respectively, compared to the ratios of 
5.00% and 10.00%, respectively, needed to be considered "Well
Capitalized." Net Interest
Income Net interest income is the difference
between interest and dividends earned on loans and leases, mortgage-backed
securities and investment securities ("interest-earnings assets") and the
interest paid on deposits and borrowings ("interest-bearing liabilities"). The
spread between the yield on interest-earnings assets and the cost of
interest-bearing liabilities and the relative dollar amounts of these assets and
liabilities are the principle items affecting net interest income. Our net interest income totaled $35.9
million for the current quarter, up 20 percent or $5.9 million from $30.0
million for the quarter ended June 30, 2003.  Net interest spread increased
to 3.97% for the current quarter from 3.78% for the quarter ended June 30,
2003.  The increase in net interest spread reflects our success in
transitioning our balance sheet to a higher margin business model by focusing on
the Four-Cs and core deposits.  Contributing to the increase in net
interest income were increases in average interest earning assets of $468.8
million or 15 percent from the comparable period of the prior year.  Our
net interest spread and net interest income are also impacted by the repricing
or rate adjustment characteristics of our interest-earning assets and
interest-bearing liabilities.  Reflecting the lower interest rate
environment, the average yield on loans and leases receivable, net decreased 39
basis point to 5.73% for the quarter ended June 30, 2004.  This is due to a
high level of loan and lease paydown activity during the current quarter across
all loan and lease product categories and new loans and leases originated or
purchased at lower prevailing market rates. The average cost of
interest-bearing liabilities decreased 46 basis points to 1.50% between the
three months ended June 30, 2003 and 2004.  This reflects a decrease in the
average cost of core deposits to 0.85% for the quarter ended June 30, 2004, from
1.07% for the comparable period last year.  Additionally, the average cost
of FHLB advances and other borrowings decreased to1.76% for the quarter ended
June 30, 2004 from
2.98%                                                                                   
14  for the comparable period last
year.  We continued to control our overall cost of funds by focusing on
core deposits and making judicious use of FHLB advances and other
borrowings. Provision for Loan and Lease
Losses We recorded a $524,000 provision for loan
and lease losses for the quarter ended June 30, 2004 compared to a provision of
$660,000 for the comparable period of 2003.  At June 30, 2004, the
allowance for loan and lease losses was $31.0 million or 0.83% of gross loan and
leases and 261% of non-accrual loans compared to $30.8 million or 0.84% of gross
loans and leases and 226% of non-accrual loans at March 31, 2004.  We will
continue to monitor and modify the allowance for loan and lease losses based
upon economic conditions, loss experience, changes in portfolio composition, and
other factors. Non-Interest
Income Our total non-interest income was $6.9
million and $5.6 million for the quarters ended June 30, 2004 and 2003,
respectively. Deposit and Related
Fees Deposit and related fees totaled $2.9
million for the current quarter, up $44,000 from the comparable quarter in
2003.  This increase reflects the continued growth in our core deposits and
related transaction fee income. Loan and Servicing
Fees Loan and servicing fees were relatively
flat at $1.6 million for the quarters ended June 30, 2004 and 2003.  Loan
and servicing fees income is shown net of amortization of our mortgage servicing
rights ("MSR") asset of $7,000 and $14,000 for the quarters ended June 30, 2004
and 2003, respectively.  At June 30, 2004, our MSR asset was
$338,000. Trust and Investment
Fees Trust and investment fees rose $198,000
or 36 percent between the quarters ended June 30, 2003 and 2004 to
$755,000.  This reflects an increase in market value of trust assets under
custody or management to $292.7 million at June 30, 2004 from $249.8 million at
June 30, 2003. Gain on Sale of
Loans Our community banking business strategy
does not include aggressively pursuing the origination of loans for sale. 
The Four-Cs have consistently comprised in excess of 80 percent of total
originations and those four product types are originated for portfolio as
opposed to sale.  Accordingly, the principal balances of loans sold during
the quarters ended June 30, 2004 and 2003 were $3.8 million and $14.1 million,
respectively.  This activity generated net gains on sale of $43,000 and
$375,000 for the quarters ended June 30, 2004 and 2003, respectively. Gain on Sale of
Securities We generally follow a "buy and
hold" strategy with respect to our securities portfolio.  While the
overwhelming majority of our securities portfolio is classified as "available
for sale", our securities
sales                                                                                   
15  activity has been and is expected to
continue to be infrequent.  Gain on sales of securities was $1.4 million
for the current quarter compared to $117,000 for the comparable period of prior
year. The sales during the current quarter were initiated primarily to reduce
our exposure to our investment in the common stock of Friedman, Billings, Ramsey
Group, Inc., which has appreciated significantly since we purchased it in 1996.
As a result of this price appreciation, prudent risk diversification required
that our investment be reduced, although not eliminated, to reduce concentration
in any single security.  A portion of this reduction was effected during
the quarter ended December 31, 2003 and an additional reduction took place
during the current quarter generating a gain of $1.4 million.  At June 30,
2004, we own 210,000 shares of this security with a cost basis and market value
of $3.56 and $19.79 per share, respectively. Non-Interest
Expense Non-interest expense increased $3.1
million to $21.9 million for the three months ended June 30, 2004 as compared to
the same period last year.  General and administrative ("G&A") expense
increased from $18.8 million or 2.40%, on an annualized basis, of average assets
for the three months ended June 30, 2003 to $21.9 million or 2.39%, on an
annualized basis, of average assets for the three months ended June 30,
2004.  While our balance sheet, which is increasingly comprised by Four-Cs
and core deposits, generates higher levels of net interest income as compared to
a balance sheet comprised of residential mortgage loans and CDs, our higher
margin business is also more cost intensive, in particular with respect to
compensation levels.  Improvement in our efficiency ratio from 52.83% to
51.13% between the quarters ended June 30, 2003 and 2004 indicates that total
revenue is increasing at a faster rate than is total G&A expense. Compensation and benefits expense
accounted for $1.7 million of the $3.0 million increase in G&A expense
between the quarters ended June 30, 2004 and 2003.  This increase reflects
both the number of employees and compensation levels of staff required to
support our lending, deposit, and investment advisory operations.  Full
time equivalents ("FTE") increased to 642 at June 30, 2004 as compared to 592 at
June 30, 2003.  Non-cash charges associated with the Bank's Employee Stock
Ownership Plan ("ESOP") also contributed to the increase in compensation and
benefits expense.  ESOP expense increased $819,000 between the quarters
ended June 30, 2003 and 2004 to $2.4 million.  The allocation of shares
under the Bank's ESOP will continue in generally equal installments through
March 2005.  The amount charged to expense under the ESOP moves upward or
downward with changes in the market price of the Bancorp's common
stock. The increase in marketing and
professional services expense from $2.1 million to $2.3 million between the
quarters ended June 30, 2004 and 2003 was attributable to the marketing efforts
associated with the opening of our Yucaipa branch during May 2004 as well as an
increase in expenditures associated with increased marketing efforts directed
toward the Hispanic segments of the communities we serve. Other non-interest expense increased from
$3.0 million to $3.8 million between the three months ended June 30, 2003 and
2004. The increase was primarily attributable to $300,000 accrued for interest
that we expect will be assessed upon our filing of amended tax returns in
connection with the deductions we have taken for ESOP expense in prior years and
$138,000 related to a write-down of a CRA investment located in Riverside,
California. Income Taxes Income taxes and the effective
tax rates were $9.5 million and 46.9 percent, respectively, for the three months
ended June 30, 2004 compared to $6.8 million and 42.3 percent, respectively, for
the
comparative                                                                               
16  period last year.  The increase in
our income taxes and effective tax rate as of June 30, 2004 was due to a book
versus tax permanent difference associated with our ESOP.  As discussed in
our June 9, 2004 press release, we expect our effective tax rate to average
approximately 46 percent for the current fiscal year and then to decrease to
approximately 42 percent during the first quarter of fiscal 2006 when the
current ESOP is completed. Comparison of Financial Condition
at June 30, 2004 and March 31, 2004 Total assets decreased $33.5 million to
$3.64 billion at June 30, 2004 from $3.68 billion at March 31, 2004.  This
is primarily due to a net decrease in mortgage-backed securities of $34.1
million, partially offset by a net increase in loans and leases receivable of
$14.1 million.  During the current quarter our core and total deposits
increased $65.8 million to $1.63 billion and $48.9 million to $2.50 billion,
respectively, while our CD's decreased $16.9 million to $877.2 million.  At
June 30, 2004, core deposits comprised 65 percent of total deposits, up from 64
percent at March 31, 2004.  FHLB advances and other borrowings decreased
$80.6 million during the current quarter to $771.0 million as we replaced higher
costing FHLB advances with lower costing core deposits. At June 30, 2004, the allowance for loan
and lease losses was $31.0 million or 0.83% of gross loans and leases and 261%
of non accrual loans compared to $30.8 million or 0.84% of gross loans and
leases and 226% of non accrual loans at March 31, 2004.  The slight
decrease in the ratio of the allowance for loan and lease losses to gross loans
and leases between March 31 and June 30, 2004 reflects the improvement in the
ratio of non-accrual loans to gross loans and leases from 0.37% at March 31,
2004 to 0.32% at June 30, 2004. The allowance for loan and lease losses
is maintained at an amount management considers adequate to cover probable
losses on loans and leases receivable. The determination of the adequacy of the
allowance for loan and lease losses is influenced to a significant degree by the
evaluation of the loan and lease portfolio by our Internal Asset Review ("IAR")
function.  The IAR system is designed to identify problem loans and leases
and probable losses.  As our loan and lease portfolio has become comprised
to a greater degree by the Four-Cs, the IAR function has become increasingly
important not only for the timely and accurate identification of probable
losses, but also to minimize our exposure to such losses through early
intervention.  Among the factors taken into account by the IAR function in
identifying probable losses and determining the adequacy of the allowance for
loan and lease losses are the nature, level and severity of classified assets,
historical loss experience adjusted for current economic conditions, and
composition of the loan and lease portfolio by type.  In addition, various
regulatory agencies, as an integral part of their examination process,
periodically review the Bank's allowance for loan and lease losses.  Such
agencies may require the Bank to make additional provisions for loan and lease
losses based upon information available at the time of the review.  We will
continue to monitor and modify our allowance for loan and lease losses as
economic conditions, loss experience, changes in asset quality, portfolio
composition and as other factors dictate. 17  The following table sets forth activity
in our allowance for loan and leases losses. Three months
    endedJune
      30,2004
    
    2003(Dollars in
      thousands)Beginning
      balance
    $30,819
    
    $31,121Provision for loan and leases
      losses
    524
    
    660Charge-offs
    (384
    )
    (2,634
    )Recoveries
    89
    
    76Ending balance
    $31,048
    
    $29,223
 Charge-offs of $384,000 for the three
months ended June 30, 2004 include $266,000 related to commercial business loans
and $118,000 related to consumer loans.  The charge-offs of $2.6 million
for the three months ended June 30, 2003 primarily related to a $2.1 million
commercial business loan to a jewelry store chain and $319,000 of participating
interests in two commercial aircraft leases that were repurchased by the lead
lender. Total stockholders' equity was $323.1
million at June 30, 2004 compared to $316.4 million at March 31, 2004. The $6.7
million increase in total stockholders' equity was comprised principally of a
$7.9 million increase in additional paid-in-capital and a $3.5 million increase
in retained earnings, substantially restricted, partially offset by an increase
in unrealized losses of $5.5 million on securities available for sale.  The
$7.9 million increase in additional paid-in-capital reflects the exercise of
304,166 stock options, along with the associated tax benefit and the
amortization of shares under our stock based compensation plans, partially
offset by $956,000 representing the original issuance price of the 134,100
shares of the repurchased common stock.  The $3.5 million increase in
retained earnings, substantially restricted is comprised of $10.8 million of net
earnings for the three months ended June 30, 2004, partially offset by $3.9
million paid in excess of the original issuance price for 134,100 shares of our
common stock repurchased during the period and $3.3 million applicable to a
quarterly dividend of $0.20 per common share paid on June 25, 2004 to
shareholders of record as of June 11, 2004.  Accumulated other
comprehensive losses at June 30, 2004 consists of $5.5 million of unrealized
loss, net of tax on available-for-sale securities, offset by a $367,000 increase
in the tax benefit on the minimum pension liability.  The $461,000 decrease
in unearned stock-based compensation reflects the amortization of unearned
compensation under our ESOP. Liquidity and Capital
Resources The objective of liquidity management is
to ensure that we have the continuing ability to meet our funding needs on a
cost-effective basis.  Our most liquid assets are cash and short-term
investments.  The levels of these assets are dependent on our operating,
financing, lending and investing activities during any given
period. Our primary sources of funds
are deposits, principal and interest payments on loans, leases and securities,
FHLB advances and other borrowings, and to a lesser extent, proceeds from the
sale of loans and securities.  While maturities and scheduled amortization
of loans, leases and securities are predictable sources of funds, deposit flows
and loan and security prepayments are greatly influenced by the general level of
interest rates, economic conditions and
competition.                                                                                  
18  The Office of Thrift Supervision has no
statutory liquidity requirement, but rather a policy, consistent with that of
the other Federal banking regulatory agencies, that liquidity be maintained at a
level which provides for safe and sound banking practices and financial
flexibility.  Our internal policy is to maintain cash and readily
marketable debt securities with final maturities of one year or less equal to
approximately three percent of total deposits, FHLB advances and other
borrowings maturing within one year.  At June 30, 2004, our defined
liquidity ratio was 3.3% and our average defined liquidity ratio for the current
quarter ended June 30, 2004, was 3.3%.  At June 30, 2004, cash and
short-term investments totaled $45.3 million.  As an additional component
of liquidity management, we seek to maintain sufficient mortgage and securities
collateral at the FHLB to enable us to immediately borrow an amount equal to at
least five percent of total assets.  At June 30, 2004, our immediate
borrowing capacity from the FHLB was $240.3 million or 6.7 percent of our total
assets at our banking subsidiary. Deposits, particularly core deposits,
provide a more preferable source of funding than do FHLB advances and other
borrowings. However, as and to the extent competitive or market factors do not
allow us to meet our funding needs with deposits; FHLB advances and other
borrowings provide a readily available source of liquidity.  We also have
the ability to borrow funds under reverse repurchase agreements collateralized
by securities.  Additionally, we have the capability to borrow funds from
the Federal Reserve Bank discount window.  As of June 30, 2004, our
borrowing capacity at the Federal Reserve Bank was approximately $17.0
million. Our strategy is to manage liquidity by
investing excess cash flows in higher yielding interest-earning assets, such as
loans, leases and securities, or paying down FHLB advances and other borrowings,
depending on market conditions.  Conversely, if the need for funds is not
met through deposits and cash flows from loans, leases and securities, we
initiate FHLB advances and other borrowings or, if necessary and of economic
benefit, sell loans and/or securities.  Only when no other alternatives
exist will we constrain loan and lease originations as a means of addressing a
liquidity shortfall.  We have not found it necessary to constrain loan and
lease originations due to liquidity considerations. Our cash flows are comprised of three
primary classifications: cash flows from operating activities, investing
activities and financing activities. Net cash provided by operating activities
was $8.8 million for the quarter ended June 30, 2004, compared to net cash used
of $11.5 million for the comparable period of the prior year.  The change
from net cash used by operating activities in 2003 to net cash provided by
operating activities in 2004 was attributable principally to the change in
accrued expenses and other liabilities from a $26.4 million decrease for the
quarter ended June 30, 2003 to $307,000 decrease for the comparable period of
2004.   The $26.4 million decrease in accrued expenses and other
liabilities during the quarter ended June 30, 2003 was attributable to a $35.8
million decrease in securities purchased but not yet settled between March 31
and June 30, 2003. Investing activities consist primarily of
disbursements for loan and lease originations, purchases of loans, leases and
securities, offset by principal collections on loans, leases and securities and
to a lesser degree proceeds from the sale of securities. The levels of cash
flows from investing activities are influenced by the general level of interest
rates.  During periods of declining rates, borrowers exhibit an increasing
propensity to refinance their indebtedness, which results in an increase in cash
flows from loan, lease, and securities paydowns.  Accordingly, we reinvest
those cash flows into loan and lease originations, and purchases of loans and
securities in order to effectively manage our cash resources. 19  Net cash provided by investing activities
was $13.0 million and $29.0 million for the quarters ended June 30, 2004 and
2003, respectively.  The decrease in cash provided by investing activities
was primarily attributable to a $34.2 million decrease in proceeds from sale of
securities between the three months ended June 30, 2003 and 2004. 
Reflecting the acceleration in cash flows arising from a declining rate
environment, principal payments on loans and leases increased $127.5 million
from $573.7 million for the quarter ended June 30, 2003 to $701.2 million for
the current quarter.  In response to the increase in principal payments on
loans and leases, we increased our disbursements for originations and purchases,
excluding loans originated for sale by $143.2 million from $589.5 million for
the quarter ended June 30, 2003 to $732.7 million for the comparable quarter of
2004.  
 Financing activities consist primarily of net activity in deposit
accounts and FHLB advances and other borrowings. Our net increases in deposits
were $48.9 million and $15.8 million for the quarters ended June 30, 2004 and
2003, respectively.  During the quarter ended June 30, 2004, we decreased
our use of FHLB advances by a net $80.6 million compared to a net decrease of
$42.4 million for the comparable period of 2003. At June 30, 2004, the Bank exceeded all
of its regulatory capital requirements with tangible capital of $284.9 million,
or 7.89% of adjusted total assets, which is above the required level of $54.2
million, or 1.5%; core capital of $284.9 million, or 7.89% of adjusted total
assets, which is above the required level of $144.5 million, or 4.0%; and total
risk-based capital of $312.8 million, or 11.23% of risk-weighted assets, which
is above the required level of $222.8 million, or 8.0%. We currently have no material contractual
obligations or commitments for capital expenditures. At June 30, 2004, we had
outstanding commitments to originate and purchase loans of $112.6 million and
$54.6 million, respectively, compared to $105.5 million and $54.8 million,
respectively, at June 30, 2003.  We anticipate that we will have sufficient
funds available to meet our commitments.  At June 30, 2004, we had $150,000
of outstanding commitments to purchase securities.  Certificate accounts
that are scheduled to mature in less than one year from June 30, 2004 totaled
$609.6 million.  We expect that we will retain a substantial portion of the
funds from maturing certificate accounts at maturity either in certificate or
liquid accounts. The continued low interest rate environment during fiscal 2005
has resulted in a reduction in the differential between certificate accounts and
more liquid instruments such as money market accounts. Accordingly, a portion of
our maturing certificate accounts have been and are expected to continue to be
reinvested by customers into more liquid accounts until such time as the rate
differential between certificate and liquid accounts increases. Segment
Reporting Through our branch network and
investment advisory offices, we provide 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; cash management; trust services; investment advisory services
and diversified financial services for homebuilders.  While our chief
decision makers monitor the revenue streams of our various products and
services, operations are managed and financial performance is evaluated on a
company-wide basis.  Accordingly, we consider all of our operations are
aggregated in one reportable operating
segment.                                                                                 
20  Item 3. Qualitative and
Quantitative Disclosures about Market Risk We believe there have been no significant
changes to our qualitative and quantitative disclosures of market risk
(consisting primarily of interest rate risk) during the three months ended June
30, 2004. Item 4. Controls and
Procedures Our management, including our Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness
of our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d --15(e)) as of the end of the period covered by this
report.  Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures are
effective, in all material aspects, to ensure that information relating to us,
which is required to be disclosed in the reports we file with the Securities and
Exchange Commission under the Exchange Act, is recorded, processed, summarized
and reported as and when required. There has been no change in
our internal control over financial reporting identified in connection with the
evaluation that occurred during our last fiscal quarter that has materially
affected, or that is reasonably likely to materially affect, our internal
control over financial
reporting.                                                                                
21


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PART II -- OTHER
      INFORMATIONPFF BANCORP, INC.
      AND SUBSIDIARIESItem 1.  Legal
      ProceedingsOther than ordinary routine
      litigation incidental to our business, neither we, nor any of our
      subsidiaries or any of   
                  their properties, are the subject of any material
      pending legal proceeding and, to the best of our knowledge, no  
                  such
      proceedings are contemplated by any governmental
      authorities.   Item 2.
    Changes in Securities and Use
      of Proceeds. Common
      Stock RepurchasedPeriod
    TotalNumberof
      SharesPurchased (1)
    AveragePricePaid PerShare
    Total Number
      of shares Purchased as Part of 
      Publicly Announced Plans or Programs
    Total Shares 
      Remaining 
 Under 
 Repurchase 
 Program (2)Remaining balance of our authorized
      share repurchase program at March 31, 2004
    -
    -
    -
    511,580June 1, 2004 through June 30,
      2004
    134,100
    $36.53
    134,100
    377,480 (1)  During fiscal 2004 and 2003 ,
we repurchased 302,800 and 25,620 common shares, respectively, under the 840,000 repurchase program adopted by our Board
of Directors on March 26, 2003.(2)  At June 30, 2004, the maximum
amount of our common shares that can be repurchased was 377,480
shares.  Item 3.
    Defaults Upon Senior
      Securities.NoneItem 4.
    Submission of Matters to a Vote
      of Security Holders.NoneItem 5.
    Other
      Information.None 22  Item 6.
    Exhibits and Reports on Form
      8-K.(a)(3)(a)
    Except as noted, the following
      exhibits are filed as part of this report:3.1
    Certificate of Incorporation of PFF
      Bancorp, Inc. *3.2
    Bylaws of PFF Bancorp, Inc.
      *31.1
    Rule 13a-14(a)/15d-14(a)
      Certifications32.1
    Section 1350 Certifications
      **(b)
    Reports on Form
8-KWe furnished a report on Form 8-K
      dated April 12, 2004, announcing under Item 15, that our wholly owned
      subsidiary, PFF Bank & Trust, plans to open a new full-service branch
      in Beaumont, California.  A copy of the press release dated April 12,
      2004 describing the plans to open the new branch was attached as Exhibit
      99.1, under Item 7.We furnished a report on Form 8-K
      dated April 19, 2004, announcing our earnings for the fourth quarter and
      fiscal year ended March 31, 2004, under Item 12.  A copy of the press
      release dated April 19, 2004, describing fourth quarter and fiscal year
      ended March 31, 2004 earnings was attached as Exhibit 99.1, under Item
      7.We furnished a report on Form 8-K
      dated June 10, 2004, announcing that our Audit Committee determined that
      the effective income tax rate applied to its pre-tax earnings for fiscal
      2004 should be revised from 42% to 44%.  A copy of the press release
      dated June 9, 2004 describing the revision of the effective tax rate was
      attached as Exhibit 99.1, under Item 7._________________________*    Incorporated
      herein by reference to Form S-1, Registration Statement, as amended, filed
      on 
            December 8, 1995, SEC Registration Number 33-80259.**  Exhibit 32.1 is furnished
      as part of this report and shall not be deemed "filed" for purposes of
      Section 18
            of the Exchange Act (15 U.S.C. 78r), or otherwise subject to
      the liability of that section. 23   PFF BANCORP, INC.
      AND SUBSIDIARIESSIGNATURESPursuant to the requirements 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: August 9, 2004
    BY: /s/ LARRY M.
      RINEHARTLarry M. RinehartPresident,
      Chief Executive Officerand DirectorDATED: August 9, 2004
    BY: /s/ GREGORY C.
      TALBOTTGregory C. TalbottExecutive
      Vice President, ChiefFinancial Officer and Treasurer  24