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 1934For the quarterly period ended September 30, 2006
				
				or[   
				] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
				SECURITIES EXCHANGE ACT OF 1934For the
				transition period from                                                                   
				toCommission File Number 001-16845PFF 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.)9337 Milliken Avenue, Rancho Cucamonga,
				California  91730(Address of principal
				executive offices)(909) 941-5400(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 a large
				accelerated filer, an accelerated filer, or a non-accelerated
				filer.  See definition of "accelerated
				filer and large
				accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
				one):
				Large accelerated
				filer X   
				Accelerated filer       
				Non- accelerated filer  .Indicate by check mark whether the registrant is a shell company
				(as defined in rule 12b-2 of the Exchange Act).
				Yes    
				No X .The registrant had 24,609,220 shares of common stock, par value
				$.01 per share, outstanding as of October 31, 2006.


---

PFF
	BANCORP, INC. AND SUBSIDIARIES Form 10-Q Table of
	Contents  PART I
				FINANCIAL
				INFORMATION (Unaudited)
				PAGEItem 1
				Financial
				Statements
				
				
				Consolidated
				Balance Sheets as of September 30, 2006 and March 31, 2006
				1Consolidated
				Statements of Earnings for the three and six months ended
				September 30, 2006 and 2005
				2Consolidated
				Statements of Comprehensive Earnings for the three and six
				months ended
				September 30,
				2006 and 2005
				3Consolidated
				Statement of Stockholders' Equity for the six months ended
				September 30, 2006
				4Consolidated
				Statements of Cash Flows for the six months ended
				September 30,
				2006 and 2005
				5Notes to
				Unaudited Consolidated Financial Statements
				6Item 2
				Management's
				Discussion and Analysis of Financial Condition and
				Results of
				Operations
				14Item 3
				Quantitative and
				Qualitative Disclosures about Market Risk
				26Item 4
				Controls and
				Procedures
				26PART II
				OTHER
				INFORMATIONItem 1
				Legal Proceedings
				27Item 1A
				Risk Factors
				27Item 2
				Unregistered
				Sales of Equity Securities and Use of Proceeds
				27Item 3
				Defaults Upon
				Senior Securities
				27Item 4
				Submission of
				Matters to a Vote of Security Holders
				28Item 5
				Other Information
				28Item 6
				Exhibits
				28SIGNATURES
				29


---

PART I -- FINANCIAL INFORMATION Item 1. Financial Statements. PFF BANCORP, INC. AND SUBSIDIARIES
	CONSOLIDATED BALANCE SHEETS
	(Dollars in thousands, except per share data) September 30,
				2006
				
				March 31,
				2006(Unaudited)AssetsCash and cash equivalents
				$
				62,259
				
				$
				58,831Investment securities held-to-maturity
				(estimated fair value of
				$6,606 at September 30, 2006, and
				$6,567 at March 31, 2006)
				
				6,718
				
				
				6,724Investment securities available-for-sale, at
				fair value
				
				78,656
				
				
				60,092Mortgage-backed securities available-for-sale,
				at fair value
				
				237,314
				
				
				229,470Loans held-for-sale
				
				397
				
				
				795Loans and leases receivable, net (net of
				allowances for loan and lease losses
				of $40,289 at September 30, 2006 and $37,126 at March 31, 2006)
				
				4,101,825
				
				
				3,839,779Federal Home Loan Bank (FHLB) stock, at cost
				
				44,885
				
				
				39,307Accrued interest receivable
				
				25,256
				
				
				21,278Assets acquired through foreclosure, net
				
				8,605
				
				
				8,728Property and equipment, net
				
				49,978
				
				
				44,303Prepaid expenses and other assets
				
				27,857
				
				
				31,483Total assets
				$
				4,643,750
				
				$
				4,340,790Liabilities and Stockholders' EquityLiabilities:Deposits
				$
				3,180,935
				
				$
				3,057,309FHLB advances and other borrowings
				
				973,400
				
				
				822,000Junior subordinated debentures
				
				56,702
				
				
				56,702Accrued expenses and other liabilities
				
				42,682
				
				
				41,048Total liabilities
				
				4,253,719
				
				
				3,977,059Commitments 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 and outstanding 24,604,302 and 24,493,472 at
				September 30, 2006 and March 31, 2006, respectively
				
				244
				
				
				244Additional paid-in capital
				
				180,101
				
				
				175,581Retained earnings
				
				216,713
				
				
				195,591Accumulated other comprehensive losses
				
				(7,027
				)
				
				(7,685
				)Total stockholders' equity
				
				390,031
				
				
				363,731Total liabilities and stockholders' equity
				$
				4,643,750
				
				$
				4,340,790
  See accompanying notes to the unaudited consolidated financial
	statements. 1   PFF BANCORP, INC. AND SUBSIDIARIES
	CONSOLIDATED STATEMENTS OF EARNINGS(Dollars in thousands, except per share data)
	(Unaudited) For the Three Months Ended
				September 30,
				For the Six Months Ended
				September 30,2006
				
				2005
				
				2006
				
				2005Interest income:Loans and leases receivable
				$       80,334
				
				$       
				59,124
				
				$   156,788
				
				$     115,229Mortgage-backed securities
				2,764
				
				2,201
				
				5,377
				
				4,547Investment securities and deposits
				1,736
				
				1,116
				
				3,172
				
				2,249Total interest
				income
				84,834
				
				62,441
				
				165,337
				
				122,025Interest expense:Deposits
				26,010
				
				15,097
				
				48,416
				
				27,701Borrowings
				12,966
				
				5,809
				
				24,191
				
				11,703Total interest
				expense
				38,976
				
				20,906
				
				72,607
				
				39,404Net interest income
				45,858
				
				41,535
				
				92,730
				
				82,621Provision for loan and lease losses
				2,520
				
				1,220
				
				3,020
				
				1,220Net interest income after provision for loan
				and
				lease losses
				43,338
				
				40,315
				
				89,710
				
				81,401Non-interest income:Deposit and related fees
				3,380
				
				3,469
				
				6,673
				
				6,416Loan and servicing fees
				578
				
				593
				
				1,171
				
				1,095Trust, investment and insurance fees
				1,302
				
				1,030
				
				2,824
				
				2,176Gain on sale of loans, net
				73
				
				36
				
				83
				
				103Gain on sale of securities, net
				-
				
				923
				
				271
				
				923Mark-to-market on interest rate swaps
				(797
				)
				-
				
				(322
				)
				-Other non-interest income
				1,094
				
				287
				
				1,405
				
				493Total
				non-interest income
				5,630
				
				6,338
				
				12,105
				
				11,206Non-interest expense:General and administrative:Compensation and benefits
				13,696
				
				13,760
				
				29,331
				
				26,709Occupancy and equipment
				4,268
				
				3,600
				
				8,025
				
				7,057Marketing and professional
				services
				3,183
				
				2,660
				
				6,317
				
				5,647Other general and
				administrative
				3,518
				
				3,375
				
				7,274
				
				6,648Total general
				and administrative
				24,665
				
				23,395
				
				50,947
				
				46,061Foreclosed asset operations, net
				-
				
				10
				
				(115
				)
				9Total
				non-interest expense
				24,665
				
				23,405
				
				50,832
				
				46,070Earnings before income taxes
				24,303
				
				23,248
				
				50,983
				
				46,537Income taxes
				10,260
				
				9,889
				
				21,515
				
				20,820Net earnings
				$        
				14,043
				
				$      
				13,359
				
				$      29,468
				
				$      25,717Basic earnings per share
				$            
				0.57
				
				$          
				0.55
				
				$         
				1.20
				
				$         
				1.06Weighted average shares outstanding for basic
  earnings per share calculation
				24,517,593
				
				24,256,805
				
				24,471,266
				
				24,329,067Diluted earnings per share
				$            
				0.56
				
				$          
				0.54
				
				$         
				1.19
				
				$         
				1.03Weighted average shares outstanding for diluted
  earnings per share calculation
				24,856,348
				
				24,892,633
				
				24,812,956
				
				24,974,616
  See accompanying notes to the unaudited consolidated financial
	statements. 2  PFF BANCORP, INC. AND SUBSIDIARIES
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
	(Dollars in thousands)
	(Unaudited) For the Three Months Ended
				September 30,
				
				For the Six Months Ended
				September 30,2006
				
				2005
				
				
				2006
				
				2005Net earnings
				$     14,043
				
				$    13,359
				
				$
				29,468
				
				$    25,717Other comprehensive earnings (losses), net of
				income tax
				expense (benefit) of $1,284 and $(846) for three
				months ended September 30, 2006 and 2005, and $475 and $(82) for
				the six months ended September 30, 2006 and 2005:Change in unrealized gains (losses) on:Investment securities
				available-for-sale, at fair value
				165
				
				78
				
				
				79
				
				188Mortgage-backed securities
				available-for-sale,
				at
				fair value
				1,608
				
				(945
				)
				
				846
				
				413Reclassification of realized
				securities gains included
      in earnings
				-
				
				(685
				)
				
				(174
				)
				(784
				)Reclassification of realized gains on
				interest rate swaps
				included in earnings
				-
				
				-
				
				
				(93
				)
				-Change in fair value of interest rate
				swaps
				-
				
				384
				
				
				-
				
				69Other comprehensive earnings (losses)
				1,773
				
				(1,168
				)
				
				658
				
				(114
				)Comprehensive earnings
				$     15,816
				
				$    12,191
				
				$
				30,126
				
				$    25,603
  See accompanying notes to the unaudited consolidated financial
	statements.  3


PFF BANCORP, INC. AND SUBSIDIARIES
	CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
	(Dollars in thousands, except per share data)
	(Unaudited) Number of
				Shares
				
				Common
				Stock
				Additional
				Paid-in
				Capital
				
				Retained
				Earnings
				
				Accumulated
				Other
				Comprehensive
				Losses
				
				TotalBalance at March 31, 2006
				24,493,472
				
				$    244
				$  175,581
				
				$   195,591
				
				$
				(7,685
				)
				$  363,731Net earnings
				-
				
				-
				-
				
				29,468
				
				
				-
				
				29,468Stock issued for 2004 incentive plan
				41,706
				
				-
				-
				
				-
				
				
				-
				
				-Amortization under stock-based
				compensation
				plans
				-
				
				-
				2,793
				
				-
				
				
				-
				
				2,793Stock options exercised
				69,124
				
				-
				559
				
				-
				
				
				-
				
				559Dividends ($0.17 per share for June and
				September 2006)
				-
				
				-
				-
				
				(8,346
				)
				
				-
				
				(8,346
				)Changes in unrealized losses on securities
				available-for-sale, net
				-
				
				-
				-
				
				-
				
				
				751
				
				751Changes in unrealized gains on
				interest rate swaps, net
				-
				
				-
				-
				
				-
				
				
				(93
				)
				(93
				)Tax benefit from stock-based
				compensation
				-
				
				-
				1,168
				
				-
				
				
				-
				
				1,168Balance at September 30, 2006
				24,604,302
				
				$    244
				$  180,101
				
				$   216,713
				
				$
				(7,027
				)
				$  390,031
  See accompanying notes to the unaudited consolidated financial
	statements. 4


PFF BANCORP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in thousands)(Unaudited)Six Months Ended September 30,2006
			
			2005Cash flows from operating activities:Net earnings
			$
			29,468
			
			$
			25,717Adjustments to reconcile net earnings to net cash
			provided by operating activities:Amortization of premiums, net of discount accretion
			on loans, leases
			and securities and deferred
			loan origination fees, net
			
			(11,324
			)
			
			(8,517
			)Loan and lease fees collected
			
			11,547
			
			
			11,762Dividends on FHLB stock
			
			(1,002
			)
			
			(1,381
			)Provisions for losses on loans, leases and
			foreclosed asset operations
			
			3,020
			
			
			1,220Gains on sales of loans, securities
			available-for-sale, real estate and
			property and equipment
			
			(1,070
			)
			
			(1,024
			)Depreciation and amortization of property and
			equipment
			
			2,123
			
			
			1,820Loans originated for sale
			
			(6,174
			)
			
			(8,625
			)Proceeds from sale of loans held-for-sale
			
			6,655
			
			
			9,329Amortization of stock-based compensation
			
			2,793
			
			
			3,115Decrease in market value on interest rate swaps
			
			322
			
			
			-Amortization of deferred issuance cost on junior
			subordinated debt
			
			40
			
			
			32Other, net
			
			(10,720
			)
			
			(5,440
			)Net cash provided by operating activities
			
			25,678
			
			
			28,008Cash flows from investing activities:Loans and leases originated for investment
			
			(1,399,193
			)
			
			(1,416,864
			)Increase in construction loans in process
			
			3,713
			
			
			150,492Purchases of loans held-for-investment
			
			(2,997
			)
			
			(25,520
			)Principal payments on loans and leases
			
			1,144,387
			
			
			1,252,809Principal payments on mortgage-backed securities
			available-for-sale
			
			35,694
			
			
			37,808Principal payments on investment
			securities-available-for-sale
			
			1,386
			
			
			35Purchases of investment securities
			available-for-sale
			
			(25,000
			)
			
			-Purchases of mortgage-backed securities
			available-for-sale
			
			(42,449
			)
			
			(20,277
			)Redemption (purchases) of FHLB stock, net
			
			(4,576
			)
			
			896Proceeds from sale of investment securities
			available-for-sale
			
			5,337
			
			
			1,315Proceeds from sale of property and equipment
			
			1,218
			
			
			2Purchases of property and equipment
			
			(8,177
			)
			
			(14,021
			)Net cash used in investing
			activities
			
			(290,657
			)
			
			(33,325
			)Cash flows from financing activities:Net change in deposits
			
			123,626
			
			
			158,602Proceeds from long-term FHLB advances and other
			borrowings
			
			603,250
			
			
			255,000Repayment of long-term FHLB advances and other
			borrowings
			
			(458,850
			)
			
			(310,000
			)Net change in short-term FHLB advances and other
			borrowings
			
			7,000
			
			
			(94,423
			)Proceeds from issuance of junior subordinated
			debentures
			
			-
			
			
			25,774Proceeds from exercise of stock options
			
			559
			
			
			1,335Cash dividends
			
			(8,346
			)
			
			(7,334
			)Excess tax benefit from stock-based payment
			arrangements
			
			1,168
			
			
			2,717Purchases of treasury stock
			
			-
			
			
			(18,010
			)Net cash provided by financing activities
			
			268,407
			
			
			13,661Net increase in cash and cash equivalents
			
			3,428
			
			
			8,344Cash and cash equivalents, beginning of period
			
			58,831
			
			
			44,844Cash and cash equivalents, end of period
			$
			62,259
			
			$
			53,188Supplemental information:Interest paid
			$
			69,244
			
			$
			39,497Income taxes paid
			$
			17,450
			
			$
			14,560Non-cash investing and financing activities:Net transfers from loans and leases receivable to
			assets acquired through foreclosure
			$
			-
			
			$
			63




See accompanying
notes to the unaudited consolidated financial statements.



5

---

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 wholly-owned subsidiaries PFF Bank &
	Trust, Glencrest Investment Advisors, Inc. ("Glencrest") and Diversified
	Builder Services, Inc. ("DBS") (collectively "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 includes the accounts of Glencrest
	Insurance Services, Inc. The Bancorp owns 100% of the common stock of two
	unconsolidated special purpose business trusts "PFF
	Bancorp Capital Trust I" and "PFF Bancorp Capital Trust II" created for
	the purpose of issuing capital securities. 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 Rule 10-01 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 and six months ended September 30, 2006 are not necessarily indicative
	of results that may be expected for the entire fiscal year ending March 31,
	2007.  These interim consolidated financial statements should be read in
	conjunction with our consolidated financial statements, and the notes
	thereto, included in our Form 10-K for the year ended March 31, 2006.  (2)    Current Accounting Issues  In February 2006, the Financial Accounting Standards Board ("FASB")
	issued Statement of Financial Accounting Standards ("SFAS") 155, "Accounting
	for Certain Hybrid Financial Instruments, an amendment of SFAS 133 and SFAS
	140" ("SFAS 155"). This Statement permits fair value remeasurement for any
	hybrid financial instrument that contains an embedded derivative that
	otherwise would require bifurcation; clarifies which interest-only strips
	and principal-only strips are not subject to SFAS 133; establishes a
	requirement to evaluate interests in securitized financial assets to
	identify interests that are freestanding derivatives or hybrid financial
	instruments that contain an embedded derivative requiring bifurcation;
	clarifies that concentrations of credit risks in the form of subordinations
	are not embedded derivatives; and amends SFAS 140 to eliminate the
	prohibition on a Qualified Special Purpose Entity from holding a derivative
	financial instrument that pertains to a beneficial interest other than
	another derivative financial instrument.  In October 2006, the FASB
	clarified SFAS 155 and exempted most prepayable assets from the provisions
	of SFAS 155 that would have required mark-to-market of those assets through
	income if purchased at a discount to par, which includes all pass-through
	securities and most structured agency and non-agency mortgage-backed
	securities.   SFAS 155 is effective for all financial instruments
	acquired or issued after the beginning of an entity's first fiscal year that
	begins after September 15, 2006. Early adoption of this statement is
	allowed. We do not expect the adoption of SFAS 155 to have a material impact
	on our financial condition or results of operations.  In March 2006, the FASB issued SFAS 156, "Accounting for Servicing of
	Financial Assets, an amendment of SFAS 140," ("SFAS 156"). SFAS 156 requires
	that an entity separately recognize a servicing asset or a servicing
	liability when it undertakes an obligation to service a financial asset
	under a servicing contract in certain situations. Such servicing assets or
	servicing liabilities are required to be measured initially at fair value,
	if practicable. SFAS 156 also allows an entity to measure its servicing
	assets and servicing liabilities subsequently using either the amortization
	method, which existed under SFAS 140, or the fair value measurement method.
	SFAS 156 will be effective in the fiscal year beginning April 1, 2007. We do
	not expect the adoption of SFAS 156 to have a material impact on our
	financial condition or results of operations.  In June 2006, the FASB issued Interpretation 48, "Accounting for
	Uncertainty in Income Taxes - an Interpretation of SFAS 109" ("FIN 48"),
	which clarifies the accounting for uncertainty in income taxes recognized in
	an enterprise's financial statements in accordance with SFAS 109,
	"Accounting for Income Taxes." FIN 48 prescribes a recognition threshold and
	measurement attribute for the financial statement recognition and
	measurement of a tax position taken or expected to be taken in a tax return.
	We will be required to adopt FIN 48 in the fiscal year beginning April 1,
	2007. We are currently assessing the impact that the adoption of FIN 48 will
	have on our financial condition and results of operations. 6




PFF BANCORP,
INC. AND SUBSIDIARIES

Notes to
Unaudited Consolidated Financial Statements

(Continued)

In September 2006, the FASB issued SFAS 158, "Employers' Accounting
	for Defined Benefit Pension and Other Postretirement Plans, an amendment of SFAS 87, SFAS 88, SFAS 106 and SFAS 132R" ("SFAS 158"), which requires an
	employer that sponsors a defined benefit plan to recognize the funded status
	of a benefit plan, measured as the difference between plan assets at fair
	value and the projected benefit obligation (for defined benefit pension
	plans) or the accumulated benefit obligation (for other postretirement
	benefit plans) in its statement of financial position. SFAS 158 also
	requires recognition of amounts previously deferred and amortized under SFAS
	87 and SFAS 106 in other comprehensive income in the period in which they
	occur. Under SFAS 158, plan assets and obligations must be measured as of
	the fiscal year end. SFAS 158 is effective for fiscal years ending after
	December 15, 2006. The Company does not expect adoption to have a
	significant effect on its financial condition, results of operations or cash
	flows. In September 2006, the Securities and Exchange Commission released Staff
	Accounting Bulletin 108, "Quantifying Financial Statement Misstatements" ("SAB 108").  SAB 108
	clarifies that the evaluation of financial statement misstatements must be
	made based on all relevant quantitative and qualitative factors; this is
	referred to as a "dual approach." The adoption of SAB 108 is effective for
	our fiscal year ending March 31, 2007. SAB 108 permits companies to
	initially apply its provision either by restating prior financial
	statements, or recording the cumulative effect of initially applying the
	dual approach. We are currently assessing the impact that the adoption of
	SAB 108 will have on the Company's consolidated financial statements.  7   PFF BANCORP,
INC. AND SUBSIDIARIES Notes to
Unaudited Consolidated Financial Statements (Continued)                     (3)    Stock-Based Compensation Plans  In December 2004, the FASB issued SFAS 123R, "Share-Based Payment, an
	Amendment of FASB Statement No. 123"  ("SFAS 123R").  SFAS 123R
	requires companies to recognize in the statement of operations the
	grant-date fair value of stock options and other equity-based compensation
	issued to employees and directors. SFAS 123R is effective for fiscal years
	beginning after June 15, 2005.  We adopted SFAS 123R beginning with our
	first quarter of fiscal 2006, and the impact was not material to our
	consolidated financial statements. 2006 Equity Incentive Plan   During September 2006, our stockholders approved the PFF Bancorp, Inc.
	2006 Equity Incentive Plan (the "2006 Plan").  The 2006 Plan authorizes
	the granting of 2,953,234 options or 1,476,617 restricted stock awards to
	Directors or employees.  Additionally, any maximum of options or awards
	previously granted under the stock based compensation plans described below
	that expire, lapse or otherwise terminate for any reason without having been
	settled in full will become available for issuance under the 2006 Plan. 
	No options or awards were granted to directors or employees during the six
	months ended September 30, 2006.   2004 Equity Incentive Plan  During September 2004, our stockholders approved the PFF Bancorp, Inc.
	2004 Equity Incentive Plan (the "2004 Plan").  The 2004 Plan authorized
	the granting of 1,112,632 options or 556,315 restricted stock awards to
	Directors or employees.  For the three and six months ended September
	30, 2006 and 2005, based upon current performance levels, compensation
	expense associated with the 2004 Plan was $897,000 and $1.9 million,
	respectively, and $1.0 million and $1.7 million, respectively.  As of
	September 30, 2006, there was $2.9 million of total unrecognized
	compensation cost related to non-vested awards granted under the 2004 Plan. 
	The unrecognized compensation cost is expected to be recognized over a
	weighted average period of 1.2 years.   A summary of our nonvested awards principally to Directors that vest
	based solely on service as of September 30, 2006 and 2005 and changes during
	the six months ended September 30, 2006 and 2005 are presented below:  Weighted AverageGrant DateShares
			Fair ValueNonvested at April 1, 2006
			81,900
			$
			28.59Granted
			-
			
			-Vested
			(29,550)
			
			28.59Forfeited
			-
			
			-Nonvested at September 30, 2006
			52,350
			$
			28.59    Weighted AverageGrant DateShares
			Fair ValueNonvested at April 1, 2005
			-
			$
			-Granted
			81,900
			
			28.59Vested
			-
			
			-Forfeited
			-
			
			-Nonvested at September 30, 2005
			81,900
			$
			28.59      8   PFF BANCORP,
INC. AND SUBSIDIARIES Notes to
Unaudited Consolidated Financial Statements (Continued)  A summary of activity of our nonvested awards to employees that vest
	based on a combination of service and performance as of September 30, 2006
	and 2005 is presented below:   Weighted AverageGrant DateShares
			Fair ValueNonvested at April 1, 2006
			329,565
			$
			27.50Granted
			-
			
			-Vested
			(41,406)
			
			28.05Forfeited
			(21,176)
			
			27.46Nonvested at September 30, 2006
			266,983
			$
			27.42    Weighted AverageGrant DateShares
			Fair ValueNonvested at April 1, 2005
			-
			$
			-Granted
			441,100
			
			27.45Vested
			-
			
			-Forfeited
			(8,680
			)
			27.42Nonvested at September 30, 2005
			432,420
			$
			27.45   1996 and 1999 Incentive Plans   During October 1996, our stockholders approved the PFF Bancorp, Inc. 1996
	Incentive Plan (the "1996 Plan"). During September 1999, our stockholders
	approved the PFF Bancorp, Inc. 1999 Incentive Plan (the "1999 Plan"). The
	1996 Plan authorized the granting of options to purchase our common stock,
	option related awards, and grants of common stock. The 1999 Plan authorized
	the granting of options to purchase our common stock.    A summary of option activity under the 1996 and 1999 Plans as of
	September 30, 2006 and 2005, and changes during the six months ended
	September 30, 2006 and 2005 are presented below:    For the Six Months Ended September 30, 2006Weighted AverageWeighted Average
			Remaining
			AggregateShares
			
			Exercise Price
			Contractual Term
			Intrinsic Value(Dollars in thousands, except per share data)Outstanding at April 1, 2006
			602,993
			
			$
			12.49
			-
			$
			-Granted
			-
			
			
			-
			-
			
			-Exercised
			(69,946
			)
			
			8.46
			-
			
			-Forfeited or expired
			(840
			)
			
			15.33
			-
			
			-Outstanding at September 30, 2006
			532,207
			
			$
			13.02
			5.06
			$
			12,786Exercisable at September 30, 2006
			526,916
			
			$
			13.03
			5.06
			$
			12,651  9   PFF BANCORP,
INC. AND SUBSIDIARIES Notes to
Unaudited Consolidated Financial Statements (Continued)          For the Six Months Ended September 30, 2005Weighted AverageWeighted Average
			Remaining
			AggregateShares
			
			Exercise Price
			Contractual Term
			Intrinsic Value(Dollars in thousands, except per share data)Outstanding at April 1, 2005
			1,019,615
			
			$
			10.82
			-
			$
			-Granted
			-
			
			
			-
			-
			
			-Exercised
			(179,683
			)
			
			7.43
			-
			
			-Forfeited or expired
			(1,463
			)
			
			11.67
			-
			
			-Outstanding at September 30, 2005
			838,469
			
			$
			11.55
			4.7
			$
			15,689Exercisable at September 30, 2005
			816,895
			
			$
			11.39
			4.6
			$
			15,413   No options were granted during the three and six months ended September
	30, 2006 and 2005.  The total intrinsic value of options exercised was
	$2.0 million during the three and six months ended September 30, 2006,
	compared to $2.3 million and $4.0 million during the three and six months
	ended September 30, 2005, respectively.  Cash received from options
	exercised under the 1996 and 1999 Plans for the three and six months ended
	September 30, 2006 was $523,000 and $559,000, respectively, compared to
	$852,000 and $1.3 million for the three and six months ended September 30,
	2005, respectively.  The tax benefit realized for the tax deductions
	from options exercised totaled $805,000 and $807,000 for the three and six
	months ended September 30, 2006, respectively, compared to $916,000 and $1.6
	million for the three and six months ended September 30, 2005, respectively.   The fair value of each option is estimated on the grant date using the
	Black-Scholes model that applies the following assumptions:  volatility
	is based on the historical volatility of our stock; the expected term of
	options granted represents the period of time the options granted are
	expected to be outstanding; the risk-free rate is the yield from United
	States government securities with the same terms as the life of the options;
	dividend yield is calculated using the anticipated dividend payout rate of
	the stock over the life of the option.   Compensation expense under the 1996 and 1999 Plans was $6,000 and $13,000
	for the three and six months ended September 30, 2006, based upon the
	vesting of 1,338 options and 2,733 options, respectively, compared to
	$29,000 and $63,000 for the three and six months ended September 30, 2005
	based upon the vesting of 4,101 options and 9,042 options, respectively.
	Compensation expense of $2,000, associated with an additional 347 previously
	issued, but unvested options outstanding at September 30, 2006, will be
	recorded in future periods ending in October 2006 as the applicable service
	is rendered.  10   PFF BANCORP,
INC. AND SUBSIDIARIES Notes to
Unaudited Consolidated Financial Statements (Continued)


(4)    Earnings Per Share  Earnings per share ("EPS") is calculated on both a basic and diluted
	basis, excluding common shares in treasury. Basic EPS is calculated by
	dividing net earnings available to common stockholders by the weighted
	average common shares outstanding during the period.  Diluted EPS
	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 presents a reconciliation of the numerators and
	denominators of the basic and diluted EPS computations for the three months
	ended September 30, 2006 and 2005.   For the Three Months Ended September 30,2006
				
				2005Earnings
				(Numerator)
				Shares
				(Denominator)
				Per-Share
				Amount
				
				Earnings
  (Numerator)
				Shares
				(Denominator)
				Per-Share
				Amount(Dollars in thousands, except per share
				data)Net Earnings
				$
				14,043
				
				
				
				
				$
				13,359Basic EPSEarnings available to common stockholders
				
				14,043
				24,517,593
				$
				0.57
				
				
				13,359
				24,256,805
				$
				0.55Effect of Dilutive SecuritiesOptions and stock awards
				
				
				338,755
				
				
				
				
				
				635,828Diluted EPSEarnings available to common stockholders
				  
				and assumed conversions
				$
				14,043
				24,856,348
				$
				0.56
				
				$
				13,359
				24,892,633
				$
				0.54
  The exercise price of all options was less than the average market
		price of the common shares during the three month period ended September
		30, 2006 and 2005.  As a result, there were no options excluded
		from the computation of earnings per share due to anti-dilution.
		
		11
		
		PFF BANCORP,
INC. AND SUBSIDIARIES
Notes to
Unaudited Consolidated Financial Statements
(Continued)               The following table presents a reconciliation of the numerators and
	denominators of the basic and diluted EPS computations for the six months
	ended September 30, 2006 and 2005.   For the Six Months Ended September 30,2006
				
				2005Earnings
				(Numerator)
				Shares
				(Denominator)
				Per-Share
				Amount
				
				Earnings
  (Numerator)
				Shares
				(Denominator)
				Per-Share
				Amount(Dollars in thousands, except per share
				data)Net Earnings
				$
				29,468
				
				
				
				
				$
				25,717Basic EPSEarnings available to common stockholders
				
				29,468
				24,471,266
				$
				1.20
				
				
				25,717
				24,329,067
				$
				1.06Effect of Dilutive SecuritiesOptions and stock awards
				
				
				341,690
				
				
				
				
				
				645,549Diluted EPSEarnings available to common stockholders
				and assumed conversions
				$
				29,468
				24,812,956
				$
				1.19
				
				$
				25,717
				24,974,616
				$
				1.03
  The exercise price of all options was less than the average market
		price of the common shares during the six month period ended September
		30, 2006 and 2005.  As a result, there were no options excluded
		from the computation of earnings per share due to anti-dilution.
		
		12
		
		PFF BANCORP,
INC. AND SUBSIDIARIES
Notes to
Unaudited Consolidated Financial Statements
(Continued)


(5)    Derivative Hedging Activities   The Company enters into financial derivatives in order to mitigate
	exposure to the issuance of its junior subordinated debentures.   On September 30, 2004, we entered into an interest rate swap with a
	financial institution in the notional amount of $30.0 million for a period
	of five years.  This interest rate swap was transacted concurrent with
	and for the purpose of hedging the cash outflows from $30.0 million of
	variable rate junior subordinated debentures against increasing interest
	rates.  The terms of the interest rate swap require us to pay a fixed
	rate of 6.08 percent and receive three month LIBOR plus 2.20 percent
	quarterly on dates which mirror those of the junior subordinated debentures
	through the termination of the interest rate swap on November 23, 2009. 
	We recognize all derivatives on the balance sheet at fair value based on
	dealer quotes.  At September 30, 2006, the interest rate swap with a
	notional amount of $30.0 million had a fair value of $1.0 million.  The
	periodic net settlement of this swap decreased interest expense by $117,000
	and $204,000 for the three and six months ended September 30, 2006.  On September 16, 2005, we entered into an interest rate swap with a
	financial institution in the notional amount of $10.0 million for a period
	of five years.  The interest rate swap was transacted concurrent with
	and for the purpose of hedging the cash outflows from a portion of an
	additional $25.0 million of variable rate junior subordinated debentures
	against increasing interest rates.  The terms of the interest rate swap
	require us to pay a fixed rate of 5.98 percent and receive three month LIBOR
	plus 1.52 percent quarterly on dates which mirror those of the junior
	subordinated debentures through the termination of the interest rate swap on
	November 23, 2010.  At September 30, 2006, the interest rate swap with
	a notional amount of $10.0 million had a fair value of $221,000.  The
	periodic net settlement of this swap decreased interest expense by $24,000
	and $38,000 for the three and six months ended September 30, 2006.  We have determined that the above interest rate swaps do not qualify for
	hedge treatment under the provisions of SFAS 133, "Accounting for Derivative
	Instruments and Hedging Activities", as amended ("SFAS 133").  As a
	result, non-cash charges of $797,000 and $322,000 representing
	the decreases in market value of the interest rate swaps for the three and
	six month ended September 30, 2006 have been recorded as a component of
	other non-interest income in the Statement of Earnings.  Future changes
	in market value will also be recorded as a component of non-interest income. 
	While the provisions of SFAS 133 require that these interest rate swaps be
	considered unhedged derivatives for accounting purposes, from both economic
	substance and cash flow standpoints, the interest rate swaps have been and
	will continue to be fully effective in hedging the floating rate nature of
	the junior subordinated debentures.  13


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 September 30, 2006 and 2005.  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 September 30,2006
					2005Average
					Balance
					Interest
					Average
					Yield/
					Cost
					Average
					Balance
					Interest
					Average
					Yield/
					Cost(Dollars in thousands)Assets:Interest-earning assets:Interest-earnings deposits and short-term investments
					$
					10,001
					$
					123
					4.88
					%
					$
					15,276
					$
					142
					3.69
					%Investment securities, net
					
					78,718
					
					1,026
					5.17
					
					
					67,877
					
					543
					3.17Mortgage-backed securities, net
					
					247,208
					
					2,764
					4.47
					
					
					230,885
					
					2,201
					3.81Loans and leases receivable, net
					
					4,025,690
					
					80,334
					7.95
					
					
					3,444,878
					
					59,124
					6.84FHLB stock
					
					43,422
					
					587
					5.36
					
					
					42,035
					
					431
					4.07Total interest-earning assets
					
					4,405,039
					
					84,834
					7.67
					
					
					3,800,951
					
					62,441
					6.55Non-interest-earning assets
					
					170,832
					
					
					
					
					
					153,590Total assets
					$
					4,575,871
					
					
					
					
					$
					3,954,541Liabilities and Stockholders'
					Equity:Deposits:Non-interest bearing demand accounts
					$
					283,744
					
					-
					0.00
					
					$
					285,597
					
					-
					0.00Interest-bearing demand accounts
					
					355,297
					
					429
					0.48
					
					
					444,793
					
					656
					0.59Savings accounts
					
					154,278
					
					164
					0.42
					
					
					172,713
					
					134
					0.31Money market accounts
					
					822,517
					
					7,290
					3.52
					
					
					935,305
					
					5,907
					2.51Certificate accounts
					
					1,526,514
					
					18,127
					4.71
					
					
					990,302
					
					8,400
					3.37Total Deposits
					
					3,142,350
					
					26,010
					3.28
					
					
					2,828,710
					
					15,097
					2.12FHLB advances and other borrowings
					
					932,176
					
					12,080
					5.14
					
					
					683,660
					
					5,278
					3.06Junior subordinated debentures
					
					56,702
					
					886
					6.25
					
					
					35,130
					
					531
					6.05Total interest-bearing liabilities
					
					4,131,228
					
					38,976
					3.74
					
					
					3,547,500
					
					20,906
					2.34Non-interest-bearing liabilities
					
					61,506
					
					
					
					
					
					62,602Total liabilities
					
					4,192,734
					
					
					
					
					
					3,610,102Stockholder's equity
					
					383,137
					
					
					
					
					
					344,439Total liabilities and stockholders' equity
					$
					4,575,871
					
					
					
					
					$
					3,954,541Net interest income
					
					
					$
					45,858
					
					
					
					
					$
					41,535Net interest spread
					
					
					
					
					3.93
					
					
					
					
					
					4.21Net interest margin
					
					
					
					
					4.16
					
					
					
					
					
					4.37Ratio of interest-earning assets to interest-bearing
					liabilities
					106.63
					%
					
					
					107.14
					%   14   Average Balance Sheets The following table sets forth certain information relating to our
	average balances of assets, liabilities and equity for the six months ended
	September 30, 2006 and 2005.  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.
 Six
		Months Ended September 30,2006
		2005Average
		Balance
		Interest
		Average
		Yield/
		Cost
		Average
		Balance
		Interest
		Average
		Yield/
		Cost(Dollars in thousands)Assets:Interest-earning assets:Interest-earnings deposits and short-term investments
		$
		9,659
		$
		228
		4.71
		%
		$
		11,339
		$
		219
		3.85
		%Investment
		securities, net
		
		70,497
		
		1,836
		5.19
		
		
		68,139
		
		1,119
		3.28Mortgage-backed securities, net
		
		244,586
		
		5,377
		4.40
		
		
		236,918
		
		4,547
		3.84Loans and
		leases receivable, net
		
		3,966,337
		
		156,788
		7.90
		
		
		3,440,238
		
		115,229
		6.69FHLB stock
		
		42,475
		
		1,108
		5.20
		
		
		41,937
		
		911
		4.33Total interest-earning assets
		
		4,333,554
		
		165,337
		7.57
		
		
		3,798,571
		
		122,025
		6.42Non-interest-earning assets
		
		162,572
		
		
		
		
		
		137,720Total assets
		$
		4,496,126
		
		
		
		
		$
		3,936,291Liabilities and Stockholders' Equity:Deposits:Non-interest
		bearing demand accounts
		$
		279,625
		
		-
		0.00
		
		$
		276,792
		
		-
		0.00Interest-bearing demand accounts
		
		375,598
		
		931
		0.49
		
		
		467,069
		
		1,431
		0.61Savings
		accounts
		
		156,928
		
		331
		0.42
		
		
		174,504
		
		266
		0.30Money market
		accounts
		
		810,558
		
		13,614
		3.35
		
		
		877,261
		
		10,208
		2.32Certificate
		accounts
		
		1,478,377
		
		33,540
		4.53
		
		
		978,006
		
		15,796
		3.22Total Deposits
		
		3,101,086
		
		48,416
		3.11
		
		
		2,773,632
		
		27,701
		1.99FHLB advances
		and other borrowings
		
		903,745
		
		22,434
		4.95
		
		
		734,921
		
		10,701
		2.90Junior
		subordinated debentures
		
		56,702
		
		1,757
		6.20
		
		
		33,041
		
		1,002
		6.07Total interest-bearing liabilities
		
		4,061,533
		
		72,607
		3.57
		
		
		3,541,594
		
		39,404
		2.22Non-interest-bearing liabilities
		
		58,097
		
		
		
		
		
		52,633Total liabilities
		
		4,119,630
		
		
		
		
		
		3,594,227Stockholder's
		equity
		
		376,496
		
		
		
		
		
		342,064Total liabilities and stockholders' equity
		$
		4,496,126
		
		
		
		
		$
		3,936,291Net interest income
		
		
		$
		92,730
		
		
		
		
		$
		82,621Net interest spread
		
		
		
		
		4.05
		
		
		
		
		
		4.20Net interest margin
		
		
		
		
		4.28
		
		
		
		
		
		4.35Ratio of
		interest-earning assets to interest-bearing liabilities
		106.70
		%
		
		
		107.26
		%  15   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 September 30, 2006
			
			Six Months Ended September 30, 2006Compared to
			
			Compared toThree Months Ended September 30, 2005
			
			Six Months Ended September 30, 2005Increase (Decrease)
			
			Increase (Decrease)Due to
			
			Due toVolume
			
			Rate
			Rate/
			Volume
			
			Net
			
			Volume
			
			Rate
			Rate/
			Volume
			
			Net(In thousands)Interest-earning assets:Interest-earning deposits and
       short-term investments
			$      (49
			)
			46
			
			(16
			)
			(19
			)
			$     (32
			)
			48
			
			(7
			)
			9Investment securities, net
			87
			
			341
			
			55
			
			483
			
			39
			
			655
			
			23
			
			717Mortgage-backed securities, net
			156
			
			379
			
			28
			
			563
			
			148
			
			660
			
			22
			
			830Loans receivable, net
			9,932
			
			9,667
			
			1,611
			
			21,210
			
			17,649
			
			20,721
			
			3,189
			
			41,559FHLB stock
			14
			
			137
			
			5
			
			156
			
			12
			
			183
			
			2
			
			197Total
			interest-earning assets
			10,140
			
			10,570
			
			1,683
			
			22,393
			
			17,816
			
			22,267
			
			3,229
			
			43,312Interest-bearing liabilities:Demand deposit accounts
			(132
			)
			(119
			)
			24
			
			(227
			)
			(280
			)
			(274
			)
			54
			
			(500
			)Savings accounts
			(14
			)
			49
			
			(5
			)
			30
			
			(27
			)
			102
			
			(10
			)
			65Money market accounts
			(712
			)
			2,382
			
			(287
			)
			1,383
			
			(776
			)
			4,526
			
			(344
			)
			3,406Certificate accounts
			4,548
			
			3,360
			
			1,819
			
			9,727
			
			8,082
			
			6,392
			
			3,270
			
			17,744FHLB advances and other borrowings
			1,919
			
			3,582
			
			1,301
			
			6,802
			
			2,458
			
			7,542
			
			1,733
			
			11,733Junior subordinated debentures
			329
			
			26
			
			-
			
			355
			
			720
			
			19
			
			16
			
			755Total
			interest-bearing liabilities
			5,938
			
			9,280
			
			2,852
			
			18,070
			
			10,177
			
			18,307
			
			4,719
			
			33,203Change in net
			interest income
			$   4,202
			
			1,290
			
			(1,169
			)
			4,323
			
			$   7,639
			
			3,960
			
			(1,490
			)
			10,109                                 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 2007 and beyond to differ
	materially from those expressed in any forward-looking statements by, or on
	behalf of, us.  16           Critical Accounting Policies Our management has established various accounting policies, which govern the
	application of accounting principles generally accepted in the United States
	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, 2006 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 losses on loans and leases.  For further
		information, see "Comparison of Financial Condition at September 30,
		2006 and March 31, 2006" in this Form 10-Q and "Item 1 - Business -
		Lending Activities - Allowance for Loan and Lease Losses", "Item 1-
		Foreclosed Assets" and "Notes 5 and 6 to the Consolidated Financial
		Statements" in our March 31, 2006 Annual Report on Form 10-K.  Other-Than-Temporary Impairment.  For further information, see "Item
	1 - Business - Investment Activities" and "Notes 2 and 3 to the Consolidated
	Financial Statements" in our March 31, 2006 Annual Report on Form 10-K.  Financial Derivatives. For further information, see "Item 1 --
		Financial Statements - Note 5 - Derivative Hedging Activities" in this
		Form 10-Q and "Note 13 to the Consolidated Financial Statements" in our
		March 31, 2006 Annual Report on Form 10-K.   17   Comparison of Operating Results for the Three
	Months Ended September 30, 2006 and 2005   Overview   The following discussion compares the results of operations for the three
	months ended September 30, 2006 with the corresponding period of 2005. This
	discussion should be read in conjunction with the consolidated financial
	statements and footnotes included therein.   We recorded net earnings of $14.0 million or $0.56 per diluted share for
	the three months ended September 30, 2006 compared to net earnings of $13.4
	million or $0.54 per diluted share for the comparable period of 2005.  Net interest income rose $4.3 million or 10 percent to $45.9 million for
	the current quarter compared to the same quarter of 2005.  On a
	sequential quarter basis, net interest income decreased $1.0 million or 2
	percent.  Net interest margin contracted 21 basis points to 4.16%
	between the quarters ended September 30, 2005 and 2006 and contracted 24
	basis points on a sequential quarter basis.  Construction, commercial business, commercial real estate and consumer
	loans (the "Four-Cs") increased $598.3 million or 33 percent to $2.42
	billion or 59 percent of loans and leases receivable, net compared to $1.82
	billion or 52 percent of loans and leases receivable, net, one year ago.
	Based on end of period balances, the Four-Cs increased $132.5 million or 6
	percent during the current quarter.  The average balance of the Four-Cs
	increased $53.2 million or 2 percent on a sequential quarter basis.  Our loan origination focus continues to be on the Four-Cs.  Four-Cs
	originations totaled $612.8 million or 86 percent of total originations in
	the current quarter, compared to $636.4 million or 87 percent of total
	originations for the comparable period of the prior year.  The Four-Cs
	originations include $16.5 million and $10.3 million originated by DBS
	during the quarters ended September 30, 2006 and 2005, respectively. 
	At September 30, 2006, DBS had outstanding loans receivable, net, of $89.9
	million compared to $54.7 million one year ago.  The majority of DBS's
	loans are classified as construction and land.  Average total deposits increased $313.6 million or 11 percent compared to
	the quarter ended September 30, 2005 and increased $244.5 million from the
	quarter ended March 31, 2006.  Reflecting a widening rate differential
	between certificate accounts ("CDs") and interest-bearing liquid accounts
	arising from increases in the general level of interest rates, the average
	balance of CDs increased $536.2 million while lower cost passbook, money
	market and demand deposits ("core deposits") decreased $222.6 million from
	one year ago.  At September 30, 2006, core deposits totaled $1.61
	billion or 51 percent of total deposits, compared to $1.69 billion or 55
	percent of total deposits at March 31, 2006 and $1.87 billion or 64 percent
	of total deposits one year ago. Non-interest-bearing demand deposits
	averaged $283.7 million or 9 percent of average total deposits for the
	current quarter compared to $285.6 million or 10 percent of average total
	deposits for the comparable quarter of 2005.   Deposits, particularly core deposits, provide a more preferable source of
	funding than Federal Home Loan Bank ("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.  At September 30,
	2006, FHLB advances and other borrowings increased to $973.4 million or 23
	percent of total liabilities from $822.0 million or 21 percent of total
	liabilities at March 31, 2006.   Non-accrual loans were $617,000 or 0.01 percent of gross loans and leases
	at September 30, 2006 compared to $1.1 million or 0.03 percent of gross
	loans and leases at March 31, 2006 and $11.9 million or 0.28 percent of
	gross loans and leases at September 30, 2005.  The distribution of the
	non-accrual loan balance of $617,000 as of September 30, 2006 by loan type
	was $119,000 single-family, $346,000 commercial business and $152,000
	consumer.   We did not repurchase any shares of our common stock during the current
	quarter.  At September 30, 2006, 954,310 shares remain under a 1.0
	million share repurchase authorization adopted by our Board of Directors on
	October 26, 2005.  18    At September 30, 2006, our consolidated capital to assets ratio was
	8.40%.  The Bank's core and total risk-based capital ratios were 8.35%
	and 10.83%, respectively, compared to 5.00% and 10.00%, respectively, needed
	to be considered "Well Capitalized."  Our internal target floors for
	the Bank's core and total risk-based capital ratios are 7.75% and 11.00%,
	respectively. For further information
	relating to our risk-based capital ratios, see "Liquidity and Capital
	Resources" in this Form 10-Q.  Net Interest Income  Net interest income is the difference between interest and dividends
	earned on loans and leases, mortgage-backed securities and other investment
	securities and other interest-earning investments (collectively,
	"interest-earnings assets") and the interest paid on deposits and borrowings
	("interest-bearing liabilities"). The spread between the yield on
	interest-earning 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 $45.9 million for the quarter, up 10
	percent or $4.3 million from $41.5 million for the quarter ended September
	30, 2005.  This increase was attributable primarily to a $604.1 million
	or 16 percent increase in average interest-earning assets from the
	comparable period of the prior year, partially offset by a 21 basis point
	decrease in our net interest margin for the current quarter compared with
	the year ago period.  The average balance of the Four-Cs increased
	$560.4 million or 32 percent between the quarters ended September 30, 2005
	and 2006, which contributed to the increase of $580.8 million or 17 percent
	in the average balance of loans and leases receivable, net. Highly
	competitive pricing of deposits in our markets has exacerbated the effect of
	the flattening of the yield curve over the past year. These factors, in
	combination with a larger portion of our funding being in certificate
	accounts and borrowings, have resulted in a 140 basis point increase in our
	cost of funds for the current quarter as compared to the same period last
	year. This exceeded the 112 basis point increase in our earning assets yield
	for the current quarter as compared to the same period last year. As a
	result, our net interest spread and net interest margin for the three months
	ended September 30, 2006 were 3.93% and 4.16%, respectively, compared to
	4.21% and 4.37%, respectively for the same period last year.  We believe that the competitive pressures on deposit rates and customer
	preference for certificate accounts will continue to put pressure on our net
	interest margin. Certificate accounts which will reprice or mature during
	the third quarter ending December 31, 2006 total $292.3 million and have a
	weighted average rate of 4.41%.   Reflecting the higher interest rate environment and the sensitivity of
	our loan and lease portfolio to changes in rates, the average yield on loans
	and leases receivable, net, increased 111 basis points to 7.95% for the
	quarter ended September 30, 2006 as compared to the quarter ended September
	30, 2005.  Loan and lease principal repayments totaled $547.9 million
	for the quarter ended September 30, 2006 compared to $645.9 million for the
	same period of 2005.  Expressed as an annualized percentage of average
	loans and leases receivable, net, this represented
	54 percent of the portfolio compared to 75 percent for the quarter ended
	September 30, 2005.  Premium amortization, net of discount accretion on
	the loan and lease portfolio for the quarters ended September 30, 2006 and
	2005 was $323,000 and $510,000, respectively.  Amortization of loan
	origination fees and extension fees, net, increased to $3.9 million and $1.5
	million, respectively, for the quarter ended September 30, 2006 compared to
	$3.6 million and $1.3 million for the comparable period of 2005.  For
	the quarter ended September 30, 2006, this fee amortization increased yield
	on average loans receivable, net, and yield on average interest-earning
	assets by 53 basis points and 48 basis points, respectively, compared to 56
	basis points and 51 basis points for the comparable period of 2005.   Our average cost of interest-bearing liabilities increased 140 basis
	points to 3.74% for the quarter ended September 30, 2006 as compared to the
	quarter ended September 30, 2005.  Our average cost of deposits rose
	116 basis points to 3.28% for   the quarter ended September 30,
	2006 as compared to the quarter ended September 30, 2005, while our average
	cost of FHLB advances, other borrowings and junior subordinated debentures
	rose 199 basis points over that same time period.  The average balance
	of our deposit portfolio increased $313.6 million or 11 percent to $3.14
	billion or 76 percent of our average interest-bearing liabilities.  19      Provision for Loan and Lease Losses  We recorded a $2.5 million provision for loan and lease losses for the
	quarter ended September 30, 2006 compared to $1.2 million for the comparable
	period of 2005.  Classified assets rose $13.4 million during the
	current quarter to $32.8 million at September 30, 2006.  This increase
	was due to a $15.0 million commercial loan that is paying as agreed, but is
	secured by equipment leases, some of which are non-performing.  This
	loan accounted for $850,000 of the $2.5 million provision for loan and lease
	losses during the current quarter.  At September 30, 2006, the
	Allowance for Loan and Lease Losses ("ALLL") was $40.3 million or 0.85% of
	gross loans and leases compared to $37.1 million or 0.83% of gross loans and
	leases at March 31, 2006.  We will continue to monitor and modify the
	ALLL based upon economic conditions, loss experience, changes in portfolio
	composition, and other factors.   Non-Interest Income  Total non-interest income
	decreased $708,000 to $5.6 million between the quarters ended September 30,
	2006 and 2005.  Excluding gains on sales of securities of $923,000 for
	the quarter ended September 30, 2005, gain on sale of a former
	administrative building of $716,000 and the non-cash charges of $797,000
	associated with our interest rate swaps, non-interest income increased
	$296,000 or 5 percent between the quarters ended September 30, 2005 and 2006.   Deposit and Related Fees   Deposit and related fees decreased 3 percent or $89,000 to $3.4 million
	for the current quarter due to a decrease in ATM service fees as we are no
	longer charging our customers a service fee for using foreign or non-bank
	ATMs.   Monthly service charges and overdraft fees were relatively
	unchanged at $2.9 million for the current quarter.  Our transaction
	accounts increased slightly to 70,000 accounts at September 30, 2006 as
	compared to 68,000 accounts at September 30, 2005.   Loan and Servicing Fees    Loan and servicing fees decreased $15,000 or 3 percent to $578,000 for
	the current quarter.  Amortization of our mortgage servicing rights
	("MSR") asset was $3,000 and $12,000 for the quarters ended September 30,
	2006 and 2005, respectively.  At September 30, 2006, our MSR asset was
	$283,000.   Trust, Investment and Insurance Fees   Trust, investment and insurance fees increased $272,000 or 26 percent to
	$1.3 million for the quarter ended September 30, 2006. The increase in fees
	is a result of an increase in market value of trust and investment assets
	under management or advisory by Glencrest and the Bank's trust department to
	$708.5 million at September 30, 2006, compared to $577.6 million at
	September 30, 2005.  These assets under management or advisory include
	$572.6 million managed or advised by Glencrest at September 30, 2006
	compared to $428.2 million at September 30, 2005.  The average annual
	fee per dollar of assets managed or advised by Glencrest and the Bank's
	trust department was approximately 52 basis points for the quarter ended
	September 30, 2006 compared to 55 basis points for the comparable period of
	2005.  Gain on Sale of Loans   Our community banking business strategy does not include aggressively
	pursuing the origination of loans for sale. Accordingly, the principal
	balances of loans sold during the quarters ended September 30, 2006 and 2005
	were $4.9 million and $4.4 million, respectively.  This activity
	generated net gains on sales of $73,000 and $36,000 for the quarters ended
	September 30, 2006 and 2005, 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 activity has been and is expected to continue to be infrequent. 
	Securities with a cost basis aggregating $393,000 were sold during the
	quarter ended September 30, 2005,  20  generating gain on sales of $923,000. 
	There were no securities sales during the quarter ended September 30, 2006.   Non-Interest Expense   Non-interest expense and general and administrative ("G&A") expense
	increased $1.3 million or 5 percent to $24.7 million for the quarter ended
	September 30, 2006 as compared to the same period last year.  Excluding
	a $700,000 revision to benefit accruals in the current quarter, G&A expenses
	for the quarter would have been $25.4 million, an 8 percent increase over
	the comparable period of 2005.  The increase in G&A expense primarily
	reflects the direct and indirect costs associated with the growth in our
	deposit and lending operations.   The ratio of G&A expense to average assets decreased
	21 basis points to 2.16%, on an annualized basis for the quarter ended
	September 30, 2006 compared to 2.37% for the comparable period of 2005.  
	Our efficiency ratio improved to 47.90% for the current quarter compared to
	48.87% for the comparable period of 2005.  Excluding gains on sales of
	securities of $923,000 for the quarter ended September 30, 2005, gain on
	sale of a former administrative building of $716,000 and the non-cash charges
	of $797,000 associated with our interest rate swaps for the quarter ended
	September 30, 2006, our efficiency ratios would have been 47.83% and
	49.83% for the quarters ended September 30, 2006 and 2005, respectively.  Income Taxes Income taxes and the effective tax rates were $10.3 million and 42.2
	percent, respectively, for the current quarter compared to $9.9 million and
	42.5 percent for the quarter ended September 30, 2005.  Comparison of Operating Results for the Six Months Ended September
	30, 2006 and 2005  Overview  The following discussion compares the results of operations for the six
	months ended September 30, 2006 with the corresponding period of 2005. This
	discussion should be read in conjunction with the consolidated financial
	statements and footnotes included therein.  We recorded net earnings of $29.5 million or $1.19 per diluted share for
	the six months ended September 30, 2006 compared to net earnings of $25.7
	million or $1.03 per diluted share for the comparable period of 2005. 
	Excluding gain on sale of securities of $271,000 and $923,000 for the six
	months ended September 30, 2006 and 2005, respectively, gain on sale of a
	former administrative building of $716,000 and non-cash charges of $322,000
	associated with interest rate swaps for the six months ended September 30,
	2006, earnings before
	income taxes increased $4.7 million or 10 percent to $50.3 million for the
	six months ended September 30, 2006, compared to $45.6 million for the
	comparable period of the prior year.  Net Interest Income Our net interest income totaled $92.7 million for the six months ended
	September 30, 2006, up 12 percent or $10.1 million from $82.6 million for
	the comparable period of 2005.  Average interest-earning assets
	increased $535.0 million or 14 percent between the six months ended
	September 30, 2005 and 2006 and net interest margin decreased 7 basis points
	to 4.28% for the six months ended September 30, 2006 from 4.35% for the same
	period of 2005.  The average balance of the Four-Cs increased $529.1
	million or 30 percent between the six months ended September 30, 2005 and
	2006, which accounted for the increase of $526.1 million or 15 percent in
	the average balance of loans and leases receivable, net.  The average yield on loans and leases receivable, net, increased 121
	basis points between the six months ended September 30, 2005 and 2006 to
	7.90%.  Loan and lease principal repayments totaled $1.14 billion for
	the six months ended September 30, 2006 compared to $1.25 billion for the
	comparable period of 2005.  Expressed as an annualized percentage of
	average loans and leases receivable, net, this represented 58 percent and 73
	percent of the portfolio for the six months ended September 30, 2006 and
	2005, respectively.  Premium amortization, net of discount accretion on
	the loan and lease portfolio for the six months ended September 30, 2006 was
	$566,000 compared to $830,000 for the comparable period of 2005. 
	Amortization of loan origination fees and extension fees, net, increased to $8.2
	million and $3.3 million, respectively, for the six months ended September
	30, 2006 21   compared to $7.3 million and $2.0 million for the comparable period
	of 2005.  For the six months ended September 30, 2006, this fee
	amortization increased yield on average loans receivable, net, and yield on
	average interest-earning  assets by 58 basis points and 48 basis points,
	respectively, compared to 54 basis points and 49 basis points, respectively,
	for the comparable period of 2005.  Our average cost of interest-bearing liabilities increased 135 basis
	points to 3.57% between the six months ended September 30, 2005 and 2006. 
	Our average cost of deposits rose 112 basis points between the six months
	ended September 30, 2005 and 2006 while our average cost of FHLB advances,
	other borrowings and junior subordinated debentures rose 198 basis points.
	The increase in our average cost of interest-bearing liabilities was
	partially mitigated by the continued growth and increasing utilization of
	deposits as our principal and preferable source of funding.  The
	average balance of our deposit portfolio increased $327.5 million or 12
	percent to $3.10 billion or 76 percent of our average interest-bearing
	liabilities.   Provision for Loan and Lease Losses  We recorded a $3.0 million provision for loan and lease losses for the
	six months ended September 30, 2006 compared to $1.2 million for the
	comparable period of 2005.  The increase in provision for loan losses
	was primarily attributable to a $13.4 million increase in classified assets
	and the overall increase in our loan portfolio.   Non-Interest Income  Total non-interest income was $12.1 million and $11.2 million for the six
	months ended September 30, 2006 and 2005, respectively. 
	Excluding gain
	on sale of securities of $271,000 and $923,000 for the six months ended
	September 30, 2006 and 2005, respectively, gain on sale of a former
	administrative building of $716,000 and non-cash charges of $322,000
	associated with interest rate swaps for the six months ended September 30,
	2006, total non-interest income increased
	$1.2 million to $11.4 million for the six months ended September 30, 2006
	compared to $10.3 million for the comparable period of 2005.   Deposit and Related Fees   Deposit and related fees totaled $6.7 million for the six months ended
	September 30, 2006, up $257,000 or 4 percent from the comparable period in
	2005.  This increase reflects fee income of $400,000 associated with
	transaction accounts, partially offset by a decrease of $145,000 in ATM
	service fees associated with our customers not being charged for using
	foreign or non-bank ATMs for the six months ended September 30, 2006, as
	compared to the comparable period in 2005.   Loan and Servicing Fees   Loan and servicing fees were $1.2 million and $1.1 million, respectively,
	for the six months ended September 30, 2006 and 2005.  The increase is
	primarily related to disbursement and inspection fees associated with our
	construction loan portfolio, which increased $138,000 to $458,000 for the
	six months ended September 30, 2006.   Trust, Investment and Insurance Fees   Trust, investment and insurance fees were $2.8 million for the six months
	ended September 30, 2006, an increase of $648,000 or 30 percent from the
	comparable period of 2005, which reflects the increase in assets under
	management or advisory.  Gain on Sale of Loans   The net gain on sale of loans was $83,000 on $6.6 million of principal
	sold for the six months ended September 30, 2006 compared to a net gain of
	$103,000 on $9.2 million of principal sold during the same period last year.   Gain on Sale of Securities   Securities with cost bases aggregating $5.1 million and $393,000 were
	sold during the six months ended September 30, 2006 and 2005, generating
	gains on sales of $271,000 and $923,000, respectively.  22          Non-Interest Expense   Non-interest expense increased $4.8 million to $50.8 million for the six
	months ended September 30, 2006 as compared to the same period last year. 
	G&A expense increased $4.9 million or 11 percent between the six months
	ended September 30, 2006 and 2005 to $50.9 million.  ESOP expense was
	$1.5 million for the six months ended September 30, 2006, and the comparable
	period of 2005.   The ratio of G&A expense to average assets improved to 2.27%, on an
	annualized basis for the six months ended September 30, 2006 compared to
	2.34% for the comparable period of 2005.  Our efficiency ratio was
	48.60% for the six months ended September 30, 2006 compared to 49.09% for
	the comparable period of 2005.  Excluding gain on sale of securities of
	$271,000 and $923,000 for the six months ended September 30, 2006 and 2005,
	respectively, gain on sale of a former administrative building of $716,000
	and non-cash charges of $322,000 associated with interest rate swaps for the
	six months ended September 30, 2006, our efficiency ratios would have been 48.91% and 49.58% for the six
	months ended September 30, 2006 and 2005, respectively.   Income Taxes  Our effective income tax rates were 42.2 percent and 44.7 percent for the
	six months ended September 30, 2006 and 2005.  The reduction in our
	effective tax rate was attributable principally to a reduction in the
	non-deductible portion of ESOP expense.   Comparison of Financial Condition at September 30, 2006 and March 31,
	2006  Total assets were $4.64 billion at September 30, 2006 compared to $4.34
	billion at March 31, 2006.  Loans and leases receivable, net, totaled
	$4.10 billion at September 30, 2006, a $262.0 million increase from $3.84
	billion at March 31, 2006.  The balance of our Four-Cs increased $252.6
	million or 12 percent from $2.17 billion at March 31, 2006 to $2.42 billion
	at September 30, 2006.  These loan balances are shown net of
	undisbursed construction loan funds of $617.5 million and $596.2 million at
	September 30 and March 31, 2006, respectively.  These undisbursed
	balances represent funds that will be disbursed and begin earning interest
	as construction progresses.   At September 30, 2006, the ALLL was $40.3 million or 0.85% of gross loans
	and leases compared to $37.1 million or 0.83% of gross loans and leases at
	March 31, 2006.  Assets classified "Substandard" and "Doubtful" under
	our Internal Asset Review ("IAR") system were $32.6 million and $150,000,
	respectively at September 30, 2006 compared to $16.6 million and none,
	respectively at March 31, 2006.  The $32.6 million at September 30,
	2006 primarily consists of 24 commercial business loans totaling $23.3
	million, a commercial real estate loan of $452,000, and $8.6 million
	attributable to a 20-unit residential construction loan, that was
	reclassified to assets acquired through foreclosure when a court appointed
	receiver was put in place to oversee the property during the quarter ended
	December 31, 2005.   The ALLL is maintained at an amount management considers adequate to
	cover probable losses on loans and leases receivable. The determination of
	the adequacy of the ALLL is influenced to a significant degree by the
	evaluation of the loan and lease portfolio by our IAR function.  The
	IAR system is designed to identify problem loans and leases and probable
	losses.  As the percentage of our loan and lease portfolio comprised by
	the Four-Cs has increased, 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 ALLL 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 ALLL.  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 ALLL as economic conditions, loss experience, changes in asset
	quality, portfolio composition and other factors dictate.        23   The following table sets forth activity in our ALLL. Three Months Ended
					Six Months EndedSeptember 30,
					September 30,2006
					2005
					2006
					2005(Dollars
					in thousands)Beginning balance
					$
					37,658
					$
					33,192
					$
					37,126
					$
					33,302Provision for loan lossses
					
					2,520
					
					1,220
					
					3,020
					
					1,220Charge-offs
					
					(9
					)
					(29
					)
					(108
					)
					(167
					)Recoveries
					
					120
					
					99
					
					251
					
					127Ending balance
					$
					40,289
					$
					34,482
					$
					40,289
					$
					34,482    The charge-offs of $108,000 for the six months ended September 30, 2006
	included $63,000 related to commercial business loans and $45,000 related to
	consumer loans.  The charge-offs of $167,000 for the six months ended
	September 30, 2005 was primarily related to commercial business loans.   Total liabilities were $4.25 billion at September 30, 2006, an increase
	of $276.7 million from $3.98 billion at March 31, 2006. Deposits increased
	$123.6 million to $3.18 billion or 75 percent of total liabilities at
	September 30, 2006 compared to $3.06 billion or 77 percent of total
	liabilities at March 31, 2006.  Reflecting a widening rate differential
	between certificate accounts and interest-bearing liquid accounts arising
	from increases in the general level of interest rates, core deposits
	decreased $80.1 million while certificate accounts increased $203.8 million
	during the past six months.  At September 30, 2006, non-interest
	bearing demand deposits were $293.7 million or 9 percent of total deposits
	compared to $313.6 million or 10 percent of total deposits at March 31,
	2006.   Total stockholders' equity
	increased $26.3 million to $390.0 million at September 30, 2006 compared to
	$363.7 million at March 31, 2006. The increase in total stockholders' equity
	was comprised principally of increases due to net earnings of $29.5 million
	and $4.5 million in additional paid in capital attributable to the exercise
	of 69,124 stock options, the associated tax benefit and the amortization
	of shares under our stock-based compensation plan, partially offset by
	dividends of $8.3 million.   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.   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 seek to maintain at approximately three percent the
	ratio of cash and readily marketable debt securities to total deposits, (our
	"defined liquidity ratio").  In determining the adequacy of
	liquidity and borrowing capacity, we also consider large customer deposit
	concentrations, particularly with respect to core deposits, which provide
	immediate withdrawal opportunity.   At September 30,
	2006, our largest core deposit relationship was $55.6 million and our ten
	largest core deposit relationships aggregated $147.4 million.   At September 30, 2006, our defined liquidity ratio was 4.94% and our
	average defined liquidity ratio for the six months ended September 30, 2006
	was 4.21%.  As an additional component of liquidity management, we seek
	to maintain sufficient mortgage loan and securities collateral at the FHLB
	to enable us to immediately borrow an amount equal to at least five percent
	of the Bank's total assets.  At September 30, 2006, our immediate
	borrowing capacity from the FHLB was $399.8  24   million or nine percent of the
	Bank's total assets. Additionally, we have the capability to borrow funds
	from the Federal Reserve Bank discount window.  As of September 30,
	2006, our borrowing capacity at the Federal Reserve Bank was approximately
	$31.6 million.  We also have $23.6 million of immediate borrowing
	capacity at September 30, 2006, under a $50.0 million line of credit with a
	commercial bank.   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 $25.7 million for the six
	months ended September 30, 2006 compared to $28.0 million for the comparable
	period of the prior year.  The decrease in net cash provided by
	operating activities is primarily due to an increase in amortization of net
	deferred loan origination fees and an increase in our interest receivable
	during the six month ended September 30, 2006, partially offset by an
	increase in net earnings between the six months ended September 30, 2005 and
	2006.   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.   Net cash used in investing activities was $290.7 million and $33.3
	million for the six months ended September 30, 2006 and 2005, respectively. 
	The increase in net cash used in investing activities between the six months
	ended September 30, 2006 was attributable principally to a decrease in
	principal payments on loans and leases of $108.4 million, a $47.2 million
	increase in purchases of investment securities and mortgage-backed
	securities available-for-sale, and a $146.8 million net decrease in
	construction loans in process, partially offset by lower purchases of
	property and equipment.   Cash flows provided by financing activities were $268.4 million for the
	six months ended September 30, 2006 compared to $13.7 million for the
	comparable period of 2005.  Financing activities consist primarily of
	net activity in deposit accounts and FHLB advances and other borrowings. Our
	net increases in deposits were $123.6 million and $158.6 million for the six
	months ended September 30, 2006 and 2005, respectively.  During the six
	months ended September 30, 2006, we increased our use of FHLB advances and
	other borrowings by $151.4 million, net, compared to a decrease of $149.4
	million, net for the comparable period of 2005.   At September 30, 2006, the Bank exceeded all of its regulatory capital
	requirements with tangible capital of $379.9 million, or 8.35% of adjusted
	total assets, which is above the required level of $68.2 million, or 1.5%;
	core capital of $379.9 million, or 8.35% of adjusted total assets, which is
	above the required level of $182.0 million, or 4.0%; and total risk-based
	capital of $417.5 million, or 10.83% of risk-weighted assets, which is above
	the required level of $308.5 million, or 8.0%.  Our internal policy is
	to maintain our total risk-based capital ratio at approximately 11.00%. 
	To the extent the Bank's total risk-based capital is below 11.00%, our
	internal policy restricts the upstreaming of cash from the Bank to the
	Company.  Based on our expectations of continued robust Four-Cs loan
	growth, we do not expect to be in a position to upstream cash from the Bank
	to the Company for the next several quarters.  However, the Company has
	sufficient cash flow available to it from DBS as well as from a $50.0
	million revolving line of credit with a commercial bank, $23.6 million of
	which was available at September 30, 2006, to meet all of its funding
	requirements, including dividends paid to shareholders.  The Company
	also has the ability to issue additional junior subordinated debentures
	should the need for additional funding arise.    25   We currently have no material contractual obligations or commitments for
	capital expenditures. At September 30, 2006, we had outstanding commitments
	to originate and purchase loans of $99.1 million and none, respectively,
	compared to $134.0 million and $17.3 million, respectively, at September 30,
	2005.  Standby letters of credit are conditional commitments we issue
	to guarantee the performance of a customer to a third party.  At
	September 30, 2006 and 2005, we had standby letters of credit of $28.4
	million and $26.6 million, respectively.  We anticipate that we will
	have sufficient funds available to meet our commitments. Certificate
	accounts that are scheduled to mature in less than one year from September
	30, 2006 totaled $1.41 billion.  We expect that we will retain a
	substantial portion of the funds from maturing CD accounts at maturity
	either in certificate or liquid accounts.  In response to the increases
	in short-term interest rates initiated by the Federal Reserve, as well as
	competitive market forces, rates on CDs have increased disproportionately to
	those of more liquid accounts.  As a result, we have seen a shift in
	customer behavior back towards CDs.  We anticipate that this shift in
	consumer preference will continue as and to the extent general market
	conditions create continued widening of the rate differential between CDs
	and liquid accounts.   Segment Reporting   Through our branch network, lending operations 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, CDs, 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.  Item 3. Quantitative and Qualitative 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 six months ended September 30, 2006, from those which
	are disclosed in our Annual Report on Form 10-K for the fiscal year ended
	March 31, 2006.   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, as of
	September 30, 2006, 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 (i) recorded, processed,
	summarized and reported as and when required and (ii) accumulated and
	communicated to our management, including our principal executive officer
	and principal financial officer, as appropriate to allow timely decisions
	regarding required disclosures.   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.  26              PART II -- OTHER INFORMATIONPFF BANCORP, INC. AND SUBSIDIARIESItem 1.
			Legal Proceedings.Other 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 1A.
			Risk Factors.There have been no material changes to the risk factors
			previously disclosed in Part I. Item 1A of the Company's Annual
			Report on Form 10-K for the year ended March 31, 2006.   Item 2.
			Unregistered Sales of Equity Securities and Use of Proceeds.We did not repurchase any shares of our common stock during the quarter
	ended September 30, 2006.  At September 30, 2006, the maximum amount of
	shares that were available to be repurchased was 954,310 shares under a 1.0
	million share repurchase authorization adopted by our Board of Directors on
	October 26, 2005.   Item 3.
			Defaults Upon Senior Securities.None27Item 4.
			Submission of Matters to a Vote of Security Holders.The Company held its annual meeting on
			September 12, 2006.  The proposals submitted to shareholders
			and the tabulation of votes for each proposal were as follows:1.) Election of directors of the Company for two-year and
			three-year terms:Nominees
			Number of Votes For
			Number of Votes
			Withheld
			TermStephen C. Morgan
			20,851,301
			266,063
			3 YearsJil H. Stark
			19,699,258
			1,418,106
			3 YearsRoyce A. Stutzman
			20,939,087
			178,277
			3 YearsKevin McCarthy
			19,708,432
			1,408,932
			2 YearsThe directors whose terms continued and the years their terms
			expire are as follows:Continuing
			Directors
			Year Term
			ExpiresLarry M. Rinehart
			2007Richard P. Crean
			2007Robert W. Burwell
			2008Curtis W. Morris
			20082.) Ratification of KPMG LLP as the Company's Registered
			Independent Public Accounting Firm.Number of Votes For
			Number of Votes
			Against
			Number of Votes
			Abstaining20,878,474
			166,097
			72,7913.)  Approval of the PFF Bancorp, Inc. 2006 Equity Incentive
			Plan.Number of Votes For
			Number of Votes
			Against
			Number of Votes
			Abstaining16,861,434
			1,992,096
			121,175  Item 5.
			Other Information.NoneItem 6.
			Exhibits.31.1
			Rule 13a-14(a)/15d-14(a) Certifications32.1
			Section 1350 Certifications
 28   PFF BANCORP, INC. AND SUBSIDIARIES
			SIGNATURESPursuant 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: November 9, 2006
			BY: /s/ KEVIN MCCARTHYKevin McCarthy
			President, Chief Executive Officer and DirectorDATED: November 9, 2006
			BY: /s/ GREGORY C. TALBOTTGregory C. Talbott
			Senior Executive Vice
			President,
			Chief Operating Officer/Chief Financial Officer
			and Treasurer
 29