<PAGE>
EXHIBIT 99.1
CAPITAL ACCUMULATION PLAN for
EMPLOYEES OF PFF BANK & TRUST
Financial Statements and Supplemental Schedule
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
<PAGE>
CAPITAL ACCUMULATION PLAN for
EMPLOYEES OF PFF BANK & TRUST
Index to Financial Statements and Supplemental Schedules
Page
<TABLE>
<S> <C>
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits,
December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for Benefits,
Years ended December 31, 1999 and 1998 3
Notes to Financial Statements 4
Schedule
Schedule of Assets Held for Investment Purposes at End of Year 10
</TABLE>
<PAGE>
Independent Auditors' Report
The Plan Administrator
Capital Accumulation Plan
for Employees of PFF Bank & Trust:
We have audited the accompanying statements of Net Assets Available for Benefits
of the Capital Accumulation Plan for Employees of PFF Bank & Trust (the Plan) as
of December 31, 1999 and 1998 and the related Statements of Changes in Net
Assets Available for Benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998 and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
KPMG, LLP
Orange County, California
June 21, 2000
<PAGE>
CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Notes to Financial Statements
December 31, 1999 and 1998
(1) Description of Plan
The following description of the Capital Accumulation Plan for Employees of
PFF Bank & Trust (the Plan), formerly Pomona First Federal Savings and Loan
Association Capital Accumulation Plan, provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
(a) General
The Plan is a defined contribution plan covering all eligible
employees of PFF Bank & Trust and its subsidiaries (the Bank or Plan
Sponsor). Employees become eligible for participation in the Plan upon
6 months of employment. Participants must complete 501 hours of
service to share in the employer's matching contribution. In order to
become a participant, each eligible employee authorizes contributions
by filing a 401(k) enrollment/change of status election. The Plan is
subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
In December 1994, the Bank amended and restated the Plan by adopting
the Union Bank Non-Standardized 401(k) Profit Sharing Adoption
Agreement. In January 1999, the Bank amended and restated the Plan by
adopting a nonstandardized Code 401(k) profit sharing plan which named
PFF Bank and Trust, Trust and Investment Services Division as trustee.
(b) Contributions
No contribution is required by the Bank; however, at the discretion of
its Board of Directors, the Bank may contribute out of its income
and/or accumulated earned surplus an amount equal to a specified
percentage of the tax-deferred contribution of the participants or a
profit sharing contribution with the amount to be determined by the
Board of Directors. From inception of the Plan through July 3, 1997,
the maximum annual participant contribution was 15% of the
participant's annual salary, as defined within the Plan. Beginning
July 4, 1997 and thereafter, to avoid violating IRS regulations, the
maximum annual contribution is 8%, 7% and 5% for "non-highly"
compensated employees, "highly compensated" employees and
"executives," respectively. For 1999 and 1998, the Bank chose to match
the participants' contributions at a rate of 100% of the first 1% and
50% of the next 6% of contributions. For "highly compensated"
participants and "executives", the Bank chose to match 50% of the
participants contributions up to 7% for 1999 and 1998. Forfeitures of
matching contributions are used to reduce the Bank's matching
contributions. For the years ended December 31, 1999 and 1998,
participant forfeitures totaled $26,293 and $18,539, respectively. No
profit sharing contribution was made for either 1999 or 1998.
(c) Participant Accounts
Each participant's account is credited with the participant's
contribution and allocation of (a) the Bank's contribution and (b)
Plan earnings. Allocations other than the Bank's matching
contributions are based on participant earnings or account balances,
as defined. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's account.
4
<PAGE>
CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Notes to Financial Statements
December 31, 1999 and 1998
(d) Participants Loans
Participants may borrow from their fund accounts a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 reduced by the highest
outstanding loan balance during the preceding 12 months or 50% of their
vested account balance. Loan repayments are to be made over a period not
to exceed 5 years except loans for the purchase of a primary residence
in which case payment may exceed 5 years. The loans are secured by the
balance in the participant's account and bear interest at a rate of
prime plus 1%. Participants pay a $50 origination fee for each loan
advanced to them.
(e) Vesting
Participation in the Plan is voluntary. Employee contributions and the
earnings as a result of each participant's contributions are 100% vested
and nonforfeitable. The Bank's contributions vest to participants in
accordance with a specified schedule with 100% vesting occurring after 5
years of service, on the participant's attaining age 65, or on the
participant's death or total and permanent disablement.
(f) Payment of Benefits
On termination of service, a participant may elect to receive either a
lump-sum amount equal to the vested balance of his or her account or
annual (or more frequent) installments over a period not to exceed the
life expectancy of the participant.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements have been prepared on the accrual
basis of accounting.
(b) Trust Fund Managed by Investment Advisory Committee
Under the terms of the Plan, the assets of the Plan are placed in trust
(the Trust), and are held under the trusteeship of PFF Trust and
Investment Services (PFF Trust). Assets are managed under the direction
of Employee Compensation and Benefits Committee of the Bank's Board of
Directors (the Committee). The Committee has delegated certain of its
ordinary management and investment responsibilities to certain members
of the Bank's Executive Committee and the Human Resources Director.
Committee members are appointed for an indefinite term by the Bank's
Board of Directors. The Committee has full discretionary authority to
administer the Plan and the trust agreement.
The investments and changes therein of these trust funds have been
reported by PFF Trust as having been determined through the use of fair
market values based upon quotations obtained from national securities
exchanges or latest bid prices. Security transactions are accounted for
on a trade-date basis. Realized gains and losses on the sale of
investments are computed using the average cost method. Participant
loans are valued at their outstanding balance which approximates fair
value.
(c) Disclosure about Fair Value of Financial Instruments
Substantially all of the Plan's financial instruments are carried at
fair value or amounts approximating fair value.
5
<PAGE>
CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Notes to Financial Statements
December 31, 1999 and 1998
(d) Use of Estimates
Certain estimates and assumptions have been made relating to the
reporting of Plan assets and liabilities to prepare the financial
statements in conformity with generally accepted accounting principles.
Actual results could differ from those estimates.
(e) Reclassifications
Certain reclassifications have been made to the prior year financial
statements to conform with the current year presentation.
(f) Administrative Expenses
All administrative expenses of the Plan were paid directly by the Bank
in 1999 and 1998 except for participant loans origination fees.
(3) Investments
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3, Accounting for and Reporting of Certain
Defined Contribution Plan Investments and Other Disclosure Matters (SOP 99-
3). SOP 99-3 simplifies the disclosure for certain investments and is
effective for plan years ending December 31, 1999 with earlier application
encouraged. The Plan adopted SOP 99-3 during the Plan year ending December
31, 1999. Accordingly, information previously required to be disclosed
about participant-directed fund investment programs is not presented in the
Plan's 1999 financial statements. The Plan's 1998 financial statements have
been reclassified with the current year's presentation.
The following table presents the cost and fair values of those investments
at December 31, that represent 5% or more of the Plan's net assets.
<TABLE>
<CAPTION>
December 31, 1999
----------------------------------------------
Identity of party and
description of asset Cost Fair value
------------------------------------------ -------------------- -------------------
<S> <C> <C>
PFF Bancorp, Inc. Stock $ 3,932,958 4,434,705
Capital Preservation Fund 2,828,333 2,828,335
Federated Stock Trust Fund 1,610,001 1,470,836
Federated Max-Cap Institutional Fund 2,463,402 2,830,242
Janus Worldwide Fund 847,849 1,276,303
Janus Balanced Fund 1,438,781 1,628,189
----------------- -----------------
Total $ 13,121,324 14,468,610
================= =================
</TABLE>
6
<PAGE>
CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
December 31, 1998
----------------------------------------------
Identity of party and
description of asset Cost Fair value
------------------------------------------ -------------------- --------------------
<S> <C> <C>
PFF Bank & Trust Certificates of Deposit:
Fixed rate $ 2,041,509 2,041,509
Highmark Diversified Money Market 3,744,547 3,744,547
Vanguard Wellington Fund 1,696,776 1,803,418
Franklin Small Cap Growth Fund 1,476,557 1,552,226
PFF Bancorp, Inc. Stock Fund 2,872,662 3,446,688
-------------- --------------
Total $ 11,832,051 12,588,388
============== ==============
</TABLE>
Allocation of Plan Assets
Employee contributions are allocated to various funds based on the election
made by each participant. Net income or loss of each fund is allocated on
the basis of the proportionate asset balance of each participant as of the
previous valuation date after adjustment for withdrawals, distributions and
other additions or subtractions that may be appropriate. Under the daily
valuation record-keeping system, earnings are allocated on the basis of
current shares held in each participant's account and the accounts are valued
daily.
A description of each investment fund follows:
. Federated Money Market Trust Fund - The fund seeks to preserve capital while
returning a market rate of return.
. Federated Capital Preservation Fund - The fund invests in Guaranteed
Investment Contracts (GICs) issued by major U.S. and Canadian life insurance
companies, and other stable value products.
. Federated Intermediate Income Bond Fund - The fund seeks current income
consistent with capital preservation, by investing in U.S. government and
corporate fixed-income securities.
. Janus Balanced Fund - The fund seeks long-term growth of capital by investing
primarily in equity and debt securities.
. Federated Max-Cap Fund - The fund attempts to provide investment results that
approximate the price and yield performance of the Standard & Poor's 500
Composite Index
. Federated Stock Trust - The fund is designed for investors who seek growth of
income and capital.
. Berger Small Company Growth Fund - The fund seeks capital preservation by
investing primarily in equities issued by companies with capitalizations of
less than $1 billion.
7
<PAGE>
CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Notes to Financial Statements
December 31, 1999 and 1998
. Janus Worldwide Fund - The fund seeks long-term growth of capital consistent
with preservation of capital by primarily investing in foreign and domestic
common stocks.
. Federated Managed Income Fund - The fund seeks income by investing in 500 or
more securities and across as many as 9 different asset classes.
. Federated Managed Growth & Income - The fund seeks stable income and some
growth by investing in 500 or more securities and across as many as 9
different asset classes.
. Federated Managed Growth Fund - The fund seeks growth by investing in 500 or
more securities and across as many as 9 different asset classes.
. Federated Managed Aggressive Growth Fund - The fund seeks high returns
despite the significant risks by investing in 500 or more securities and
across as many as 9 different asset classes.
. Federated Prime Obligation Fund - Proceeds from the liquidation of mutual
funds are invested at a market rate of return until the assets are
reinvested.
. Franklin Small Cap Growth Fund - The fund seeks long-term capital
appreciation by investing in equity securities of companies with a market
capitalization of less than $1 billion.
. T. Rowe Price International Stock Fund - The fund seeks total return from
long-term growth of capital and income by investing primarily in common
stocks of established foreign issuers.
. Vanguard Index Trust 500 Portfolio - The fund seeks to track, as closely as
possible, the investment performance of the S&P 500 Index by investing in
each of the Index's 500 stocks according to each stock's weighting in the
index.
. Vanguard Wellington Fund - The fund seeks to provide conservative investors
with conservation of principal and reasonable current income and profits
without undue risk, by investing in common stocks and bonds.
. Vanguard Total Bond Market Portfolio - The fund seeks to replicate the total
return of the Lehman Brothers Aggregate Bond Index by investing primarily in
securities listed in the index.
. Certificates of Deposit - Fixed - The Fixed Rate Certificate of Deposit pays
a market rate of return for a fixed term of one year.
. PFF Bancorp, Inc. Stock Fund - Stock fund assets are invested in PFF Bancorp,
Inc. common stock and cash and cash equivalents. PFF Bancorp, Inc., is the
holding company of the Plan's sponsor, the Bank.
. Highmark Diversified Money Market - Proceeds from the liquidation of mutual
funds are invested at a market rate of return temporarily until the assets
are reinvested.
(4) Plan Termination
Although the Bank has not expressed any intent to terminate the Plan, it may
do so at any time subject to the provisions of ERISA. In the event the Plan
is terminated, all participants become 100% vested in their account balances.
8
<PAGE>
CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Notes to Financial Statements
December 31, 1999 and 1998
(5) Federal Income Taxes
The Internal Revenue Service has determined and informed the Bank by a
letter dated July 24, 1995, that the Plan is designed in accordance with
applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended since then. The Bank and the Plan's tax counsel believe that the
Plan as amended is designed and is currently being operated in compliance
with the applicable requirements of the IRC.
(6) Related Party Transactions
The Plan had zero and $2.04 million on deposit at December 31, 1999 and
1998, respectively, in certificates of deposit at the Bank, the employer.
The Plan held 228,888 and 215,418 shares of common stock of PFF Bancorp,
Inc. at December 31, 1999 and 1998, respectively. In addition, the Bank was
Trustee for all assets of the Plan.
9
<PAGE>
CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Statement of Net Assets Available for Benefits
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Investments:
Cash and cash equivalents $ 16,137 3,743,968
Certificates of deposit -- 2,041,509
Mutual funds 11,332,776 3,965,759
Common stock 4,434,705 3,446,688
Loans to participants 536,400 530,603
----------- ----------
Total investments at fair value 16,320,018 13,728,527
Receivables:
Employer contribution 463,437 384,371
Participants' contributions -- 25,087
----------- ----------
Net assets available for plan benefits $16,783,455 14,137,985
=========== ==========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Statement of Changes in Net Assets Available for Benefits
Years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
------------------ ------------------
<S> <C> <C>
Contributions:
Employer (note 1) $ 463,437 384,281
Participants 950,755 816,170
----------- -----------
1,414,192 1,200,451
----------- -----------
Investment income:
Interest and dividends earned on investments 568,743 360,940
Realized and unrealized gains 2,025,735 130,927
----------- -----------
2,594,478 491,867
----------- -----------
Total additions 4,008,670 1,692,318
----------- -----------
Deductions from net assets attributed to:
Benefit paid to participants 1,361,800 1,275,488
Loan fees (note 1) 1,400 --
----------- -----------
Total deductions 1,363,200 1,275,488
----------- -----------
Increase in net assets available for benefits 2,645,470 416,830
Net assets available for benefits:
Beginning of year 14,137,985 13,721,155
----------- -----------
End of year $16,783,455 14,137,985
=========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
Schedule 1
CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 1999
<TABLE>
<CAPTION>
Description of investment
including maturity date, rate of
Identity of issue, borrower, interest, collateral, par, or Current
lessor or similar party maturity value Cost value
------------------------------------ ---------------------------------------- ---------------- --------------
<S> <C> <C> <C>
*PFF Bancorp, Inc. Common Stock 228,888 shares $3,932,958 4,434,705
Federated Capital Preservation
Fund Mutual Fund 282,833 units 2,828,333 2,828,335
Federated Intermediate Income
Bond Fund Mutual Fund 16,550 units 164,606 157,891
Federated Money Market Trust Mutual Fund 7,291 units 7,291 7,291
Federated Managed Growth Fund Mutual Fund 8,238 units 105,320 111,375
Federated Stock Trust Fund Mutual Fund 40,766 units 1,610,001 1,470,836
Federated Max-Cap Fund Mutual Fund 94,625 units 2,463,402 2,830,242
Berger Small Company Growth Mutual Fund 97,877 units 405,588 627,459
Federated Managed Aggressive
Growth Fund Mutual Fund 7,180 units 100,118 110,063
Janus Worldwide Fund Mutual Fund 16,699 units 847,849 1,276,303
Janus Balanced Fund Mutual Fund 69,610 units 1,438,781 1,628,189
Federated Managed Income Fund Mutual Fund 12,097 units 129,170 124,722
Federated Managed Growth
and Income Fund Mutual Fund 13,658 units 159,835 160,070
Federated Prime Obligation Fund Money Market 16,137 16,137
Participants loans 79 loans with interest rates ranging
from 7.29% to 10% -- 536,400
----------- ----------
Total $14,209,389 16,320,018
=========== ==========
</TABLE>
* Denotes a party in interest.
See accompanying independent auditors' report.
10
