UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission File No. 0-27404
Capital Accumulation Plan for
Employees of PFF Bank & Trust
PFF Bancorp, Inc.
350 South Garey Avenue
Pomona, California 91766
PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Financial Statements and Supplemental Schedule
December 31, 2001 and 2000
(With Independent Auditors' Report Thereon)
CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Index to Financial Statements and Supplemental Schedule
| Page | |
Independent Auditors' Report | 1 |
Statements of Net Assets Available for Benefits - December 31, 2001 and 2000 | 2 |
| Statements of Changes in Net Assets Available for Benefits - Years ended December 31, 2001 and 2000 | 3 |
Notes to Financial Statements | 4 |
Schedule | |
| Schedule H, Line 4i - Schedule of Assets (Held at End of Year) | 8 |
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, 2001 and 2000 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 auditing standards generally accepted in the United States of America. 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, 2001 and 2000 and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
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 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 4, 2002
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CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000
| 2001 | 2000 | |||
Investments | |||||
Cash and cash equivalents | $ 38,050 | 15,240 | |||
Mutual Funds | 12,109,525 | 10,896,092 | |||
Common Stock | 5,073,460 | 4,706,436 | |||
Loans to participants | 576,403 | 542,292 | |||
Total investments at fair value | 17,797,438 | 16,160,060 | |||
Receivables - employer contribution | 463,535 | 361,095 | |||
Net assets available for plan benefits | $ 18,260,973 | 16,521,155 | |||
| See accompanying notes to financial statements. | |||||
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CAPITAL ACCUMULATION PLAN FOR
EMPLOYEES OF PFF BANK & TRUST
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 2001 and 2000
2001 | 2000 | ||||
Contributions: | |||||
Employer (note 1) | $ 463,535 | 361,095 | |||
Participants | 973,230 | 965,953 | |||
1,436,765 | 1,327,048 | ||||
Investment Income: | |||||
Interest and dividends earned on investments | 457,611 | 361,879 | |||
Realized and unrealized gains (losses), net | 490,673 | (601,774) | |||
948,284 | (239,895) | ||||
Total additions | 2,385,049 | 1,087,153 | |||
Deductions from net assets attributed to: | |||||
Benefits paid to participants | 643,271 | 1,347,903 | |||
Loan fees (note 1) | 1,960 | 1,550 | |||
Total deductions | 645,231 | 1,349,453 | |||
Increase (decrease) in net assets available for benefits | 1,739,818 | (262,300) | |||
Net assets available for benefits: | |||||
Beginning of year | 16,521,155 | 16,783,455 | |||
| End of year | $ 18,260,973 | 16,521,155 | ||
See accompanying notes to financial statements. | |||||
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(1) Description of Plan
The following description of the Capital Accumulation Plan for Employees of PFF Bank & Trust (the 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 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 "nonhighly compensated" employees, "highly compensated" employees, and "executives," respectively. For 2001 and 2000, 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 2001 and 2000. Forfeitures of matching contributions are used to reduce the Bank's matching contributions. For the years ended December 31, 2001 and 2000 participant forfeitures totaled $23,971 and $85,302, respectively. No profit sharing contribution was made for either 2001 or 2000.
(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.
(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.
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(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.
(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.
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(e) Administrative Expenses
All administrative expenses of the Plan were paid directly by the Bank in 2001 and 2000 except for participant loans origination fees.
(3) Investments
The following table presents the cost and fair values of those investments at December 31, with those that represent 5% or more of the Plan's net assets separately identified.
2001 | ||||
Identity of party and description of asset | Cost | Fair value | ||
| PFF Bancorp, Inc. Stock | $ | 1,433,554 | 5,073,460 | |
| Berger Small Company Growth | 1,299,483 | 939,491 | ||
| Capital Preservation Fund | 4,473,174 | 4,473,175 | ||
| Federated Stock Trust Fund | 1,624,977 | 1,475,362 | ||
| Federated Max-Cap Fund | 2,469,132 | 2,195,212 | ||
| Janus Worldwide Fund | 1,103,596 | 861,746 | ||
| Janus Balanced Fund | 1,454,233 | 1,369,368 | ||
| Others individually less than 5% of net assets | 1,461,706 | 1,409,624 | ||
| Total | $ | 15,319,855 | 17,797,438 | |
2000 | ||||
Identity of party and description of asset | Cost | Fair value | ||
| PFF Bancorp, Inc. Stock | $ | 1,458,287 | 4,706,436 | |
| Berger Small Company Growth | 1,196,552 | 924,628 | ||
| Capital Preservation Fund | 2,990,143 | 2,990,143 | ||
| Federated Stock Trust Fund | 1,539,946 | 1,364,934 | ||
| Federated Max-Cap Fund | 2,474,009 | 2,502,490 | ||
| Janus Worldwide Fund | 1,074,689 | 1,056,589 | ||
| Janus Balanced Fund | 1,427,746 | 1,439,063 | ||
| Others individually less than 5% of net assets | 667,977 | 1,175,777 | ||
| Total | $ | 12,829,349 | 16,160,060 | |
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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.
(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.
(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 on deposit at December 31, 2001 and 2000, respectively, in certificates of deposit at the Bank, the employer. The Plan held 183,821 and 225,458 shares of common stock of PFF Bancorp, Inc. at December 31, 2001 and 2000, respectively. In addition, the Bank was Trustee for all assets of the Plan.
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Schedule | ||||||||||||||
CAPITAL ACCUMULATION PLAN FOR | ||||||||||||||
EMPLOYEES OF PFF BANK & TRUST | ||||||||||||||
Schedule H, Line 4I - Schedule of Assets (Held at End of Year) | ||||||||||||||
December 31, 2001 | ||||||||||||||
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 | |||||||||||
*PFF Bancorp, Inc.
Common Stock 183,821 shares
$
1,433,554
5,073,460
Federated Capital Preservation
Fund
Mutual Fund 447,318 units
4,473,174
4,473,175
Federated Intermediate Income
Bond Fund
Mutual Fund 24,760 units
248,193
246,111
Federated Money Market Trust
Mutual Fund 107 units
107
107
Federated Managed Growth
Fund
Mutual Fund 9,047 units
109,268
98,702
Federated Stock Trust Fund
Mutual Fund 43,470 units
1,624,977
1,475,362
Federated Max-Cap Fund
Mutual Fund 94,449 units
2,469,132
2,195,212
Berger Small Company Growth
Mutual Fund 296,370 units
1,299,483
939,491
Federated Managed Aggressive
Growth Fund
Mutual Fund 11,145 units
151,960
127,944
Federated Growth Strategies
Fund
Mutual Fund 1,344 units
35,092
34,386
Janus Worldwide Fund
Mutual Fund 19,657 units
1,103,596
861,746
Janus Balanced Fund
Mutual Fund 69,759 units
1,454,233
1,369,368
Federated Managed Income
Fund
Mutual Fund 17,072 units
178,387
173,795
Federated Managed Growth
and Income Fund
Mutual Fund 11,233 units
124,246
114,126
Federated Prime Obligation
Fund
Money Market 38,050 units
38,050
38,050
Participants loans
81 loans with interest rates ranging
from 5.75% to 10.50%
576,403
573,403
Total
$
15,319,855
17,797,438
* Denotes a party in interest.
See accompanying independent auditors' report.
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REQUIRED INFORMATION
Financial statements and schedule prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974, together with independent auditors' report thereon.
Consent of Independent Auditors.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned, hereunto duly authorized.
| PFF Bank & Trust, Capital Accumulation Plan for Employees of PFF Bank & Trust | ||
Dated: June 21, 2002 | By: | /s/ Gregory C. Talbott |
Gregory C. Talbott |
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