January 26, 2006
Mail Stop 4561
Mr. Larry M. Rinehart
President and Chief Executive Officer
PFF Bancorp, Inc.
350 South Garey Avenue
Pomona, CA 91766
Re: PFF Bancorp, Inc.
Form 10-K for Fiscal Year Ended March 31, 2005
Filed June 14, 2005
Forms 10-QSB for Fiscal Year Ended March 31, 2006
File Number: 001-16845
Dear Mr. Rinehart:
We have reviewed your filings and have limited our review to
the following comments. Where indicated, we think you should
revise
your document in response to these comments. If you disagree, we
will consider your explanation as to why our comments are
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In our comments, we may ask you to
provide us with supplemental information so we may better
understand
your disclosure. After reviewing this information, we may or may
not
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your
filings.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
* * * * *
Form 10-K, filed June 14, 2005
Notes to Consolidated Financial Statements
Note 13 - Derivative Hedging Instruments, page 98
1. We note that you have entered into an interest rate swap
agreement
with a financial institution in the notional amount of $30.0
million
for a period of five years for the purpose of hedging the cash
flows
of $30.0 million of your variable rate junior subordinated
debentures
issuance. Please address the following:
* Please tell us if you accounted for this hedging relationship
under
the short-cut or long-haul method of accounting in accordance with
SFAS 133. If you applied the short-cut method of accounting,
please
tell us in detail how you complied with each of the requirements
of
paragraph 68 of SFAS 133;
* If you accounted for this hedging relationship under the long-
haul
method of accounting, please tell us how you met all of the
requirements of paragraphs 28-30 of SFAS 133. Additionally, please
tell us in detail the method used to measure hedge
ineffectiveness,
and quantify for us the hedge ineffectiveness, if applicable,
recognized in your income statement for all periods presented as
required by paragraph 45(b)(1) of SFAS 133; and
* In a Form 8-K filed on October 6, 2004 you state that you have
"the
right to defer payments of interest on the debt securities by
extending the interest payment period on the debt securities for
up
to 20 consecutive quarterly periods." Please tell us how this
deferral clause impacts your determination of hedge accounting.
Please cite the authoritative guidance you relied upon to support
your accounting.
Form 10-Q, filed November 9, 2005
Notes to Unaudited Consolidated Financial Statements
Note 6 - Derivative Hedging Activities, page 12
2. We also note that you have entered into an interest rate swap
agreement with a financial institution in the notional amount of
$10.0 million for a period of five years for the purpose of
hedging
the cash flows of $10.0 million of your $30.0 million variable
rate
junior subordinated debentures issuance on September 16, 2005.
Please
address the following:
* Please tell us if you accounted for this hedging relationship
under
the short-cut or long-haul method of accounting in accordance with
SFAS 133. If you applied the short-cut method of accounting,
please
tell us in detail how you complied with each of the requirements
of
paragraph 68 of SFAS 133;
* If you accounted for this hedging relationship under the long-
haul
method of accounting, please tell us how you met all of the
requirements of paragraphs 28-30 of SFAS 133. Additionally, please
tell us in detail the method used to measure hedge
ineffectiveness,
and quantify for us the hedge ineffectiveness, if applicable,
recognized in your income statement for all periods presented as
required by paragraph 45(b)(1) of SFAS 133; and
* In a Form 8-K filed on September 22, 2005 you state that you
have
"the right to defer payments of interest on the debt securities by
extending the interest payment period on the debt securities for
up
to 20 consecutive quarterly periods." Please tell us how this
deferral clause impacts your determination of hedge accounting.
Please cite the authoritative guidance you relied upon to support
your accounting.
* * * * *
As appropriate, please amend your filings and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish
a cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and response to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its
management are in possession of all facts relating to a company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.
You may contact John Spitz, Staff Accountant at (202) 551-
3484,
or me at (202) 551-3492, if you have questions regarding these
comments.
Sincerely,
John P. Nolan
Accounting Branch Chief
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Mr. Larry M. Rinehart
PFF Bancorp, Inc.
January 26, 2006
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