SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

For Quarter Ended September 30, 1998              Commission File Number 1-4629


                        GOLDEN WEST FINANCIAL CORPORATION
-------------------------------------------------------------------------------


          Delaware                                       95-2080059
-----------------------------------------    -----------------------------------
(State or other jurisdiction of              I.R.S. Employer Identification No.)
incorporation or organization)

1901 Harrison Street, Oakland, California                            94612
-----------------------------------------                        ---------------
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number, including area code:              (510) 446-3420
                                                           ---------------------


     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
    -------      -------

     The  number of  shares  outstanding  of the  registrant's  common  stock on
October 31, 1998, was 56,920,949 shares.


<PAGE>


PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

     The consolidated  financial statements of Golden West Financial Corporation
and subsidiaries (the Company) for the three and nine months ended September 30,
1998 and 1997 are  unaudited.  In the opinion of the  Company,  all  adjustments
(consisting  only of normal  recurring  accruals)  that are necessary for a fair
statement  of the  results  for such  three  and nine  month  periods  have been
included.  The operating  results for the three and nine months ended  September
30, 1998, are not necessarily indicative of the results for the full year.


                        Golden West Financial Corporation
                  Consolidated Statement of Financial Condition
                             (Dollars in thousands)
<TABLE>
<CAPTION>


                                                                      September 30   September 30  December 31
                                                                          1998          1997           1997
                                                                      -------------  ------------  -------------
                                                                             (Unaudited)
                                                                      ---------------------------

Assets:
<S>                                                                   <C>            <C>           <C>         
  Cash                                                                $    199,747   $   140,898   $    172,241
  Securities available for sale at fair value                              310,296       586,401        608,544
  Other investments at cost                                                890,379       436,404        252,648
  Mortgage-backed securities available for sale without recourse at        125,107       197,121        157,327
fair value
  Mortgage-backed securities held to maturity without recourse at cost     629,036       749,913        752,029
  Mortgage-backed securities held to maturity with recourse at cost      7,642,479     2,974,764      3,030,390
  Loans receivable                                                      27,940,415    32,723,212     33,260,709
  Interest earned but uncollected                                          200,036       211,653        216,923
  Investment in capital stock of Federal Home Loan Banks--at cost
      which approximates fair value                                        768,601       580,861        590,244
  Real estate held for sale or investment                                   45,659        67,074         62,006
  Prepaid expenses and other assets                                        365,451       329,545        247,003
  Premises and equipment--at cost less accumulated depreciation            265,800       230,513        240,207
                                                                      -------------  ------------  -------------
                                                                      $ 39,383,006   $39,228,359   $ 39,590,271
                                                                      =============  ============  =============

Liabilities and Stockholders' Equity:
  Deposits                                                            $ 25,477,429   $24,234,947   $ 24,109,717
  Advances from Federal Home Loan Banks                                  6,866,847     7,228,765      8,516,605
  Securities sold under agreements to repurchase                         2,310,198     2,890,918      2,334,048
  Medium-term notes                                                            -0-       309,969        109,992
  Accounts payable and accrued expenses                                    523,230       527,992        446,325
  Taxes on income                                                          307,969       250,407        265,065
  Subordinated notes--net of discount                                      911,467     1,210,141      1,110,488
  Stockholders' equity                                                   2,985,866     2,575,220      2,698,031
                                                                      -------------  ------------  -------------
                                                                      $ 39,383,006   $39,228,359   $ 39,590,271
                                                                      =============  ============  =============
</TABLE>


<PAGE>


                        Golden West Financial Corporation
                     Consolidated Statement of Net Earnings
                                   (Unaudited)
                 (Dollars in thousands except per share figures)
<TABLE>
<CAPTION>

                                                         Three Months Ended              Nine Months Ended
                                                           September 30                    September 30
                                                    ----------------------------    ----------------------------
                                                        1998           1997            1998            1997
                                                    -------------   ------------    ------------    ------------
   Interest Income:
<S>                                                  <C>            <C>             <C>             <C>        
       Interest on loans                             $   529,135    $   610,177     $ 1,745,201     $ 1,758,899
       Interest on mortgage-backed securities            156,234         70,611         333,965         217,913
       Interest and dividends on investments              59,088         37,414         161,063         105,908
                                                    -------------   ------------    ------------    ------------
                                                         744,457        718,202       2,240,229       2,082,720
   Interest Expense:
       Interest on deposits                              327,589        314,895         963,878         889,337
       Interest on advances                              112,394        103,005         341,160         323,394
       Interest on repurchase agreements                  27,750         43,371          93,783         111,739
       Interest on other borrowings                       38,582         34,786         120,355         100,833
                                                                                    ------------    ------------
                                                    -------------   ------------
                                                         506,315        496,057       1,519,176       1,425,303
                                                    -------------   ------------    ------------    ------------
           Net Interest Income                           238,142        222,145         721,053         657,417
   Provision for loan losses                               3,130          9,980           8,777          43,786
                                                    -------------   ------------    ------------    ------------
           Net Interest Income after Provision
               for Loan Losses                           235,012        212,165         712,276         613,631
   Non-Interest Income:
       Fees                                               16,224         11,574          44,887          33,609
       Gain on the sale of securities, MBS, and            6,417          1,884          28,001           6,168
   loans
       Other                                               8,182          6,962          27,035          19,685
                                                    -------------   ------------    ------------    ------------
                                                          30,823         20,420          99,923          59,462
   Non-Interest Expense:
       General and administrative:
           Personnel                                      49,632         45,198         144,212         133,190
           Occupancy                                      15,636         14,008          44,754          40,804
           Deposit insurance                               1,444          1,786           4,572           5,769
           Advertising                                     2,189          3,445           7,653           8,205
           Other                                          18,604         18,797          57,024          53,063
                                                    -------------   ------------    ------------    ------------
                                                          87,505         83,234         258,215         241,031
   Earnings Before Taxes on Income and
       Extraordinary Item                                178,330        149,351         553,984         432,062
       Taxes on Income                                    70,309         59,344         218,932         171,404
                                                    -------------   ------------    ------------    ------------
   Earnings Before Extraordinary Item                    108,021         90,007         335,052         260,658
   Extraordinary Item:
   Federal Home Loan Bank advance prepayment
       penalty, net of tax                                (4,801)           -0-         (12,511)            -0-
                                                    -------------   ------------    ------------    ------------
   Net Earnings                                     $    103,220    $    90,007     $   322,541     $   260,658
                                                    =============   ============    ============    ============

   Basic Earnings Per Share Before Extraordinary    $       1.87    $      1.59     $      5.84     $      4.57
   Basic Earnings Per Share on Extraordinary
       Item, Net of Tax                                    (0.08)          0.00           (0.22)           0.00
                                                    ------------    ------------    ------------    ------------
   Basic Earnings Per Share                         $       1.79    $      1.59     $      5.62     $      4.57
                                                    =============   ============    ============    ============

   Diluted Earnings Per Share Before Extraordinary  $       1.85    $      1.56     $      5.78     $      4.50
   Diluted Earnings Per Share on Extraordinary
   Item, Net of Tax                                        (0.08)          0.00           (0.22)           0.00
                                                    -------------   ------------    ------------    ------------
   Diluted Earnings Per Share                       $       1.77    $      1.56     $      5.56     $      4.50
                                                    =============   ============    ============    ============
</TABLE>



<PAGE>
<TABLE>
<CAPTION>


                        Golden West Financial Corporation
                      Consolidated Statement of Cash Flows
                                   (Unaudited)
                             (Dollars in thousands)


                                                         Three Months Ended            Nine Months Ended
                                                            September 30                 September 30
                                                     ---------------------------   --------------------------
                                                        1998           1997           1998           1997
                                                     ------------   ------------   ------------   ------------
Cash Flows From Operating Activities:
<S>                                                  <C>            <C>            <C>            <C>        
  Net earnings ...................................   $   103,220    $    90,007    $   322,541    $   260,658
  Adjustments  to  reconcile  net  earnings to net
  cash  provided  by  operating activities:
    Extraordinary item ...........................         8,117            -0-         21,152            -0-
    Provision for loan losses ....................         3,130          9,980          8,777         43,786
    Amortization of loan fees and discounts ......        (5,474)        (4,282)       (16,568)       (13,533)
    Depreciation and amortization ................         6,369          5,263         18,060         15,570
    Loans originated for sale ....................      (291,424)       (47,591)      (625,382)      (146,342)
    Sales of loans ...............................       375,872         44,482        776,038        142,786
    Decrease  in interest earned but uncollected .         9,651          5,656         16,887          9,951
    Federal Home Loan Bank stock dividends .......       (12,559)        (9,145)       (40,274)       (33,463)
    Decrease (increase) in prepaid expenses and ..          (452)        26,917       (107,284)       (94,545)
    other assets
    Increase in accounts payable and accrued .....         2,433         42,187         76,905         75,810
    expenses
    Increase (decrease) in taxes on income .......       (11,412)           138         31,819         25,007
    Other, net ...................................           785           (874)        (5,087)        (8,744)
                                                     -----------    -----------    -----------    -----------
      Net cash provided by operating activities ..       188,256        162,738        477,584        276,941

Cash Flows From Investing Activities:
  New loan activity:
    New real estate loans originated for portfolio    (1,886,820)    (1,932,509)    (5,091,687)    (5,383,485)
    Real estate loans purchased ..................          (648)          (670)        (2,337)        (1,930)
    Other, net ...................................       (65,120)       (13,172)       (85,491)       (36,291)
                                                     -----------    -----------    -----------    -----------
                                                      (1,952,588)    (1,946,351)    (5,179,515)    (5,421,706)
  Real estate loan principal payments:
    Monthly payments .............................       158,922        174,060        493,429        508,619
    Payoffs, net of foreclosures .................     1,340,611        821,316      4,073,503      2,136,605
                                                     -----------    -----------    -----------    -----------
                                                       1,499,533        995,376      4,566,932      2,645,224

  Repayments of mortgage-backed securities .......       723,795        131,174      1,239,664        369,760
  Proceeds from sales of real estate .............        31,484         58,487        118,020        171,803
  Purchases of securities available for sale .....      (183,116)          (110)      (310,597)        (1,297)
  Sales of securities available for sale .........           -0-          4,381         81,373          5,342
  Matured securities available for sale ..........       304,096         13,994        557,767        238,047
  Decrease (increase) in other investments .......      (746,379)       608,352       (637,731)       642,428
  Purchases of Federal Home Loan Bank stock ......       (49,253)           -0-       (149,247)       (56,239)
  Additions to premises and equipment ............       (13,495)       (14,612)       (48,792)       (37,744)
                                                     -----------    -----------    -----------    -----------
    Net cash provided by (used in) investing .....      (385,923)      (149,309)       237,874     (1,444,382)
    activities
</TABLE>



<PAGE>

<TABLE>
<CAPTION>


                                                      Three Months Ended                 Nine Months Ended
                                                         September 30                      September 30
                                                   --------------------------       ------------------------------
                                                      1998          1997                1998            1997
                                                   -----------   ------------       -------------    -------------
Cash Flows From Financing Activities:
    Deposit activity:
<S>                                               <C>              <C>              <C>              <C>          
    Increase (decrease) in deposits, net ......   $     213,571    $     (46,244)   $     589,384    $   1,426,904
    Interest credited .........................         270,150          244,531          778,328          708,109
                                                  -------------    -------------    -------------    -------------
                                                        483,721          198,287        1,367,712        2,135,013

  Additions to Federal Home Loan Bank advances        2,712,440          511,750        5,976,940          555,950
  Repayments of Federal Home Loan Bank advances      (3,341,798)        (642,070)      (7,648,071)      (2,125,759)
  Proceeds from agreements to repurchase securities   3,490,320        2,553,903        6,554,310        4,990,396
  Repayments of agreements to repurchase securities  (2,996,555)      (2,617,206)      (6,578,160)      (4,007,604)
  Repayments of medium-term notes .............             -0-              -0-         (110,000)        (280,000)
  Proceeds from federal funds purchased .......      43,084,000        7,808,000      122,934,000        7,808,000
  Repayments of federal funds purchased .......     (43,084,000)      (7,808,000)    (122,934,000)      (7,808,000)    
  Repayment of subordinated debt ..............        (100,000)             -0-         (200,000)        (115,000)
  Dividends on common stock ...................          (7,214)          (6,241)         (21,517)         (18,795)
  Sale of stock ...............................           2,286            1,441           15,133            3,770
  Purchase and retirement of Company stock ....         (44,299)          (3,062)         (44,299)         (48,351)
                                                  -------------    -------------    -------------    -------------
    Net cash provided by (used in) financing ..         198,901           (3,198)        (687,952)       1,089,620
    activities
                                                  -------------    -------------    -------------    -------------
Net Increase (Decrease) in Cash ...............           1,234           10,231           27,506          (77,821)
Cash at beginning of period ...................         198,513          130,667          172,241          218,719
                                                  -------------    -------------    -------------    -------------
Cash at end of period .........................   $     199,747    $     140,898    $     199,747    $     140,898
                                                  =============    =============    =============    =============

Supplemental cash flow information:
  Cash paid for:
    Interest ..................................   $     510,620    $     492,562    $   1,525,208    $   1,421,204
    Income taxes ..............................          77,500           59,206          181,582          147,720
  Cash received for interest and dividends ....         754,108          723,858        2,257,116        2,092,671
  Noncash investing activities:
    Loans transferred to foreclosed real estate          29,614           51,472           88,667          156,198
    Loans securitized into mortgage-backed
securities
         with recourse ........................             -0-              -0-        5,698,458              -0-
</TABLE>


<PAGE>


                        Golden West Financial Corporation
                 Consolidated Statement of Stockholders' Equity
                                   (Unaudited)
                             (Dollars in thousands)
<TABLE>
<CAPTION>


                                                   For the Nine Months Ended September 30, 1998
                               -------------------------------------------------------------------------------------
                                                                       Accumulated
                                                                      Comprehensive
                                                                       Income From
                                            Additional                 Unrealized         Total
                                Common       Paid-in     Retained       Gains On       Stockholders' Comprehensive
                                 Stock       Capital     Earnings      Securities        Equity          Income
                               ----------   ----------   ----------   --------------   ------------  ---------------

<S>                            <C>          <C>         <C>            <C>            <C>        
Balance at January 1, 1998 .   $    5,707   $  85,532   $ 2,457,055    $   149,737    $ 2,698,031
Comprehensive income:
  Net earnings .............          -0-         -0-       322,541                       322,541    $   322,541
  Change in unrealized gains on
    securities available for sale,
    net of tax .............          -0-         -0-           -0-         23,998         23,998         23,998
  Reclassification adjustment
    for gains included in income      -0-         -0-           -0-         (8,022)        (8,022)        (8,022)
                                                                                                     ------------
    Comprehensive Income ...                                                                         $   338,517
                                                                                                     ============
Cash dividends on common
  stock ($.375 per share) ..          -0-         -0-       (21,517)                      (21,517)
Common stock issued upon
  exercise of stock options,
  including tax benefits ...           66      15,068           -0-                        15,134
Purchase and retirement of
  Company stock ............          (56)        -0-       (44,243)                      (44,299)
                               -----------   ---------   -----------  -------------    -----------
Balance at September 30, 1998  $    5,717    $100,600   $ 2,713,836   $    165,713     $2,985,866
                               ===========   =========   ===========  =============    ===========
</TABLE>
<TABLE>
<CAPTION>


                                                   For the Nine Months Ended September 30, 1997
                               -------------------------------------------------------------------------------------
                                                                       Accumulated
                                                                      Comprehensive
                                                                       Income From
                                            Additional                 Unrealized         Total
                                Common       Paid-in     Retained       Gains On       Stockholders' Comprehensive
                                 Stock       Capital     Earnings      Securities        Equity          Income
                               ----------   ----------   ----------   --------------   ------------  ---------------

<S>                            <C>          <C>          <C>          <C>              <C>        
Balance at January 1, 1997     $  5,734     $  67,953    $2,177,098   $      99,692    $ 2,350,477
Comprehensive income:
  Net earnings                       -0-          -0-      260,658                         260,658   $      260,658
  Change in unrealized gains on
    securities available for sale,
    net of tax                       -0-          -0-          -0-           29,315         29,315           29,315
  Reclassification adjustment
    for gains included in income     -0-          -0-          -0-           (1,854)        (1,854)          (1,854)
                                                                                                      --------------
    Comprehensive Income                                                                              $     288,119
                                                                                                      ==============
Cash dividends on common
  stock ($.33 per share)             -0-          -0-      (18,795)                       (18,795)
Common stock issued upon
  exercise of stock options,
  including tax benefits              16        3,754          -0-                           3,770
Purchase and retirement of
  Company stock                      (73)        -0-       (48,278)                        (48,351)
                               ----------   ----------   ----------   --------------   ------------
Balance at September 30, 1997   $  5,677     $  71,707   $2,370,683    $     127,153    $ 2,575,220
                               ==========   ==========   ==========   ==============   ============
</TABLE>


<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The discussion and analysis  included herein covers those material  changes
in liquidity and capital  resources  that have occurred since December 31, 1997,
as well as certain  material  changes in results of operations  during the three
and nine month periods ended September 30, 1998, and 1997, respectively.

     The following narrative is written with the presumption that the users have
read or have  access to the  Company's  1997 Annual  Report on Form 10-K,  which
contains the latest audited  financial  statements  and notes thereto,  together
with Management's  Discussion and Analysis of Financial Condition and Results of
Operations as of December 31, 1997, and for the year then ended. Therefore, only
material changes in financial  condition and results of operations are discussed
herein.

         NEW ACCOUNTING PRONOUNCEMENT

         Effective  January 1, 1998,  Golden West adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130), which
requires that an enterprise  report,  by major components and as a single total,
the change in its net assets during the period from nonowner sources.

         In June 1998, the Financial Accounting Standards Board issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments  and Hedging  Activities"  (SFAS 133).  This  Statement  establishes
accounting and reporting  standards for derivative  instruments  and for hedging
activities.  It requires  that an entity  recognize  all  derivatives  as either
assets or liabilities  in the statement of financial  position and measure those
instruments at fair value.  This Statement is effective for all fiscal  quarters
of fiscal years beginning after June 15, 1999. The Company has not yet completed
a full  assessment of the impact of this  statement on its financial  statements
and results of operations.

<PAGE>
<TABLE>
<CAPTION>


                        Golden West Financial Corporation
                              Financial Highlights
                                   (Unaudited)
                 (Dollars in thousands except per share figures)

                                                       September 30     September 30     December 31
                                                           1998            1997              1997
                                                       -------------    ------------     -------------
<S>                                                    <C>              <C>              <C>         
   Assets                                              $ 39,383,006     $39,228,359      $ 39,590,271
   Loans receivable                                      27,940,415      32,723,212        33,260,709
   Mortgage-backed securities                             8,396,622       3,921,798         3,939,746
   Deposits                                              25,477,429      24,234,947        24,109,717
   Stockholders' equity                                   2,985,866       2,575,220         2,698,031
   Stockholders' equity/total assets                          7.58%           6.56%             6.81%
   Book value per common share                         $      52.23     $     45.36      $      47.28
   Common shares outstanding                             57,172,249      56,770,444        57,068,504
   Diluted common shares outstanding                     57,743,225      57,837,051        58,021,902
   Yield on loan portfolio                                    7.49%           7.47%             7.53%
   Yield on mortgage-backed securities                        7.23%           7.15%             7.23%
   Yield on investments                                       6.20%           6.61%             6.48%
   Yield on earning assets                                    7.40%           7.42%             7.48%
   Cost of deposits                                           4.91%           5.08%             5.04%
   Cost of borrowings                                         5.92%           5.98%             5.99%
   Cost of funds                                              5.20%           5.37%             5.36%
   Yield on earning assets less cost of funds                 2.20%           2.05%             2.12%
   Ratio of nonperforming assets to total assets               .78%           1.05%              .96%
   Ratio of troubled debt restructured to total assets         .06%            .13%              .11%
   World Savings Bank, a Federal Savings Bank:
     Total assets                                      $ 31,854,886     $21,734,516      $ 24,608,701
     Net worth                                            2,095,404       1,489,373         1,605,561
     Net worth/total assets                                   6.58%           6.85%             6.52%
     Regulatory capital ratios:
       Core capital                                           6.57%           6.83%             6.51%
       Risk-based capital                                    12.76%          13.30%            12.80%
   World Savings and Loan Association:
     Total assets                                      $  8,288,587     $17,116,425       $15,446,575
     Net worth                                              804,414       1,196,534         1,121,961
     Net worth/total assets                                   9.71%           6.99%             7.26%
     Regulatory capital ratios:
       Core capital                                           7.91%           6.34%             6.42%
       Risk-based capital                                    16.72%          13.83%            13.64%
</TABLE>



<PAGE>
<TABLE>
<CAPTION>


                        Golden West Financial Corporation
                              Financial Highlights
                                   (Unaudited)
                 (Dollars in thousands except per share figures)

                                                         Three Months Ended           Nine Months Ended
                                                            September 30                September 30
                                                      -------------------------   --------------------------
                                                         1998          1997          1998           1997
                                                      -----------   -----------   ------------   -----------
<S>                                                   <C>           <C>           <C>            <C>       
   New real estate loans originated                   $2,178,244    $1,980,100    $ 5,717,069    $5,529,827
   Average yield on new real estate loans                  7.76%         7.63%          7.76%         7.56%
   Increase in deposits (a)                           $  483,721    $  198,287    $ 1,367,712    $2,135,013
   Earnings before extraordinary item                    108,021        90,007        335,052       260,658
   Net earnings                                          103,220        90,007        322,541       260,658
   Basic earnings per share before extraordinary item       1.87          1.59           5.84          4.57
   Diluted earnings per share before extraordinary item     1.85          1.56           5.78          4.50
   Basic earnings per share                                 1.79          1.59           5.62          4.57
   Diluted earnings per share                               1.77          1.56           5.56          4.50
   Cash dividends on common stock                           .125           .11           .375           .33
   Average common shares outstanding                  57,562,090    56,740,342     57,343,932    56,980,399
   Average diluted common shares outstanding          58,182,842    57,756,318     57,997,076    57,921,035
   Ratios:(b)
     Net earnings/average net worth (ROE)(c)              13.97%        14.23%         15.04%        14.14%
     Net earnings/average assets (ROA)(c)                  1.05%          .92%          1.09%          .90%
     Net interest income/average assets                    2.43%         2.26%          2.44%         2.27%
     General and administrative expense/average assets      .89%          .85%           .87%          .83%
</TABLE>

(a)    Includes a decrease of $208 million of wholesale deposits for the quarter
       ended  September  30,  1997.  Includes a decrease of $525  million and an
       increase of $864 million of wholesale  deposits for the nine months ended
       September 30, 1998 and 1997, respectively.
(b)    Ratios are  annualized by multiplying  the quarterly  computation by four
       and  the  nine-month  computation  by one  and  one-third.  Averages  are
       computed by adding the beginning balance and each monthend balance during
       the  quarter  and  nine-month  period  and  dividing  by  four  and  ten,
       respectively.
(c)    The ratios for the  quarter  and nine  months  ended  September  30, 1998
       include  the  extraordinary  item.  The  ratios  for  the  quarter  ended
       September 30, 1998 excluding the  extraordinary  item are: ROE 14.62% and
       ROA 1.10%. The year-to-date ratios as of September 30, 1998 excluding the
       extraordinary item are: ROE 15.62% and ROA 1.13%.



<PAGE>


         FINANCIAL CONDITION

         The  consolidated  condensed  balance  sheet  shown in the table  below
  presents the Company's assets and liabilities in percentage terms at September
  30, 1998 and 1997, and December 31, 1997. The reader is referred to page 52 of
  the Company's 1997 Annual Report on Form 10-K for similar  information for the
  years 1994 through 1997 and a discussion of the changes in the  composition of
  the Company's assets and liabilities in those years.
<TABLE>
<CAPTION>

                                     TABLE 1

                      Consolidated Condensed Balance Sheet
                               In Percentage Terms

                                                              September 30               December 31
                                                           --------------------
                                                            1998         1997                1997
                                                           -------      -------          -------------
       Assets:
<S>                                                           <C>         <C>                   <C>   
          Cash and investments                                3.6%         3.0%                   2.6%
          Mortgage-backed securities                         21.3         10.0                   10.0
          Loans receivable                                   70.9         83.4                   84.0
          Other assets                                        4.2          3.6                    3.4
                                                           -------      -------                -------
                                                            100.0%       100.0%                 100.0%
                                                           =======      =======                =======
       Liabilities and Stockholders' Equity:
          Deposits                                           64.7%        61.8%                  60.9%
          Federal Home Loan Bank advances                    17.4         18.4                   21.5
          Securities sold under agreements to repurchase      5.9          7.4                    5.9
          Medium-term notes                                   0.0          0.8                    0.3
          Other liabilities                                   2.1          1.9                    1.8
          Subordinated debt                                   2.3          3.1                    2.8
          Stockholders' equity                                7.6          6.6                    6.8
                                                           -------     --------                -------
                                                            100.0%       100.0%                 100.0%
                                                           =======      =======                =======
</TABLE>

         As the above  table  shows,  deposits  represent  the  majority  of the
Company's  liabilities.  The largest asset component is long-term mortgages held
as loans and  mortgage-backed  securities.  The disparity  between the repricing
(maturity or interest rate change) of deposits and  borrowings and the repricing
of mortgage loans and  investments  can have a material  impact on the Company's
results of operations.  The difference between the repricing  characteristics of
assets and liabilities is commonly referred to as "the gap."



<PAGE>


         The  following  gap table shows that,  as of September  30,  1998,  the
Company's  assets reprice sooner than its  liabilities.  If all repricing assets
and liabilities  responded  equally to changes in the interest rate environment,
then the gap analysis would suggest that the Company's  earnings would rise when
interest rates increase and would fall when interest  rates  decrease.  However,
the Company's earnings are also affected by the built-in reporting and repricing
lags inherent in the Eleventh District Cost of Funds Index (COFI),  which is the
index Golden West uses to determine  the rate on the majority of its  adjustable
rate mortgages (ARMs).  The reporting lag occurs because of the time it takes to
gather the data needed to compute the index. As a result,  the COFI in effect in
any month actually  reflects the Eleventh  District's cost of funds at the level
it was two months prior.  The  repricing  lag occurs  because COFI is based on a
portfolio of accounts,  not all of which reprice  immediately.  Therefore,  COFI
does  not  initially   fully  reflect  a  change  in  market   interest   rates.
Consequently,  when the interest rate environment  changes,  the COFI lags cause
assets to initially  reprice more slowly than  liabilities,  enhancing  earnings
when rates are falling and holding down income when rates rise.
<TABLE>
<CAPTION>


                                     TABLE 2

            Repricing of Interest-Earning Assets and Interest-Bearing
                   Liabilities, Repricing Gaps, and Gap Ratio
                            As of September 30, 1998
                              (Dollars in millions)

                                                            Projected Repricing(a)
                                       -----------------------------------------------------------------
                                         0 - 3        4 - 12        1 - 5        Over 5
                                         Months       Months        Years         Years        Total
                                       -----------   ----------   -----------   ----------   -----------
Interest-Earning Assets:
<S>                                    <C>           <C>          <C>           <C>          <C>       
  Investments                          $    1,012    $       6    $       87    $      96    $    1,201
  Mortgage-backed securities                7,728          103           331          234         8,396
  Loans receivable:
    Rate-sensitive                         23,691        1,764           142          -0-        25,597
    Fixed-rate                                129          287           945          835         2,196
  Other(b)                                    927          -0-           -0-          -0-           927
  Impact of interest rate swaps               587          103          (454)        (236)          -0-
                                       -----------   ---------    -----------   -----------  -----------
Total                                  $   34,074    $   2,263    $    1,051    $     929    $   38,317
                                       ===========   ==========   ===========   ==========   ===========
Interest-Bearing Liabilities(c):
  Deposits                             $   14,033    $   9,129    $    2,308    $       7    $   25,477
  FHLB advances                             6,250          200           122          295         6,867
  Other borrowings                          2,304            7           712          199         3,222
  Impact of interest rate swaps               461         (328)         (133)         -0-           -0-
                                       -----------   ----------   -----------   ----------   -----------
Total                                  $   23,048    $   9,008    $    3,009    $     501    $   35,566
                                       ===========   ==========   ===========   ==========   ===========
                                       

Repricing gap                          $   11,026    $  (6,745)   $   (1,958)   $     428
                                       ===========   ==========   ===========   ==========

Cumulative gap                         $   11,026    $   4,281    $    2,323    $   2,751
                                       ===========   ==========   ===========   ==========

Cumulative gap as a percentage of
    total assets                            28.0%        10.9%          5.9%
                                       ===========   ==========   ===========
</TABLE>

(a)  Based on scheduled maturity or scheduled repricing; loans reflect scheduled
     repayments and projected prepayments of principal.
(b)  Includes cash in banks and Federal Home Loan Bank (FHLB) stock.
(c)  Liabilities  with no maturity  date,  such as checking,  passbook and money
     market deposit accounts, are assigned zero months.


<PAGE>


         CASH AND INVESTMENTS

         The Office of Thrift  Supervision (OTS) requires insured  institutions,
such as World Savings Bank, FSB (WFSB),  and World Savings and Loan  Association
(WSL), to maintain a minimum amount of cash and certain  qualifying  investments
for liquidity purposes.  As of December 1, 1997, the current minimum requirement
was changed from a monthly to a quarterly  calculation and is either equal to 4%
of the quarterly average of daily balances of short-term deposits and borrowings
or 4%  of  the  prior  quarter's  ending  balance  of  short-term  deposits  and
borrowings.  For all other months during 1997, the minimum liquidity requirement
was  calculated  monthly and was equal to 5% of the monthly  average of deposits
and short-term  borrowings.  WFSB's regulatory liquidity ratios were 20% and 11%
for the quarters ended  September 30, 1998 and December 31, 1997,  respectively.
WFSB's  regulatory  average liquidity ratio was 8% for the month ended September
30, 1997.  WSL's  regulatory  liquidity ratios were 49% and 12% for the quarters
ended September 30, 1998 and December 31, 1997,  respectively.  WSL's regulatory
average  liquidity  ratio was 10% for the month ended  September  30, 1997.  The
increase in the average  liquidity  ratios for the quarters ended  September 30,
1998 and December 31, 1997,  as compared to the month ended  September 30, 1997,
was due to a change in the revised OTS liquidity  regulation  which expanded the
assets qualifying for the calculation.

         At September 30, 1998 and 1997,  and December 31, 1997, the Company had
securities  available for sale in the amount of $310 million,  $586 million, and
$609 million,  respectively,  including unrealized gains on securities available
for sale of $274 million,  $206  million,  and $245  million,  respectively.  At
September  30,  1998 and  1997,  and  December  31,  1997,  the  Company  had no
securities held for trading in its investment securities portfolio.

         Included in the  Company's  investment  portfolio at September 30, 1998
and 1997, and December 31, 1997, were collateralized mortgage obligations (CMOs)
in the amount of $98 million,  $82 million, and $71 million,  respectively.  The
Company holds CMOs on which both  principal  and interest are received.  It does
not hold any interest-only or principal-only CMOs. At September 30, 1998, all of
these CMOs qualified for inclusion in the regulatory liquidity measurement.

         MORTGAGE-BACKED SECURITIES

         At September 30, 1998 and 1997,  and December 31, 1997, the Company had
mortgage-backed securities (MBS) held to maturity in the amount of $8.3 billion,
$3.7  billion,  and  $3.8  billion,  respectively,  including  Federal  National
Mortgage  Association  (FNMA) MBS subject to full credit recourse to the Company
of $4.2 billion at September  30, 1998,  $3.0 billion at September  30, 1997 and
$3.0 billion at December 31, 1997,  and including  $3.4 billion at September 30,
1998, of securities issued by a Real Estate Mortgage Investment Conduit (REMIC).
At  September  30,  1998 and 1997,  and  December  31,  1997,  the  Company  had
mortgage-backed  securities  available  for sale in the amount of $125  million,
$197 million, and $157 million, respectively,  including unrealized gains on MBS
available for sale of $6 million, $8 million, and $8 million,  respectively.  At
September  30, 1998 and 1997 and December  31, 1997,  the Company had no trading
MBS.

         During the second quarter of 1998, the Company securitized $3.9 billion
of mortgage loans into a Real Estate  Mortgage  Investment  Conduit.  Securities
issued by the REMIC are being used as  collateral  for advances from the FHLB of
Dallas.  The  securities  issued  by the  REMIC  are  classified  as MBS held to
maturity.


<PAGE>


         During the first and second  quarters of 1998, the Company  securitized
$501 million and $1.3 billion, respectively, of adjustable rate mortgages (ARMs)
into FNMA  COFI-indexed  MBS.  During the fourth  quarter of 1997,  the  Company
desecuritized  $856 million of FNMA COFI-indexed MBS in November and securitized
$1.0 billion of ARMs into FNMA COFI-indexed MBS in December. The Company has the
ability and intent to hold these MBS until maturity and, accordingly,  these MBS
are classified as held to maturity.  The FNMA MBS held to maturity are available
to be used as collateral for borrowings and are subject to full credit  recourse
to the Company.

         Repayments  of MBS during the third  quarter  and first nine  months of
1998 were $724 million and $1.2 billion, respectively,  compared to $131 million
and $370 million in the same periods of 1997. MBS repayments  were higher during
the first nine  months of 1998 as  compared to the first nine months of 1997 due
to an increase in total MBS  outstanding  and an increase in  prepayments on the
underlying mortgages.

         LOAN PORTFOLIO

             LOAN VOLUME

         New loan originations for the three and nine months ended September 30,
1998, amounted to $2.2 billion and $5.7 billion, respectively,  compared to $2.0
billion and $5.5 billion for the same periods in 1997.  The 1998 loan volume was
similar  to the 1997 loan  volume  due to a  continued  strong  housing  market,
especially in  California,  and lower  interest  rates causing more borrowers to
refinance. Refinanced loans constituted 42% and 43% of new loan originations for
the three and nine months ended September 30, 1998,  compared to 30% and 32% for
the three and nine months ended September 30, 1997.

         Loans originated for sale amounted to $291 million and $625 million for
the three and nine months ended  September 30, 1998,  respectively,  compared to
$48 million and $146 million for the same periods in 1997. The Company continues
to sell most of its fixed-rate originations.

         The Company has lending  operations in 26 states. The primary source of
mortgage  origination is loans secured by residential  properties in California.
For  the  three  and  nine  months  ended  September  30,  1998,  63%  and  62%,
respectively,  of total loan  originations  were on  residential  properties  in
California  compared  to 53% for the  same  periods  in 1997.  The five  largest
states,  other than  California,  for originations for the three and nine months
ended  September  30,  1998,  were  Florida,  Texas,  Colorado,   Illinois,  and
Washington  with  a  combined  total  of 20%  and  21%  of  total  originations,
respectively.   The   percentage   of  the  total  loan   portfolio   (including
mortgage-backed securities with recourse) that is comprised of residential loans
in  California  was 66% at September  30, 1998  compared to 67% at September 30,
1997, and 66% at December 31, 1997.

     The tables on the following two pages show the Company's  loan portfolio by
state at September 30, 1998 and 1997.


<PAGE>
<TABLE>
<CAPTION>


                                     TABLE 3

                             Loan Portfolio by State
                               September 30, 1998
                             (Dollars in thousands)

                         Residential                          
                         Real Estate                          Commercial                     Loans as
                   -------------------------                     Real           Total          a% of
    State            1 - 4           5+          Land           Estate        Loans (a)      Portfolio
---------------   ------------   -----------   ----------   ---------------   -----------   ------------
<S>               <C>            <C>           <C>          <C>              <C>               <C>   
California        $20,097,429    $3,381,050    $     216    $    42,197      $23,520,892       65.65%
Texas               1,410,729        70,144          524          1,374        1,482,771        4.14
Florida             1,438,608        19,052            4            703        1,458,367        4.07
Illinois            1,186,384       152,000          -0-          1,481        1,339,865        3.74
Colorado            1,022,793       206,054          -0-          5,975        1,234,822        3.45
New Jersey          1,227,348           -0-          -0-          4,633        1,231,981        3.44
Washington            542,281       416,926          -0-            693          959,900        2.68
Arizona               757,130        24,201          -0-            -0-          781,331        2.18
Pennsylvania          640,893         4,179          -0-          2,988          648,060        1.81
Virginia              501,118         8,435          -0-          1,211          510,764        1.43
Connecticut           494,604           -0-          -0-             16          494,620        1.38
Maryland              351,221         2,124          -0-            448          353,793        0.99
Oregon                254,915        14,476          -0-            243          269,634        0.75
Minnesota             222,190         7,841          -0-            -0-          230,031        0.64
Utah                  210,748            49          -0-          1,401          212,198        0.59
Wisconsin             178,817         3,812          -0-            -0-          182,629        0.51
Kansas                169,011         4,959          -0-            161          174,131        0.49
Nevada                172,091           912          -0-            -0-          173,003        0.48
Massachusetts         140,684           -0-          -0-            -0-          140,684        0.39
Missouri               90,051         5,551          -0-            -0-           95,602        0.27
Washington DC          55,075           -0-          -0-            -0-           55,075        0.15
New Mexico             48,585           -0-          -0-            -0-           48,585        0.14
New York               38,021           -0-          -0-            -0-           38,021        0.11
Michigan               36,292           -0-          -0-            -0-           36,292        0.10
Idaho                  32,834           -0-          -0-            -0-           32,834        0.09
Delaware               32,701           -0-          -0-            -0-           32,701        0.09
North Carolina         29,012           -0-          -0-            -0-           29,012        0.08
Georgia                25,472           -0-          -0-          1,366           26,838        0.07
South Dakota           11,968           -0-          -0-            -0-           11,968        0.03
Ohio                    7,621         1,231           68          2,978           11,898        0.03
Other                   7,078           -0-          -0-          2,767            9,845        0.03
                  ------------   -----------   ----------   ------------     ------------   ---------
  Totals          $31,433,704    $4,322,996    $     812    $    70,635       35,828,147      100.00%
                  ============   ===========   ==========   ============                    =========

SFAS 91 deferred loan fees                                                       (20,134)
Loan discount on purchased loans                                                  (3,309)
Undisbursed loan funds                                                            (3,321)
Allowance for loan losses                                                       (242,415)
Loans to facilitate (LTF) interest reserve                                          (514)
Troubled debt restructured (TDR) interest reserve                                 (2,214)
Loans on deposits                                                                 26,654
                                                                             -------------
   Total loan portfolio and loans securitized into FNMA MBS with recourse
   and MBS-REMIC                                                              35,582,894
Loans securitized into FNMA MBS with recourse and MBS-REMIC                   (7,642,479)(b)
                                                                             -------------
     Total loan portfolio                                                    $27,940,415
                                                                             =============
</TABLE>

(a)    The Company has no commercial loans.
(b)    The above schedule includes the September 30, 1998 balances of adjustable
       rate loans that have been  securitized  with full  recourse  into Federal
       National  Mortgage  Association   mortgage-backed  securities  and  REMIC
       mortgage-backed securities.


<PAGE>
<TABLE>
<CAPTION>


                                     TABLE 4

                             Loan Portfolio by State
                               September 30, 1997
                             (Dollars in thousands)

                         Residential                           
                         Real Estate                          Commercial                     Loans as
                   -------------------------                     Real          Total           a% of
    State            1 - 4           5+          Land           Estate        Loans (a)      Portfolio
---------------   ------------   -----------   ----------   ---------------   -----------   ------------
<S>               <C>            <C>           <C>           <C>             <C>               <C>   
California        $20,573,055    $ 3,418,748   $     240     $   51,498      $24,043,541       66.89%
Texas               1,335,730       100,082          563          1,493        1,437,868        4.00
Illinois            1,189,536       175,226          -0-          1,668        1,366,430        3.80
Colorado            1,075,954       231,209          -0-          7,014        1,314,177        3.66
Florida             1,260,196        20,120           30            923        1,281,269        3.56
New Jersey          1,196,308           403          -0-          5,551        1,202,262        3.34
Washington            507,543       398,141          -0-            732          906,416        2.52
Arizona               737,858        40,000          -0-            559          778,417        2.17
Pennsylvania          583,660         4,228          -0-          3,282          591,170        1.64
Virginia              524,069         8,527          -0-          1,361          533,957        1.49
Connecticut           477,893           -0-          -0-             20          477,913        1.33
Maryland              364,166         2,168          -0-            507          366,841        1.02
Oregon                247,806        12,844          -0-            245          260,895        0.73
Utah                  194,538            56          -0-          1,630          196,224        0.55
Nevada                190,787         1,035          -0-            -0-          191,822        0.53
Minnesota             182,700         8,146          -0-            -0-          190,846        0.53
Kansas                162,572         4,797          -0-            178          167,547        0.47
Wisconsin             139,254         3,866          -0-            -0-          143,120        0.40
Massachusetts         118,187           -0-          -0-             20          118,207        0.33
Missouri               80,941         6,153          -0-            -0-           87,094        0.24
Washington DC          49,706           -0-          -0-            -0-           49,706        0.14
New Mexico             47,573           -0-          -0-            -0-           47,573        0.13
New York               44,610           -0-          -0-            -0-           44,610        0.12
Georgia                31,578           -0-          -0-          1,443           33,021        0.09
Delaware               30,631           -0-          -0-            -0-           30,631        0.09
Idaho                  30,227           -0-          -0-            -0-           30,227        0.08
Ohio                   13,256         1,788          181          3,477           18,702        0.05
South Dakota            9,452           -0-          -0-            -0-            9,452        0.03
North Carolina          7,486           -0-          -0-            464            7,950        0.02
Other                  10,315             4          -0-          4,419           14,738        0.05
                  ------------   -----------   ----------   ------------     ------------   ---------
  Totals          $31,417,587    $4,437,541    $   1,014    $    86,484       35,942,626      100.00%                  
                  ============   ===========   ==========   ============                    =========

SFAS 91 deferred loan fees                                                       (42,573)
Loan discount on purchased loans                                                  (3,654)
Undisbursed loan funds                                                            (3,511)
Allowance for loan losses                                                       (222,020)
Loans to facilitate interest reserve                                                (587)
Troubled debt restructured interest reserve                                       (3,965)
Loans on deposits                                                                 31,660
                                                                             ------------
   Total loan portfolio and loans securitized into FNMA MBS with recourse     35,697,976
Loans securitized into FNMA MBS with recourse                                 (2,974,764)(b)
                                                                             ------------
     Total loan portfolio                                                    $32,723,212
                                                                             ============
</TABLE>

(a)    The Company has no commercial loans.
(b)    The above schedule includes the September 30, 1997 balances of adjustable
       rate loans that have been  securitized  with full  recourse  into Federal
       National Mortgage Association mortgage-backed securities.



<PAGE>


         The Company  continues to emphasize ARM loans with interest  rates that
change  periodically  in accordance  with  movements in specified  indexes.  The
portion of the mortgage  portfolio  (including  MBS) composed of  rate-sensitive
loans was 92% at September  30, 1998  compared to 91% at September  30, 1997 and
91% at December 31, 1997. The Company's ARM  originations  for the third quarter
and first nine  months of 1998  constituted  84% and 86%,  respectively,  of new
mortgage loans made in 1998 compared to 96% for the third quarter and first nine
months of 1997.

         The weighted  average  maximum  lifetime cap rate on the  Company's ARM
loan portfolio  (including  ARMs swapped into MBS with recourse) was 12.64%,  or
5.27% above the actual  weighted  average  rate at September  30,  1998,  versus
12.76%, or 5.43% above the weighted average rate at September 30, 1997.

         Approximately  $5.0 billion of the Company's ARM loans  (including  MBS
with recourse) have terms that state that the interest rate may not fall below a
lifetime floor set at the time of origination or assumption. As of September 30,
1998,  $492  million of ARM loans had reached  their rate  floors.  The weighted
average  floor  rate on the  loans  that had  reached  their  floor was 7.74% at
September 30, 1998  compared to 7.76% at September 30, 1997.  Without the floor,
the average yield on these loans would have been 7.17% at September 30, 1998 and
7.14% at September 30, 1997.

         Loan repayments  consist of monthly loan amortization and loan payoffs.
For the three and nine months ended  September 30, 1998,  loan  repayments  were
$1.5 billion and $4.6 billion,  respectively,  compared to $995 million and $2.6
billion in the same periods of 1997. The increase in  prepayments  for the first
nine  months of 1998 as  compared to the first nine months of 1997 was due to an
increase in refinance and home sale activity.

         MORTGAGE SERVICING RIGHTS

         The Company  accounts for mortgage  servicing rights in accordance with
SFAS 125.  For the third  quarter  and first nine  months of 1998,  the  Company
recognized gains of $5.8 million and $12.4 million, respectively, on the sale of
loans due to the capitalization of servicing rights compared to $1.1 million and
$3.2 million for the same periods in 1997.  After  amortization,  the balance at
September  30,  1998 and 1997 of the  capitalized  servicing  rights  was  $20.2
million  and  $10.3  million,  respectively.  The book  value of  Golden  West's
servicing  rights did not exceed the fair value at  September  30,  1998 or 1997
and,  therefore,  no write-down of the servicing  rights to their fair value was
necessary.


<PAGE>


         ASSET QUALITY

         One measure of the soundness of the Company's portfolio is its ratio of
nonperforming  assets  (NPAs) to total  assets.  Nonperforming  assets  includes
non-accrual  loans  (loans,  including  loans swapped into MBS with recourse and
loan  securitized  into  MBS-REMIC,  that are 90 days or more past due) and real
estate acquired through foreclosure.  No interest is recognized on loans 90 days
or more past due. The Company's troubled debt restructured  (TDRs) is made up of
loans on which  delinquent  payments have been capitalized or on which temporary
interest  rate  reductions  have been made,  primarily  to  customers  adversely
impacted by economic conditions.

         The following table shows the components of the Company's nonperforming
assets and troubled debt restructured and the various ratios to total assets.
<TABLE>
<CAPTION>

                                     TABLE 5

               Nonperforming Assets and Troubled Debt Restructured
                             (Dollars in thousands)

                                                         September 30            
                                                   --------------------------    December 31
                                                      1998          1997            1997
                                                   -----------   ------------   --------------
<S>                                                <C>           <C>             <C>        
Non-accrual loans                                  $  264,198    $   344,655     $   317,550
Real estate acquired through foreclosure               44,537         66,652          61,517
Real estate in judgment                                   -0-            -0-              67
                                                   -----------   ------------    ------------
Total nonperforming assets                         $  308,735    $   411,307     $   379,134
                                                   ===========   ============    ============

TDRs                                               $   24,118    $    51,785     $    43,795
                                                   ===========   ============    ============

Ratio of NPAs to total assets                            .78%          1.05%            .96%
                                                   ===========   ============    ============

Ratio of TDRs to total assets                            .06%           .13%            .11%
                                                   ===========   ============    ============

Ratio of NPAs and TDRs to total assets                   .84%          1.18%           1.07%
                                                   ===========   ============    ============
</TABLE>

     The decrease in NPAs during 1998 reflects the strong California economy and
housing market.  The Company  continues to closely monitor all delinquencies and
takes  appropriate  steps to protect its  interests.  For the third  quarter and
first nine months of 1998, the Company's  reserve for interest foregone on loans
90 days or more past due increased  $738 thousand and $6 million,  respectively,
as compared to  increases  of $3 million and $12 million for the same periods in
1997.  Interest foregone on TDRs amounted to $203 thousand and $729 thousand for
the three and nine months ended  September  30, 1998,  compared to $381 thousand
and $1.5 million for the three and nine months ended September 30, 1997.

         The tables on the following two pages show the Company's  nonperforming
assets by state as of September 30, 1998 and 1997.


<PAGE>
<TABLE>
<CAPTION>



                                     TABLE 6

                          Nonperforming Assets by State
                               September 30, 1998
                             (Dollars in thousands)


                          Non-Accrual Loans (a)                  Real Estate Owned
                    ----------------------------------    --------------------------------
                        Residential       Commercial                          Commercial                 NPAs as
                        Real Estate          Real            Residential         Real        Total        a% of
     State            1 -4         5+       Estate        1 - 4        5+       Estate      NPAs(b)       Loans
----------------    ---------   ---------   --------      --------  ---------   --------    ---------    ---------
<S>                 <C>         <C>         <C>            <C>      <C>         <C>         <C>           <C>
California          $178,080    $  5,835    $   462        $39,236  $  1,027    $   -0-     $224,640      0.96%
Texas                  7,434         -0-        -0-            755       -0-        -0-        8,189      0.55
Florida               13,506         -0-         80            926       -0-        -0-       14,512      1.00
Illinois              10,487         220        -0-          1,242       -0-        -0-       11,949      0.89
Colorado               1,141         -0-          3            -0-       -0-        -0-        1,144      0.09
New Jersey            14,805         -0-         57            875       -0-        -0-       15,737      1.28
Washington             1,620         -0-        -0-            -0-       -0-        -0-        1,620      0.17
Arizona                2,618         -0-        -0-            112       -0-        -0-        2,730      0.35
Pennsylvania           7,396         -0-        -0-            286       -0-        -0-        7,682      1.19
Virginia               1,805         -0-        -0-            239       -0-        -0-        2,044      0.40
Connecticut            3,029         -0-        -0-             80       -0-        -0-        3,109      0.63
Maryland               1,179         -0-        -0-             82       -0-        -0-        1,261      0.36
Oregon                   844         -0-        -0-            -0-       -0-        -0-          844      0.31
Minnesota              1,463         -0-        -0-            104       -0-        -0-        1,567      0.68
Utah                   2,208         -0-        -0-            -0-       -0-        -0-        2,208      1.04
Wisconsin                369         -0-        -0-            -0-       -0-        -0-          369      0.20
Kansas                   569          40        -0-            -0-       -0-        -0-          609      0.35
Nevada                 2,080         -0-        -0-            328       -0-        -0-        2,408      1.39
Massachusetts            -0-         -0-        -0-            -0-       -0-        -0-          -0-      0.00
Missouri                 225         -0-        -0-             27       -0-        -0-          252      0.26
Washington DC            139         -0-        -0-            -0-       -0-        -0-          139      0.25
New Mexico               393         -0-        -0-            -0-       -0-        -0-          393      0.81
New York               3,188         -0-        -0-            -0-       -0-         11        3,199      8.41
Michigan                  12         -0-        -0-            -0-       -0-        -0-           12      0.03
Idaho                    235         -0-        -0-            -0-       -0-        -0-          235      0.72
Delaware                 -0-         -0-        -0-            -0-       -0-        -0-          -0-      0.00
North Carolina           -0-         -0-        -0-            -0-       -0-        -0-          -0-      0.00
Georgia                  510         -0-        -0-            148       -0-        -0-          658      2.45
South Dakota             135         -0-        -0-            -0-       -0-        -0-          135      1.13
Ohio                       2         -0-        -0-            -0-       -0-        -0-            2      0.02
Other                  2,029         -0-        -0-            -0-       -0-        -0-        2,029     20.61
                    ---------   ---------   --------      --------   --------   --------    ---------    ------
  Totals            $257,501    $  6,095    $   602        $44,440  $  1,027    $    11      309,676      0.86%
                    =========   =========   ========      ========   ========   ========

REO general valuation allowance                                                                 (941)     0.00
                                                                                            ---------    ------
Total nonperforming assets                                                                  $308,735      0.86%
                                                                                            =========    ======
</TABLE>


(a)  Non-accruals loans are 90 days or more past due and have no unpaid interest
     accrued.

(b)  During the past four years,  the Company has  securitized  adjustable  rate
     loans into FNMA  mortgage-backed  securities with full credit recourse.  In
     addition,  during  the  second  quarter of 1998,  the  Company  securitized
     mortgage  loans into REMIC MBS.  The  September  30,  1998  balances of the
     related nonperforming assets are reflected in the amounts above.



<PAGE>
<TABLE>
<CAPTION>


                                     TABLE 7

                          Nonperforming Assets by State
                               September 30, 1997
                             (Dollars in thousands)


                          Non-Accrual Loans (a)                  Real Estate Owned
                    ----------------------------------    --------------------------------
                        Residential       Commercial                          Commercial                 NPAs as
                        Real Estate          Real            Residential         Real        Total        a% of
     State            1 -4         5+       Estate        1 - 4        5+       Estate      NPAs(b)       Loans
----------------    ---------   ---------   --------      -------   ---------   --------    ---------    ---------
<S>                 <C>          <C>         <C>         <C>          <C>       <C>         <C>          <C>  
California          $252,838     $12,737     $1,071      $55,089      $6,112    $ 2,279     $330,126     1.37%
Texas                  7,986         -0-        -0-        1,059         -0-        -0-        9,045     0.63
Illinois              10,400         223        -0-          384         -0-        -0-       11,007     0.81
Colorado               1,890         -0-      3,086          -0-         -0-        -0-        4,976     0.38
Florida               10,265         -0-        257          546         -0-        -0-       11,068     0.86
New Jersey            16,076         -0-        823          494         -0-        -0-       17,393     1.45
Washington             2,014         -0-        -0-          -0-         -0-        -0-        2,014     0.22
Arizona                1,989         -0-        -0-           52         -0-        -0-        2,041     0.26
Pennsylvania           5,289         -0-        -0-          295         -0-        -0-        5,584     0.94
Virginia               1,469         -0-        -0-          530         -0-        -0-        1,999     0.37
Connecticut            2,430         -0-        -0-          354         -0-        -0-        2,784     0.58
Maryland               2,545         -0-        -0-          106         -0-        -0-        2,651     0.72
Oregon                 1,008         -0-        -0-          -0-         -0-        -0-        1,008     0.39
Utah                     982         -0-        -0-          -0-         -0-        -0-          982     0.50
Nevada                 1,964         -0-        -0-          133         -0-        -0-        2,097     1.09
Minnesota                492         -0-        -0-          -0-         -0-        -0-          492     0.26
Kansas                   293          40        -0-          -0-         -0-        -0-          333     0.20
Wisconsin                612         -0-        -0-          -0-         -0-        -0-          612     0.43
Massachusetts             96         -0-         20          -0-         -0-        -0-          116     0.10
Missouri                 488          40        -0-          -0-         -0-        -0-          528     0.61
Washington, DC            43         -0-        -0-          -0-         -0-        -0-           43     0.09
New Mexico               109         -0-        -0-          -0-         -0-        -0-          109     0.23
New York               3,049         -0-        -0-          420         -0-        243        3,712     8.32
Georgia                1,533         -0-        -0-          181         -0-        -0-        1,714     5.19
Delaware                 198         -0-        -0-          -0-         -0-        -0-          198     0.65
Idaho                    235         -0-        -0-          -0-         -0-        -0-          235     0.78
Ohio                       6         -0-          3          -0-         -0-        -0-            9     0.05
South Dakota             -0-         -0-        -0-          -0-         -0-        -0-          -0-     0.00
North Carolina           -0-         -0-        -0-          -0-         -0-        -0-          -0-     0.00
Other                     56         -0-        -0-          -0-         -0-        -0-           56     0.38
                    ---------   ---------   --------      -------   ---------   --------    ---------    -----
  Totals            $326,355    $ 13,040    $ 5,260       $59,643   $  6,112    $ 2,522      412,932     1.15%
                    =========   =========   ========      =======   =========   ========

REO general valuation allowance                                                               (1,625)   (0.01)
                                                                                            ---------    -----
Total nonperforming assets                                                                  $411,307     1.14%
                                                                                            =========    =====
</TABLE>


(a)  Non-accruals loans are 90 days or more past due and have no unpaid interest
     accrued.
(b)  During  1995,  1996,  and 1997,  the Company  securitized  adjustable  rate
     mortgages into FNMA  mortgage-backed  securities with full credit recourse.
     The  September 30, 1997  balances of the related  nonperforming  assets are
     reflected in the amounts above.



<PAGE>


         The Company provides specific valuation  allowances for losses on loans
  when impaired,  including  loans  securitized  into MBS with  recourse,  loans
  securitized into MBS-REMIC, loans sold with recourse, and on real estate owned
  when any significant and permanent decline in value is identified. The Company
  also  utilizes  a  methodology,  based on trends in the basic  portfolio,  for
  monitoring  and  estimating  loan  losses  that is  based  on both  historical
  experience  in the loan  portfolio  and factors  reflecting  current  economic
  conditions.  This approach uses a database that identifies losses on loans and
  foreclosed real estate from past years to the present,  broken down by year of
  origination,  type of loan, and geographical area.  Management is then able to
  estimate a range of general loss  allowances to cover losses in the portfolio.
  In addition,  periodic  reviews are made of major loans and real estate owned,
  and  major  lending  areas  are  regularly  reviewed  to  determine  potential
  problems.  Where indicated,  valuation allowances are established or adjusted.
  In estimating  possible  losses,  consideration is given to the estimated sale
  price,  cost of refurbishing,  payment of delinquent  taxes, cost of disposal,
  and  cost of  holding  the  property.  Additions  to and  reductions  from the
  allowances are reflected in current earnings.

         The table below shows the changes in the  allowance for loan losses for
  the three and nine months ended September 30, 1998 and 1997.
<TABLE>
<CAPTION>

                                     TABLE 8

                      Changes in Allowance for Loan Losses
                             (Dollars in thousands)

                                                                    Three Months Ended          Nine Months Ended
                                                                       September 30                September 30
                                                                 ------------------------    -----------------------
                                                                    1998         1997          1998         1997
                                                                 -----------   ----------    ----------   ----------
<S>                                                               <C>          <C>           <C>          <C>      
  Beginning allowance for loan losses                             $ 239,537    $ 216,651     $ 233,280    $ 195,702
  Provision charged to expense                                        3,130        9,980         8,777       43,786
  Less loans charged off, net                                          (370)      (4,810)           46      (18,115)
  Add recoveries                                                        118          199           312          647
                                                                 -----------   ----------    ----------   ----------
  Ending allowance for loan losses                                $ 242,415    $ 222,020     $ 242,415    $ 222,020
                                                                 ===========   ==========    ==========   ==========

  Ratio of chargeoffs net of recoveries to average loans
    outstanding (including MBS with recourse and MBS-REMIC)            .00%         .05%          .00%         .07%
                                                                 ===========   ==========    ==========   ==========
  Ratio of allowance for loan losses to nonperforming assets                                     78.5%        54.0%
                                                                                             ==========   ==========
  Ratio of allowance for loan losses to total loans
    (including MBS with recourse and MBS-REMIC)                                                   .68%         .62%
                                                                                             ==========   ==========
</TABLE>
         DEPOSITS

         Retail  deposits  increased  during  the third  quarter of 1998 by $484
million, including interest credited of $270 million, compared to an increase of
$406 million,  including interest credited of $244 million, in the third quarter
of 1997. Retail deposits  increased during the first nine months of 1998 by $1.9
billion, including interest credited of $778 million, compared to an increase of
$1.3 billion,  including  interest  credited of $708 million,  in the first nine
months of 1997.  Retail deposits  increased during the first nine months of 1998
and 1997  primarily  due to ongoing  marketing  efforts  and  competitive  rates
offered by the Company on its insured accounts.  In addition,  the Company began
actively  promoting market rate  transaction  accounts during the second half of
1997, which continued during the first nine months of 1998.


<PAGE>


         Beginning  in  January  1997,  the  Company  began  a  program  to  use
government   securities  dealers  to  sell  certificates  of  deposit  (CDs)  to
institutional  investors.  There were no outstanding  wholesale CDs at September
30, 1998 as compared to $864 million at September 30, 1997.

         The table below shows the  Company's  deposits by interest  rate and by
remaining maturity at September 30, 1998 and 1997.
<TABLE>
<CAPTION>

                                     TABLE 9

                                    Deposits
                              (Dollars in millions)

                                                                                  September 30
                                                               ---------------------------------------------------
                                                                       1998                         1997
                                                               ----------------------      -----------------------
                                                                 Rate*        Amount         Rate*        Amount
                                                               --------     ----------     ---------    ----------
       Deposits by interest rate:
<S>                                                                <C>      <C>                <C>      <C>      
       Interest-bearing checking accounts                          2.24%    $      87          1.28%    $     286
       Passbook accounts                                           2.73           666          2.15           530
       Money market deposit accounts                               4.37         7,168          3.73         2,883
       Term certificate accounts with original maturities of:
           4 weeks to 1 year                                       4.95         6,741          5.28        11,220
           1 to 2 years                                            5.36         7,331          5.44         4,455
           2 to 3 years                                            5.43         1,376          5.44         1,382
           3 to 4 years                                            5.32           371          5.77           453
           4 years and over                                        5.80         1,178          5.79         1,544
       Retail jumbo CDs                                            5.20           558          5.58           617
       Wholesale CDs                                               0.00           -0-          5.69           864
       All other                                                   7.60             1          7.65             1
                                                                           -----------                 -----------
                                                                           $   25,477                  $   24,235
                                                                           ===========                 ===========

       Deposits by remaining maturity:
       No contractual maturity                                             $    7,921                  $    3,699
       Maturity within one year:
          4th quarter                                                           6,112                       9,570
          1st quarter                                                           4,449                       4,236
          2nd quarter                                                           2,093                       1,914
          3rd quarter                                                           2,588                       2,175
                                                                           -----------                 -----------
                                                                               15,242                      17,895

       1 to 2 years                                                             1,783                       1,986
       2 to 3 years                                                               283                         389
       3 to 4 years                                                               132                         121
       4 years and over                                                           116                         145
                                                                           -----------                 -----------
                                                                           $   25,477                  $   24,235
                                                                           ===========                 ===========
</TABLE>

* Weighted average interest rate, including the impact of interest rate swaps.

         At September 30, the weighted average cost of deposits was 4.91% (1998)
and 5.08% (1997).



<PAGE>


         ADVANCES FROM FEDERAL HOME LOAN BANKS

         The Company uses  borrowings  from FHLBs,  also known as "advances," to
supplement  cash  flow and to  provide  funds for loan  origination  activities.
Advances are secured by pledges of certain loans,  MBS-REMIC,  and capital stock
of FHLBs. FHLB advances amounted to $6.9 billion at September 30, 1998, compared
to $7.2 billion and $8.5 billion at September  30, 1997,  and December 31, 1997,
respectively. During the first quarter of 1998, the Company notified the FHLB of
San Francisco that it would pay off, before maturity,  $2.9 billion of high-cost
advances  and, as a result,  incurred a $13 million  pre-tax  charge  during the
first  quarter of 1998 for the  penalties  associated  with  these  prepayments.
During July 1998,  the Company  notified the FHLB of San Francisco that it would
pay off an additional $1.5 billion of high-cost advances before maturity and, as
a result,  incurred an  additional  $8 million  pre-tax  charge during the third
quarter  of 1998  for the  penalties  associated  with  these  prepayments.  See
Extraordinary Item discussion on page 30.

         SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

         The Company borrows funds through  transactions in which securities are
sold under agreements to repurchase  (Reverse Repos).  Reverse Repos are entered
into with selected major  government  securities  dealers,  large banks, and the
Federal Home Loan Bank of San Francisco,  typically using MBS from the Company's
portfolio.  Reverse Repos with dealers,  banks and the Federal Home Loan Bank of
San  Francisco  amounted to $2.3  billion,  $2.9  billion,  and $2.3  billion at
September 30, 1998 and 1997, and December 31, 1997, respectively.

         The Company uses  accounting and reporting  standards for transfers and
servicing of financial assets and  extinguishments  of liabilities in accordance
with SFAS 125 and SFAS 127. The Company  adopted SFAS 127 on January 1, 1998 and
the adoption of SFAS 127 had no effect on the Company's  financial condition and
results of operations.

         OTHER BORROWINGS

         At September 30, 1998, Golden West, at the holding company level, had a
total of $812  million  of  subordinated  debt  issued  and  outstanding.  As of
September 30, 1998, the Company's subordinated debt securities were rated A3 and
A- by Moody's  Investors  Service  (Moody's)  and Standard & Poor's  Corporation
(S&P),  respectively.  At  September  30,  1998,  Golden  West  had  on  file  a
registration  statement with the Securities and Exchange Commission for the sale
of up to $300 million of subordinated notes.

         WSL also has on file a registration statement with the OTS for the sale
of up to $300 million of subordinated notes and, at September 30, 1998, the full
amount was available for issuance.  As of September 30, 1998, WSL had a total of
$100 million of subordinated  notes issued and outstanding,  which were rated A2
and A by Moody's and S&P,  respectively.  The subordinated notes are included in
WSL's risk-based regulatory capital as Supplementary Capital.



<PAGE>


         WSL  currently  has on file a shelf  registration  with the OTS for the
issuance  of $2.0  billion  of  unsecured  medium-term  notes,  all of which was
available  for issuance at  September  30, 1998.  WSL had no  medium-term  notes
outstanding  under prior  registrations at September 30, 1998,  compared to $310
million at  September  30, 1997,  and $110  million at December 31, 1997.  As of
September 30, 1998, WSL's medium-term  notes had a preliminary  rating of A1 and
A+ by Moody's and S&P, respectively.

         During  November 1996,  WFSB received  permission from the OTS to issue
non-convertible medium-term notes to institutional investors under rules similar
to Office of the  Comptroller  of the  Currency  rules  applicable  to similarly
situated national banks. As of September 30, 1998, WFSB had not issued any notes
under this authority.

         STOCKHOLDERS' EQUITY

         The Company's stockholders' equity increased by $288 million during the
first nine months of 1998. The increase in stockholders'  equity was a result of
net  earnings  for the first nine months of 1998 and a $16  million  increase in
market  values  of  securities  available  for sale  since  December  31,  1997,
partially  offset by the $44 million cost of the  purchase of Company  stock and
the payment of $22 million in quarterly dividends to stockholders. The Company's
stockholders'  equity  increased by $225 million during the first nine months of
1997. The increase in  stockholders'  equity in 1997 was primarily the result of
net  earnings  for the first nine months of 1997 and a $27  million  increase in
market values of securities  available for sale since  December 31, 1996,  which
were  partially  offset by the $48 million cost of the purchase of Company stock
and  the  payment  of  $19  million  in  quarterly  dividends  to  stockholders.
Unrealized  gains,  net of  taxes,  on  securities  and MBS  available  for sale
included in  stockholders'  equity at September 30, 1998 and 1997,  and December
31, 1997, were $166 million, $127 million, and $150 million, respectively.

         During  periods of low asset growth,  the Company's  capital ratios may
build to levels  well in  excess of the  amounts  necessary  to meet  regulatory
capital  requirements.  Golden  West's Board of Directors  periodically  reviews
alternative uses of excess capital, including faster growth and acquisitions. At
times,  the Board has determined that the purchase of the Company's common stock
is a wise use of excess capital.

         Since 1993,  through  three  separate  actions,  Golden West's Board of
Directors  has  authorized  the  purchase by the  Company of up to 12.2  million
shares of Golden West's common stock. As of September 30, 1998, 9 million shares
had been  purchased and retired at a cost of $425 million since October 1993, of
which 553,300  shares were purchased and retired at a cost of $44 million during
the first nine  months of 1998.  Dividends  from  subsidiaries  are  expected to
continue to be the major source of funding for the stock repurchase program. The
purchase of Golden West stock is not  intended to have a material  impact on the
normal liquidity of the Company.

         WSL paid a $100  million  dividend  to Golden  West in March,  June and
August and $200 million in September  1998,  for a total of $500 million for the
nine months ended September 30, 1998. Also, Golden West purchased at market from
WSL,  and  subsequently   contributed  as  capital  to  WFSB,  $100  million  of
substandard loans during each of the three quarters of 1998, for a total of $300
million for the nine months ended September 30, 1998.



<PAGE>


         The  Company  has on  file a  shelf  registration  statement  with  the
Securities  and  Exchange  Commission  to issue up to two million  shares of its
preferred  stock.  The preferred stock may be issued in one or more series,  may
have varying  provisions and designations,  and may be represented by depository
shares.  The preferred stock is not convertible  into common stock. No preferred
stock has yet been issued under the registration.  The Company's preferred stock
has been preliminarily rated a2 by Moody's.

         REGULATORY CAPITAL

         The OTS requires federally insured institutions,  such as WFSB and WSL,
to meet certain minimum capital requirements. Effective March 31, 1998, FIRREA's
old 3% minimum requirement for Core (or Leverage) Capital has been superseded by
a 4%  minimum  requirement  under  the  Federal  Deposit  Insurance  Corporation
Improvement Act of 1991 (FDICIA).

         The following table shows WFSB's regulatory capital ratios and compares
them to the OTS minimum requirements at September 30, 1998 and 1997.
<TABLE>
<CAPTION>

                                    TABLE 10

                   World Savings Bank, a Federal Savings Bank
                            Regulatory Capital Ratios
                             (Dollars in thousands)

                            September 30, 1998                               September 30, 1997
              -----------------------------------------------   ----------------------------------------------
                     ACTUAL                  REQUIRED                  ACTUAL                  REQUIRED
              ----------------------   ----------------------   ----------------------   ----------------------
               Capital      Ratio       Capital      Ratio       Capital      Ratio       Capital      Ratio
              -----------  ---------   -----------  ---------   ----------   ---------   ----------   --------
<S>           <C>           <C>        <C>           <C>       <C>            <C>       <C>            <C>  
   Tangible   $2,094,134    6.57%      $  478,353    1.50%     $1,487,088     6.83%     $  326,468     1.50%
   Core        2,094,134    6.57        1,275,607    4.00       1,487,088     6.83         652,936     3.00
   Risk-based  2,197,128   12.76        1,377,966    8.00       1,562,867    13.30         940,300     8.00

</TABLE>


         The following table shows WSL's current  regulatory  capital ratios and
compares them to the OTS minimum requirements at September 30, 1998 and 1997.
<TABLE>
<CAPTION>

                                    TABLE 11

                       World Savings and Loan Association
                            Regulatory Capital Ratios
                             (Dollars in thousands)

                            September 30, 1998                                 September 30, 1997
              ------------------------------------------------   ------------------------------------------------
                      ACTUAL                   REQUIRED                 ACTUAL                   REQUIRED
              -----------------------   -----------------------  ----------------------   -----------------------
               Capital       Ratio         Capital    Ratio        Capital      Ratio       Capital      Ratio
              -----------   ---------   -----------  ---------   -----------   --------   -----------   --------
<S>           <C>            <C>        <C>            <C>       <C>            <C>       <C>            <C>  
   Tangible   $  638,887     7.91%      $  121,168     1.50%     $1,077,399     6.34%     $  254,738     1.50%
   Core          638,887     7.91          323,115     4.00       1,077,399     6.34         509,477     3.00
   Risk-based    797,702    16.72          381,666     8.00       1,390,093    13.83         804,375     8.00
</TABLE>

         In addition,  institutions  whose  exposure to interest  rate risk,  as
determined  by the OTS,  is deemed to be above  normal may be  required  to hold
additional  risk-based capital. The OTS has determined that neither WFSB nor WSL
has above-normal exposure to interest rate risk.



<PAGE>


         The  OTS  has   adopted   rules   based   upon  five   capital   tiers:
well-capitalized,   adequately  capitalized,   undercapitalized,   significantly
undercapitalized,  and critically undercapitalized. The determination of whether
an  association  falls into a certain  classification  depends  primarily on its
capital ratios. As of September 30, 1998, the most recent  notification from the
OTS  categorized  both  WFSB and WSL as  "well-capitalized"  under  the  current
requirements.  There are no conditions  or events that have occurred  since that
notification   that  the   Company   believes   would  have  an  impact  on  the
categorization of either WFSB or WSL.

         The table  below  shows that  WFSB's  regulatory  capital  exceeds  the
requirements of the well-capitalized classification at September 30, 1998.
<TABLE>
<CAPTION>

                                    TABLE 12

                   World Savings Bank, a Federal Savings Bank
         Regulatory Capital Compared to Well-Capitalized Classification
                             (Dollars in thousands)

                                                  ACTUAL                       WELL-CAPITALIZED
                                          ----------------------- --       --------------------------
                                           Capital        Ratio             Capital         Ratio
                                          -----------    ----------       -----------    -----------
<S>                                      <C>                <C>           <C>                <C>  
        Leverage                         $ 2,094,134        6.57%         $ 1,594,509        5.00%
        Tier 1 risk-based                  2,094,134       12.16            1,033,474        6.00
        Total risk-based                   2,197,128       12.76            1,722,457       10.00
</TABLE>
<TABLE>
<CAPTION>

         The table  below  shows  that  WSL's  regulatory  capital  exceeds  the
requirements of the well-capitalized classification at September 30, 1998.

                                    TABLE 13

                       World Savings and Loan Association
         Regulatory Capital Compared to Well-Capitalized Classification
                             (Dollars in thousands)

                                                    ACTUAL                     WELL-CAPITALIZED
                                          ----------------------- --       --------------------------
                                            Capital        Ratio             Capital         Ratio
                                          -----------    ----------        -----------    -----------
<S>                                        <C>              <C>            <C>               <C>  
        Leverage                           $ 638,887        7.91%          $  403,891        5.00%
        Tier 1 risk-based                    638,887       13.39              286,250        6.00
        Total risk-based                     797,702       16.72              477,083       10.00
</TABLE>

RESULTS OF OPERATIONS

         NET EARNINGS

         Net  earnings  before an  extraordinary  item (see  extraordinary  item
discussion  on page 30) for the nine months ended  September  30, 1998 were $335
million  compared  to net  earnings of $261  million  for the nine months  ended
September  30, 1997.  Net  earnings  after the  extraordinary  item for the nine
months ended September 30, 1998 were $323 million  compared,  to net earnings of
$261 million for the nine months ended  September 30, 1997. Net earnings for the
first nine  months of 1998  included a gain of $13  million  before tax from the
redemption of preferred stock which was called by the issuer. In addition to the
stock gain,  net  earnings  increased  in 1998 as  compared  1997 as a result of
increased  net interest  income and a decrease in the provision for loan losses.
These increases to net earnings were partially  offset by an increase in general
and administrative expense.


<PAGE>


         EARNINGS PER SHARE

         Golden West  calculates  Basic Earnings Per Share (EPS) and Diluted EPS
in  accordance  with SFAS 128.  Basic EPS is calculated by dividing net earnings
for the  period  by the  weighted-average  common  shares  outstanding  for that
period. Diluted EPS takes into account the effect of dilutive instruments,  such
as stock options, but uses the average share price for the period in determining
the number of  incremental  shares that are to be added to the weighted  average
number of shares  outstanding.  The Company's Basic EPS before the extraordinary
item and the  preferred  stock gain of $.13 per share for the  quarter  and nine
months ended September 30, 1998 were $1.87 and $5.71, respectively,  as compared
to $1.59 and $4.57 for the quarter and nine months  ended  September  30,  1997,
respectively. Basic EPS after the extraordinary item and including the preferred
stock gain for the quarter and nine months ended  September  30, 1998 were $1.79
and $5.62,  respectively,  as compared  to $1.59 and $4.57,  for the quarter and
nine months ended September 30, 1997, respectively. The Company reported Diluted
EPS (before the  extraordinary  item and the preferred  stock gain) of $1.85 and
$5.65 for the quarter and nine months  ended  September  30,  1998,  compared to
$1.56 and $4.50 for the three and nine months ended September 30, 1997.  Diluted
EPS after the  extraordinary  item and the preferred  stock gain for the quarter
and nine months ended September 30, 1998 were $1.77 and $5.56, respectively,  as
compared to $1.56 and $4.50 for the quarter and nine months ended  September 30,
1997, respectively.

         SPREADS

         An  important  determinant  of the  Company's  earnings  is its primary
spread -- the  difference  between  its yield on earning  assets and its cost of
funds. The table below shows the components of the Company's spread at September
30, 1998 and 1997, and December 31, 1997.
<TABLE>
<CAPTION>

                                    TABLE 14

                            Yield on Earning Assets,
                        Cost of Funds, and Primary Spread

                                                            September 30                    
                                                     ---------------------------          December 31
                                                         1998          1997                   1997
                                                     -----------   -----------           -------------
<S>                                                      <C>           <C>                     <C>  
        Yield on loan portfolio                          7.49%         7.47%                   7.53%
        Yield on MBS                                     7.23          7.15                    7.23
        Yield on investments                             6.20          6.61                    6.48
                                                    ----------      --------              ----------
        Yield on earning assets                          7.40          7.42                    7.48
                                                    ----------      --------              ----------
        Cost of deposits                                 4.91          5.08                    5.04
        Cost of borrowings                               5.92          5.98                    5.99
                                                    ----------      --------              ----------
        Cost of funds                                    5.20          5.37                    5.36
                                                    ----------      --------              ----------
        Primary spread                                   2.20%         2.05%                   2.12%
                                                    ==========      ========              ==========
</TABLE>



<PAGE>


         The Company originates ARMs to manage the rate sensitivity of the asset
side of the balance  sheet.  Most of the Company's ARMs have interest rates that
change in accordance  with an index based on the cost of deposits and borrowings
of  savings  institutions  that are  members of the FHLB of San  Francisco  (the
COFI).  Nevertheless,  the yield on the  Company's  ARM  portfolio  tends to lag
changes  in market  interest  rates  because  of lags  related  to the index and
because of certain loan features.  These features include  introductory rates on
new ARM loans,  the interest rate  adjustment  frequency of ARM loans,  interest
rate caps or limits on  individual  rate  changes and interest  rate floors.  On
balance,  COFI  lags and ARM  structural  features  cause the  Company's  assets
initially to reprice more slowly than its liabilities,  resulting in a temporary
reduction in net interest income when rates increase and a temporary increase in
net interest income when rates fall.

         The  following  table shows the  Company's  revenues  and expenses as a
percentage of total  revenues for the three and nine months ended  September 30,
1998 and 1997, in order to focus on the changes in interest income between years
as well as changes in other revenue and expense amounts.
<TABLE>
<CAPTION>

                                    TABLE 15

                       Selected Revenue and Expense Items
                        as Percentages of Total Revenues

                                                           Three Months Ended         Nine Months Ended
                                                              September 30              September 30
                                                          ----------------------    ----------------------
                                                            1998         1997         1998         1997
                                                          ---------    ---------    ---------    ---------
<S>                                                           <C>          <C>          <C>          <C>  
    Interest on loans                                         68.2%        82.6%        74.6%        82.1%
    Interest on mortgage-backed securities                    20.2          9.6         14.2         10.2
    Interest and dividends on investments                      7.6          5.0          6.9          4.9
                                                          ---------    ---------   ---------    ---------
                                                              96.0         97.2         95.7         97.2
    Less:
      Interest on deposits                                    42.3         42.6         41.2         41.5
      Interest on advances and other borrowings               23.0         24.5         23.7         25.0
                                                          ---------    ---------    ---------    ---------
                                                              65.3         67.1         64.9         66.5

    Net interest income                                       30.7         30.1         30.8         30.7
      Provision for loan losses                                0.4          1.4          0.4          2.0
                                                          ---------    ---------    ---------    ---------
    Net interest income after provision for loan              30.3         28.7         30.4         28.7
    losses

    Add:
      Fees                                                     2.1          1.6          1.9          1.6
      Gain on the sale of securities,  MBS, and loans          0.8          0.3          1.2          0.3
      Other non-interest income                                1.1          0.9          1.2          0.9
                                                          ---------    ---------    ---------    ---------
                                                               4.0          2.8          4.3          2.8
    Less:
      General and administrative expenses                     11.3         11.3         11.0         11.3
      Taxes on income                                          9.1          8.0          9.4          8.0
                                                          ---------    ---------    ---------    ---------
    Earnings before extraordinary item                        13.9         12.2         14.3         12.2
    Extraordinary item                                        (0.6)         0.0         (0.5)         0.0
                                                          ---------    ---------    ---------    ---------
    Net earnings                                              13.3%        12.2%        13.8%        12.2%
                                                          =========    =========    =========    =========
</TABLE>



<PAGE>


         INTEREST RATE SWAPS

         The Company  enters into  interest rate swaps as a part of its interest
rate risk management strategy. Such instruments are entered into solely to alter
the repricing characteristics of designated assets and liabilities.  The Company
does not hold any derivative financial instruments for trading purposes.

         Interest rate swap activity decreased net interest income by $2 million
and $7 million  for the three and nine  months  ended  September  30,  1998,  as
compared  to a decrease of $1.5  million and $3 million for the same  periods in
1997.

         The following  table  summarizes  the  unrealized  gains and losses for
interest rate swaps at September 30, 1998 and 1997.
<TABLE>
<CAPTION>

                                    TABLE 16

         Schedule of Unrealized Gains and Losses on Interest Rate Swaps
                             (Dollars in thousands)

                                      September 30, 1998                         September 30, 1997
                            ----------------------------------------   ----------------------------------------
                                                           Net                                         Net
                            Unrealized    Unrealized    Unrealized     Unrealized    Unrealized    Unrealized
                               Gains        Losses     Gain (Loss)        Gains        Losses      Gain (Loss)
                            ------------  ------------ -------------   ------------  ------------  ------------
<S>                         <C>           <C>          <C>             <C>           <C>           <C>         
Interest rate swaps         $    12,416   $  (59,075)  $   (46,659)    $    13,625   $   (34,030)  $    (20,405)
                            ============  ============ =============   ============  ============  =============
</TABLE>
<TABLE>
<CAPTION>


                                    TABLE 17

                    Schedule of Interest Rate Swaps Activity
                         (Notional amounts in millions)

                                            Nine Months Ended
                                           September 30, 1998
                                       ----------------------------
                                         Receive           Pay
                                          Fixed           Fixed
                                          Swaps           Swaps
                                       -------------   ------------
<S>                                    <C>             <C>         
Balance at December 31, 1997           $      1,679    $      1,108
Additions                                       -0-             -0-
Maturities                                   (1,078)           (179)
                                       -------------   -------------
Balance at September 30, 1998          $        601    $        929
                                       =============   =============
</TABLE>


         The range of floating  interest rates received on swap contracts in the
first nine months of 1998 was 5.31% to 6.19%, and the range of floating interest
rates paid on swap  contracts  was 4.95% to 6.08%.  The range of fixed  interest
rates  received on swap  contracts in the first nine months of 1998 was 4.86% to
8.68% and the range of fixed  interest rates paid on swap contracts was 5.38% to
9.14%.


<PAGE>


         INTEREST ON LOANS

         In the third  quarter of 1998,  interest on loans was lower than in the
comparable  1997  period by $81  million  or 13.3%.  The  decrease  in the third
quarter of 1998 was due to a $4.5  billion  decrease  in the  average  portfolio
balance partially offset by a four basis point increase in the average portfolio
yield.  The decrease in the average loan portfolio  balance was primarily due to
the securitization of  adjustable-rate  loans into MBS with full credit recourse
(see page 13).  For the first nine  months of 1998,  interest on loans was lower
than in the  comparable  1997 period by $14 million or .8%. The decrease was due
to a $689 million decrease in the average  portfolio balance which was partially
offset by a ten basis point increase in the average portfolio yield.

         INTEREST ON MORTGAGE-BACKED SECURITIES

         In the third quarter of 1998,  interest on  mortgage-backed  securities
was higher than in the comparable 1997 period by $86 million or 121.3%. The 1998
increase was due primarily to a $4.7 billion  increase in the average  portfolio
balance and a nine basis point increase in the average  portfolio yield. For the
first nine months of 1998,  interest on  mortgage-backed  securities  was higher
than in the comparable  1997 period by $116 million or 53.3% due primarily to an
$2.1  billion  increase in the average  portfolio  balance and a six basis point
increase in the average  portfolio  yield.  The increase in the  mortgage-backed
securities  portfolio is primarily due to the  securitization of adjustable-rate
loans with full credit recourse, as discussed on page 13.

         INTEREST AND DIVIDENDS ON INVESTMENTS

         The income earned on the  investment  portfolio  fluctuates,  depending
upon the volume outstanding and the yields available on short-term  investments.
For the third quarter of 1998,  interest and dividends on investments was higher
than in the  comparable  1997 period by $22 million or 57.9%.  The  increase was
primarily due to a $1.5 billion increase in the average portfolio balance, which
was  partially  offset by a six basis point  decrease  in the average  portfolio
yield. For the first nine months of 1998,  interest and dividends on investments
was higher  than in the  comparable  1997  period by $55  million or 52.1%.  The
increase was primarily due to a $1.2 billion  increase in the average  portfolio
balance, which was partially offset by a one basis point decrease in the average
portfolio yield.

         INTEREST ON DEPOSITS

         In the third  quarter of 1998,  interest on deposits  increased  by $13
million or 4.0% from the comparable  period in 1997. The third quarter  increase
was due to a $1.6 billion increase in the average balance of deposits, which was
partially  offset by a 12 basis point  decrease in the average cost of deposits.
In the first nine months of 1998,  interest on deposits increased by $75 million
or 8.4%  from the  comparable  period  in  1997.  The nine  month  increase  was
primarily  due to a $2.1  billion  increase in the average  balance of deposits,
which was partially  offset by a three basis point  decrease in the average cost
of deposits.



<PAGE>


         INTEREST ON ADVANCES AND OTHER BORROWINGS

         For the  third  quarter  interest  on  advances  and  other  borrowings
decreased by $2.4 million or 1.3% from the comparable  period of 1997. The third
quarter  decrease was  primarily  due to a $154 million  decrease in the average
balance.  For the first nine  months of 1998,  interest  on  advances  and other
borrowings increased by $19 million or 3.6% from the comparable periods of 1997.
The nine month  increase was  primarily  due to a $272  million  increase in the
average  balance and an eight basis point  increase in the average cost of these
borrowings.

         PROVISION FOR LOAN LOSSES

         The   provision  for  loan  losses  was  $3  million  and  $9  million,
respectively,  for the three and nine months ended September 30, 1998,  compared
to $10 million and $44 million for the same periods in 1997. The lower provision
in 1998 was due to lower chargeoffs resulting from the strong California housing
market and declining nonperforming assets.

         GENERAL AND ADMINISTRATIVE EXPENSES

         For the third  quarter  and first  nine  months  of 1998,  general  and
administrative  expenses  (G&A) was $88 million and $258 million,  respectively,
compared to $83 million and $241 million for the comparable periods in 1997. G&A
as a  percentage  of average  assets on an  annualized  basis was .89% and .87%,
respectively,  for the third  quarter and first nine months of 1998  compared to
 .85% and .83%, respectively, for the same periods in 1997. Expenses are slightly
higher in 1998  because  of the  increase  in  mortgage  activity,  the  ongoing
expansion of the Company's branch system, and the implementation of a variety of
technology  initiatives including addressing the "Year 2000" computer issue (see
Year 2000 discussion on page 32).

         EXTRAORDINARY ITEM

         During the first quarter of 1998, the Company  notified the FHLB of San
Francisco that it intended to retire before maturity,  $2.9 billion of high-cost
FHLB advances.  As a result, the Company incurred a $13 million pretax charge in
the first quarter of 1998 for the penalties associated with the prepayments.  In
addition,  in July of 1998, the Company  notified the FHLB of San Francisco that
it intended to retire before  maturity,  an additional $1.5 billion of high-cost
FHLB advances.  As a result, the Company incurred an $8 million pretax charge in
the third quarter of 1998 for the  penalties  associated  with the  prepayments.
Golden  West  has  replaced  the  prepaid  FHLB  advances  with  new  lower-cost
obligations.

         TAXES ON INCOME

         The Company  utilizes the accrual  method of accounting  for income tax
purposes and for  preparing its published  financial  statements.  For financial
reporting purposes only, the Company uses purchase accounting in connection with
certain assets acquired  through  mergers.  The purchase  accounting  portion of
income is not subject to tax.

         Taxes as a percentage of earnings  before the  extraordinary  item were
39.4% and 39.5%,  respectively,  for the third  quarter and first nine months of
1998 compared to 39.7% for the same periods a year ago.



<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

         WFSB's  principal  sources  of funds  are  cash  flows  generated  from
earnings;  deposits;  loan  repayments;   negotiable  certificates  of  deposit;
borrowings from the FHLB;  investments and borrowings from its affiliates;  debt
collateralized by mortgages, MBS, or securities; and the issuance of medium-term
notes. In addition,  WFSB has other alternatives  available to provide liquidity
or finance operations  including borrowings from public offerings of debt, sales
of loans,  issuances of commercial  paper, and borrowings from commercial banks.
Furthermore,  under certain conditions, WFSB may borrow from the Federal Reserve
Bank of San Francisco to meet short-term cash needs.  The  availability of these
funds will vary depending upon policies of the FHLB, the Federal Reserve Bank of
San  Francisco,  and the  Federal  Reserve  Board.  For a  discussion  of WFSB's
liquidity  positions at September 30, 1998, and 1997, and December 31, 1997, see
the Cash and Investments section on page 12.

         WSL's  principal  sources  of  funds  are  cash  flows  generated  from
earnings;   deposits;   loan   repayments;   borrowings   from  the  FHLB;  debt
collateralized by mortgages, MBS, or securities; and the issuance of medium-term
notes. In addition,  WSL has a number of other alternatives available to provide
liquidity or finance  operations.  These include borrowings from its affiliates,
borrowings  from  public   offerings  of  debt,   sales  of  loans,   negotiable
certificates  of deposit,  issuances of commercial  paper,  and borrowings  from
commercial banks. Furthermore, under certain conditions, WSL may borrow from the
Federal  Reserve  Bank of San  Francisco  to meet  short-term  cash  needs.  The
availability  of these funds will vary  depending upon policies of the FHLB, the
Federal  Reserve Bank of San Francisco,  and the Federal  Reserve  Board.  For a
discussion of WSL's  liquidity  positions at September 30, 1998,  and 1997,  and
December 31, 1997, see the Cash and Investments section on page 12.

         The  principal  sources of funds for WFSB's  and WSL's  parent,  Golden
West, are dividends from subsidiaries, interest on investments, and the proceeds
from  the  issuance  of  debt  and  equity  securities.  Various  statutory  and
regulatory  restrictions  and tax  considerations  limit the amount of dividends
WFSB and WSL can pay.  The  principal  liquidity  needs of  Golden  West are for
payment of interest  and  principal on  subordinated  debt  securities,  capital
contributions to its insured  subsidiaries  (including $466 million for the nine
months ended September 30, 1998 and $224 million for the year ended December 31,
1997),  dividends  to  stockholders,  the  purchase  of Golden  West  stock (see
stockholders'  equity  section  on page  23),  and  general  and  administrative
expenses.  At September 30, 1998 and 1997, and December 31, 1997,  Golden West's
total cash and  investments  amounted to $728 million,  $891  million,  and $965
million, respectively. Included in the September 30, 1998 and 1997, and December
31, 1997 amounts is a $600 million loan to WFSB.




<PAGE>


YEAR 2000

         The  Company is aware of the system  challenges  that the Year 2000 has
created and  currently  has a plan in place to insure that all of the  Company's
mission critical systems will be Year 2000 compliant by early 1999. The plan has
been  developed  in  accordance  with  guidance  set  forth by  federal  banking
regulators  in a series of  jointly-issued  policy  statements.  The Company has
completed an inventory and  assessment of its systems.  The Company is currently
in the  process  of testing  and  modifying  or  replacing  systems  that may be
affected by these Year 2000 compliance  issues (Year 2000 Project.)  Included in
this process are both  information  technology  systems and other  systems (e.g.
elevators,  doorlocks)  that could be affected by Year 2000 issues.  The Company
has  placed  priority  on  information  technology  systems  affecting  its core
business of deposit-taking  and lending.  Testing of individual  systems for the
ability to function during the Year 2000 has been started,  with such testing to
be  substantially  completed by December 31, 1998.  During the first  quarter of
1999,  the Company  will  commence  integrated  testing and  ascertain  that all
systems function together. All systems affecting the Company's core business are
scheduled to be Year 2000 compliant by June 1999.

         While  the  Company  believes  it is doing  everything  technologically
possible to assure Year 2000 compliance, the success of the Year 2000 Project is
to some extent dependent upon vendor  cooperation.  The Company is requiring its
computer  systems and software  vendors to represent that the products  provided
are or will be Year 2000  compliant  and has  planned a program of  testing  for
compliance. Such testing is included in the testing previously described in this
section.  To date, the Company has no indication  that its principal  vendors or
their systems will adversely affect the Company's Year 2000 compliance efforts.

         The Company  currently  estimates that it will cost  approximately  $19
million to make all of its computer  systems  Year 2000  compliant by the end of
1999. The Company will expense all costs  associated  with the Year 2000 Project
and  expects to fund such costs  through  operating  cash  flows.  The Year 2000
Project  expense  incurred  during the first nine months of 1998 was $5 million.
Included  in the  $19  million  are  estimates  for  compensation  of  employees
dedicated to the Year 2000 Project,  consultants,  hardware and software expense
and  depreciation of the equipment  purchased as part of this process.  However,
the  Company's  Year 2000  expenses  are not  expected to result in a dollar for
dollar  increase  in the  Company's  overall  information  systems  expenditures
because the Company has dedicated a number of its existing  resources  solely to
the Year 2000 Project.

         The  Company  believes  that its Year 2000  Project  will result in the
Company's systems functioning normally, without adverse consequences.  While the
systems of others,  with whom and through which the Company  conducts  business,
are not within the  Company's  control,  the Year 2000  Project is  intended  to
provide the Company with  sufficient  advance warning that such systems will not
perform.  In the unlikely event of a system  problem,  the Company has developed
contingency  plans to address the potential that one or more systems might fail,
despite efforts to the contrary.



<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Golden West  estimates  the  sensitivity  of the Company's net interest
income,  net  earnings,  and capital  ratios to interest  rate changes  based on
simulations  using an  asset/liability  model which takes into  account the lags
described on pages 11 and 27. The simulation model projects net interest income,
net earnings,  and capital  ratios based on an immediate  interest rate increase
that is  sustained  for a  thirty-six  month  period.  The model is based on the
actual maturity and repricing  characteristics of interest-rate sensitive assets
and  liabilities.   For  certain  assets,  the  model  incorporates  assumptions
regarding the impact of changing  interest  rates on prepayment  rates which are
based on the Company's historical prepayment  information.  The model factors in
projections  for  anticipated  activity  levels by product  lines offered by the
Company.  Based on the  information  and  assumptions in effect at September 30,
1998,  Management believes that a 200 basis point rate increase sustained over a
thirty-six month period would not affect the Company's  long-term  profitability
and financial strength.






<PAGE>


PART II. OTHER INFORMATION

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

(a)      Index to Exhibits

           Exhibit  Description
              No.

             3(a)   Certificate  of  Incorporation,  as amended,  and amendments
                    thereto,  are  incorporated  by reference to Exhibit 3(a) to
                    the Company's  Annual Report on Form 10-K (File No.  1-4269)
                    for the year ended December 31, 1990.

             3(b)   By-Laws  of  the   Company,   as   amended  in  1997,.   are
                    incorporated  by reference to Exhibit 3(a) to the  Company's
                    Annual  Report on Form 10-K (File No.  1-4269)  for the year
                    ended December 31, 1997.

             4(a)   The  Registrant  agrees to furnish to the  Commission,  upon
                    request, a copy of each instrument with respect to issues of
                    long-term  debt,  the authorized  principal  amount of which
                    does not exceed 10% of the total assets of the Company.

            10(a)   1996 Stock  Option  Plan,  as amended,  is  incorporated  by
                    reference  to Exhibit A of the  Company's  Definitive  Proxy
                    Statement on Schedule 14A,  filed on March 15, 1996, for the
                    Company's 1996 Annual Meeting of Stockholders.

            10(b)   Annual  Incentive Bonus Plan is incorporated by reference to
                    Exhibit A of the  Company's  Definitive  Proxy  Statement on
                    Schedule  14A,  filed on March 14, 1997,  for the  Company's
                    1997 Annual Meeting of Stockholders.

            10(c)   Deferred  Compensation  Agreement  between  the  Company and
                    James T. Judd is  incorporated by reference to Exhibit 10(b)
                    of the  Company's  Annual  Report  on Form  10-K  (File  No.
                    1-4629) for the year ended December 31, 1986.

            10(d)   Deferred  Compensation  Agreement  between  the  Company and
                    Russell W. Kettell is  incorporated  by reference to Exhibit
                    10(c) of the Company's  Annual Report on Form 10-K (File No.
                    1-4629) for the year ended December 31, 1986.




<PAGE>


ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K (Continued)

(a) Index To Exhibits (continued)

          Exhibit  Description
              No.

            10(e)   Deferred  Compensation  Agreement between the Company and J.
                    L. Helvey is  incorporated  by reference to Exhibit 10(d) of
                    the Company's  Annual Report on Form 10-K (File No.  1-4629)
                    for the year ended December 31, 1986.

            10(f)   Deferred  Compensation  Agreement  between  the  Company and
                    David C. Welch is incorporated by reference to Exhibit 10(f)
                    of the  Company's  Annual  Report  on Form  10-K  (File  No.
                    1-4629) for the year ended December 31, 1987.

            10(g)   Form  of  Supplemental   Retirement  Agreement  between  the
                    Company and certain  executive  officers is  incorporated by
                    reference to Exhibit 10(j) to the Company's Annual Report on
                    Form 10-K (File No.  1-4629) for the year ended December 31,
                    1990.

            10(h)   Operating  lease  on  Company  headquarters  building,  1901
                    Harrison Street, Oakland, California 94612.

            11      Statement of Computation of Earnings Per Share

            27      Financial Data Schedule


     (b)  Reports on Form 8-K

          The Registrant  did not file any current  reports on Form 8-K with the
          Commission during the first nine months of 1998.





<PAGE>





                                   SIGNATURES

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

                                       GOLDEN WEST FINANCIAL CORPORATION

Dated:  November 12, 1998              /s/ J. L. Helvey
                                       ---------------------------------
                                       J. L. Helvey
                                       Executive Vice President
                                       (duly authorized and principal financial
                                        officer)