SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

For Quarter Ended March 31, 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
April 30, 1998, was 57,282,044 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 months ended March 31,
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 month  periods have been  included.  The
operating results for the three months ended March 31, 1998, are not necessarily
indicative of the results for the full year.

<TABLE>
<CAPTION>

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


                                                                        March 31      March 31     December 31
                                                                          1998          1997           1997
                                                                      -------------  ------------  -------------
Assets:
<S>                                                                   <C>            <C>           <C>         
  Cash                                                                $    177,913   $   132,972   $    172,241
  Securities available for sale at fair value                              628,235       602,667        608,544
  Other investments at cost                                                389,044     1,538,551        252,648
  Mortgage-backed securities available for sale without recourse at        148,740       216,332        157,327
  fair value
  Mortgage-backed securities held to maturity without recourse at cost     718,733       785,486        752,029
  Mortgage-backed securities held to maturity with recourse at cost      3,424,636     3,183,765      3,030,390
  Loans receivable                                                      32,723,855    30,698,538     33,260,709
  Interest earned but uncollected                                          213,590       212,280        216,923
  Investment in capital stock of Federal Home Loan Banks--at cost
      which approximates fair value                                        599,960       564,389        590,244
  Real estate held for sale or investment                                   48,187        79,687         62,006
  Prepaid expenses and other assets                                        347,264       292,312        247,003
  Premises and equipment--at cost less accumulated depreciation            249,263       223,030        240,207
                                                                      -------------  ------------  -------------
                                                                      $ 39,669,420   $38,530,009   $ 39,590,271
                                                                      =============  ============  =============

Liabilities and Stockholders' Equity:
  Deposits                                                            $ 24,559,270   $22,943,924   $ 24,109,717
  Advances from Federal Home Loan Banks                                  7,645,830     8,133,882      8,516,605
  Securities sold under agreements to repurchase                         2,184,991     2,662,179      2,334,048
  Medium-term notes                                                            -0-       309,903        109,992
  Federal funds purchased                                                  500,000           -0-            -0-
  Accounts payable and accrued expenses                                    512,497       482,335        446,325
  Taxes on income                                                          341,043       259,504        265,065
  Subordinated notes--net of discount                                    1,110,828     1,324,390      1,110,488
  Stockholders' equity                                                   2,814,961     2,413,892      2,698,031
                                                                      -------------  ------------  -------------
                                                                      $ 39,669,420   $38,530,009   $ 39,590,271
                                                                      =============  ============  =============
</TABLE>



<PAGE>

<TABLE>

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

                                                        Three Months Ended
                                                             March 31
                                                   -----------------------------
                                                      1998             1997
                                                   ------------     ------------
Interest Income:
<S>                                                <C>              <C>        
    Interest on loans                              $   628,878      $   565,063
    Interest on mortgage-backed securities              72,195           74,933
    Interest and dividends on investments               54,130           34,283
                                                   ------------     ------------
                                                       755,203          674,279
Interest Expense:
    Interest on deposits                               315,210          280,320
    Interest on advances                               123,560          112,608
    Interest on repurchase agreements                   32,936           27,898
    Interest on other borrowings                        39,783           34,761
                                                   ------------     ------------
                                                       511,489          455,587
                                                   ------------     ------------
        Net Interest Income                            243,714          218,692
Provision for loan losses                                2,965           20,695
                                                   ------------     ------------
        Net Interest Income after Provision
            for Loan Losses                            240,749          197,997
Non-Interest Income:
    Fees                                                12,947           10,737
    Gain on the sale of securities,
        MBS, and loans                                   2,507            1,223
    Other                                               10,549            7,272
                                                   ------------     ------------
                                                        26,003           19,232
Non-Interest Expense:
    General and administrative:
        Personnel                                       46,536           44,100
        Occupancy                                       14,169           13,388
        Deposit insurance                                1,612            2,046
        Advertising                                      2,246            2,418
        Other                                           19,111           17,218
                                                   ------------     ------------
                                                        83,674           79,170
Earnings Before Taxes on Income and
    Extraordinary Item                                 183,078          138,059
    Taxes on Income                                     72,997           54,685
                                                   ------------     ------------
Earnings Before Extraordinary Item                     110,081           83,374
Extraordinary Item:
Federal Home Loan Bank advance prepayment
    penalty, net of tax of $5,325                       (7,710)             -0-
                                                   ------------     ------------
Net Earnings                                       $   102,371      $    83,374
                                                   ============     ============

Basic Earnings Per Share Before Extraordinary Item $      1.92      $      1.45
Basic Earnings Per Share on Extraordinary
    Item, Net of Tax                                      (.13)             -0-
                                                   ------------     ------------
Basic Earnings Per Share                           $      1.79      $      1.45
                                                   ============     ============

Diluted Earnings Per Share Before Extraordinary    $      1.89      $      1.43
Diluted Earnings Per Share on Extraordinary Item,
    Net of Tax                                            (.13)             -0-
                                                   ------------     ------------
Diluted Earnings Per Share                         $      1.76      $      1.43
                                                   ============     ============

</TABLE>


<PAGE>
<TABLE>


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


                                                                 Three Months Ended
                                                                      March 31
                                                             ---------------------------
                                                                1998           1997
                                                             ------------  -------------
Cash Flows From Operating Activities:
<S>                                                          <C>           <C>         
  Net earnings                                               $   102,371   $     83,374
  Adjustments  to  reconcile  net  earnings to net cash  
  provided  by  operating ctivities:
    Extraordinary item                                            13,035            -0-
    Provision for loan losses                                      2,965         20,695
    Amortization of loan fees and discounts                       (5,105)        (4,441)
    Depreciation and amortization                                  5,724          5,143
    Loans originated for sale                                   (121,539)       (53,560)
    Sales of loans originated for sale                           131,940         49,508
    Decrease in interest earned but uncollected                    3,333          9,324
    Federal Home Loan Bank stock dividends                       (17,383)       (15,722)
    Increase in prepaid expenses and other assets                (91,604)       (58,581)
    Increase in accounts payable and accrued expenses             58,824         30,153
    Increase in taxes on income                                   63,938         54,668
    Other, net                                                    (4,427)        (4,626)
                                                             ------------  -------------
      Net cash provided by operating activities                  142,072        115,935

Cash Flows From Investing Activities:
  New loan activity:
    New real estate loans originated for portfolio            (1,345,654)    (1,341,904)
    Real estate loans purchased                                   (1,047)          (652)
    Other, net                                                   (10,817)        (8,270)
                                                             ------------  -------------
                                                              (1,357,518)    (1,350,826)
  Real estate loan principal payments:
    Monthly payments                                             174,919        164,249
    Payoffs, net of foreclosures                               1,078,493        487,720
    Refinances                                                    98,876         57,383
                                                             ------------  -------------
                                                               1,352,288        709,352

  Repayments of mortgage-backed securities                       148,520        106,025
  Proceeds from sales of real estate                              51,405         52,680
  Purchases of securities available for sale                         (22)           (10)
  Sales of securities available for sale                             223            -0-
  Matured securities available for sale                           10,042         175,601
  Increase in other investments                                 (136,396)      (459,719)
  Purchases of Federal Home Loan Bank stock                         (990)       (56,239)
  Additions to premises and equipment                            (15,063)       (14,347)
                                                             ------------  -------------
    Net cash provided by (used in) investing activities           52,489       (837,483)
</TABLE>



<PAGE>
<TABLE>
<CAPTION>


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


                                                                 Three Months Ended
                                                                      March 31
                                                             ---------------------------
                                                                1998           1997
                                                             ------------   ------------
Cash Flows From Financing Activities:
    Deposit activity:
<S>                                                          <C>            <C>        
    Increase in deposits, net                                $   204,135    $   618,182
    Interest credited                                            245,418        225,808
                                                             ------------   ------------
                                                                 449,553        843,990

  Additions to Federal Home Loan Bank advances                   711,200         21,600
  Repayments of Federal Home Loan Bank advances               (1,587,707)      (686,199)
  Proceeds from agreements to repurchase securities            1,255,890      1,424,702
  Repayments of agreements to repurchase securities           (1,404,947)      (670,649)
  Repayments of medium-term notes                               (110,000)      (280,000)
  Proceeds from federal funds purchased                       44,790,000            -0-
  Repayments of federal funds purchased                      (44,290,000)           -0-
  Dividends on common stock                                       (7,140)        (6,301)
  Exercise of stock options                                        4,262          2,009
  Purchase and retirement of Company stock                           -0-        (13,351)
                                                             ------------   ------------
    Net cash provided by (used in) financing activities         (188,889)       635,801
                                                             ------------   ------------
Net Increase (Decrease) in Cash                                    5,672        (85,747)
Cash at beginning of period                                      172,241        218,719
                                                             ------------   ------------
Cash at end of period                                        $   177,913    $   132,972
                                                             ============   ============

Supplemental cash flow information:
  Cash paid for:
    Interest                                                 $   507,374    $   452,524
    Income taxes                                                   3,831            611
  Cash received for interest and dividends                       758,536        683,603
  Noncash investing activities:
    Loans transferred to foreclosed real estate                   31,561         50,657
    Loans securitized into mortgage-backed securities
         with recourse                                           500,992            -0-

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


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

                                                    For the Three Months Ended March 31, 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-      102,371                         102,371    $     102,371
  Change in unrealized gains on
   securities available for sale,    -0-          -0-          -0-           17,434         17,434           17,434
  Reclassification adjustment
   for loss included inincome        -0-          -0-          -0-                3              3                3

Cash dividends on common
  stock ($.125 per share)            -0-          -0-       (7,140)                         (7,140)

Common stock issued upon
  exercise of stock options,
  including tax benefits              12        4,250          -0-              -0-          4,262
                              -----------   ----------   ----------   --------------   ------------  ---------------
Balance at March 31, 1998      $   5,719     $ 89,782    $2,552,286   $     167,174    $  2,814,961   $      119,808
                               ==========   ==========   ==========   ==============   ============  ===============
</TABLE>

<TABLE>
<CAPTION>


                                                    For the Three Months Ended March 31, 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-        83,374                          83,374    $     83,374
  Change in unrealized gains on
   securities availablefor sale      -0-          -0-           -0-          (2,316)         (2,316)         (2,316)

Cash dividends on common
  stock ($.11 per share)             -0-          -0-        (6,301)                         (6,301)

Common stock issued upon
  exercise of stock options,
  including tax benefits               7        2,002           -0-                           2,009

Purchase and retirement of
  Company stock                      (19)         -0-       (13,332)                        (13,351)
                               ----------   ----------   ----------   --------------   ------------  ---------------
Balance at March 31, 1997      $   5,722    $  69,955    $2,240,839   $      97,376    $  2,413,892   $       81,058
                               ==========   ==========   ==========   ==============   ============  ===============

</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 month periods ended March 31, 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.
<PAGE>
<TABLE>
<CAPTION>

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

                                                         March 31        March 31        December 31
                                                           1998            1997              1997
                                                       -------------    ------------     -------------
<S>                                                    <C>              <C>              <C>         
   Assets                                              $ 39,669,420     $38,530,009      $ 39,590,271
   Loans receivable                                      32,723,855      30,698,538        33,260,709
   Mortgage-backed securities                             4,292,109       4,185,583         3,939,746
   Deposits                                              24,559,270      22,943,924        24,109,717
   Stockholders' equity                                   2,814,961       2,413,892         2,698,031
   Stockholders' equity/total assets                          7.10%           6.26%             6.81%
   Book value per common share                         $      49.22     $     42.19      $      47.28
   Common shares outstanding                             57,190,004      57,218,464        57,068,504
   Yield on loan portfolio                                    7.57%           7.43%             7.53%
   Yield on mortgage-backed securities                        7.23%           7.12%             7.23%
   Yield on investments                                       6.53%           6.82%             6.48%
   Yield on earning assets                                    7.51%           7.37%             7.48%
   Cost of deposits                                           5.02%           4.98%             5.04%
   Cost of borrowings                                         6.02%           5.82%             5.99%
   Cost of funds                                              5.33%           5.27%             5.36%
   Yield on earning assets less cost of funds                 2.18%           2.10%             2.12%
   Ratio of nonperforming assets to total assets               .93%           1.22%              .96%
   Ratio of troubled debt restructured to total assets         .10%            .23%              .11%
   World Savings Bank, a Federal Savings Bank:
     Total assets                                       $25,820,982     $18,465,208       $24,608,701
     Net worth                                            1,769,860       1,235,418         1,605,561
     Net worth/total assets                                   6.85%           6.69%             6.52%
     Regulatory capital ratios:
       Core capital                                           6.84%           6.67%             6.51%
       Risk-based capital                                    13.51%          13.26%            12.80%
   World Savings and Loan Association:
     Total assets                                       $14,239,835     $19,633,902       $15,446,575
     Net worth                                            1,087,367       1,337,107         1,121,961
     Net worth/total assets                                   7.64%           6.81%             7.26%
     Regulatory capital ratios:
       Core capital                                           6.62%           6.37%             6.42%
       Risk-based capital                                    13.90%          13.74%            13.64%
</TABLE>



<PAGE>
<TABLE>
<CAPTION>


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

                                                                        Three Months Ended
                                                                             March 31
                                                                     --------------------------
                                                                        1998           1997
                                                                     ------------   -----------
<S>                                                                  <C>           <C>        
   New real estate loans originated                                  $ 1,467,193   $ 1,395,464
   Average yield on new real estate loans                                  7.76%         7.52%
   Increase in deposits(a)                                           $   449,553   $   843,990
   Earnings before extraordinary item                                    110,081        83,374
   Net earnings                                                          102,371        83,374
   Basic earnings per share before extraordinary item                       1.92          1.45
   Diluted earnings per share before extraordinary item                     1.89          1.43
   Basic earnings per share                                                 1.79          1.45
   Diluted earnings per share                                               1.76          1.43
   Cash dividends on common stock                                           .125           .11
   Average common shares outstanding                                  57,126,696    57,314,639
   Average diluted common shares outstanding                          58,008,840    58,254,583
   Ratios:(b)
     Net earnings/average net worth (ROE)(c)                              14.83%        13.95%
     Net earnings/average assets (ROA)(c)                                  1.03%          .88%
     Net interest income/average assets                                    2.45%         2.30%
     General and administrative expense/average assets                      .84%          .83%
</TABLE>

(a)    Includes a decrease  of $525  million  and  increase  of $397  million of
       wholesale  deposits  for the  quarters  ended  March  31,  1998 and 1997,
       respectively.
(b)    Ratios are annualized by multiplying  the quarterly  computation by four.
       Averages are computed by adding the  beginning  balance and each monthend
       balance during the quarter and dividing by four.
(c)    The ratios for the quarter ended March 31, 1998 include the extraordinary
       item.  The ratios for the  quarter  ended March 31,  1998  excluding  the
       extraordinary item are: ROE 15.95% and ROA 1.11%.



<PAGE>


         FINANCIAL CONDITION

         The  consolidated  condensed  balance  sheet  shown in the table  below
  presents the Company's assets and liabilities in percentage terms at March 31,
  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 1993 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

                                                                March 31                 
                                                           --------------------          December 31
                                                            1998         1997                1997
                                                           -------      -------          -------------
       Assets:
<S>                                                           <C>          <C>                    <C> 
          Cash and investments                                3.0%         5.9%                   2.6%
          Mortgage-backed securities                         10.8         10.9                   10.0
          Loans receivable                                   82.5         79.7                   84.0
          Other assets                                        3.7          3.5                    3.4
                                                           -------      -------                -------
                                                            100.0%       100.0%                 100.0%
                                                           =======      =======                =======
       Liabilities and Stockholders' Equity:
          Deposits                                           61.9%        59.5%                  60.9%
          Federal Home Loan Bank advances                    19.3         21.1                   21.5
          Securities sold under agreements to repurchase      5.5          6.9                    5.9
          Medium-term notes                                   0.0          0.8                    0.3
          Federal funds purchased                             1.3          0.0                    0.0
          Other liabilities                                   2.1          2.0                    1.8
          Subordinated debt                                   2.8          3.4                    2.8
          Stockholders' equity                                7.1          6.3                    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 the loan portfolio, which
consists primarily of long-term  mortgages.  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 March 31, 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 March 31, 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                          $       711    $      300    $        4    $         2    $    1,017
  Mortgage-backed securities                 3,512           104           355            321         4,292
  Loans receivable:
    Rate-sensitive                          28,449         1,545           129            -0-        30,123
    Fixed-rate                                 110           272         1,046            957         2,385
  Other(b)                                     730           -0-           -0-            -0-           730
  Impact of interest rate swaps                582           145          (471)          (256)          -0-
                                       ------------   -----------   -----------   ------------   -----------
Total                                  $    34,094    $    2,366    $    1,063    $     1,024    $   38,547
                                       ============   ===========   ===========   ============   ===========
Interest-Bearing Liabilities(c):
  Deposits                             $    11,639    $   10,508    $    2,401    $        11    $   24,559
  FHLB advances                              6,454           775           122            295         7,646
  Other borrowings                           2,779           100           718            199         3,796
  Impact of interest rate swaps                750          (474)         (276)           -0-           -0-
                                       ------------   -----------   -----------   ------------   -----------
Total                                  $    21,622    $   10,909    $    2,965    $       505    $   36,001
                                       ===========    ===========   ===========   ============   ===========
Repricing gap                          $    12,472    $   (8,543)   $   (1,902)   $       519    $    2,546
                                       ============   ===========   ===========   ============   ===========

Cumulative gap                         $    12,472    $    3,929    $    2,027    $     2,546
                                       ============   ===========   ===========   ============

Cumulative gap as a percentage of
    total assets                             31.4%          9.9%          5.1%
                                       ============   ===========   ===========
</TABLE>

(a)  Based on scheduled maturity or scheduled repricing; loans reflect scheduled
     repayments  and projected  prepayments  of principal.  
(b)  Includes cash banks and Federal  Home Loan Bank (FHLB)  stock.  
(c)  Liabilities  with no maturity  date, such as 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 16% and 11% for
the quarters  ended March 31, 1998 and December 31, 1997,  respectively.  WFSB's
regulatory  average liquidity ratio was 5.3% for the month ended March 31, 1997.
WSL's regulatory  liquidity ratios were 25% and 12% for the quarters ended March
31, 1998 and December 31, 1997, respectively. WSL's regulatory average liquidity
ratio was 8% for the month ended  March 31,  1997.  The  increase in the average
liquidity ratio in the first quarter of 1998, as compared to the last quarter of
1997,  was due to a  clarification  in the new OTS  liquidity  regulation  which
expanded the assets qualifying for the calculation.

         At March 31, 1998 and 1997,  and  December  31,  1997,  the Company had
securities  available for sale in the amount of $628 million,  $603 million, and
$609 million,  respectively,  including unrealized gains on securities available
for sale of $275 million, $156 million, and $245 million, respectively. At March
31, 1998 and 1997, and December 31, 1997, the Company had no securities  held to
maturity or for trading in its investment securities portfolio.

         Included  in the  securities  available  for sale at March 31, 1998 and
1997, and December 31, 1997, were collateralized  mortgage obligations (CMOs) in
the amount of $61 million,  $144  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 March 31, 1998, all CMOs
qualified for inclusion in the regulatory liquidity measurement.

         MORTGAGE-BACKED SECURITIES

         At March 31, 1998 and 1997,  and  December  31,  1997,  the Company had
mortgage-backed securities (MBS) held to maturity in the amount of $4.1 billion,
$4.0  billion,  and  $3.8  billion,  respectively,  including  Federal  National
Mortgage  Association  (FNMA) MBS subject to full credit recourse to the Company
of $3.4  billion at March 31,  1998,  $3.2  billion  at March 31,  1997 and $3.0
billion at December 31, 1997. At March 31, 1998 and 1997, and December 31, 1997,
the Company had mortgage-backed  securities  available for sale in the amount of
$149 million, $216 million, and $157 million, respectively, including unrealized
gains on MBS  available  for sale of $8  million,  $9  million,  and $8 million,
respectively.  At March 31, 1998 and 1997 and December 31, 1997, the Company had
no trading MBS.

<PAGE>

         During the first quarter of 1998, the Company  securitized $501 million
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 first  quarter of 1998 were $149  million
compared to $106 million in the same period of 1997. MBS repayments  were higher
during the first quarter of 1998 as compared to the first quarter 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 quarter ended March 31, 1998, amounted to
$1.5 billion  compared to $1.4  billion for the same period in 1997.  The slight
increase in loan volume in 1998 over the first quarter of 1997 occurred  because
of a continued  strong  housing  market and lower  interest  rates  causing more
borrowers  to  refinance.   Refinanced   loans   constituted  44%  of  new  loan
originations  for the  quarter  ended  March 31,  1998,  compared to 36% for the
quarter ended March 31, 1997.

         Loans  originated for sale amounted to $122 million for the first three
months of 1998  compared to $54 million for the first three months of 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 months ended March 31, 1998, 59% of total loan  originations  were
on residential  properties in California  compared to 52% for the same period in
1997. The five largest states,  other than California,  for originations for the
three months ended March 31, 1998, were Florida, Texas, Colorado, New Jersey and
Illinois with a combined total of 22% of total  originations.  The percentage of
the total loan portfolio  (excluding  mortgage-backed  securities with recourse)
that is comprised of  residential  loans in California was 62% at March 31, 1998
compared to 68% at March 31, 1997,  and 63% at December 31, 1997. The percentage
of the total loan portfolio (including mortgage-backed securities with recourse)
that is comprised of  residential  loans in California was 66% at March 31, 1998
compared to 68% at March 31, 1997, and 66% at December 31, 1997.

     The tables on the following two pages show the Company's  loan portfolio by
state at March 31, 1998 and 1997.


<PAGE>
<TABLE>
<CAPTION>

                                     TABLE 3

                             Loan Portfolio by State
                                 March 31, 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        $20,559,134    $3,441,030    $     227    $    46,376      $24,046,767       66.06%
Texas               1,401,536        84,865          557          1,435        1,488,393        4.09
Florida             1,391,624        19,980            7            825        1,412,436        3.88
Illinois            1,207,662       165,490          -0-          1,576        1,374,728        3.78
Colorado            1,084,163       223,494          -0-          6,992        1,314,649        3.61
New Jersey          1,247,812           399          -0-          5,372        1,253,583        3.44
Washington            530,491       410,124          -0-            712          941,327        2.59
Arizona               765,220        36,671          -0-            541          802,432        2.20
Pennsylvania          629,664         4,204          -0-          3,114          636,982        1.75
Virginia              527,634         8,482          -0-          1,288          537,404        1.48
Connecticut           492,840           -0-          -0-             18          492,858        1.35
Maryland              365,578         2,147          -0-            478          368,203        1.01
Oregon                254,678        12,762          -0-            244          267,684        0.74
Minnesota             206,309         8,097          -0-            -0-          214,406        0.59
Utah                  204,426            52          -0-          1,518          205,996        0.57
Nevada                181,598           975          -0-            -0-          182,573        0.50
Kansas                167,229         4,745          -0-            168          172,142        0.47
Wisconsin             160,007         3,839          -0-            -0-          163,846        0.45
Massachusetts         128,725           -0-          -0-             20          128,745        0.35
Missouri               85,873         5,718          -0-            -0-           91,591        0.25
Washington DC          52,286           -0-          -0-            -0-           52,286        0.14
New Mexico             48,782           -0-          -0-            -0-           48,782        0.13
New York               42,011           -0-          -0-            -0-           42,011        0.12
Delaware               33,161           -0-          -0-            -0-           33,161        0.09
Idaho                  31,246           -0-          -0-            -0-           31,246        0.09
Georgia                29,504           -0-          -0-          1,384           30,888        0.08
North Carolina         17,616           -0-          -0-            -0-           17,616        0.05
Ohio                   10,369         1,523           86          3,225           15,203        0.04
South Dakota           10,492           -0-          -0-            -0-           10,492        0.03
Other                  20,991             1          -0-          3,928           24,920        0.07
                  ------------   -----------   ----------   ------------     ------------    ---------
  Totals          $31,888,661    $4,434,598    $     877    $    79,214       36,403,350      100.00%
                  ============   ===========   ==========   ============                     =========

SFAS 91 deferred loan fees                                                       (33,962)
Loan discount on purchased loans                                                  (3,689)
Undisbursed loan funds                                                            (3,579)
Allowance for loan losses                                                       (237,186)
Loans to facilitate (LTF) interest reserve                                          (570)
Troubled debt restructured (TDR) interest reserve                                 (3,042)
Loans on deposits                                                                 27,169
                                                                             ------------
 Total loan portfolio and loans securitized into FNMA MBS with recourse       36,148,491
Loans securitized into FNMA MBS with recourse                                 (3,424,636)(b)                       
                                                                             ------------
     Total loan portfolio                                                    $32,723,855
                                                                             ============
</TABLE>

(a)    The Company has no commercial loans.
(b)    The above  schedule  includes the March 31, 1998  balances of  adjustable
       rate loans that were securitized with full recourse into Federal National
       Mortgage  Association  mortgage-backed  securities,  which can be used to
       collateralize reverse repurchase agreements.


<PAGE>
<TABLE>
<CAPTION>


                                     TABLE 4

                             Loan Portfolio by State
                                 March 31, 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        $19,965,421    $3,399,540    $    250     $    55,486      $23,420,697       68.63%
Texas               1,176,028       106,963          571          1,549        1,285,111        3.77
Illinois            1,078,539       183,142          -0-          1,756        1,263,437        3.70
Colorado              993,304       236,588          -0-          7,100        1,236,992        3.62
Florida             1,085,361        20,264           88            941        1,106,654        3.24
New Jersey          1,075,776           406          -0-          6,468        1,082,650        3.17
Washington            440,186       375,010          -0-            749          815,945        2.39
Arizona               651,402        46,570          -0-            577          698,549        2.05
Pennsylvania          502,320         4,251          -0-          3,534          510,105        1.49
Virginia              499,980         8,575          -0-          1,431          509,986        1.49
Connecticut           425,616           -0-          -0-             22          425,638        1.25
Maryland              335,978         2,188          -0-            535          338,701        0.99
Oregon                223,792        11,078          -0-          2,691          237,561        0.70
Nevada                186,474         1,093          -0-            -0-          187,567        0.55
Utah                  163,441            58          -0-          1,738          165,237        0.48
Minnesota             145,192         8,357          -0-            -0-          153,549        0.45
Kansas                146,769         4,849          -0-            188          151,806        0.44
Wisconsin             105,418         3,888          -0-            -0-          109,306        0.32
Massachusetts          81,373           -0-          -0-             20           81,393        0.24
Missouri               72,461         6,328          -0-            -0-           78,789        0.23
New York               47,504           -0-          -0-            -0-           47,504        0.14
Washington DC          44,396           -0-          -0-            -0-           44,396        0.13
New Mexico             37,312           -0-          -0-            -0-           37,312        0.11
Georgia                34,316           -0-          -0-          1,706           36,022        0.11
Idaho                  27,064           -0-          -0-            -0-           27,064        0.08
Delaware               23,897           -0-          -0-            -0-           23,897        0.07
Ohio                   16,377         2,219          196          3,975           22,767        0.07
North Carolina          7,749           -0-          -0-            488            8,237        0.02
South Dakota            7,227           -0-          -0-            -0-            7,227        0.02
Other                  11,214            11          -0-          4,561           15,786        0.05
                  ------------   -----------   ----------   ------------     ------------   ---------
  Totals          $29,611,887    $4,421,378    $   1,105    $    95,515        34,129,885     100.00%  
                  ============   ===========   ==========   ============                    =========

SFAS 91 deferred loan fees                                                       (54,130)
Loan discount on purchased loans                                                  (4,207)
Undisbursed loan funds                                                            (3,934)
Allowance for loan losses                                                       (209,077)
Loans to facilitate (LTF) interest reserve                                          (553)
Troubled debt restructured (TDR) interest reserve                                 (6,987)
Loans on deposits                                                                 31,306
                                                                             ------------
  Total loan portfolio and loans securitized into FNMA MBS with recourse      33,882,303
Loans securitized into FNMA MBS with recourse                                 (3,183,765)(b)
                                                                             ------------
  Total loan portfolio                                                       $30,698,538
                                                                             ============
</TABLE>

(a)    The Company has no commercial loans.
(b)    The above  schedule  includes the March 31, 1997  balances of  adjustable
       rate loans that were securitized with full recourse into Federal National
       Mortgage  Association  mortgage-backed  securities,  which can be used to
       collateralize reverse repurchase agreements.



<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  (excluding  MBS) composed of  rate-sensitive
loans was 93% at March 31, 1998  compared to 92% at March 31,  1997,  and 93% at
December  31,  1997.  The  portion of the  mortgage  portfolio  (including  MBS)
composed of  rate-sensitive  loans was 92% at March 31, 1998  compared to 90% at
March 31, 1997, and 91% at December 31, 1997. The Company's ARM originations for
the first  quarter of 1998  constituted  over 87% of new mortgage  loans made in
1998 compared to over 94% in the first three months of 1997.

         The weighted  average  maximum  lifetime cap rate on the  Company's ARM
loan  portfolio  (including  MBS with  recourse) was 12.72%,  or 5.28% above the
actual weighted  average rate at March 31, 1998,  versus 12.02%,  or 5.60% above
the weighted average rate at March 31, 1997.

         Approximately  $5.4 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 March 31,
1998,  $523  million of ARM loans had reached  their rate  floors.  The weighted
average  floor rate on the loans that had reached their floor was 7.75% at March
31, 1998  compared to 7.74% at March 31,  1997.  Without the floor,  the average
yield on these  loans would have been 7.24% at March 31, 1998 and 7.09% at March
31, 1997.

         Loan repayments consist of monthly loan amortization, loan payoffs, and
refinances.  For the quarter  ended March 31, 1998,  loan  repayments  were $1.4
billion  compared to $709  million in the same period of 1997.  The  increase in
prepayments  for the first  quarter of 1998 as compared to the first  quarter of
1997 was due to an increase in the prepayment rates during 1998.

         MORTGAGE SERVICING RIGHTS

         The Company  accounts for mortgage  servicing rights in accordance with
SFAS 122 and SFAS 125.  For the first  quarter  of 1998 and  1997,  the  Company
recognized gains of $2.2 million and $1.0 million,  respectively, on the sale of
loans due to the  capitalization of servicing rights.  After  amortization,  the
balance at March 31, 1998 and 1997 of the capitalized servicing rights was $12.4
million  and $9.7  million,  respectively.  The  book  value  of  Golden  West's
servicing  rights did not  exceed the fair value at March 31,  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,  that
are 90 days or more past due) and real estate acquired through  foreclosure.  No
interest is  recognized  on  non-accrual  loans.  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)

                                                           March 31              December 31
                                                   --------------------------
                                                      1998          1997            1997
                                                   -----------   ------------   --------------
<S>                                                <C>           <C>             <C>                                               
Non-accrual loans                                  $  319,324    $   389,625     $   317,550                                       
Real estate acquired through foreclosure               47,696         77,859          61,517
Real estate in judgment                                    69          1,274              67
                                                   -----------   ------------    ------------
Total nonperforming assets                         $  367,089    $   468,758     $   379,134
                                                   ===========   ============    ============

TDRs                                               $   38,686    $    86,931     $    43,795
                                                   ===========   ============    ============

Ratio of NPAs to total assets                           0.93%          1.22%            .96%
                                                   ===========   ============    ============

Ratio of TDRs to total assets                           0.10%           .23%            .11%
                                                   ===========   ============    ============

Ratio of NPAs and TDRs to total assets                  1.03%          1.45%           1.07%
                                                   ===========   ============    ============
</TABLE>

         The  decrease in NPAs during 1998  reflects  the  improving  California
economy.  The Company  continues to closely monitor all  delinquencies and takes
appropriate  steps to protect its  interests.  Interest  foregone on non-accrual
loans is fully-reserved  and amounted to $3 million in the first quarter of 1998
compared  to $5 million in the same  period of 1997.  Interest  foregone on TDRs
amounted to $286 thousand for the three months ended March 31, 1998, compared to
$583 thousand for the three months ended March 31, 1997.

         The tables on the following two pages show the Company's  nonperforming
assets by state at March 31, 1998 and 1997.


<PAGE>
<TABLE>
<CAPTION>

                                     TABLE 6

                          Nonperforming Assets by State
                                 March 31, 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    $  224,419    $  7,827    $  1,463    $ 42,586    $ 1,506   $     -0-    $ 277,801         1.16%
Texas              8,284         -0-         -0-         935        -0-         -0-        9,219         0.62
Florida           12,565         -0-         188         482        -0-         -0-       13,235         0.94
Illinois          11,030         221         -0-         612        -0-         -0-       11,863         0.86
Colorado           1,624         114          68          77        -0-         -0-        1,883         0.14
New Jersey        18,194         -0-         201         422        -0-         -0-       18,817         1.50
Washington         1,969         -0-         -0-         544        -0-         -0-        2,513         0.27
Arizona            1,756         -0-         -0-         244        -0-         -0-        2,000         0.25
Pennsylvania       8,130         -0-         -0-         245        -0-         -0-        8,375         1.31
Virginia           2,062         -0-         -0-         150        -0-         -0-        2,212         0.41
Connecticut        3,512         -0-         -0-         134        -0-         -0-        3,646         0.74
Maryland           2,001         -0-         -0-          90        -0-         -0-        2,091         0.57
Oregon               537         -0-         -0-         -0-        -0-         -0-          537         0.20
Minnesota          1,621         -0-         -0-         -0-        -0-         -0-        1,621         0.76
Utah               1,512         -0-         -0-         -0-        -0-         -0-        1,512         0.73
Nevada             2,013         -0-         -0-          99        -0-         -0-        2,112         1.16
Kansas               656          41         -0-          11        -0-         -0-          708         0.41
Wisconsin            563         -0-         -0-         -0-        -0-         -0-          563         0.34
Massachusetts        641         -0-          20         -0-        -0-         -0-          661         0.51
Missouri             492         -0-         -0-          55        162         -0-          709         0.77
Washington DC        173         -0-         -0-         -0-        -0-         -0-          173         0.33
New Mexico           518         -0-         -0-         -0-        -0-         -0-          518         1.06
New York           3,369         -0-         -0-         175        -0-          11        3,555         8.46
Delaware             151         -0-         -0-         -0-        -0-         -0-          151         0.46
Idaho                235         -0-         -0-         -0-        -0-         -0-          235         0.75
Georgia            1,046         -0-         -0-         257        -0-         -0-        1,303         4.22
North Carolina       -0-         -0-         -0-         -0-        -0-         -0-          -0-         0.00
Ohio                 -0-         -0-         -0-         -0-        -0-         -0-          -0-         0.00
South Dakota          72         -0-         -0-         -0-        -0-         -0-           72         0.69
Other                 36         -0-         -0-         -0-        -0-         -0-           36         0.14
              -----------   ---------   ---------   ---------   --------  ----------   ----------   ----------
  Totals      $  309,181    $  8,203    $  1,940    $ 47,118    $ 1,668    $     11      368,121         1.01%
              ===========   =========   =========   =========   ========  ==========

REO general valuation allowance                                                          (1,032)         0.00
                                                                                      -----------  -----------
Total nonperforming assets                                                            $  367,089         1.01%   
                                                                                      ===========  ===========

</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.  The
     March 31, 1998 balances of the related  nonperforming  assets are reflected
     in the amounts above.


<PAGE>
<TABLE>
<CAPTION>


                                     TABLE 7

                          Nonperforming Assets by State
                                 March 31, 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>     
California    $305,760     $ 14,352    $  2,391       $63,523     $ 9,804   $  2,289     $398,119     1.70%
Texas            5,881          -0-         -0-           803         -0-        -0-        6,684     0.52
Illinois         7,366          223         -0-           246         282        -0-        8,117     0.64
Colorado         2,150          -0-       3,089           269         -0-        -0-        5,508     0.45
Florida          6,199          -0-         263           774         -0-        -0-        7,236     0.65
New Jersey      14,029          -0-       1,544           763         -0-        -0-       16,336     1.51
Washington       2,146          -0-         -0-           -0-         -0-        -0-        2,146     0.26
Arizona          1,574          -0-         -0-            12         -0-        -0-        1,586     0.23
Pennsylvania     5,068          -0-           5           152         -0-        -0-        5,225     1.02
Virginia         1,409          -0-         -0-           538         -0-        -0-        1,947     0.38
Connecticut      3,870          -0-         -0-           598         -0-        -0-        4,468     1.05
Maryland         1,458          -0-         -0-           570         -0-        -0-        2,028     0.60
Oregon             601          -0-         -0-           -0-         -0-        -0-          601     0.25
Nevada           1,632          -0-         -0-           219         -0-        -0-        1,851     0.99
Utah               737          -0-         -0-           -0-         -0-        -0-          737     0.45
Minnesota          641          -0-         -0-           -0-         -0-        -0-          641     0.42
Kansas             724           40         -0-           -0-         -0-        -0-          764     0.50
Wisconsin          433          -0-         -0-           -0-         -0-        -0-          433     0.40
Massachusetts       64          -0-          20           -0-         -0-        -0-           84     0.10
Missouri           465           42         -0-           243          17        -0-          767     0.97
New York         3,637          -0-         -0-           141         -0-        -0-        3,778     7.95
Washington,DC      -0-          -0-         -0-           -0-         -0-        -0-          -0-     0.00
New Mexico         -0-          -0-         -0-           -0-         -0-        -0-          -0-     0.00
Georgia          1,542          -0-         -0-           -0-         -0-        -0-        1,542     4.28
Idaho              -0-          -0-         -0-           -0-         -0-        -0-          -0-     0.00
Delaware           118          -0-         -0-           -0-         -0-        -0-          118     0.49
Ohio                62          -0-           2           -0-         -0-        -0-           64     0.28
North Carolina      38          -0-         -0-           -0-         -0-        -0-           38     0.46
South Dakota       -0-          -0-         -0-           -0-         -0-        -0-          -0-     0.00
Other               50          -0-         -0-           -0-         -0-        -0-           50     0.32
              ---------   ----------   ---------      --------   ---------  ---------    ---------    -----
  Totals      $367,654     $ 14,657     $ 7,314       $68,851    $ 10,103   $   2,289      470,868    1.38%
              =========   ==========   =========      ========   =========  =========

REO general valuation allowance                                                             (2,110)  (0.01)
                                                                                         ---------   ------
Total nonperforming assets                                                                $468,758    1.37%
                                                                                         =========   ======
</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 March  31,  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 or 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 months ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>

                                     TABLE 8

                      Changes in Allowance for Loan Losses
                             (Dollars in thousands)

                                                                  Three Months Ended
                                                                        March 31
                                                               --------------------------
                                                                  1998          1997
                                                               -----------   ------------
<S>                                                            <C>           <C>                                                   
  Beginning allowance for loan losses                          $  233,280    $   195,702                     
  Provision charged to expense                                      2,965         20,695
  Less loans charged off                                              -0-         (7,558)
  Add recoveries                                                      941            238
                                                               -----------   ------------
  Ending allowance for loan losses                             $  237,186     $  209,077                    
                                                               ===========   ============

  Ratio of chargeoffs net of recoveries to average loans
    outstanding (including MBS with recourse)                       (.01%)         .09%
                                                               ===========   ============

  Ratio of allowance for loan losses to nonperforming assets        64.6%          44.6%
                                                               ===========   ============
</TABLE>


         DEPOSITS

         Retail  deposits  increased  during  the first  quarter of 1998 by $975
million, including interest credited of $245 million, compared to an increase of
$447 million,  including interest credited of $226 million, in the first quarter
of 1997.  Retail deposits  increased  during the first quarters 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 quarter of 1998.

         Beginning in January  1997,  the Company began a program to use brokers
to sell certificates of deposit (CDs) to institutional investors.  There were no
outstanding wholesale CDs at March 31, 1998 as compared to $397 million at March
31, 1997.


<PAGE>


         The table below shows the  Company's  deposits by interest  rate and by
remaining maturity at March 31, 1998 and 1997.
<TABLE>
<CAPTION>

                                     TABLE 9

                                    Deposits
                              (Dollars in millions)

                                                                                    March 31
                                                               ---------------------------------------------------
                                                                       1998                         1997
                                                               ----------------------      -----------------------
                                                                Rate*         Amount         Rate*        Amount
                                                               --------     ----------     ---------    ----------
       Deposits by interest rate:
<S>                                                                <C>      <C>                <C>      <C>      
       Interest-bearing checking accounts                          2.10%    $      81          1.17%    $     307
       Passbook accounts                                           2.11           527          2.22           558
       Money market deposit accounts                               4.15         5,074          2.43         1,778
       Term certificate accounts with original maturities of:
           4 weeks to 1 year                                       5.17         8,734          5.25        11,472
           1 to 2 years                                            5.46         6,292          5.27         4,192
           2 to 3 years                                            5.46         1,495          5.50         1,334
           3 to 4 years                                            5.45           396          5.73           554
           4 years and over                                        5.71         1,256          5.69         1,941
       Retail jumbo CDs                                            5.45           703          5.30           410
       Wholesale CDs                                               0.00           -0-          5.40           397
       All other                                                   7.38             1          7.66             1
                                                                           -----------                 -----------
                                                                           $   24,559                  $   22,944
                                                                           ===========                 ===========

       Deposits by remaining maturity:
       No contractual maturity                                             $    5,682                  $    2,643
       Maturity within one year:
          2nd quarter                                                           5,957                       5,481
          3rd quarter                                                           5,738                       6,113
          4th quarter                                                           2,702                       4,354
          1st quarter                                                           2,068                       1,626
                                                                           -----------                 -----------
                                                                               16,465                      17,574

       1 to 2 years                                                             1,824                       1,642
       2 to 3 years                                                               301                         814
       3 to 4 years                                                               142                         106
       4 years and over                                                           145                         165
                                                                           -----------                 -----------
                                                                           $   24,559                  $   22,944
                                                                           ===========                 ===========
</TABLE>

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

         ADVANCES FROM FEDERAL HOME LOAN BANKS

         The Company uses borrowings from the FHLB, also known as "advances," to
supplement  cash  flow and to  provide  funds for loan  origination  activities.
Advances are secured by pledges of certain  loans and capital stock of the FHLB.
FHLB  advances  amounted  to $7.6  billion at March 31,  1998,  compared to $8.1
billion and $8.5 billion at March 31, 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  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.  See  Extraordinary  Item
discussion on page 30.


<PAGE>


         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 $2.2 billion,  $2.7 billion, and $2.3 billion at March
31, 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 March 31, 1998,  Golden West, at the holding  company  level,  had a
total of $1.1 billion of subordinated  debt issued and outstanding.  As of March
31, 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  March  31,  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.

         At  March  31,  1998,  Golden  West had  outstanding  $500  million  of
short-term federal funds purchased from the Federal Home Loan Bank of Dallas.

         WSL also has on file a registration statement with the OTS for the sale
of up to $300 million of  subordinated  notes and, at March 31,  1998,  the full
amount was available for issuance. As of March 31, 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.

         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  March  31,  1998.  WSL  had no  medium-term  notes
outstanding  under  prior  registrations  at March 31,  1998,  compared  to $310
million at March 31, 1997,  and $110  million at December 31, 1997.  As of March
31,  1998,  WSL's  medium-term  notes had a  preliminary  rating of A1 and A+ by
Moody's and S&P, respectively.


<PAGE>


         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 March 31, 1998,  WFSB had not issued any notes
under this authority.

         STOCKHOLDERS' EQUITY

         The Company's stockholders' equity increased by $117 million during the
first three months of 1998. The increase in stockholders' equity was a result of
net earnings  for the first three  months of 1998 and a $17 million  increase in
market  values  of  securities  available  for sale  since  December  31,  1997,
partially  offset  by the  payment  of $7  million  in  quarterly  dividends  to
stockholders. The Company's stockholders' equity increased by $63 million during
the first  three  months of 1997.  The  increase  in  stockholders'  equity  was
primarily a result of net  earnings  for the first three  months of 1997,  which
were partially  offset by the $13 million cost of the purchase of Company stock,
the  payment of $6 million in  quarterly  dividends  to  stockholders,  and a $2
million  decrease  in  market  values of  securities  available  for sale  since
December 31, 1996. Unrealized gains net of taxes on securities and MBS available
for sale  included  in  stockholders'  equity  at March 31,  1998 and 1997,  and
December  31,  1997,  were  $167  million,   $97  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 March 31, 1998,  8.5 million shares
had been purchased and retired at a cost of $380 million since October 1993. The
Company  did not  purchase  any stock  during  the first  three  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  1998.  In
addition,  WSL has received  approval from the OTS to pay up to $50 million more
in upstream  dividends to Golden West.  Also,  during the first quarter of 1998,
Golden West purchased from WSL, and subsequently contributed as capital to WFSB,
$100 million in loans.

         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.


<PAGE>


         REGULATORY CAPITAL

         The OTS requires federally insured institutions,  such as WFSB and WSL,
to meet certain minimum capital requirements.

         The following table shows WFSB's regulatory capital ratios and compares
them to the OTS minimum requirements at March 31, 1998 and 1997.
<TABLE>
<CAPTION>

                                    TABLE 10

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

                              March 31, 1998                                   March 31, 1997
              -----------------------------------------------   ----------------------------------------------
                     ACTUAL                  REQUIRED                  ACTUAL                  REQUIRED
              ----------------------   ----------------------   ----------------------   ----------------------
               Capital      Ratio       Capital      Ratio       Capital      Ratio       Capital      Ratio
              -----------  ---------   -----------  ---------   ----------   ---------   ----------   --------
<S>           <C>           <C>        <C>           <C>       <C>            <C>        <C>           <C>  
   Tangible   $1,768,105    6.84%      $  387,893    1.50%     $1,232,625     6.67%      $ 277,288     1.50%
   Core        1,768,105    6.84        1,034,382    4.00       1,232,625     6.67         554,576     3.00
   Risk-based  1,863,679   13.51        1,103,194    8.00       1,287,612    13.26         777,033     8.00
</TABLE>

         The following table shows WSL's current  regulatory  capital ratios and
compares  them to the  current OTS  minimum  requirements  at March 31, 1998 and
1997.
<TABLE>
<CAPTION>

                                    TABLE 11

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

                              March 31, 1998                                     March 31, 1997
              ------------------------------------------------   ------------------------------------------------
                      ACTUAL                   REQUIRED                 ACTUAL                   REQUIRED
              -----------------------   -----------------------  ----------------------   -----------------------
               Capital       Ratio       Capital      Ratio       Capital       Ratio      Capital       Ratio
              -----------   ---------   -----------  ---------   -----------   --------   -----------   --------
<S>           <C>            <C>       <C>             <C>       <C>            <C>        <C>           <C>
   Tangible   $  929,084     6.62%     $   210,439     1.50%     $1,245,575     6.37%      $ 293,257     1.50%     
   Core          929,084     6.62          561,171     4.00       1,245,575     6.37         586,514     3.00
   Risk-based  1,130,198    13.90          650,525     8.00       1,565,900    13.74         911,568     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.

         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 March 31, 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.


<PAGE>


         The table  below  shows that  WFSB's  regulatory  capital  exceeds  the
requirements of the well capitalized classification at March 31, 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                         $ 1,768,105        6.84%         $ 1,292,978        5.00%
        Tier 1 risk-based                  1,768,105       12.82              827,395        6.00
        Total risk-based                   1,863,679       13.51            1,378,992       10.00
</TABLE>


         The table  below  shows  that  WSL's  regulatory  capital  exceeds  the
requirements of the well capitalized classification at March 31, 1998.
<TABLE>
<CAPTION>

                                    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                          $  929,084        6.62%          $  701,464        5.00%                      
        Tier 1 risk-based                    929,084       11.43              487,894        6.00
        Total risk-based                   1,130,198       13.90              813,156       10.00
</TABLE>


RESULTS OF OPERATIONS

         NET EARNINGS

         Net  earnings  before an  extraordinary  item (see  extraordinary  item
discussion  on page 30) for the three  months  ended  March  31,  1998 were $110
million  compared to net earnings of $83 million for the quarter ended March 31,
1997. Net earnings after the extraordinary item for the three months ended March
31,  1998 were $102  million  compared  to net  earnings  of $83 million for the
quarter  ended March 31, 1997.  Net earnings  increased in the first  quarter of
1998 as  compared  to the first  quarter  of 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 for the  quarters  ended  March 31, 1998 and 1997,  were $1.92,  and $1.45,
respectively.  Basic EPS after the  extraordinary  item for the  quarters  ended
March 31, 1998 and 1997 were $1.79 and $1.45, respectively. The Company reported
Diluted EPS before the extraordinary  item of $1.89, for the quarter ended March
31, 1998,  compared to $1.43, for the three months ended March 31, 1997. Diluted
EPS after the extraordinary  item for the quarters ended March 31, 1998 and 1997
were $1.76 and $1.43, 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 March 31,
1998 and 1997, and December 31, 1997.
<TABLE>
<CAPTION>

                                    TABLE 14

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

                                                              March 31                      December 31
                                                     -------------------------
                                                       1998            1997                   1997
                                                     -----------   -----------           -------------
<S>                                                      <C>           <C>                     <C>  
        Yield on loan portfolio                          7.57%         7.43%                   7.53%
        Yield on MBS                                     7.23          7.12                    7.23
        Yield on investments                             6.53          6.82                    6.48
                                                    ---------       --------              ----------
        Yield on earning assets                          7.51          7.37                    7.48
                                                    ----------      --------              ----------
        Cost of deposits                                 5.02          4.98                    5.04
        Cost of borrowings                               6.02          5.82                    5.99
                                                    ----------      --------              ----------
        Cost of funds                                    5.33          5.27                    5.36
                                                    ----------      --------              ----------
        Primary spread                                   2.18%         2.10%                  2.12%
                                                    ==========      ========              ==========
</TABLE>

         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 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.


<PAGE>


         The  following  table shows the  Company's  revenues  and expenses as a
percentage of total revenues for the three months ended March 31, 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
                                                                        March 31
                                                                  ----------------------
                                                                     1998         1997
                                                                  ---------    ---------
<S>                                                                   <C>          <C>  
    Interest on loans                                                 80.5%        81.5%
    Interest on mortgage-backed securities                             9.3         10.8
    Interest and dividends on investments                              6.9          4.9
                                                                  ---------    ---------
                                                                      96.7         97.2
    Less:
      Interest on deposits                                            40.4         40.4
      Interest on advances and other borrowings                       25.1         25.3
                                                                  ---------    ---------
                                                                      65.5         65.7

    Net interest income                                               31.2         31.5
      Provision for loan losses                                        0.4          3.0
                                                                  ---------    ---------
    Net interest income after provision for loan losses               30.8         28.5

    Add:
      Fees                                                             1.7          1.5
      Gain on the sale of securities,  MBS, and loans                  0.3          0.2
      Other non-interest income                                        1.3          1.1
                                                                  ---------    ---------
                                                                       3.3          2.8
    Less:
      General and administrative expenses                             10.7         11.4
      Taxes on income                                                  9.3          7.9
                                                                  ---------    ---------
    Earnings before extraordinary item                                14.1         12.0
    Extraordinary item                                                (1.0)         0.0
                                                                  ---------    ---------
    Net earnings                                                      13.1%        12.0%
                                                                  =========    =========
</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
for the three  months  ended March 31,  1998,  as compared to a decrease of $323
thousand for the same period in 1997.

         The following  table  summarizes  the  unrealized  gains and losses for
interest rate swaps at March 31, 1998 and 1997.
<TABLE>
<CAPTION>

                                    TABLE 16

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

                                        March 31, 1998                             March 31, 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         $     8,568   $  (34,537)  $   (25,969)    $    23,351  $    (28,797)   $   (5,446)
                            ============  ============ =============   ============ ============= =============
</TABLE>
<TABLE>
<CAPTION>


                                    TABLE 17

                         Schedule of Interest Rate Swaps
                         (Notional amounts in millions)

                                           Three Months Ended
                                             March 31, 1998
                                       ----------------------------
                                         Receive           Pay
                                          Fixed           Fixed
                                          Swaps           Swaps
                                       -------------   ------------
<S>                                    <C>             <C>         
Balance at December 31, 1997           $      1,679    $      1,108

Additions                                       -0-             -0-
Maturities                                     (409)            (70)
                                        ------------    ------------
Balance at March 31, 1998              $      1,270    $      1,038
                                        ============    ============
</TABLE>


         The range of floating  interest rates received on swap contracts in the
first  three  months  of 1998 was  5.62% 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 three 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 first quarter of 1998,  interest on loans was higher than in the
comparable  1997  period by $64  million  or 11.3%.  The  increase  in the first
quarter of 1998 was due to a $2.8  billion  increase  in the  average  portfolio
balance and a 15 basis point increase in the average portfolio yield.

         INTEREST ON MORTGAGE-BACKED SECURITIES

         In the first quarter of 1998,  interest on  mortgage-backed  securities
was lower than in the  comparable  1997  period by $3 million or 3.7%.  The 1998
decrease was due primarily to an $210 million decrease in the average  portfolio
balance,  which was partially offset by a 10 basis point increase in the average
portfolio yield.

         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 first quarter of 1998,  interest and dividends on investments was higher
than in the  comparable  1997 period by $20 million or 57.9%.  The  increase was
primarily due to a $1.3 billion increase in the average  portfolio balance and a
10 basis point increase in the average portfolio yield.

         INTEREST ON DEPOSITS

         In the first  quarter of 1998,  interest on deposits  increased  by $35
million or 12.4% from the comparable  period in 1997. The first quarter increase
was due to a $2.6  billion  increase in the average  balance of deposits and a 5
basis point increase in the average cost of deposits.

         INTEREST ON ADVANCES AND OTHER BORROWINGS

         For  the  first  quarter  of  1998,  interest  on  advances  and  other
borrowings increased by $21 million or 12.0% from the comparable period of 1997.
The first quarter  increase was primarily due to a $1.1 billion  increase in the
average  balance  and an 18 basis point  increase  in the average  cost of these
borrowings.

         PROVISION FOR LOAN LOSSES

         The provision for loan losses was $3 million for the three months ended
March 31, 1998,  compared to $21 million for the same period 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 first  quarter of 1998,  general  and  administrative  expenses
(G&A) was $84 million compared to $79 million for the comparable period in 1997.
G&A as a percentage of average  assets on an  annualized  basis was .84% for the
first quarter of 1998 compared to .83% for the same period in 1997. Expenses are
likely to rise in  subsequent  quarters  because  of the  seasonal  increase  in
mortgage activity during the spring and summer months,  the ongoing expansion of
our branch system, and the implementation of a variety of technology initiatives
including  addressing the "Year 2000 " computer issue (see Year 2000  discussion
on page 31).


<PAGE>


         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.
Golden West will replace the prepaid FHLB advances with new low-cost obligations
that will produce more favorable  interest expense for the Company over the next
five years.

         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 39.9%
for the first quarter of 1998 compared to 39.6% for the same period a year ago.

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 March 31, 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,  World 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 March 31,  1998,  and  1997,  and
December 31, 1997, see the cash and investments section on page 12.



<PAGE>


         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 (of which $200
million  mature in 1998),  capital  contributions  to its  insured  subsidiaries
(including  $100  million  for the three  months  ended  March 31, 1998 and $284
million  for  the  year  ended   December  31,  1997  to  WFSB),   dividends  to
stockholders,  the  purchase  of Golden  West  stock (see  stockholders'  equity
section on page 23), and general and administrative  expenses. At March 31, 1998
and 1997,  and  December  31, 1997,  Golden  West's  total cash and  investments
amounted to $964 million (including a $600 million long-term loan to WFSB), $978
million  (including a $600  million  long-term  loan to WFSB),  and $965 million
(including a $600 million long-term loan to WFSB), respectively.

YEAR 2000

         Golden  West 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
systems  will be year 2000  compliant  by the  beginning  of the year 1999.  The
Company is currently in the process of identifying,  prioritizing  and modifying
or replacing  systems that may be affected by these year 2000 compliance  issues
(Year  2000  Project.)  While  Golden  West  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.  The Company  currently  estimates that over the next
two years,  it will cost  approximately  $14 million to make all of its computer
systems year 2000 compliant.  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 quarter of 1998
was $1 million.  Included in the $14 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 is likely to  dedicate a number of its  existing  resources
solely to the Year 2000 Project.



<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  above.  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 March 31,  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.
<TABLE>
<CAPTION>

PART II.   OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a)      May 5, 1998 - Annual Meeting
                                                                                                         Broker
                                                 For          Against       Withheld      Abstain       Non-Vote
                                             -------------  ------------- ------------- ------------- -------------
(b)       Directors elected:

<S>                                            <C>                             <C>    
          Patricia A. King                     49,968,414                      371,871

          Marion O. Sandler                    50,035,544                      304,741

          Leslie Tang Schilling                49,976,038                      364,247

(c)       Ratification of Auditors:

          Appointment of Deloitte & Touche
          LLP, independent public 
          accountants, for the fiscal 
          year 1998                            50,307,067         12,555                      20,663
</TABLE>

Other Directors continuing in office are:

     Maryellen B. Cattani, Louis J. Galen, Antonia Hernandez,  Bernard A. Osher,
Kenneth T. Rosen, and Herbert M. Sandler




<PAGE>



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Index to Exhibits

                Exhibit No.            Description
                                                               
                 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 No.            Description

                 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)   Operating lease on Company headquarters building,  1901
                         Harrison   Street,   Oakland,   California   94612,  is
                         incorporated  by  reference  to  Exhibit  10(e)  of the
                         Company's  Annual Report on Form 10-K (File No. 1-4629)
                         for the year ended December 31, 1986.

                 10(h)   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.

                 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 in the first quarter.

<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:  May 13, 1998                           /s/ J. L. Helvey
                                               ---------------------------------
                                               J. L. Helvey
                                               Executive Vice President
                                               (duly authorized and principal
                                               financial officer)