SECURITIES AND EXCHANGE COMMISSION

                         WASHINGTON, D.C. 20549

                               FORM 10-Q

For Quarter Ended September 30, 1997             Commission File Number 1-4629


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


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

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

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


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes            X       No
           -----------          -----------

     The  number of  shares  outstanding  of the  registrant's  common  stock on
October 31, 1997, was 56,803,844 shares.

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

     The consolidated  financial statements of Golden West Financial Corporation
and subsidiaries (the Company) for the three and nine months ended September 30,
1997 and 1996 are  unaudited.  In the opinion of the  Company,  all  adjustments
(consisting  only of normal  recurring  accruals)  that are necessary for a fair
statement  of the  results  for such  three  and nine  month  periods  have been
included.  The operating  results for the three and nine months ended  September
30, 1997, 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)


                                                                              September 30           
                                                                       ---------------------------  December 31
                                                                           1997          1996           1996
                                                                       -------------  ------------  -------------
<S>                                                                    <C>            <C>            <C>
Assets:
  Cash                                                                  $   140,898    $  130,467     $  218,719
  Securities available for sale at fair value                               586,401       650,927        781,325
  Other investments at cost                                                 436,404     1,350,002      1,078,832
  Mortgage-backed securities available for sale without recourse at         197,121       237,176        227,466
    fair value
  Mortgage-backed securities available for sale with recourse at fair value     -0-       220,612            -0-
  Mortgage-backed securities held to maturity without recourse at cost      749,913       814,619        800,692
  Mortgage-backed securities held to maturity with recourse at cost       2,974,764     2,039,227      3,265,424
  Loans receivable                                                       32,723,212    30,278,267     30,113,421
  Interest earned but uncollected                                           211,653       218,366        221,604
  Investment in capital stock of Federal Home Loan Bank--at cost
      which approximates fair value                                         580,861       480,468        500,105
  Real estate held for sale or investment                                    67,074        83,074         83,052
  Prepaid expenses and other assets                                         329,545       297,917        226,054
  Premises and equipment--at cost less accumulated depreciation             230,513       210,301        213,904
                                                                       -------------  ------------  -------------
                                                                       $ 39,228,359   $37,011,423    $37,730,598
                                                                       =============  ============  =============

Liabilities and Stockholders' Equity:
  Deposits                                                             $ 24,234,947   $21,584,365    $22,099,934
  Advances from Federal Home Loan Bank                                    7,228,765     8,159,240      8,798,433
  Securities sold under agreements to repurchase                          2,890,918     2,227,481      1,908,126
  Medium-term notes                                                         309,969       689,755        589,845
  Accounts payable and accrued expenses                                     527,992       593,594        452,182
  Taxes on income                                                           250,407       163,252        207,605
  Subordinated notes--net of discount                                     1,210,141     1,323,592      1,323,996
  Stockholders' equity                                                    2,575,220     2,270,144      2,350,477
                                                                       -------------  ------------  -------------
                                                                       $ 39,228,359   $37,011,423    $37,730,598
                                                                       =============  ============  =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

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

                                                       Three Months Ended                  Nine Months Ended
                                                          September 30                       September 30
                                                  ------------------------------     ------------------------------
                                                      1997              1996             1997              1996
                                                  ------------     -------------     ------------     -------------
<S>                                               <C>              <C>               <C>              <C>    
Interest Income:
    Interest on loans                              $  610,177      $    554,245      $ 1,758,899      $  1,637,733
    Interest on mortgage-backed securities             70,611            59,882          217,913           181,416
    Interest and dividends on investments              37,414            32,460          105,908            96,723
                                                  ------------     -------------     ------------     -------------
                                                      718,202           646,587        2,082,720         1,915,872
Interest Expense:
    Interest on deposits                              314,895           264,445          889,337           787,727
    Interest on advances                              103,005           107,803          323,394           289,476
    Interest on repurchase agreements                  43,371            31,054          111,739            93,408
    Interest on other borrowings                       34,786            38,338          100,833           124,152
                                                  ------------     -------------     ------------     -------------
                                                      496,057           441,640        1,425,303         1,294,763
                                                  ------------     -------------     ------------     -------------
        Net Interest Income                           222,145           204,947          657,417           621,109
Provision for loan losses                               9,980            23,498           43,786            59,256
                                                  ------------     -------------     ------------     -------------
        Net Interest Income after Provision
            for Loan Losses                           212,165           181,449          613,631           561,853
Non-Interest Income:
    Fees                                               11,574             9,504           33,609            27,872
    Gain on the sale of securities, MBS, and loans      1,884             1,952            6,168             9,783
    Other                                               6,962             6,220           19,685            18,371
                                                  ------------     -------------     ------------     -------------
                                                       20,420            17,676           59,462            56,026
Non-Interest Expense:
    General and administrative:
        Personnel                                      45,198            40,146          133,190           119,273
        Occupancy                                      14,008            12,702           40,804            37,267
        Deposit insurance (a)                           1,786           140,949            5,769           162,298
        Advertising                                     3,445             1,954            8,205             6,711
        Other                                          18,797            15,531           53,063            46,993
                                                  ------------     -------------     ------------     -------------
                                                       83,234           211,282          241,031           372,542
Earnings (Loss) Before Taxes on Income and
    Cumulative Effect of Change in Accounting         149,351           (12,157)        432,062            245,337
    Taxes on Income (b)                                59,344          (147,942)        171,404            (48,626)
                                                  ------------     -------------     ------------     -------------
Earnings Before Cumulative Effect of Change in
    Accounting for Goodwill                            90,007           135,785          260,658           293,963
Cumulative Effect of Change in Accounting
    for Goodwill (c)                                      -0-               -0-              -0-          (205,242)
                                                  ------------     -------------     -----------      -------------
Net Earnings                                      $    90,007      $    135,785      $   260,658      $     88,721
                                                  ============     =============     ===========      =============

Earnings Per Share:
Earnings Per Share Before Cumulative Effect of
    Change in Accounting for Goodwill             $      1.58      $       2.32      $      4.57      $       5.01
Cumulative Effect of Change in Accounting
    for Goodwill (c)                                     0.00              0.00             0.00             (3.49)
                                                  ------------     -------------     -----------      ------------
Net Earnings Per Share                            $      1.58      $       2.32      $      4.57      $       1.52
                                                  ============     =============     ============     =============
</TABLE>


(a) The  amounts for 1996  reflect the  one-time  SAIF  assessment  of $133
    million.

(b) The amounts for 1996 reflect a tax benefit of $139 million arising from
    a prior year  acquisition.  

(c) In September  1996, the Company  adopted SFAS 72 effective  January 1, 1996
    for  acquisitions  prior to September  30, 1982. As a result,  the  Company 
    wrote off $205  million as the  cumulative  effect of the change in 
    accounting for goodwill.


<PAGE>
<TABLE>
<CAPTION>
                        Golden West Financial Corporation
                      Consolidated Statement of Cash Flows
                                   (Unaudited)
                             (Dollars in thousands)


                                                                 Three Months Ended             Nine Months Ended
                                                                    September 30                  September 30
                                                             ---------------------------   ----------------------------
                                                                1997           1996           1997            1996
                                                             ------------   ------------   ------------   -------------
<S>                                                          <C>            <C>            <C>            <C>  
Cash Flows From Operating Activities:
  Net earnings                                               $    90,007     $  135,785     $  260,658     $     88,721
  Adjustments  to  reconcile  net  earnings to net cash
  provided  by  operatingctivities:
    Provision for loan losses                                      9,980         23,498         43,786          59,256
    Cumulative effect of the change in accounting for goodwill       -0-            -0-            -0-         205,242
    Amortization of loan fees and discounts                       (4,282)        (5,412)       (13,533)        (18,093) 
    Depreciation and amortization                                  5,263          4,884         15,570          14,512
    Loans originated for sale                                    (47,591)       (72,354)      (146,342)       (407,606)
    Sales of loans originated for sale                            44,482         73,715        142,786         408,594
    Decrease in interest earned but uncollected                    5,656          6,198          9,951           7,029
    Federal Home Loan Bank stock dividends                        (9,145)        (6,217)       (33,463)        (20,701)
    Decrease (increase) in prepaid expenses and other assets      26,917          7,684        (94,545)       (136,688)
    Increase in accounts payable and accrued expenses             42,187         80,576         75,810         142,780
    Increase (decrease) in taxes on income                           138       (197,773)        25,007        (198,759)
    Other, net                                                      (874)        (4,672)        (8,744)        (11,987)
                                                             ------------   ------------   ------------   -------------
      Net cash provided by operating activities                  162,738         45,912        276,941         132,300

Cash Flows From Investing Activities:
  New loan activity:
    New real estate loans originated for portfolio            (1,932,509)    (2,034,022)     (5,383,485)    (4,791,836)
    Real estate loans purchased                                     (670)        (1,934)         (1,930)        (4,009)
    Other, net                                                   (13,172)        (9,559)        (36,291)       (15,074)
                                                             ------------   ------------   ------------   -------------
                                                              (1,946,351)    (2,045,515)     (5,421,706)    (4,810,919)
  Real estate loan principal payments:
    Monthly payments                                             174,060        161,679         508,619        451,541
    Payoffs, net of foreclosures                                 744,387        528,889       1,932,070      1,651,319
    Refinances                                                    76,929         62,114         204,535        202,411
                                                             ------------   ------------   ------------   -------------
                                                                 995,376        752,682       2,645,224      2,305,271

  Purchases of mortgage-backed securities held to maturity           -0-             (4)           -0-          (1,522)
  Repayments of mortgage-backed securities                       131,174        100,527        369,760         320,465
  Proceeds from sales of real estate                              58,487         50,371        171,803         148,349
  Purchases of securities available for sale                        (110)      (344,476)        (1,297)       (674,721)
  Sales of securities available for sale                           4,381            -0-          5,342          81,133
  Matured securities available for sale                           13,994        207,393        238,047         862,264
  Decrease (increase) in other investments                       608,352       (139,862)       642,428        (159,842)
  Purchases of Federal Home Loan Bank stock                          -0-       (115,256)       (56,239)       (152,355)
  Redemptions of Federal Home Loan Bank stock                        -0-         37,649            -0-          37,649 
  Additions to premises and equipment                            (14,612)        (7,216)       (37,744)        (21,722)
                                                             ------------   ------------   ------------   -------------
    Net cash used in investing activities                       (149,309)    (1,503,707)    (1,444,382)     (2,065,950)

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

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


                                                                 Three Months Ended            Nine Months Ended
                                                                    September 30                  September 30
                                                             ---------------------------   ---------------------------
                                                                1997           1996           1997            1996
                                                             ------------   ------------   ------------   -------------
<S>                                                          <C>            <C>            <C>            <C>   
Cash Flows From Financing Activities:
    Deposit activity:
      Increase (decrease) in deposits, net                   $   (46,244)   $   324,260     $1,426,904     $    92,604
      Interest credited                                          244,531        219,507        708,109         643,851
                                                             ------------   ------------   ------------   -------------
                                                                 198,287        543,767      2,135,013         736,455

  Additions to Federal Home Loan Bank advances                   511,750      1,117,600        555,950       1,881,050
  Repayments of Federal Home Loan Bank advances                 (642,070)      (134,025)    (2,125,759)       (169,302)
  Proceeds from agreements to repurchase securities            2,553,903      1,974,262      4,990,396       3,989,933
  Repayments of agreements to repurchase securities           (2,617,206)    (2,064,039)    (4,007,604)     (3,580,395)
  Repayments of medium-term notes                                    -0-            -0-       (280,000)       (908,135)
  Proceeds from federal funds purchased                        7,808,000            -0-      7,808,000       1,250,000
  Repayments of federal funds purchased                       (7,808,000)           -0-     (7,808,000)     (1,250,000)
  Repayment of subordinated debt                                     -0-            -0-       (115,000)            -0-
  Dividends on common stock                                       (6,241)        (5,496)       (18,795)        (16,591)
  Sale of stock                                                   1,441           1,665          3,770           6,110
  Purchase and retirement of Company stock                        (3,062)       (35,196)       (48,351)        (93,703)
                                                             ------------   -------------  ------------   ------------
    Net cash provided by (used in) financing activities           (3,198)     1,398,538      1,089,620       1,845,422
                                                             ------------   ------------   ------------   -------------
Net Increase (Decrease) in Cash                                   10,231        (59,257)       (77,821)        (88,228)
Cash at beginning of period                                      130,667        189,724        218,719         218,695
                                                             ------------   ------------   ------------   -------------
Cash at end of period                                        $   140,898    $   130,467    $   140,898    $    130,467
                                                             ============   ============   ============   =============

Supplemental cash flow information:
  Cash paid for:
    Interest                                                 $   492,562    $   476,400     $1,421,204    $  1,342,224
    Income taxes                                                  59,206         49,832        147,720         155,410
  Cash received for interest and dividends                       723,858        652,785      2,092,671       1,922,901
  Noncash investing activities:
    Loans transferred to foreclosed real estate                   51,472         64,061        156,198         163,050
    Loans securitized into MBS with recourse                         -0-            -0-            -0-         226,210

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

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

                                                                            Nine Months Ended
                                                                               September 30
                                                                        ---------------------------
                                                                           1997           1996
                                                                        ------------   ------------
<S>                                                                     <C>            <C>    
Common Stock:
  Balance at January 1                                                  $     5,734     $    5,887
  Common stock issued upon exercise of stock options                             16             25
  Common stock retired upon purchase of stock                                   (73)          (174)
                                                                        ------------   ------------
  Balance at September 30                                                     5,677          5,738
                                                                        ------------   ------------
Paid-in Capital:
  Balance at January 1                                                       67,953         55,353
  Common stock issued upon exercise of stock options                          3,754          6,085
                                                                        ------------   ------------
  Balance at September 30                                                    71,707         61,438
                                                                        ------------   ------------
Retained Earnings:
  Balance at January 1                                                    2,177,098      2,140,883
  Net earnings                                                              260,658         88,721
  Cash dividends on common stock                                            (18,795)       (16,591)
  Retirement of stock                                                       (48,278)       (93,529)
                                                                        ------------   ------------
  Balance at September 30                                                 2,370,683      2,119,484
                                                                        ------------   ------------
Unrealized Gains on Securities Available for Sale:
  Balance at January 1                                                       99,692         76,230
  Change during period                                                       27,461          7,254
                                                                        ------------   ------------
  Balance at September 30                                                   127,153         83,484
                                                                        ------------   ------------
Total Stockholders' Equity at September 30                              $ 2,575,220    $ 2,270,144
                                                                        ============   ============
</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, 1996,
as well as certain  material  changes in results of operations  during the three
and nine month periods ended September 30, 1997, and 1996, respectively.

     The following narrative is written with the presumption that the users have
read or have access to the Company's  1996 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, 1996, and for the year then ended. Therefore, only material changes
in financial condition and results of operations are discussed herein.

     NEW ACCOUNTING PRONOUNCEMENTS

     In June 1997, the Financial Accounting Standards Board issued Statements 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;  and No. 131,  "Disclosures about Segments of an Enterprise and Related
Information"   (SFAS  131),  which  establishes  annual  and  interim  reporting
standards for an enterprise's  operating segments and related  disclosures about
its products, services, geographic areas, and major customers. Adoption of these
statements  will not  impact  the  Company's  consolidated  financial  position,
results of operations or cash flows,  and any effect will be limited to the form
and content of its  disclosures.  The Company  operates as a single segment and,
therefore,  SFAS 131 is  expected to have no effect on the  Company's  financial
statements.  Both  statements  are  effective for fiscal years  beginning  after
December 15, 1997, with earlier application permitted.

CHANGE IN ACCOUNTING FOR GOODWILL

     Effective  January 1, 1996,  the Company  adopted  Statement  of  Financial
Accounting  Standards No. 72, "Accounting for Certain Acquisitions of Banking or
Thrift  Institutions," (SFAS 72) for goodwill related to acquisitions made prior
to September  30, 1982.  Up until 1996,  the Company had applied SFAS 72 only to
acquisitions made after September 30, 1982. The adoption of SFAS 72 for goodwill
relating to  acquisitions of banking or thrift  institutions  prior to September
30, 1982, is permitted but not required.  SFAS 72 requires,  among other things,
that goodwill be amortized over a period no longer than the estimated  remaining
life of the acquired long-term interest-earning assets. As a result, the Company
wrote off goodwill totaling $205 million during 1996 as the cumulative effect of
the change in accounting for goodwill.  The remaining goodwill from acquisitions
subsequent  to 1982  amounting  to less than .2% of total assets is not material
and has been  reclassified  to other  assets.  The minor  amount  of  continuing
goodwill  amortization  no longer warrants a separate line item on the Company's
Consolidated  Statement of Net Earnings and,  therefore,  for 1997 and 1996, has
been included in other income.
<PAGE>
     The adoption of SFAS 72 previously  noted  resulted in the  restatement  of
earnings  previously  reported  for the first and second  quarters of 1996.  The
restatement  included  a  first  quarter  charge  of  $3.49  per  share  for the
cumulative  effect of change in accounting for goodwill and a credit of $.05 per
share and $.14 per share of  goodwill  amortization  for the third  quarter  and
first nine months of 1996,  respectively.  For the three and nine  months  ended
September  30,  1996,  earnings  before the  cumulative  effect of the change in
accounting for goodwill were $2.32 per share and $5.01 per share, respectively.

<TABLE>
<CAPTION>

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

                                                       September 30      September 30     December 31
                                                            1997             1996             1996
                                                       -------------    ------------     -------------
<S>                                                    <C>              <C>              <C>    
   Assets                                              $ 39,228,359     $37,011,423      $ 37,730,598
   Loans receivable                                      32,723,212      30,278,267        30,113,421
   Mortgage-backed securities                             3,921,798       3,311,634         4,293,582
   Deposits                                              24,234,947      21,584,365        22,099,934
   Stockholders' equity                                   2,575,220       2,270,144         2,350,477
   Stockholders' equity/total assets                          6.56%           6.13%             6.23%
   Book value per common share                         $      45.36     $     39.57       $     40.99
   Common shares outstanding                             56,770,444      57,375,909        57,342,389
   Yield on loan portfolio                                    7.47%           7.42%             7.43%
   Yield on mortgage-backed securities                        7.15%           7.18%             7.13%
   Yield on investments                                       6.61%           6.06%             6.88%
   Yield on earning assets                                    7.42%           7.32%             7.37%
   Cost of deposits                                           5.08%           4.95%             4.98%
   Cost of borrowings                                         5.98%           5.85%             5.80%
   Cost of funds                                              5.37%           5.28%             5.28%
   Yield on earning assets less cost of funds                 2.05%           2.04%             2.09%
   Ratio of nonperforming assets to total assets              1.05%           1.20%             1.21%
   Ratio of troubled debt restructured to total assets         .13%            .16%              .22%

   World Savings and Loan Association:
     Total assets                                      $ 17,116,425     $23,883,202       $21,040,890
     Net worth                                            1,196,534       1,623,564         1,427,914
     Net worth/total assets                                   6.99%           6.80%             6.79%
     Regulatory capital ratios:
       Tangible capital                                       6.34%           6.47%             6.37%
       Core capital                                           6.34%           6.47%             6.37%
       Risk-based capital                                    13.83%          14.19%            13.91%

   World Savings Bank, a Federal Savings Bank:
     Total assets                                      $ 21,734,516     $12,830,891       $16,929,859
     Net worth                                            1,489,373         880,253         1,136,717
     Net worth/total assets                                   6.85%           6.86%             6.71%
     Regulatory capital ratios:
       Tangible capital                                       6.83%           6.83%             6.69%
       Core capital                                           6.83%           6.83%             6.69%
       Risk-based capital                                    13.30%          12.68%            13.14%

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                        Golden West Financial Corporation
                              Financial Highlights
                                   (Unaudited)
                 (Dollars in thousands except per share figures)

                                                          Three Months Ended            Nine Months Ended
                                                             September 30                 September 30
                                                       --------------------------   --------------------------
                                                          1997           1996          1997           1996
                                                       ------------   -----------   ------------   -----------
<S>                                                    <C>            <C>           <C>            <C>   
   New real estate loans originated                    $ 1,980,100    $2,106,376    $5,529,827     $5,199,442
   Average yield on new real estate loans                    7.63%         7.54%         7.56%          7.61%
   Increase in deposits (a)                            $   198,287    $  543,767    $2,135,013     $  736,455
   Earnings excluding 1996 nonrecurring items (b)           90,007        74,208       260,658        232,386
   Earnings before cumulative effect of change
      in accounting for goodwill                            90,007       135,785       260,658        293,963
   Net earnings                                             90,007       135,785       260,658         88,721
   Earnings per share excluding 1996 nonrecurring items (b)   1.58          1.29          4.57           3.99
   Earnings per share before cumulative effect
      of change in accounting for goodwill                    1.58          2.32          4.57           5.01
   Net earnings per share                                     1.58          2.32          4.57           1.52
   Cash dividends on common stock                              .11          .095           .33           .285
   Average common shares outstanding                    56,740,342    57,584,306    56,980,399     58,216,474
   Ratios:(c)
     Net earnings/average net worth (ROE) (d)               14.23%        24.71%        14.14%          5.45%
     Net earnings/average assets (ROA) (d)                    .92%         1.50%          .90%           .33%
     Net interest income/average assets                      2.26%         2.27%         2.27%          2.34%
     General and administrative expense/average assets
       (G&A to Average Assets) (d)                            .85%         2.34%          .83%          1.40%
</TABLE>

(a)    Includes a decrease of $208 million of wholesale deposits for the quarter
       ended  September  30, 1997 and an increase of $864  million of  wholesale
       deposits for the nine months ended September 30, 1997.

(b)    Excludes  the  third  quarter  1996  SAIF   assessment  of  $133  million
       (pre-tax),  or $1.34  per  share,  and the  special  tax  credit  of $139
       million,  or $2.40 per share. Also excluded is the $205 million, or $3.49
       per share,  cumulative  effect of the change in accounting  for goodwill,
       which was effective January 1, 1996.

(c)    Ratios are  annualized by multiplying  the quarterly  computation by four
       and the  nine  month  computation  by one  and  one-third.  Averages  are
       computed by adding the beginning balance and each monthend balance during
       the  quarter  and  nine-month  period  and  dividing  by  four  and  ten,
       respectively.

(d)    The ratios for the  quarter  and nine  months  ended  September  30, 1996
       include  the three 1996  nonrecurring  items in footnote  (b) above.  The
       ratios for the  quarter  ended  September  30,  1996,  excluding  the two
       nonrecurring  items are: ROE 13.50%;  ROA .82%; and G&A to Average Assets
       .87%.  The  year-to-date  ratios as of September 30, 1996,  excluding the
       three  nonrecurring  items are: ROE 14.27%;  ROA .87%; and G&A to Average
       Assets .90%.



<PAGE>
     FINANCIAL CONDITION

     The consolidated  condensed balance sheet shown in the table below presents
the Company's  assets and liabilities in percentage  terms at September 30, 1997
and 1996,  and  December  31,  1996.  The reader is  referred  to page 51 of the
Company's 1996 Form 10-K for similar information for the years 1993 through 1996
and a discussion of the changes in the  composition of the Company's  assets and
liabilities in those years.

<TABLE>
<CAPTION>

                                     TABLE 1

                      Consolidated Condensed Balance Sheet
                               In Percentage Terms

                                                              September 30                       
                                                           --------------------         December 31
                                                            1997         1996              1996
                                                           -------      -------        -------------

<S>                                                        <C>          <C>            <C>    
       Assets:
          Cash and investments                                3.0%         5.8%                  5.5%
          Mortgage-backed securities                         10.0          8.9                  11.4
          Loans receivable                                   83.4         81.8                  79.8
          Other assets                                        3.6          3.5                   3.3
                                                           -------      -------               -------
                                                            100.0%       100.0%                100.0%
                                                           =======      =======               =======

       Liabilities and Stockholders' Equity:
          Deposits                                           61.8%        58.3%                 58.6%
          Federal Home Loan Bank advances                    18.4         22.0                  23.3
          Securities sold under agreements to repurchase      7.4          6.0                   5.1
          Medium-term notes                                   0.8          1.9                   1.6
          Other liabilities                                   1.9          2.1                   1.7
          Subordinated debt                                   3.1          3.6                   3.5
          Stockholders' equity                                6.6          6.1                   6.2
                                                           -------      -------               -------
                                                            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 September 30, 1997, the Company's
assets mature or reprice sooner than its  liabilities.  Consequently,  one would
expect  falling  interest  rates to lower  the  Company's  earnings  and  rising
interest  rates to increase  the  Company's  earnings.  However,  the  Company's
earnings  are also  affected  by the  built-in  lags  inherent  in the  Eleventh
District Cost of Funds Index (COFI),  which is the benchmark the Company uses to
determine  the rate on the great  majority  of its  adjustable  rate  mortgages.
Specifically,  there is a two-month  delay in reporting  the COFI because of the
time required to gather the data needed to compute the index.  As a result,  the
current COFI  actually  reflects the  Eleventh  District's  cost of funds at the
level it was two months prior. In addition, because COFI is based on a portfolio
of  accounts,  not all of which  mature or  reprice  immediately,  COFI does not
initially  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.  In addition to the COFI lags,  other
elements  of ARM  loans  also have an impact on  earnings.  These  elements  are
introductory  rates on new ARM loans, the interest rate adjustment  frequency of
ARM loans,  interest rate limits on individual  rate changes,  and interest rate
floors.

<TABLE>
<CAPTION>

                                     TABLE 2

            Repricing of Interest-Earning Assets and Interest-Bearing
                   Liabilities, Repricing Gaps, and Gap Ratio
                            As of September 30, 1997
                              (Dollars in millions)

                                                             Projected Repricing(a)
                                         ----------------------------------------------------------------
                                           0 - 3        4 - 12        1 - 5        Over 5
                                          Months        Months        Years        Years         Total
                                         ----------   -----------   ----------   -----------   ----------
<S>                                      <C>          <C>           <C>          <C>           <C>    
Interest-Earning Assets:
  Investments                            $   719      $    257      $    45      $      2      $    1,023
  Mortgage-backed securities               3,066            86          339           431           3,922
  Loans receivable: (b)
    Rate-sensitive                        28,262         1,568          125           -0-          29,955
    Fixed-rate                                89           253        1,027         1,154           2,523
  Other(c)                                   684           -0-          -0-           -0-             684
  Impact of interest rate swaps              597           190         (356)         (431)            -0-
                                       ----------   -----------   ----------   -----------     ----------
Total                                  $  33,417     $   2,354    $   1,180     $   1,156      $   38,107
                                       ==========   ===========   ==========   ===========     ==========
Interest-Bearing Liabilities(d):
  Deposits                             $  13,569     $   8,025    $   2,620     $      21      $   24,235
  FHLB advances                            5,923           900           25           381           7,229
  Other borrowings                         3,294           200          718           199           4,411
  Impact of interest rate swaps            1,362          (903)        (368)          (91)            -0-
                                       ----------   -----------   ----------   -----------    -----------
  Total                                $  24,148     $   8,222    $   2,995     $     510     $    35,875
                                       ==========   ===========   ==========    ==========    ===========
Repricing gap                          $   9,269     $  (5,868)   $  (1,815)    $     646
                                       ==========   ===========   ==========    ==========
Cumulative gap                         $   9,269     $   3,401    $   1,586     $   2,232
                                       ==========   ===========   ==========   ===========

Cumulative gap as a percentage of     
  total assets                             23.6%          8.7%         4.0%
                                       ==========   ===========   ==========
</TABLE>

(a)  Based on scheduled maturity or scheduled repricing; loans reflect scheduled
     repayments and projected prepayments of principal.

(b)  Excludes nonaccrual loans (90 days or more past due).

(c)  Includes cash in banks and Federal Home Loan Bank (FHLB) stock.

(d)  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 and Loan  Association  (World or Association) and World Savings
Bank, FSB (WFSB),  to maintain a minimum  amount of cash and certain  qualifying
investments for liquidity purposes.  The current minimum requirement is equal to
a monthly average of daily balances of 5% of deposits and short-term borrowings.
Even  though  the  ratio of cash and  investments  to total  assets  was 3.0% at
September  30, 1997 as shown on page 10, the average for the month was in excess
of the 5%  requirement.  For the months ended  September 30, 1997 and 1996,  and
December 31, 1996, World's average regulatory liquidity ratios were 10%, 7%, and
8%, respectively. For the months ended September 30, 1997 and 1996, and December
31,  1996,  WFSB's  average  regulatory  liquidity  ratios  were 8%, 6%, and 6%,
respectively.  World and WFSB exceeded the monthly 5%  requirements  for each of
the nine months ended  September 30, 1997 and all months during 1996.  The level
of the Company's investments position in excess of its liquidity requirements at
any time depends on liquidity needs and available arbitrage opportunities.

     At September  30, 1997 and 1996,  and  December  31, 1996,  the Company had
securities  available for sale in the amount of $586 million,  $651 million, and
$781 million,  respectively,  including unrealized gains on securities available
for sale of $206 million,  $132  million,  and $159  million,  respectively.  At
September  30,  1997 and  1996,  and  December  31,  1996,  the  Company  had no
securities held to maturity or for trading.

     Included in the  securities  available  for sale at September  30, 1997 and
1996, and December 31, 1996, were collateralized  mortgage obligations (CMOs) in
the amount of $82 million,  $216 million,  and $170 million,  respectively.  The
Company holds CMOs on which both  principal  and interest are received.  It does
not hold any  interest-only or  principal-only  CMOs. At September 30, 1997, the
majority of the Company's CMOs had remaining  terms to maturity of five years or
less, and qualified for inclusion in the regulatory liquidity measurement.

     MORTGAGE-BACKED SECURITIES

     At September  30, 1997 and 1996,  and  December  31, 1996,  the Company had
mortgage-backed securities (MBS) held to maturity in the amount of $3.7 billion,
$2.9  billion,  and  $4.1  billion,  respectively,  including  Federal  National
Mortgage  Association  (FNMA) MBS subject to full credit recourse to the Company
of $3.0 billion at September 30, 1997,  $2.0 billion at September 30, 1996,  and
$3.3 billion at December 31, 1996. At September 30, 1997 and 1996,  and December
31, 1996, the Company had mortgage-backed  securities  available for sale in the
amount of $197 million, $458 million, and $227 million, respectively,  including
unrealized gains on MBS available for sale of $8 million,  $11 million,  and $11
million,  respectively,  and including  $221 million of FNMA MBS subject to full
credit  recourse at  September  30,  1996.  At  September  30, 1997 and 1996 and
December 31, 1996, the Company had no trading MBS.

<PAGE>

     During  1995 and  1996,  the  Company  securitized  $2.3  billion  and $1.3
billion,   respectively,   of  adjustable   rate  mortgages   (ARMs)  into  FNMA
COFI-indexed MBS, to be used as collateral for borrowings.  Included in the $1.3
billion  securitized during 1996, was $226 million of loans securitized into MBS
available for sale with recourse,  which were subsequently  transferred from the
MBS available for sale  portfolio to the MBS held to maturity  portfolio  during
the fourth quarter of 1996. These securities are subject to full credit recourse
to the  Company.  The Company has the ability and intent to hold these MBS until
maturity. Accordingly, these MBS are classified as held to maturity.

     Repayments  of MBS during the third  quarter  and first nine months of 1997
were $131 million and $370 million,  respectively,  compared to $101 million and
$320 million in the same  periods of 1996.  The  increase in  repayments  on MBS
during the first nine  months of 1997 as  compared  to the first nine  months of
1996 was primarily due to the increase in prepayments  on the  underlying  loans
during the third  quarter of 1997 as compared  to the third  quarter of 1996 and
the increase in MBS that resulted from the securitization of ARM loans into FNMA
MBS.

     LOAN PORTFOLIO

     LOAN VOLUME

     New loan  originations  for the three and nine months ended  September  30,
1997, amounted to $2.0 billion and $5.5 billion, respectively,  compared to $2.1
billion and $5.2  billion  for the same  periods in 1996.  The  increase in loan
volume in 1997  occurred  because of a  continuing  strong home sales market and
solid demand for ARMs,  our primary  product.  Despite the fact that the cost of
fixed-rate  mortgages fell below 8% during the third quarter of 1997,  ARMs, the
Company's  principal product,  remained an attractive option for many customers.
The  Company  continues  to sell  most  of its  fixed-rate  originations.  Loans
originated for sale for the three and nine months ended  September 30, 1997 were
$48 million  and $146  million,  respectively,  compared to $72 million and $408
million for the same periods in 1996.  Refinanced loans  constituted 30% and 32%
of new loan originations for the three and nine months ended September 30, 1997,
compared to 29% and 35% for the three and nine months ended September 30, 1996.

     The Company  has lending  operations  in 25 states.  The primary  source of
mortgage  origination is loans secured by residential  properties in California.
For the three and nine  months  ended  September  30,  1997,  53% of total  loan
originations  were on residential  properties in California  compared to 49% and
51%  for the  same  periods  in  1996.  The  five  largest  states,  other  than
California,  for  originations for the three and nine months ended September 30,
1997, were Florida,  Texas,  Illinois,  New Jersey, and Colorado with a combined
total of 25% of total originations for both periods. The percentage of the total
loan  portfolio  (excluding  mortgage-backed  securities  with recourse) that is
comprised of  residential  loans in  California  was 67% at  September  30, 1997
compared to 70% at September 30, 1996, and 69% at December 31, 1996.

     The tables on the following two pages show the Company's  loan portfolio by
state at September 30, 1997 and 1996.

<PAGE>
<TABLE>
<CAPTION>
                                     TABLE 3

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


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

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


(a)    The Company has no commercial loans.

(b)    During 1995 and 1996,  loans  amounting to $2.3 billion and $1.3 billion,
       respectively,  were  securitized with full recourse into Federal National
       Mortgage Association  mortgage-backed  securities. The September 30, 1997
       balances of these FNMA  mortgage-backed  securities  are reflected in the
       amounts above.



<PAGE>
<TABLE>
<CAPTION>
                                     TABLE 4

                             Loan Portfolio by State
                               September 30, 1996
                             (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         $19,615,787    $3,369,019    $     259     $   65,584      $23,050,649       70.35%
Colorado               931,879       233,318          -0-          7,404        1,172,601        3.58
Illinois               985,939       182,522          -0-          1,857        1,170,318        3.57
Texas                1,052,319       106,486          579          1,602        1,160,986        3.54
New Jersey             992,647           409          -0-          7,155        1,000,211        3.05
Florida                917,033        17,829          143            976          935,981        2.86
Washington             397,289       341,335          -0-            765          739,389        2.26
Arizona                569,451        51,943          -0-          1,689          623,083        1.90
Virginia               474,620         7,884          -0-          1,498          484,002        1.48
Pennsylvania           452,421         4,273          -0-          3,780          460,474        1.41
Connecticut            379,277           -0-          -0-             24          379,301        1.16
Maryland               310,800         1,396          -0-            561          312,757        0.95
Oregon                 199,410        11,031          -0-          2,778          213,219        0.65
Nevada                 173,693         1,148          -0-            -0-          174,841        0.53
Kansas                 140,487         4,951          -0-            198          145,636        0.44
Utah                   134,296            61          -0-          1,841          136,198        0.42
Minnesota              118,120         5,135          -0-            -0-          123,255        0.38
Wisconsin               87,158         4,183          -0-            -0-           91,341        0.28
Missouri                68,924         6,697          -0-            -0-           75,621        0.23
Massachusetts           52,479           -0-          -0-             20           52,499        0.16
New York                50,257           -0-          -0-             18           50,275        0.15
Washington, DC          39,633           -0-          -0-            -0-           39,633        0.12
Georgia                 37,223           -0-          -0-          1,864           39,087        0.12
New Mexico              31,705           -0-          -0-            -0-           31,705        0.10
Ohio                    18,743         2,322          283          4,477           25,825        0.08
Idaho                   23,298           -0-          -0-            -0-           23,298        0.07
Delaware                20,944           -0-          -0-            -0-           20,944        0.06
North Carolina           8,067           254          -0-            511            8,832        0.03
South Dakota             4,838           -0-          -0-            -0-            4,838        0.01
Other                   12,874            18          -0-          4,698           17,590        0.06
                   ------------   -----------   ----------   ------------     -------------  ---------
  Totals           $28,301,611    $4,352,214    $   1,264    $   109,300      $32,764,389      100.00%
                   ============   ===========   ==========   ============                    =========

SFAS 91 deferred loan fees                                                        (63,634)
Loan discount on purchased loans                                                   (5,436)
Undisbursed loan funds                                                             (4,913)
Allowance for loan losses                                                        (178,354)
Loans to facilitate (LTF) interest reserve                                           (532)
Troubled debt restructured (TDR) interest reserve                                  (5,237)
Loans on deposits                                                                  31,823
                                                                              ------------
  Total loan portfolio and loans securitized into FNMA MBS with recourse       32,538,106
Loans securitized into FNMA MBS with recourse                                  (2,259,839)(b)
                                                                              ------------
     Total loan portfolio                                                     $30,278,267
                                                                              ============

</TABLE>


(a)    The Company has no commercial loans.

(b)    During 1995 and 1996,  loans  amounting to $2.3 billion and $226 million,
       respectively,  were  securitized with full recourse into Federal National
       Mortgage Association (FNMA) mortgage-backed securities. The September 30,
       1996 balances of these FNMA  mortgage-backed  securities are reflected in
       the amounts above.


<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 September  30, 1997  compared to 91% at September  30, 1996 and
December 31, 1996.  The  Company's  ARM  originations  for the third quarter and
first nine months of 1997  constituted  approximately  96% of new mortgage loans
made in 1997 compared to 95% and 89% in the same periods of 1996.

     The weighted  average  maximum  lifetime cap rate on the Company's ARM loan
portfolio  (including MBS with  recourse) was 12.76%,  or 5.43% above the actual
weighted average rate at September 30, 1997,  versus 12.95%,  or 5.72% above the
weighted average rate at September 30, 1996.

     Approximately  $5.5 billion of the Company's ARM loans  (including MBS with
recourse)  have terms that  state  that the  interest  rate may not fall below a
lifetime floor set at the time of origination or assumption. As of September 30,
1997,  $567  million of ARM loans had reached  their rate  floors.  The weighted
average  floor  rate on the  loans  that had  reached  their  floor was 7.76% at
September 30, 1997  compared to 7.75% at September 30, 1996.  Without the floor,
the average yield on these loans would have been 7.14% at September 30, 1997 and
7.08% at September 30, 1996.

     Loan repayments  consist of monthly loan  amortization,  loan payoffs,  and
refinances.  For the  three and nine  months  ended  September  30,  1997,  loan
repayments  were $995 million and $2.6 billion,  respectively,  compared to $753
million  and $2.3  billion in the same  periods of 1996.  Loan  repayments  were
higher during the first nine months of 1997 as compared to the first nine months
of 1996  primarily due to an increase in the loan  portfolio  balance as well as
increased prepayment rates.
<PAGE>
     MORTGAGE SERVICING RIGHTS

     On January 1, 1996, the Company adopted  Statement of Financial  Accounting
Standards No. 122,  "Accounting for Mortgage  Servicing Rights" (SFAS 122). SFAS
122 amends Statement of Financial  Accounting  Standards No. 65, "Accounting for
Certain Mortgage Banking Activities," to require that any financial  institution
participating in the secondary  mortgage market  recognize,  as separate assets,
rights to service  mortgage  loans for others  when  those  rights are  acquired
through  either  the  purchase  or  origination  of  mortgage  loans  which  are
subsequently  sold  or  securitized.  SFAS  122  also  requires  that  financial
institutions  participating in the secondary mortgage market should evaluate and
measure for impairment of  capitalized  mortgage  servicing  rights based on the
fair value of those rights on a  disaggregated  basis. If the book value exceeds
the  fair  value  of  the  capitalized  mortgage  servicing  rights,   financial
institutions  are  required to  write-down  the  servicing  rights to their fair
value.  The book value of Golden West's servicing rights did not exceed the fair
value at September 30, 1997 or 1996 and, therefore, no adjustment was necessary.
On January 1, 1997,  the  Company  adopted  Statement  of  Financial  Accounting
Standards No. 125,  "Accounting for Transfers and Servicing of Financial  Assets
and  Extinguishments  of  Liabilities"  (SFAS 125).  The accounting for mortgage
servicing assets under SFAS 125 is substantially  the same as the accounting for
mortgage  servicing assets under SFAS 122. See page 24 for further discussion on
SFAS 125.  For the third  quarter  and first nine  months of 1997,  the  Company
recognized gains of $1.1 million and $3.2 million,  respectively, on the sale of
loans due to the  capitalization  of servicing  rights.  For the same periods in
1996,  the  Company   recognized   gains  of  $1.8  million  and  $8.8  million,
respectively.  After amortization, the balance at September 30, 1997 and 1996 of
the   capitalized   servicing   rights  was  $10.3  million  and  $7.9  million,
respectively.
<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  include
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)

                                                         September 30             
                                                   --------------------------    December 31
                                                      1997          1996            1996
                                                   -----------   ------------   --------------
<S>                                                <C>           <C>             <C>    
Non-accrual loans                                  $  344,655    $   362,817     $   373,157
Real estate acquired through foreclosure               66,652         81,563          82,075
Real estate in judgment                                   -0-            944             416
                                                   -----------   ------------    ------------
Total nonperforming assets                         $  411,307    $   445,324     $   455,648
                                                   ===========   ============    ============
TDRs                                               $   51,785    $    60,732     $    84,082
                                                   ===========   ============    ============
Ratio of NPAs to total assets                           1.05%          1.20%           1.21%
                                                   ===========   ============    ============
Ratio of TDRs to total assets                            .13%           .16%            .22%
                                                   ===========   ============    ============
Ratio of NPAs and TDRs to total assets                  1.18%          1.36%           1.43%
                                                   ===========   ============    ============

</TABLE>

     The decrease in NPAs during 1997 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 and $12 million in the third  quarter
and first nine  months of 1997  compared  to $5 million  and $15 million for the
same periods of 1996.  Interest  foregone on TDRs  amounted to $381 thousand and
$1.5 million for the three and nine months ended September 30, 1997, compared to
$432 thousand and $1.2 million for the three and nine months ended September 30,
1996.

     The  tables on the  following  two pages show the  Company's  nonperforming
assets by state at September 30, 1997 and 1996.
<PAGE>
<TABLE>
<CAPTION>
                                     TABLE 6

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


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

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

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

(b) During 1995 and 1996, loans amounting to $2.3 billion and $1.3 billion,
    respectively,  were  securitized  with full recourse  into FNMA  mortgage-
    backed securities.  The September 30, 1997 balances of the related
    nonperforming assets are reflected in the amounts above.


<PAGE>
<TABLE>
<CAPTION>
                                     TABLE 7

                          Nonperforming Assets by State
                               September 30, 1996
                             (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+         Land        Estate      NPAs(b)       Loans
-----------   ---------   ----------   ---------      --------   --------    --------    ---------   ----------    --------
<S>           <C>         <C>          <C>            <C>        <C>         <C>         <C>         <C>           <C>
California    $291,880    $  18,711      $  530       $63,792   $  14,649     $   475    $  2,167    $ 392,204     1.70%
Colorado         1,220          119       3,092           165         -0-         -0-         -0-        4,596     0.39
Illinois         4,726          191         -0-           227         281         -0-         -0-        5,425     0.46
Texas            3,881          -0-         -0-           102         -0-         -0-         -0-        3,983     0.34
New Jersey      11,955          -0-         791         1,393         -0-         -0-         -0-       14,139     1.41
Florida          3,903          -0-         269           430         -0-         -0-         -0-        4,602     0.49
Washington       1,470          -0-         -0-           -0-         -0-         -0-         -0-        1,470     0.20
Arizona            776          -0-       1,096           -0-         -0-         -0-         -0-        1,872     0.30
Virginia         1,224          -0-         -0-           733         -0-         -0-         -0-        1,957     0.40
Pennsylvania     2,696          -0-         -0-            48         -0-         -0-         -0-        2,744     0.60
Connecticut      2,936          -0-         -0-           279         -0-         -0-         -0-        3,215     0.85
Maryland         1,596          -0-         -0-           -0-         -0-         -0-         -0-        1,596     0.51
Oregon             850          -0-         -0-           -0-         -0-         -0-         -0-          850     0.40
Nevada           1,000          -0-         -0-           -0-         -0-         -0-         -0-        1,000     0.57
Kansas             720           40         -0-           -0-         -0-         -0-         -0-          760     0.52
Utah               294          -0-         -0-           -0-         -0-         -0-         -0-          294     0.22
Minnesota          323          -0-         -0-           -0-         -0-         -0-         -0-          323     0.26
Wisconsin          -0-          -0-         -0-           -0-         -0-         -0-         -0-          -0-     0.00
Missouri           849          106         -0-           -0-         -0-         -0-         -0-          955     1.26
Massachusetts      -0-          -0-         -0-           -0-         -0-         -0-         -0-          -0-     0.00
New York         3,926          -0-         -0-           -0-         -0-         -0-         -0-        3,926     7.81
Washington, DC     -0-          -0-         -0-           -0-         -0-         -0-         -0-          -0-     0.00
Georgia          1,443          -0-         -0-            73         -0-         -0-         -0-        1,516     3.88
New Mexico         -0-          -0-         -0-           -0-         -0-         -0-         -0-          -0-     0.00
Ohio                70          -0-          58           -0-         -0-         -0-         -0-          128     0.50
Idaho              -0-          -0-         -0-           -0-         -0-         -0-         -0-          -0-     0.00
Delaware           -0-          -0-         -0-           -0-         -0-         -0-         -0-          -0-     0.00
North Carolina     -0-          -0-         -0-           -0-         -0-         -0-         -0-          -0-     0.00
South Dakota       -0-          -0-         -0-           -0-         -0-         -0-         -0-          -0-     0.00
Other               76          -0-         -0-           -0-         -0-         -0-         -0-           76     0.43
              ---------   ----------   ---------      --------   ---------   ---------   ---------   ----------    ----
   Totals     $ 337,814    $ 19,167     $ 5,836       $ 67,242   $ 14,930    $    475    $  2,167      447,631     1.37%
              =========   ==========   =========      ========   =========   =========   =========

REO general valuation allowance                                                                         (2,307)    (0.01)
                                                                                                     ----------    -----
Total nonperforming assets                                                                           $ 445,324      1.36%
                                                                                                     ==========    =====
</TABLE>


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

(b) During 1995 and 1996, loans amounting to $2.3 billion and $226  million,
    respectively,  were  securitized  with full  recourse  into FNMA mortgage-
    backed securities.  The  September  30,  1996  balance 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.

     Loans securitized into FNMA MBS with full credit recourse are included with
the Company's loan portfolio when determining the allowance for loan losses. For
loans sold to FNMA with full credit  recourse,  the  Company  records a separate
recourse liability for any potential losses.

     The table below shows the changes in the  allowance for loan losses for the
three and nine months ended September 30, 1997 and 1996.
<TABLE>
<CAPTION>

                                     TABLE 8

                      Changes in Allowance for Loan Losses
                             (Dollars in thousands)

                                                                 Three Months Ended          Nine Months Ended
                                                                    September 30               September 30
                                                              ------------------------   ------------------------
                                                                 1997         1996          1997         1996
                                                              -----------   ----------   -----------   ----------
<S>                                                           <C>           <C>          <C>           <C>    
  Beginning allowance for loan losses                          $ 216,651    $ 163,846     $ 195,702    $ 141,988
  Provision charged to expense                                     9,980       23,498        43,786       59,256
  Less loans charged off                                          (4,810)      (9,167)      (18,115)     (23,398)
  Add recoveries                                                     199          177           647          508
                                                              -----------   ----------   -----------   ----------
  Ending allowance for loan losses                             $ 222,020    $ 178,354     $ 222,020    $ 178,354
                                                              ===========   ==========   ===========   ==========
  Ratio of net charge-offs to average loans
    outstanding (including MBS with recourse)                       .05%         .11%          .07%         .10%
                                                              ===========   ==========   ===========   ==========

  Ratio of allowance for loan losses to nonperforming assets                                  54.0%        40.1%
                                                                                         ===========   ==========
  Ratio of allowance for loan losses to total loans
    (including MBS with recourse)                                                              .62%         .55%
                                                                                         ===========   ==========
</TABLE>
<PAGE>
     DEPOSITS

     Retail deposits increased during the third quarter of 1997 by $406 million,
including  interest  credited of $244  million,  compared to an increase of $544
million,  including  interest credited of $220 million,  in the third quarter of
1996. Retail deposit balances in the first nine months of 1997 increased by $1.3
billion, including interest credited of $708 million, compared to an increase of
$736 million, including interest credited of $644 million, during the first nine
months of 1996.  Retail deposits  increased during 1997 primarily due to ongoing
marketing  efforts and  competitive  rates offered by the Company on its insured
accounts.

     Beginning in January 1997,  the Company  began a program to use  government
securities   dealers  to  sell  wholesale   certificates  of  deposit  (CDs)  to
institutional  investors.  The Company's  deposit  balance at September 30, 1997
includes $864 million of these wholesale CDs.

     During 1997 the Company has been actively  promoting  money market  deposit
accounts  and  starting in  September  of 1997,  the Company  began  promoting a
high-yield  checking  account.  The higher rates offered on these  accounts have
caused the weighted average interest rate for interest-bearing checking accounts
and money market deposit accounts to be higher at September 30, 1997 as compared
to the previous year (see Table 9 on page 23).

     The mix of reported  deposits  changed  during 1997 as compared to 1996, in
part due to a new program begun in the fourth quarter of 1996. Specifically, the
reported balance of interest-bearing checking accounts has decreased as compared
to 1996 and the reported balance of money market accounts has increased compared
to balances  reported in 1996 as a result of this new program  which  calculates
the minimum amount of funds needed to cover  disbursements  for each  customer's
checking  account and transfers the remaining  funds to a money market  account,
reducing  the  Company's  required  reserves at the  Federal  Reserve  Bank.  In
addition,  during 1997 the  Company has been  actively  promoting  money  market
deposit accounts.

<PAGE>
     The table  below  shows the  Company's  deposits  by  interest  rate and by
remaining maturity at September 30, 1997 and 1996.

<TABLE>
<CAPTION>

                                     TABLE 9

                                    Deposits
                              (Dollars in millions)

                                                                                  September 30
                                                               ---------------------------------------------------
                                                                       1997                         1996
                                                               ----------------------      -----------------------
                                                                Rate*       Amount         Rate*           Amount
                                                               --------     ----------     ---------    ----------
<S>                                                            <C>          <C>            <C>          <C>  
       Deposits by interest rate:
       Interest-bearing checking accounts                          1.28%    $     286          1.22%    $      747
       Passbook accounts                                           2.15           530          2.22            549
       Money market deposit accounts                               3.73         2,883          3.06          1,095
       Term certificate accounts with original maturities
       of:
           4 weeks to 1 year                                       5.28        11,220          5.05         9,104
           1 to 2 years                                            5.44         4,455          5.21         5,259
           2 to 3 years                                            5.44         1,382          5.96         1,750
           3 to 4 years                                            5.77           453          5.58           591
           4 years and over                                        5.79         1,544          5.78         2,034
       Retail jumbo CDs                                            5.58           617          5.31           453
       Wholesale CDs                                               5.69           864          0.00           -0-
       All other                                                   7.65             1          7.71             2
                                                                           -----------                 ----------- 
                                                                           $   24,235                  $   21,584
                                                                           ===========                 ===========

       Deposits by remaining maturity:
       No contractual maturity                                             $    3,699                  $    2,391
       Maturity within one year:
          4th quarter                                                           9,570                       5,704
          1st quarter                                                           4,236                       6,568
          2nd quarter                                                           1,914                       2,857
          3rd quarter                                                           2,175                       1,127
                                                                           -----------                 -----------
                                                                               17,895                      16,256

       1 to 2 years                                                             1,986                       1,763
       2 to 3 years                                                               389                         772
       3 to 4 years                                                               121                         232
       4 years and over                                                           145                         170
                                                                           -----------                 -----------
                                                                           $   24,235                  $   21,584
                                                                           ===========                 ===========

</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, capital stock of the FHLB, and
MBS. FHLB advances  amounted to $7.2 billion at September 30, 1997,  compared to
$8.2  billion and $8.8  billion at  September  30, 1996 and  December  31, 1996,
respectively.
<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 $2.9  billion,  $2.2  billion,  and $1.9  billion at
September  30, 1997 and 1996,  and  December 31,  1996,  respectively.  The $2.9
billion  balance at September  30, 1997,  included  $750 million in Federal Home
Loan Bank of San Francisco MBS Reverse Repos with  maturities  ranging from 1997
to 1998.

     In June 1996, the Financial  Accounting  Standards Board (FASB) issued SFAS
125,   "Accounting   for  Transfers  and  Servicing  of  Financial   Assets  and
Extinguishments  of  Liabilities".  SFAS 125 provides  accounting  and reporting
standards for transfers and servicing of financial assets and extinguishments of
liabilities.   These  standards  are  based  on  consistent   application  of  a
financial-components  approach  that  focuses on control.  Under that  approach,
after a transfer of financial  assets,  an entity  recognizes  the financial and
servicing  assets it controls and the liabilities it has incurred,  derecognizes
financial assets when control has been surrendered, and derecognizes liabilities
when   extinguished.   This   statement   provides   consistent   standards  for
distinguishing  transfers of financial assets that are sales from transfers that
are secured  borrowings.  SFAS 125 is effective  for  transfers and servicing of
financial assets and extinguishments of liabilities occurring after December 31,
1996,  and is to be applied  prospectively.  In December  1996,  the FASB issued
Statement of Financial  Accounting Standards No. 127, "Deferral of the Effective
Date of Certain  Provisions of FASB Statement No. 125" (SFAS 127), which delayed
the effective date for portions of SFAS 125 for one year. The impact of the SFAS
125 and SFAS 127 on the Company's  financial condition and results of operations
has not been nor is it expected to be material.

     OTHER BORROWINGS

     At September 30, 1997,  Golden West, at the holding  company  level,  had a
total of $1.0  billion  of  subordinated  debt  issued  and  outstanding.  As of
September 30, 1997, the Company's subordinated debt securities were rated A3 and
A- by Moody's  Investors  Service  (Moody's)  and Standard & Poor's  Corporation
(S&P),  respectively.  At  September  30,  1997,  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.

     World  currently  has on file a  shelf  registration  with  the OTS for the
issuance  of $2.0  billion  of  unsecured  medium-term  notes,  all of which was
available  for  issuance at  September  30, 1997.  World had  medium-term  notes
outstanding under prior  registrations with principal amounts of $310 million at
September  30, 1997,  compared to $690 million at September  30, 1996,  and $590
million at December 31,  1996.  As of September  30, 1997,  World's  medium-term
notes were rated A1 and A+ by Moody's and S&P, respectively.
<PAGE>

     World also has on file a  registration  statement with the OTS for the sale
of up to $300 million of subordinated notes and, at September 30, 1997, the full
amount was available for  issuance.  As of September 30, 1997,  World had issued
under prior  registrations  a total of $200  million of  subordinated  notes (of
which  $100  million  matured  in  October  1997),  which were rated A2 and A by
Moody's and S&P,  respectively.  The subordinated  notes are included in World's
risk-based regulatory capital as Supplementary Capital.

     During  November  1996,  WFSB  received  permission  from  the OTS to issue
non-convertible medium-term notes to institutional investors under rules similar
to Office of the  Comptroller  of the  Currency  rules  applicable  to similarly
situated national banks. As of September 30, 1997, WFSB had not issued any notes
under this authority.

     STOCKHOLDERS' EQUITY

     The Company's  stockholders'  equity  increased by $225 million  during the
first nine months of 1997. The increase in stockholders'  equity was primarily a
result of net  earnings  for the  first  nine  months of 1997 and a $27  million
increase in market  values of securities  available for sale since  December 31,
1996,  which were  partially  offset by the $48 million  cost of the purchase of
Company  stock  and  the  payment  of $19  million  in  quarterly  dividends  to
stockholders. The Company's stockholders' equity decreased during the first nine
months of 1996 as a result of the $94  million  cost of the  purchase of Company
stock and the payment of $17 million in quarterly dividends to stockholders. The
decrease  was offset by net  earnings for the first nine months of 1996 and a $7
million  increase  in  market  values of  securities  available  for sale  since
December 31, 1995. Unrealized gains net of taxes on securities and MBS available
for sale included in  stockholders'  equity at September 30, 1997 and 1996,  and
December  31,  1996,  were  $127  million,   $83  million,   and  $100  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 common stock is a wise use of excess
capital.

     Since October 1993, through three separate actions,  Golden West's Board of
Directors  has  authorized  the  purchase by the  Company of up to 12.2  million
shares of Golden  West's common  stock.  As of September  30, 1997,  8.5 million
shares had been  purchased  and retired at a cost of $380 million  since October
1993,  of which  731,100  were  purchased  and  retired at a cost of $48 million
during the first nine months of 1997.  Dividends from World Savings 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.

     World paid a $135  million,  a $140 million and a $100 million  dividend to
Golden  West in  March,  June and  September  1997,  respectively.  Golden  West
purchased  from World,  and  subsequently  contributed  as capital to WFSB,  $30
million in loans during the first  quarter of 1997,  $18 million in loans during
the second  quarter,  and $17 million in loans during the third quarter of 1997.
In addition,  Golden West  contributed $30 million in the first quarter of 1997,
$47 million in the second  quarter of 1997, and $82 million in the third quarter
of 1997 in capital to WFSB.

<PAGE>

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

     REGULATORY CAPITAL

     The OTS requires federally insured institutions, such as World and WFSB, to
meet certain minimum capital  requirements.  Both World's and WFSB's  regulatory
capital ratios continue to exceed regulatory  requirements for  well-capitalized
institutions, the highest regulatory standard. The following table shows World's
regulatory  capital ratios and compares them to the OTS minimum  requirements at
September 30, 1997 and 1996.
<TABLE>
<CAPTION>
                                    TABLE 10

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

                            September 30, 1997                                 September 30, 1996
              ------------------------------------------------   ------------------------------------------------
                      ACTUAL                   REQUIRED                 ACTUAL                   REQUIRED
              -----------------------   -----------------------  ----------------------   -----------------------
               Capital       Ratio       Capital      Ratio       Capital       Ratio      Capital       Ratio
              -----------   ---------   -----------  ---------   -----------   --------   -----------   --------
<S>           <C>           <C>         <C>           <C>        <C>           <C>        <C>           <C>
   Tangible   $ 1,077,399     6.34%     $   254,738      1.50%    $ 1,541,519     6.47%      $ 357,644     1.50%
   Core         1,077,399     6.34          509,477      3.00       1,541,519     6.47         715,288     3.00
   Risk-based   1,390,093    13.83          804,375      8.00       1,866,220    14.19       1,052,051     8.00


</TABLE>

     The following  table shows WFSB's  current  regulatory  capital  ratios and
compares them to the current OTS minimum  requirements at September 30, 1997 and
1996.

<TABLE>
<CAPTION>
                                    TABLE 11

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

                            September 30, 1997                               September 30, 1996
              -----------------------------------------------   ----------------------------------------------
                     ACTUAL                  REQUIRED                  ACTUAL                  REQUIRED
              ----------------------   ----------------------   ----------------------   ----------------------
               Capital      Ratio       Capital      Ratio       Capital      Ratio       Capital      Ratio
              -----------  ---------   -----------  ---------   ----------   ---------   ----------   --------
<S>           <C>          <C>         <C>          <C>         <C>          <C>         <C>          <C>
   Tangible   $1,487,088    6.83%      $  326,468     1.50%       $876,490     6.83%      $ 192,563      1.50%
   Core        1,487,088    6.83          652,936     3.00         876,490     6.83         385,125      3.00
   Risk-based  1,562,867   13.30          940,300     8.00         901,307    12.68         568,592      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  the
Association nor WFSB has above-normal exposure to interest rate risk.

<PAGE>

     The OTS has adopted rules based upon five capital tiers:  well capitalized,
adequately capitalized,  undercapitalized,  significantly undercapitalized,  and
critically  undercapitalized.  The determination of whether an association falls
into a certain classification depends primarily on its capital ratios.

     The  table  below  shows  that  World's   regulatory  capital  exceeds  the
requirements of the well capitalized classification at September 30, 1997.

<TABLE>
<CAPTION>
                                    TABLE 12

                       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                          $1,077,399        6.34%          $   849,128         5.00%
        Tier 1 risk-based                  1,077,399       10.72               603,282         6.00
        Total risk-based                   1,390,093       13.83             1,005,469        10.00

</TABLE>

     The  table  below  shows  that  WFSB's   regulatory   capital  exceeds  the
requirements of the well capitalized classification at September 30, 1997.
<TABLE>
<CAPTION>

                                    TABLE 13

                   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                          $1,487,088        6.83%         $ 1,088,227        5.00%
        Tier 1 risk-based                  1,487,088       12.65              705,225        6.00
        Total risk-based                   1,562,867       13.30            1,175,375       10.00

</TABLE>

     RESULTS OF OPERATIONS

     NET EARNINGS

     Net earnings for the nine months ended September 30, 1997 were $261 million
or $4.57  per  share  compared  to $89  million  or $1.52 per share for the nine
months  ended  September  30,  1996.  Net  earnings  for the nine  months  ended
September 30, 1996 were significantly  influenced by three  nonrecurring  items:
the federally mandated  recapitalization  of the Savings  Association  Insurance
Fund (SAIF) which  resulted in a one-time  charge of $133 million,  or $1.34 per
share  on an  after-tax  basis  at the end of the  third  quarter  (see  Deposit
Insurance Section on page 33); the recognition  during the third quarter of $139
million,  or  $2.40  per  share  of  tax  benefits  arising  from a  prior  year
acquisition;  and the adoption, as of January 1, 1996, of SFAS 72 which resulted
in the  write-off  of $205  million,  or  $3.49  per  share,  of  goodwill  (see
Accounting  Change  section  on  page  7).  Without  the  effect  of  the  three
nonrecurring  items,  Golden  West's  earnings for the first nine months of 1996
would have been $232 million or $3.99 per share.  Net earnings  from  operations
increased  in 1997 as a result of  increased  net  interest  income  and a lower
provision  for loan  losses.  In addition,  the 1996 general and  administrative
expenses included the one-time SAIF assessment discussed above.

<PAGE>

     SFAS 128 - EARNINGS PER SHARE

     In March 1997, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No. 128,  "Measurement  of Earnings Per Share"
(SFAS 128). SFAS 128 replaces Primary and Fully-Diluted Earnings Per Share (EPS)
with "Basic EPS" and "Diluted  EPS" for fiscal  years ending after  December 15,
1997.  Basic EPS will be  calculated  by dividing net earnings for the period by
the weighted-average common shares outstanding for that period. There will be no
adjustment  to the  number of  outstanding  shares  for stock  options  or other
dilutive items as is currently done in the  calculation of Primary EPS.  Diluted
EPS will take into  account  the effect of dilutive  instruments,  such as stock
options,  but will use 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.  In contrast,  the current,  Fully-Diluted  EPS uses the
period-ending  share price,  if it exceeds the average price, in the calculation
to determine the number of incremental  shares that are to be added. If SFAS 128
had been applied for the quarter and the nine months ended  September  30, 1997,
the Basic EPS reported  would have been $1.59 and $4.57,  respectively,  and the
Diluted EPS would have been $1.56 and $4.50,  respectively.  For the quarter and
nine months ended September 30, 1996, before the cumulative effect of the change
in  accounting  for  goodwill,  Basic EPS  would  have  been  $2.36  and  $5.05,
respectively, and Diluted EPS would have been $2.32 and $4.97, respectively.

     SPREADS

     An important determinant of the Company's earnings is its primary spread --
the difference  between its yield on earning  assets and its cost of funds.  The
table below shows the  components of the Company's  spread at September 30, 1997
and 1996, and December 31, 1996.

<TABLE>
<CAPTION>


                                    TABLE 14

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

                                                            September 30                  
                                                     ---------------------------           
                                                                                           December 31
                                                       1997            1996                   1996
                                                     ---------      -----------           -------------
<S>                                                  <C>            <C>                   <C>   
        Yield on loan portfolio                          7.47%         7.42%                   7.43%
        Yield on MBS                                     7.15          7.18                    7.13
        Yield on investments                             6.61          6.06                    6.88
                                                    ----------      --------              ----------
        Yield on earning assets                          7.42          7.32                    7.37
                                                    ----------      --------              ----------
        Cost of deposits                                 5.08          4.95                    4.98
        Cost of borrowings                               5.98          5.85                    5.80
                                                    ----------      --------              ----------
        Cost of funds                                    5.37          5.28                    5.28
                                                    ----------      --------              ----------
        Primary spread                                   2.05%         2.04%                   2.09%
                                                    ==========      ========              ==========
</TABLE>

<PAGE>

     The Company's  primary spread is, to some degree,  influenced on changes in
interest rates because the Company's  liabilities  tend to respond somewhat more
rapidly to rate movements than its assets,  which are primarily  adjustable rate
mortgages.  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).  In
general,  the repricing of COFI ARM portfolios  tends to lag liability  interest
rate changes  because the COFI tends to trail changes in liability  costs due to
the existence of a two-month  reporting lag and because of certain loan features
which  restrain  monthly  adjustments.  In addition,  because COFI is based on a
portfolio of accounts, not all of which mature or reprice immediately, COFI does
not initially  reflect a change in market interest  rates.  Yields on short term
and long-term  interest rates  fluctuated  both modestly  upward and downward in
1997.  The effects of this interest rate  environment  led to a nine basis point
increase in the Company's  cost of funds for the first nine months of 1997.  The
yield on earning assets increased five basis points during the first nine months
of 1997.  The yield on earning  assets did not  respond as much to the  changing
interest  rate  environment  mainly  due to the  lags in the COFI  index.  These
changes  resulted in a four basis point  decrease in the Company's  spread since
yearend 1996.

<PAGE>

     The  following  table  shows  the  Company's  revenues  and  expenses  as a
percentage of total  revenues for the three and nine months ended  September 30,
1997 and 1996, in order to focus on the changes in interest income between years
as well as changes in other revenue and expense amounts.

<TABLE>
<CAPTION>

                                    TABLE 15
                       Selected Revenue and Expense Items
                        as Percentages of Total Revenues

                                                              Three Months Ended          Nine Months Ended
                                                                 September 30               September 30
                                                             ----------------------     ----------------------
                                                               1997         1996          1997         1996
                                                             ---------     --------     ---------    ---------
<S>                                                          <C>           <C>          <C>          <C>    
Interest on loans                                                82.6%        83.4%         82.1%        83.1%
Interest on mortgage-backed securities                            9.6          9.0          10.2          9.2
Interest and dividends on investments                             5.0          4.9           4.9          4.9
                                                             ---------     --------     ---------    ---------
                                                                 97.2         97.3          97.2         97.2
Less:
  Interest on deposits                                           42.6         39.8          41.5         40.0
  Interest on advances and other borrowings                      24.5         26.7          25.0         25.7
                                                             ---------     --------     ---------    ---------
                                                                 67.1         66.5          66.5         65.7

Net interest income                                              30.1         30.8          30.7         31.5
  Provision for loan losses                                       1.4          3.5           2.0          3.0
                                                             ---------     --------     ---------    ---------
Net interest income after provision for loan losses              28.7         27.3          28.7         28.5

Add:
  Fees                                                            1.6          1.4           1.6          1.4
  Gain on the sale of securities,  MBS, and loans                 0.3          0.3           0.3          0.5
  Other non-interest income                                       0.9          1.0           0.9          0.9
                                                             ---------     --------     ---------    ---------
                                                                  2.8          2.7           2.8          2.8
Less:
  General and administrative expenses                            11.3         31.8  (a)     11.3         18.9 (a)
  Taxes on income                                                 8.0        (22.2) (b)      8.0         (2.5)(b)
                                                             ---------     --------     ---------    ---------
Earnings before cumulative effect of change in
  accounting for goodwill                                        12.2         20.4          12.2         14.9
Cumulative effect of change in accounting for goodwill            0.0          0.0           0.0        (10.4)
                                                             ---------     --------     ---------    ---------
Net earnings                                                     12.2%        20.4%         12.2%         4.5%
                                                             =========     ========     =========    =========

</TABLE>


(a)      Without  the  effect  of the  one-time  SAIF  assessment  (see  Deposit
         Insurance section on page 33), general and administrative expenses as a
         percentage  of total  revenues  would have been 11.8% and 12.2% for the
         three and nine months ended September 30, 1996, respectively.

(b)      Without the effect of the one-time SAIF  assessment and the special tax
         credit (see Taxes on Income  section on page 34),  taxes on income as a
         percentage  of total  revenues  would  have  been 7.0% and 7.4% for the
         three and nine months ended September 30, 1996, respectively.


<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 $1.5 million
and $3 million  for the three and nine  months  ended  September  30,  1997,  as
compared  to a decrease  of $2 million  and $9 million  for the same  periods in
1996.

<TABLE>
<CAPTION>


                                    TABLE 16

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

                                                     Nine Months Ended
                                                     September 30, 1997
                                       --------------------------------------------
                                         Receive           Pay           Forward
                                          Fixed           Fixed         Starting
                                          Swaps           Swaps           Swaps
                                       -------------   ------------    ------------
<S>                                    <C>             <C>             <C>  
Balance at December 31, 1996           $      2,581    $      1,340    $         10
Additions                                        90             -0-             -0-
Maturities                                     (926)           (202)            -0-
Forward starting becoming effective              10             -0-             (10)
                                        ------------    ------------    ------------
Balance at September 30, 1997          $      1,755     $     1,138     $        -0-
                                        ============    ============    ============
</TABLE>

     The following table summarizes the unrealized gains and losses for interest
rate swaps at September 30, 1997 and 1996.

<TABLE>
<CAPTION>

                                    TABLE 17

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

                                      September 30, 1997                         September 30, 1996
                            ----------------------------------------   ----------------------------------------
                                                           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         $   13,625    $  (34,030)   $   (20,405)    $  25,763    $  (42,980)    $  (17,217)
                            ============  ============ =============   ============ ============= =============

</TABLE>

     The range of floating  interest  rates  received on swap  contracts  in the
first nine months of 1997 was 5.47% to 6.08%, and the range of floating interest
rates paid on swap  contracts  was 4.76% to 6.00%.  The range of fixed  interest
rates  received on swap  contracts in the first nine months of 1997 was 4.62% to
8.68% and the range of fixed  interest rates paid on swap contracts was 5.38% to
9.14%.

<PAGE>

     INTEREST ON LOANS

     In the third  quarter of 1997,  interest  on loans was  higher  than in the
comparable  1996  period by $56  million  or 10.1%.  The  increase  in the third
quarter of 1997 was due to a $2.6  billion  increase  in the  average  portfolio
balance and a ten basis point increase in the average  portfolio  yield. For the
first nine months of 1997, interest on loans was higher than the comparable 1996
period by $121 million or 7.4%. The increase was due to a $2.4 billion  increase
in the average portfolio balance which was partially offset by a six basis point
decrease in the average portfolio yield.

     INTEREST ON MORTGAGE-BACKED SECURITIES

     In the third quarter of 1997,  interest on  mortgage-backed  securities was
higher than in the  comparable  1996  period by $11  million or 17.9%.  The 1997
increase was due primarily to a $623 million  increase in the average  portfolio
balance which was partially offset by a five basis point decrease in the average
portfolio yield. For the first nine months of 1997,  interest on mortgage-backed
securities was higher than in the comparable 1996 period by $36 million or 20.1%
due to a $770  million  increase  in the  average  portfolio  balance  which was
partially  offset by an 18 basis point decrease in the average  portfolio yield.
The increase in the mortgage-backed  securities  portfolio and the lower average
portfolio   yield  were   primarily   the  result  of  the   securitization   of
adjustable-rate loans with full credit recourse that began in 1995, as discussed
on page 12.

     INTEREST AND DIVIDENDS ON INVESTMENTS

     The income earned on the investment  portfolio  fluctuates,  depending upon
the volume outstanding and the yields available on short-term  investments.  For
the third  quarter of 1997,  interest and dividends on  investments  were higher
than in the  comparable  1996 period by $5 million or 15.3%.  The  increase  was
primarily due to a $177 million increase in the average  portfolio balance and a
22 basis  point  increase  in the average  portfolio  yield.  For the first nine
months of 1997,  interest and dividends on  investments  were $9 million or 9.5%
higher than for the same period in 1996. The increase was primarily due to a $92
million increase in the average  portfolio balance and a 25 basis point increase
in the average portfolio yield.

     INTEREST ON DEPOSITS

     In the third quarter of 1997, interest on deposits increased by $50 million
or 19.1% from the  comparable  period in 1996. In the first nine months of 1997,
interest  on deposits  increased  by $102  million or 12.9% from the  comparable
period in 1996. The third quarter increase was due to a $3.2 billion increase in
the average  balance of deposits  and an 18 basis point  increase in the average
cost of deposits.  The nine month  increase was  primarily due to a $2.5 billion
increase in the average  balance of deposits and a seven basis point increase in
the average cost of deposits.
<PAGE>

     INTEREST ON ADVANCES AND OTHER BORROWINGS

     For the third  quarter and first nine months of 1997,  interest on advances
and other  borrowings  increased  by $4 million or 2.2% and $29 million or 5.7%,
respectively,  from the comparable  periods of 1996. The third quarter  increase
was  primarily due to a $139 million  increase in the average  balance and a six
basis point  increase in the average  cost of these  borrowings.  The nine month
increase was  primarily  due to a $817 million  increase in the average  balance
which was partially  offset by a six basis point decrease in the average cost of
these borrowings.

     PROVISION FOR LOAN LOSSES

     The   provision   for  loan  losses  was  $10  million  and  $44   million,
respectively,  for the three and nine months ended September 30, 1997,  compared
to $23 million and $59 million for the same periods in 1996. The lower provision
in 1997  reflects  the  decrease  in  nonperforming  assets,  a decrease  in net
chargeoffs  in the third  quarter of 1997 as  compared  to the third  quarter of
1996, and the improving California economy.

     GENERAL AND ADMINISTRATIVE EXPENSES

     For  the  third  quarter  and  first  nine  months  of  1997,  general  and
administrative  expenses (G&A) were $83 million and $241 million,  respectively,
compared to $211  million and $373 million for the  comparable  periods in 1996.
The 1996 G&A amounts include the one-time 1996 third quarter Savings Association
Insurance Fund (SAIF)  assessment of $133 million (See Deposit Insurance section
below). Thus, the primary reason for the decrease in 1997 was the aforementioned
1996 SAIF  assessment  as well as the  benefit  received  from  reduced  deposit
insurance premiums paid by the Association in 1997.  Excluding the effect of the
lower deposit  insurance  premiums,  total G&A increased due to the expansion of
savings  branches,  higher loan volume,  and the installation of enhancements to
data processing systems. In addition,  advertising expense was higher during the
third  quarter  and first nine  months of 1997 due to the  promotion  of the new
money market  account and the high-yield  checking  account as discussed on page
22. Without the effect of the one-time SAIF  assessment,  G&A as a percentage of
average assets on an annualized basis was .85% and .83%,  respectively,  for the
third  quarter and first nine  months of 1997  compared to .87% and .90% for the
same periods in 1996. Including the effect of the one-time SAIF assessment,  G&A
as a percentage of average assets on an annualized basis was 2.34% and 1.40% for
the third quarter and first nine months of 1996, respectively.

     DEPOSIT INSURANCE

     During  1996,   legislation  was  enacted  to   recapitalize   the  Savings
Association  Insurance  Fund in order to bring it into  parity  with the  FDIC's
other  insurance  fund,  the Bank  Insurance  Fund  (BIF).  The new  banking law
required  members to pay a levy of $4.7 billion to bring SAIF up to the required
reserve  level of 1.25% of insured  deposits,  but lowered the premiums  paid by
SAIF-insured  institutions,  starting in the fourth quarter of 1996. As a result
of  this  legislation,   Golden  West's  subsidiary,   World  Savings  and  Loan
Association,  incurred a one-time charge of $133 million at the end of the third
quarter  of  1996.  Beginning  on  January  1,  1997,  the  premium  paid by the
Association to the FDIC was reduced from $2.30 per $1,000 in savings balances to
$.65 per $1,000.  Beginning on January 1, 1997, the premiums paid by BIF insured
institutions,  such as WFSB,  was  increased  from  $0.00 per  $1,000 in savings
balances to $.13 per $1,000.

<PAGE>

     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.

     During the third quarter of 1996,  the Company  recognized  $139 million of
tax benefits associated with the Company's  acquisition of Beach Federal Savings
and Loan  Association  (Beach).  Specifically,  in  December  1988,  Golden West
entered into a government approved  transaction with Beach to provide management
services to that institution.  As part of the agreement, Golden West obtained an
option to take title to the stock of Beach and subsequently exercised this right
in July 1991.  When Golden West took title to the stock,  the Company  disclosed
that  tax  benefits  were  anticipated  from  operating  losses  which  had been
accumulated  at  Beach's  predecessor  institution  up to the  time of the  1988
agreement,  although  the  availability  and the amount of these  benefits  were
uncertain. The availability of the $139 million of tax benefits was confirmed in
the third quarter of 1996.

     Taxes as a  percentage  of  earnings  before the  cumulative  effect of the
change in  accounting  for goodwill  were 39.7% for the third  quarter and first
nine months of 1997.  Taxes as a percentage  of earnings  before the  cumulative
effect of the change in  accounting  for  goodwill  excluding  the one time SAIF
assessment and the aforementioned $139 million tax benefit, were 38.4% and 38.5%
for the third quarter and nine months ended September 30, 1996, respectively.

     LIQUIDITY AND CAPITAL RESOURCES

     World'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,  World  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,  sales of 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 World's  liquidity  positions at September 30, 1997, and 1996, and
December 31, 1996, see the Cash and Investments section on page 12.

     WFSB's  principal  sources of funds are cash flows generated from earnings;
deposits; loan repayments;  negotiable certificates of deposit,  borrowings from
the FHLB;  issuance of medium-term  notes;  investments  and borrowings from its
affiliates;  and debt  collateralized  by  mortgages,  MBS,  or  securities.  In
addition,  WFSB has other alternatives available to provide liquidity or finance
operations  including  borrowings from public offerings of debt, sales of loans,
issuances  of  commercial   paper,   and  borrowings  from   commercial   banks.
Furthermore,  under certain conditions, WFSB may borrow from the Federal Reserve
Bank of San Francisco to meet short-term cash needs.  The  availability of these
funds will vary depending upon policies of the FHLB, the Federal Reserve Bank of
San  Francisco,  and the  Federal  Reserve  Board.  For a  discussion  of WFSB's
liquidity  positions at September 30, 1997, and 1996, and December 31, 1996, see
the Cash and Investments section on page 12.
<PAGE>
     The  principal  sources of funds for Golden West (the Parent) are dividends
from World, 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  World  and WFSB can pay.  The
principal  liquidity  needs of  Golden  West are for  payment  of  interest  and
principal on  subordinated  debt  securities  (of which $200 million  matures in
1998), capital contributions to its insured subsidiaries (including $224 million
for the nine months ended September 30, 1997 and $500 million for the year ended
December 31, 1996 to WFSB),  dividends to  stockholders,  the purchase of Golden
West stock  (see  stockholders'  equity  section on page 24),  and  general  and
administrative  expenses. At September 30, 1997 and 1996, and December 31, 1996,
Golden West's total cash and investments  amounted to $891 million  (including a
$600 million  long-term  loan to WFSB),  $910 million  (including a $600 million
short-term  loan to World and a $1.5 million  short-term  loan to World  Savings
Bank,  a State  Savings  Bank),  and  $913  million  (including  a $600  million
long-term loan to WFSB), respectively.

PART II.          OTHER INFORMATION

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         11    -  Statement of Computation of Earnings Per Share

         27    -  Financial Data Schedule


                                   SIGNATURES

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

                                  GOLDEN WEST FINANCIAL CORPORATION

Dated:  November 13, 1997          /s/ J. L. Helvey
                                  ---------------------------------------------
                                       J. L. Helvey
                                       Executive Vice President
                                      (duly authorized and principal financial
                                       officer)

<PAGE>

<TABLE>
<CAPTION>

                                   EXHIBIT 11

                        Golden West Financial Corporation
                 Statement of Computation of Earnings Per Share
                 (Dollars in thousands except per share figures)


                                                      Three Months Ended               Nine Months Ended
                                                         September 30                    September 30
                                                 -----------------------------   ------------------------------
                                                     1997            1996            1997            1996
                                                 -------------   -------------   -------------   -------------
<S>                                              <C>             <C>             <C>             <C>    
  Earnings Before Cumulative Effect of
     Change in Accounting for Goodwill           $     90,007    $    135,785    $    260,658    $    293,963
  Cumulative Effect of Change in
     Accounting for Goodwill                              -0-             -0-             -0-        (205,242)
                                                 -------------   -------------   -------------   -------------
  Net Earnings                                   $     90,007    $    135,785    $    260,658    $     88,721
                                                 =============   =============   =============   =============

  Average Number of Common
     Shares Outstanding                            56,740,342      57,584,306      56,980,399      58,216,474
                                                 =============   =============   =============   =============

  Earnings Per Share Before Cumulative Effect
      of Change in Accounting for Goodwill        $      1.58            2.32            4.57            5.01
  Cumulative Effect of Change in Accounting
      for Goodwill                                       0.00            0.00            0.00           (3.49)
                                                 -------------   -------------   -------------   -------------
  Earnings Per Common Share                       $      1.58    $       2.32    $       4.57    $       1.52
                                                 =============   =============   =============   =============
</TABLE>
<PAGE>