<PAGE> 1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q

(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
      SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1999
                                       or

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
      SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________to_______________________

                         Commission File Number 0-25664

                                SGV BANCORP, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

DELAWARE                                                         95-4524789
--------------------------------------------------------------------------------
(State or other jurisdiction of incorporation                 (I.R.S. Employer
or organization                                              Identification No.)

225 NORTH BARRANCA STREET, WEST COVINA, CALIFORNIA                        91791
--------------------------------------------------------------------------------
(Address of principal executive offices)

                                 (626) 859-4200
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

      Indicate by check mark  whether the  registrant  (1) has filed all reports
require  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.     X  Yes       No
                                             ---       ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
      Indicate the number of shares  outstanding of each of the issuer's classes
of common stock, as of the latest  practicable date:  2,176,323 shares of common
stock, par value $0.01 per share, were outstanding as of November 9, 1999.



<PAGE> 2



                                SGV BANCORP, INC.
                                    FORM 10-Q
                                      INDEX


PART I      FINANCIAL INFORMATION                                       PAGE
                                                                        ----

Item 1      Consolidated Statements of Financial Condition:
            September 30, 1999 (unaudited) and June 30, 1999..............1

            Consolidated Statements of Operations (unaudited):
            For the Three Months Ended September 30, 1999 and 1998........2

            Consolidated Statements of Cash Flows (unaudited):
            For the Three Months Ended September 30, 1999 and 1998........3

            Notes to Consolidated Financial Statements....................5

Item 2      Management's Discussion and Analysis of
            Results of Operations and Financial Condition.................6

Item 3      Quantitative and Qualitative Disclosure Regarding
            Market Risk..................................................16

PART II     OTHER INFORMATION

Item 1      Legal Proceedings............................................17

Item 2      Changes in Securities........................................17

Item 3      Defaults Upon Senior Securities..............................17

Item 4      Submission of Matters to a Vote of Security Holders..........17

Item 5      Other Information............................................17

Item 6      Exhibits and Reports on Form 8-K.............................17

SIGNATURES  .............................................................18




<PAGE> 3
<TABLE>
<CAPTION>

SGV BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, except share data)
----------------------------------------------------------------------------------------------------------
                                                                             September 30,     June 30,
                                                                                 1999            1999
                                                                            --------------  --------------
                                                                             (Unaudited)
<S>                                                                          <C>             <C>
ASSETS:
 Cash and cash equivalents, including short-term bank obligations of
  $1,950 at September 30, 1999 and $4,940 at June 30, 1999                   $     6,650     $     9,515
 Investment securities available for sale, amortized cost of $45,612
   at September 30, 1999 and $26,109 at June 30, 1999                             45,187          25,816
 Mortgage-backed securities available for sale, amortized cost of
  $24,006 at September 30, 1999 and $25,326 at June 30, 1999                      23,406          24,871
 Mortgage-backed securities held to maturity, estimated fair value of
  $35,510 at September 30, 1999 and $36,984 at June 30, 1999                      36,550          37,717
 Loans receivable held for sale                                                      460             100
 Loans receivable held for investment, net of allowance for loan losses of
  $2,013 at September 30, 1999 and $1,845 at June 30, 1999                       365,276         354,989
 Accrued interest receivable                                                       2,991           2,979
 Stock of Federal Home Loan Bank of San Francisco, at cost                         5,478           5,407
 Real estate acquired through foreclosure, net                                       294             827
 Premises and equipment, net                                                       3,625           3,166
 Prepaid expenses and other assets, net                                            4,593           3,343
                                                                            --------------  --------------
     Total assets                                                            $   494,510     $   468,730
                                                                            ==============  ==============
LIABILITIES AND STOCKHOLDERS' EQUITY:
 LIABILITIES:
 Deposit accounts                                                            $   362,634     $   324,106
 Federal Home Loan Bank advances                                                  93,959         108,002
 Securities sold under agreements to repurchase
 Accrued expenses and other liabilities                                            5,127           4,251
                                                                            --------------  --------------
     Total liabilities                                                           461,720         436,359

 STOCKHOLDERS' EQUITY:
 Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued
 Common stock, $.01 par value; 10,000,000 shares authorized;
    2,727,656 issued; 2,176,323 shares outstanding at September 30, 1999
    and at June 30, 1999                                                              27              27
 Additional paid-in capital                                                       21,391          21,297
 Retained earnings, substantially restricted                                      19,669          19,236
 Accumulated other comprehensive income                                             (603)           (440)
 Deferred stock compensation                                                      (1,086)         (1,141)
 Treasury stock; 551,333 shares at September 30, 1999 and at June 30, 1999        (6,608)         (6,608)
                                                                            --------------  --------------
     Total stockholders' equity                                                   32,790          32,371
                                                                            --------------  --------------
     Total liabilities and stockholders' equity                              $   494,510     $   468,730
                                                                            ==============  ==============

</TABLE>

                                                   1


<PAGE> 4
<TABLE>
<CAPTION>

SGV BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)(UNAUDITED)
-----------------------------------------------------------------------------------------------------------
                                                                                For the Three Months
                                                                                 Ended September 30,
                                                                        -----------------------------------
                                                                              1999              1998
                                                                        ----------------   ----------------
<S>                                                                         <C>             <C>
INTEREST INCOME:
  Interest on loans                                                         $    6,777      $    5,939
  Interest on investment securities                                                574             365
  Interest on mortgage-backed securities                                           979           1,024
  Other                                                                            128             209
                                                                        ----------------   ----------------
      Total interest income                                                      8,458           7,537

INTEREST EXPENSE:
  Interest on deposit accounts                                                   3,655           3,397
  Interest on borrowings                                                         1,360           1,278
                                                                        ----------------   ----------------
      Total interest expense                                                     5,015           4,675
                                                                        ----------------   ----------------

Net interest income before provision for loan losses                             3,443           2,862
PROVISION FOR LOAN LOSSES                                                          210             269
                                                                        ----------------   ----------------
Net interest income after provision for loan losses                              3,233           2,593

OTHER INCOME :
  Loan servicing and other fees                                                    112             145
  Deposit account fees                                                             194             144
  Secondary marketing activity, net                                                  3              21
  (Loss) gain on sale of securities available for sale, net                        (29)              7
  Other income                                                                     157              96
                                                                        ----------------   ----------------
      Total other income                                                           437             413

OTHER EXPENSES:
General and administrative expenses:
  Compensation and other employee expenses                                       1,422           1,229
  Office occupancy                                                                 271             266
  Equipment                                                                        344             277
  Advertising                                                                       60              30
  FDIC insurance premiums                                                           47              44
  Merger-related expenses                                                          230
  Other operating expenses                                                         470             343
                                                                        ----------------   ----------------
      Total general and administrative expenses                                  2,844           2,189
  Net gain on real estate acquired through foreclosure                             (49)           (145)
                                                                        ----------------   ----------------
      Total other expenses                                                       2,795           2,044
                                                                        ----------------   ----------------

EARNINGS BEFORE INCOME TAXES                                                       875             962
INCOME TAXES                                                                       442             396
                                                                        ----------------   ----------------
     NET EARNINGS                                                           $      433      $      566
                                                                        ================   ================
EARNINGS PER SHARE-Basic                                                    $     0.20      $     0.25
                                                                        ================   ================
EARNINGS PER SHARE-Diluted                                                  $     0.18      $     0.24
                                                                        ================   ================
</TABLE>

                                              2



<PAGE> 5
<TABLE>
<CAPTION>

SGV BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS) (UNAUDITED)
-----------------------------------------------------------------------------------------------------------
                                                                                FOR THE THREE MONTHS
                                                                                 ENDED SEPTEMBER 30,
                                                                         ----------------------------------
                                                                                1999             1998
                                                                         -----------------   --------------
<S>                                                                       <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net earnings                                                             $       433         $    566
 Adjustments  to  reconcile  net  earnings  to net cash  provided
  by operating activities:
   Depreciation and amortization                                                  209              172
   Loans originated for sale                                                   (1,584)          (6,145)
   Proceeds from sale of loans                                                  1,227            4,960
   Gain on sale of loans, net                                                      (3)             (40)
   Gain on sale of investments available for sale, net                                             (10)
   Gain on sale of mortgage-backed securities available for sale, net                               (2)
   Federal Home Loan Bank stock dividend                                          (70)             (62)
   Increase in prepaid expenses and other assets                               (1,321)              (6)
   Amortization of deferred loan fees                                             (37)             (27)
   Deferred loan origination costs                                               (100)            (119)
   Increase in accrued expenses and other liabilities                             990            1,434
   Provision for loan losses                                                      210              269
   Provision for (recapture of) real estate losses                                  3              (45)
   Premium amortization, net                                                       73              168
   Increase in accrued interest receivable                                        (11)            (143)
   Other, net                                                                     107             (222)
                                                                         =================   ==============
    Net cash provided by operating activities                                     126              748

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of investment securities available for sale                         (38,000)          (6,948)
 Proceeds from sale and redemption of investment securities available
  for sale                                                                     18,500           14,010
 Purchase of mortgage-backed securities available for sale                                     (10,153)
 Proceeds from sale of mortgage-backed securities available for sale                             6,931
 Purchase of mortgage-backed securities held to maturity                         (667)         (10,030)
 Principal repayments on mortgage-backed securities                             3,103            5,124
 Loans funded, net                                                            (21,524)         (16,102)
 Loans purchased, net                                                          (2,309)         (22,015)
 Principal repayments on loans                                                 13,719           21,531
 Proceeds from sale of real estate                                                585            1,582
 Purchase of premises and equipment                                              (622)             (17)
 Purchase of Federal Home Loan Bank Stock                                                         (906)
 Other, net                                                                      (410)             (15)
                                                                         =================   ==============
    Net cash used in investing activities                                     (27,625)         (17,008)
</TABLE>



                                                       3
<PAGE> 6
<TABLE>
<CAPTION>

SGV BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS) (UNAUDITED)(CONTINUED)
-----------------------------------------------------------------------------------------------------------
                                                                                   FOR THE THREE MONTHS
                                                                                   ENDED SEPTEMBER 30,
                                                                          ---------------------------------
                                                                                 1999            1998
                                                                          ----------------  ---------------
<S>                                                                         <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
 Net increase in certificate accounts                                       $    10,926     $     5,865
 Net (decrease) increase in passbook , money market savings
   NOW and non-interest-bearing accounts                                         (9,200)            902
 Purchase of deposit accounts                                                    36,802
 Proceeds from Federal Home Loan Bank advances                                   14,000          35,000
 Repayment of Federal Home Loan Bank advances                                   (28,043)         (1,505)
 Proceeds from securities sold under agreements to repurchase                                     4,300
 Repayment of securities sold under agreements to repurchase
 Purchase of treasury stock                                                                      (1,992)
 Other, net                                                                         149             141
                                                                          ----------------  ---------------
    Net cash provided by financing activities                                    24,634          42,711

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                             (2,865)         26,451

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                    9,515          20,008
                                                                          ----------------  ---------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                    $     6,650     $    46,459
                                                                          ================  ===============

SUPPLEMENTAL CASH FLOW DISCLOSURES
  Cash paid during the period for:
Interest                                                                    $     4,981     $     4,646
Income taxes, net                                                                    50             375

NONCASH INVESTING ACTIVITIES DURING THE PERIOD:
Real estate acquired through foreclosure                                                            692
Change in net unrealized loss on investment securities and
  mortgage-backed securities available for sale, net of taxes                      (163)            (47)
</TABLE>


                                                4



<PAGE> 7



                        SGV BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)

1.    Basis of Presentation:
      ---------------------

      The accompanying  unaudited  consolidated financial statements include the
accounts of SGV Bancorp,  Inc. (the "Company") and its wholly-owned  subsidiary,
First  Federal  Savings  and  Loan   Association  of  San  Gabriel  Valley  (the
"Association")  and its wholly-owned  subsidiary,  First Covina Service Company.
The interim  consolidated  financial statements have been prepared in accordance
with generally accepted accounting  principles for interim financial information
and  with the  instructions  to Form  10-Q and  Article  10 of  Regulation  S-X.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of  management  all  necessary  adjustments,  consisting  only of
normal  recurring  adjustments  necessary  for a  fair  presentation  have  been
included.  The results of operations for the three-month  period ended September
30, 1999 are not necessarily  indicative of the results that may be expected for
the entire fiscal year.

      These  consolidated  financial  statements and the  information  under the
heading  "Management's  Discussion  and  Analysis of Results of  Operations  and
Financial Condition" should be read in conjunction with the audited consolidated
financial  statements and notes thereto of SGV Bancorp,  Inc. for the year ended
June 30,  1999  included  in the  Company's  Annual  Report on Form 10-K for the
fiscal year ended June 30, 1999.


2.    Earnings Per Share
      ------------------

      Earnings per share reconciliation is as follows:

<TABLE>
<CAPTION>

                                                                   WEIGHTED
                                                                    AVERAGE
                                                     INCOME         SHARES         PER SHARE
                                                   (NUMERATOR)   (DENOMINATOR)       AMOUNT
                                                 -------------- ---------------  ------------

                                                                SEPTEMBER 30, 1999
                                                 --------------------------------------------
<S>                                                <C>              <C>            <C>
BASIC EPS
  Income available to common stockholders          $  433,000       2,176,000      $   0.20
EFFECT OF DILUTIVE SECURITIES
  Incremental shares from assumed exercise
    of outstanding options                                            166,000         (0.02)
                                                 -------------- ---------------  ------------
DILUTED EPS
  Income available to common stockholders          $  433,000       2,342,000      $   0.18
                                                 ============== ===============  ============

                                                                SEPTEMBER 30, 1998
                                                 --------------------------------------------
BASIC EPS
  Income available to common stockholders          $  566,000       2,291,000      $   0.25
EFFECT OF DILUTIVE SECURITIES
  Incremental shares from assumed exercise
    of outstanding options                                  -          98,000         (0.01)
                                                 -------------- ---------------  ------------
DILUTED EPS
  Income available to common stockholders          $  566,000       2,389,000      $   0.24
                                                 ============== ===============  ============
</TABLE>


                                            5



<PAGE> 8

3.    Comprehensive Income
      --------------------

      The Company adopted Statement of Financial  Accounting  Standards No. 130,
Reporting  Comprehensive  Income,  effective July 1, 1998. The standard requires
that  comprehensive  income and its  components  be disclosed  in the  financial
statements. The Company's comprehensive income includes all items which comprise
net income plus the unrealized holding losses on available-for-sale  securities.
For the three months ended September 1999 and 1998, the Company's  comprehensive
income was as follows:

<TABLE>
<CAPTION>
                                       SEPTEMBER 30, 1999         SEPTEMBER 30, 1998
                                      --------------------       --------------------
                                                  (Dollars in thousands)
<S>                                        <C>                        <C>
Net income                                 $   433                    $   566
Other comprehensive (loss) income             (163)                       (47)
                                      --------------------       --------------------
    Total comprehensive income             $   270                    $   519
                                      ====================       ====================
</TABLE>

4.    Accounting Principles
      ---------------------

      SFAS  No.  133,   ACCOUNTING  FOR  DERIVATIVE   INSTRUMENTS   AND  HEDGING
ACTIVITIES,  was issued in June 1998 and  establishes  accounting  and reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other contracts,  (collectively  referred to as derivatives) and for
hedging activities.  SFAS No. 133 is effective for all fiscal quarters of fiscal
years  beginning  after June 15, 1999. In July 1999,  the  Financial  Accounting
Standards   Board  (FASB)  issued  SFAS  No.  137,   ACCOUNTING  FOR  DERIVATIVE
INSTRUMENTS  AND HEDGING  ACTIVITIES  - DEFERRAL OF THE  EFFECTIVE  DATE OF FASB
STATEMENT  NO. 133,  which delays the  effective  date of SFAS No. 133 to fiscal
years beginning after June 15, 2000. Earlier  application is encouraged,  but it
is permitted  only as of the  beginning of any fiscal  quarter that begins after
June 1998. The adoption of the provisions of SFAS No. 133 as amended by SFAS No.
137 is not expected to have a material  impact on the results of  operations  or
the financial position of the Company.

5.      Use of Estimates in the Preparation of Financial Statements
        -----------------------------------------------------------

        The  preparation  of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.


Item 2. Management's Discussion and Analysis of Results of Operations and
        -----------------------------------------------------------------
        Financial Condition
        -------------------

        This Management's  Discussion and Analysis should be read in conjunction
with the Management's  Discussion and Analysis contained in the Company's Annual
Report on Form 10-K,  which focuses upon relevant  matters  occurring during the
year ended June 30, 1999.  Accordingly,  the ensuing discussion focuses upon the
material matters at and for the three months ended September 30, 1999.

GENERAL
-------

        The principal business of the Company is attracting retail deposits from
the general public and investing those  deposits,  together with funds generated
from  operations and  borrowings,  primarily in one- to four-family  residential
mortgage loans. To a lesser extent,  the Company engages in secondary  marketing
activities and invests in  multi-family,  commercial real estate,  construction,
land and  consumer  loans.  Loan sales  come from  loans  held in the  Company's
portfolio  designated as being held for sale or originated during the period and
being so designated.  The Company has historically retained the servicing rights
of loans sold,  although it has recently sold loans to the secondary market on a
servicing  released basis. The Company's  revenues are derived  principally from
interest on its mortgage loans,  and to a lesser extent,  interest and dividends
on its investment and mortgage-backed

                                       6

<PAGE> 9


securities  and income from loan  servicing.  The Company's  primary  sources of
funds are deposits,  principal and interest payments on loans, advances from the
FHLB,  securities  sold under  agreements to repurchase and, to a lesser extent,
proceeds from the sale of loans.

RECENT DEVELOPMENTS - ACQUISITION BY INDYMAC MORTGAGE HOLDINGS, INC.

       On July 12,  1999,  the  Company  and  IndyMac  Mortgage  Holdings,  Inc.
("IndyMac")  entered into a definitive  agreement pursuant to which IndyMac will
acquire  the  Company for cash.  Under the terms of the merger  agreement,  each
share of the  Company's  common stock will be  exchangeable  for $25.00 in cash.
This  price may be  subject  to  adjustment  as a result of  changes  in the net
portfolio  value of certain assets and  liabilities of the Company.  In no event
will the purchase  price be reduced  below $22.50 or increased  above $27.50 per
share. IndyMac will pay a total of approximately $62.5 million to acquire all of
the Company's shares outstanding and subject to options.  In accordance with the
terms of the merger  agreement,  the Company will be the surviving entity of the
merger. To this end,  IndyMac's  current  shareholders will receive one share of
the  Company's  common stock in exchange for each share of IndyMac  common stock
they own when the merger is  completed.  The  merger is  subject to  shareholder
approval by both companies as well as certain regulatory  approvals.  The merger
is expected to be completed in the first half of 2000.

RESULTS OF OPERATIONS
---------------------

       The Company  posted net  earnings of $433,000  for the three months ended
September  30, 1999  compared to net  earnings of $566,000  for the three months
ended September 30, 1998. For the three months ended September 30, 1999, the net
earnings  were  $0.20 per  share-basic  compared  to net  earnings  of $0.25 per
share-basic  for the three months ended September 30, 1998. The net earnings for
the three months ended  September  30, 1999  include  approximately  $230,000 in
merger-related costs (such costs are not considered deductible under current tax
laws; therefore,  no tax benefit has been provided) associated with the proposed
merger  with  IndyMac  Mortgage  Holdings,  Inc. A  discussion  of the  specific
components of net earnings is set forth in the Notes to  Consolidated  Financial
Statements.

Net Interest Income
-------------------

       Net interest income before the provision for loan losses was $3.4 million
for the three months ended  September  30, 1999 compared to $2.9 million for the
three months ended September 30, 1998.

Interest Income
---------------

      Total  interest  income for the three months ended  September 30, 1999 was
$8.5 million, an increase of $921,000 from the comparable period a year ago. The
increase in interest  income was primarily due to the $62.4 million  increase in
the average balance of  interest-earning  assets to $471.5 million for the three
months ended  September 30, 1999 from $409.1  million for the three months ended
September  30,  1998.  A portion  of the  growth in  interest-earning  assets is
attributed to the savings  account  acquisition  from  Citibank,  California,  a
federal  savings  bank in July  1999,  which  contributed  $37  million in funds
available for investment. The interest income on loans increased to $6.8 million
for the three  months ended  September  30, 1999 from $5.9 million for the three
months  ended  September  30,  1998.  The  increase in interest on loans was due
primarily to the increase in the average balance of loans receivable outstanding
to $359.5  million for the three  months  ended  September  30, 1999 from $304.9
million for the three  months  ended  September  30,  1998.  This  increase  was
partially  offset by the decrease in the average  yield on loans  receivable  to
7.54% for the three months ended  September  30, 1999  compared to 7.79% for the
three  months  ended  September  30,  1998  primarily  due to the decline in the
interest rate environment for most of the past year producing  downward pressure
on lagging  indices.  For  example,  the  Company has  approximately  45% of its
mortgage  loans indexed to the eleventh  district cost of funds index (COFI) and
this index has  declined by over 30 basis  points  over the past 12 months.  The
interest income on mortgage-backed  securities  decreased by $45,000 to $979,000
for the three  months  ended  September  30, 1999  primarily  as a result of the
decrease in average  balances  outstanding to $61.3 million for the three months
ended September 30, 1999 from $63.8 million for the three months ended September
30, 1998.  The interest  income on investment  securities  and other  securities
increased by $128,000 to $702,000 for the three months ended  September 30, 1999



                                       7

<PAGE> 10

primarily as a result of the increase in the average balances of such securities
to $50.6  million  from $40.5  million for the same period a year ago  partially
offset by the decrease in the average  yield to 5.51% for the three months ended
September 30, 1999 from 5.67% for the same period a year ago.

Interest Expense
----------------

       Total interest  expense for the three months ended September 30, 1999 was
$5.0  million,  an increase of  approximately  $340,000 from the $4.7 million in
interest  expense for the three months ended September 30, 1998. The increase in
interest  expense was  primarily  due to the increase in the average  balance of
interest-bearing  liabilities  to  $436.2  million  for the three  months  ended
September  30,  1999 as compared to $375.8  million for the three  months  ended
September  30,  1998,  partially  offset by the 38 basis  point  decrease in the
average cost of interest-bearing liabilities to 4.60% for the three months ended
September  30,  1999.  Interest  expense on savings  accounts  increased to $3.7
million for the three months ended  September 30, 1999 from $3.4 million for the
same period a year ago. This increase was related to the $50.5 million  increase
in the average balance of  interest-bearing  savings  accounts to $338.5 million
for the three months ended  September 30, 1999 due partially to the  acquisition
of $35 million in interest-bearing  savings accounts from Citibank in July 1999.
The increase in interest  expense  from higher  average  balances was  partially
offset by the 40 basis point decrease in the average cost of savings accounts to
4.32% for the three  months  ended  September  30,  1999 from 4.72% for the same
period a year ago.  Interest expense on borrowings  increased by $82,000 to $1.4
million for the three months ended September 30, 1999 primarily due to the $10.0
million  increase in the average  balance of borrowings to $97.7 million for the
three months ended  September 30, 1999.  This  increase in interest  expense was
partially  offset  by  the 26  basis  point  decrease  in the  average  cost  of
borrowings to 5.57% for the three months ended September 30, 1999.

Analysis of Net Interest Income
-------------------------------

       The following  table sets forth average  interest  rates on the Company's
interest-earning  assets and  interest-bearing  liabilities  for the three month
period ended September 30, 1999 and September 30, 1998 (dollars are in thousands
and average balances are based on month-end amounts):

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED SEPTEMBER 30,
                                            --------------------------------------------------
                                                      1999                       1998
                                            ------------------------  ------------------------
                                              Average        Yield       Average       Yield
                                              Balance         Rate       Balance        Rate
                                            -----------   ----------  ------------  ----------
<S>                                         <C>             <C>       <C>             <C>
Assets:
  Interest-earning assets:
    Loans receivable                        $  359,549        7.54%   $  304,853        7.79%
    Mortgage-backed securities                  61,297        6.39        63,802        6.42
    Investment securities and other             50,638        5.51        40,466        5.67
                                            -----------               ------------
        Total interest-earning assets          471,484        7.18%      409,121        7.37%
  Non-interest-earning assets                   16,391                    13,553
                                            -----------               ------------
        Total assets                        $  487,875                $  422,674
                                            ===========               ============
LIABILITIES AND EQUITY:
  Interest-bearing liabilities
    Savings accounts                        $  338,544        4.32%   $  288,007        4.72%
    Borrowings                                  97,701        5.57        87,782        5.83
                                            -----------               ------------
     Total interest-bearing liabilities        436,245        4.60%      375,789        4.98%
  Non-interest-bearing liabilities              19,048                    15,228
  Stockholders' equity                          32,582                    31,657
                                            -----------               ------------
     Total liabilities and equity           $  487,875                $  422,674
                                            ===========               ============
  Net interest rate spread                                    2.58%                     2.39%
  Net interest margin                                         2.92%                     2.80%
  Ratio of interest-earning assets
    to interest-bearing liabilities                         108.08%                   108.87%
</TABLE>

                                       8


<PAGE> 11

      The Company's average net interest spread increased to 2.58% for the three
months  ended  September  30, 1999 as compared  2.39% for the three months ended
September  30, 1998.  The increase was due primarily to the decrease in the cost
of  interest-bearing  liabilities  which decreased to 4.60% for the three months
ended  September  30, 1999 from 4.98% for the three months ended  September  30,
1998. The decrease in the cost of  interest-bearing  liabilities  was due to the
continued  increase  in the  average  balance  of core  deposits  (comprised  of
passbook,  money market and interest-bearing  checking accounts),  which have an
overall lower cost of funds,  and to the overall lower interest rate environment
enabling the Company to renew existing certificates of deposit and borrowings at
lower interest rates. The increase in total savings deposits and,  specifically,
in core  deposits  was aided by the  acquisition  in July 1999 of $37 million in
savings accounts from Citibank,  California, a federal saving bank. The decrease
in the average cost of interest-bearing  liabilities was partially offset by the
decrease in the overall yield on interest-earning  assets to 7.18% for the three
months  ended  September  30,  1999 from  7.37%  for the same  period a year ago
primarily due to the overall  lower  interest  rate  environment  resulting in a
decline in indices related to the Company's adjustable-rate mortgage loans.

      The average  yield on loans  receivable  decreased  to 7.54% for the three
months ended  September 30, 1999 from 7.79% for the three months ended September
30,  1998.  The  decrease in yield was due  primarily to the decline in the COFI
index which, on average, was 38 basis points lower during the three months ended
September  30, 1999 as compared  to the same  period a year ago.  The  Company's
adjustable  rate loan portfolio  comprises  approximately  75% of the total loan
portfolio  and the  adjustable  rate loans indexed to COFI comprise 45% of total
loans.  The majority of the remaining  adjustable rate loans adjust annually and
are indexed to the Constant  Maturity  Treasury Index (CMT) which was also lower
during repricing periods resulting in lower current yields. The average yield on
mortgage-backed  securities  was  relatively  unchanged  at 6.39%  for the three
months ended  September 30, 1999 as compared to 6.42% for the three months ended
September  30,  1998.  The  average  yield on  investment  securities  and other
securities decreased to 5.51% for the three months ended September 30, 1999 from
5.67% for three months  ended  September  30, 1998  primarily as a result of the
maintenance  of higher  overnight  investments  during  the three  months  ended
September  30,  1999  resulting  from the  funds  received  in late July for the
completion of the deposit acquisition from Citibank.

      The  decrease  in the  average  cost of savings  accounts to 4.32% for the
three months ended  September 30, 1999 from 4.72% for the same period a year ago
was the result of the $41.2  million  increase  in the  average  balance of core
deposits (passbook,  money market and interest-bearing checking accounts), which
generally  have a lower cost of funds than  certificates  of deposit,  to $129.1
million for the three months ended September 30, 1999 from $87.9 million for the
same  period a year  ago.  The  growth  in the core  deposits  was  aided by the
Citibank deposit  acquisition which contributed  approximately  $13.2 million in
core deposits.  The Company's average cost of borrowings  decreased to 5.57% for
the three months ended  September 30, 1999 from 5.83% for the same period a year
ago as the  Company  renewed  existing  borrowings  with those of lower rates in
relation to the decrease in the overall  interest  rate  environment  during the
past year.

Provision for Loan Losses
-------------------------

      The provision for loan losses totaled  $210,000 for the three months ended
September 30, 1999 as compared to $269,000 for the three months ended  September
30, 1998.  The decrease  from the three months ended  September 30, 1998 was due
primarily  to the higher fair value  adjustments  on two  foreclosed  properties
totaling $168,000 occurring in the three months ended September 30, 1998 and not
recurring in the current period. The Company's provision for loans losses in the
three months ended  September 30, 1999 was related to the  charge-off of $44,000
in consumer loans and to the overall growth of the loan portfolio,  specifically
related to the $11.5 million  increase in  non-residential  loans which normally
have higher loan loss factors. See "Financial Condition."

Other Income
------------

      Other  income  increased  slightly to $437,000  for the three months ended
September 30, 1999 from  $413,000 for the three months ended  September 30, 1998
The  Company's fee income on savings  accounts  increased by $50,000 to $194,000
for the three months ended  September  30, 1999 as compared to the same period a
year ago due to the increase in core deposits and the deposit  acquisition.  The
Company also experienced an increase in other income derived from the net income
of its  subsidiary,  First  Covina  Service  Company,  related to


                                       9


<PAGE> 12


the increased commissions earned on the sale of tax-deferred annuities and other
investment  vehicles.  Contributing  to the  increase for the three months ended
September  30, 1999 was the income from bank owned life  insurance  (acquired in
December  1998)  totaling  $30,000  for the  current  period.  Offsetting  these
increases was the decline in fees generated from loan servicing operations.  See
"Financial Condition."

Other Expenses
--------------

      The  Company's  other  expenses  increased  to $2.8  million for the three
months ended September 30, 1999 as compared to $2.0 million for the three months
ended  September  30,  1998.  The  Company  incurred  approximately  $230,000 in
merger-related  costs in regards to its  pending  merger with  IndyMac  Mortgage
Holdings,  Inc. during the three months ended  September 30, 1999.  Compensation
and other employee costs  increased  approximately  $193,000 to $1.4 million for
the three months ended September 30, 1999 due to additional employees, partially
related to the new branch office purchased from Citibank, and to the increase in
stock-related compensation plans as a result of the increase in the value of the
Company's  common stock.  The Company's data processing costs and other expenses
also increased  during the three months ended  September 30, 1999 as a result of
the costs to convert and acquire the deposits from  Citibank.  Included in other
expenses was  approximately  $70,000 in amortization of the goodwill  associated
with the  premiums  paid on the  deposits  acquired  from  Citibank  and a prior
acquisition.

Income Taxes
------------

      The  Company's  income  taxes  increased  to $442,000 for the three months
ended  September  30, 1999  compared  to $396,000 in income  taxes for the three
months ended  September 30, 1998. The increase in taxes was primarily due to the
expected  non-deductibility of the $230,000 in merger-related expenses regarding
the pending  merger with IndyMac  Mortgage  Holdings,  Inc. As a result of these
non-deductible  expenses,  the  effective  tax rates for the three  months ended
September  30, 1999  increased  to 50.5% from 41.2% for the three  months  ended
September 30, 1998.

FINANCIAL CONDITION
-------------------

      The Company's  total assets  increased to $494.5  million at September 30,
1999 from $468.7 million in total assets at June 30, 1999.  The Company's  loans
receivable  held for investment  increased by $10.3 million to $365.3 million at
September  30, 1999 compared to $355.0  million at June 30, 1999.  The growth in
the loan portfolio was due to the  origination  and purchase of $23.8 million in
mortgage  loans  during the three months ended  September  30, 1999.  Due to the
recent   increase  in  interest  rates,   the  level  of  prepayments   declined
significantly  from that experienced during most of fiscal 1999. Total principal
repayments  received  during the three months ended September 30, 1999 was $13.7
million  as  compared  to $21.5  million  for the same  period a year  ago.  The
Company's investment in short-term  investments and overnight federal funds sold
increased to $30.0  million at September 30, 1999 from $14.4 million at June 30,
1999  primarily  due to the receipt of cash from the  settlement  of the deposit
acquisitio from Citibank.

      During the three months ended  September 30, 1999, the Company  originated
and  purchased  for  investment  a total of $23.4  million in mortgage  loans as
compared to the $38.1 million purchased and originated in the three month period
ended  September 30, 1998.  In regards to the loans funded for portfolio  during
the three months ended  September 30, 1999,  approximately  92% were  adjustable
rate  mortgage  loans as  fixed-rate  loan rates rose  significantly  during the
quarter which curtailed  interest in this type of loan. Also, as a result of the
increase in  interest  rates for fixed rate  mortgage  loans,  the Company  only
originated  $1.6  million in loans  held for sale and sold only $1.2  million in
mortgage loans to the secondary  market during the three months ended  September
30,  1999.  The total  mortgage-backed  securities  portfolio  declined to $60.0
million at September 30, 1999 from $62.6 million at June 30, 1999,  primarily as
a result of principal  reductions  totaling $3.1 million during the three months
ended September 30, 1999. The Company's other assets  increased during the three
months ended  September  30, 1999  primarily  due to the $1.3 million in deposit
premium related to the Citibank acquisition. This premium will be amortized over
a sixty-month  period,  resulting in a pre-tax charge to income of approximately
$21,000 per month.

                                       10


<PAGE> 13


      The Company's  non-performing assets totaled $2.3 million at September 30,
1999 compared to $2.4 million at June 30, 1999.  The decrease in  non-performing
assets was due primarily to the decrease in the balance of real estate  acquired
in  settlement  of loans which  totaled  $294,000 at  September  30, 1999 versus
$827,000 at June 30, 1999. This improvement was partially offset by the increase
in non-performing  loans to $2.0 million at September 30, 1999 from $1.5 million
at June 30, 1999.  This change  reduced the  Company's  ratio of  non-performing
assets to total  assets to 0.46% at  September  30,  1999 from 0.50% at June 30,
1999.

      The following table sets forth the non-performing  assets at September 30,
1999 and June 30, 1999:

<TABLE>
<CAPTION>
                                             SEPTEMBER 30, 1999          JUNE 30, 1999
                                          ----------------------    ----------------------
                                                       (Dollars in thousands)
<S>                                             <C>                      <C>
Non-accrual loans                               $  1,969                 $  1,524
Real estate acquired through foreclosure             294                      827
    Non-performing assets                       $  2,263                 $  2,351
                                            ---------------           ------------------
Non-performing assets as a percent
  of total assets                                   0.46%                    0.50%
Non-performing loans as a percent
  of gross loans receivable                         0.54%                    0.43%

</TABLE>


      The Company considers a loan impaired when it is probable that the Company
will be unable to collect all contractual  principal and interest payments under
the terms of the loan  agreement.  Loans are evaluated for impairment as part of
the Company's  normal  internal asset review  process.  The Company  applies the
measurement provisions of SFAS No. 114, as amended by SFAS No. 118, to all loans
in its portfolio with the exception of one- to four-family  residential mortgage
loans and consumer lines of credit which are evaluated on a collective basis for
impairment.  Also,  loans which have delays in payments of less than four months
are not necessarily considered impaired unless other factors apply to the loans.
The  accrual of interest  income on  impaired  loans is  discontinued  when,  in
management's opinion, the borrower may be unable to meet payments as they become
due. When the interest accrual is  discontinued,  all unpaid accrued interest is
reversed.  Interest  income is  subsequently  recognized only to the extent cash
payments are received. Where impairment is considered temporary, an allowance is
established. Impaired loans which are performing under the contractual terms are
reported as performing  loans,  and cash payments are allocated to principal and
interest in accordance  with the terms of the loan. At September 30, 1999 and at
June 30, 1999, for those loans which are reviewed  individually  for impairment,
the Company  had  classified  none of such loans as  impaired  and there were no
specific reserves determined in accordance with SFAS No. 114, as amended by SFAS
No. 118. In addition, the Company had $2.0 million and $1.5 million at September
30,  1999 and  June 30,  1999,  respectively,  in  impaired  loans,  which  were
collectively evaluated for impairment with $266,000 and $238,000 in reserves set
aside as of  September  30, 1999 and June 30,  1999,  respectively.  The average
recorded   investment   in  impaired   loans,   inclusive  of  those   evaluated
collectively,  during  the three  months  ended  September  30,  1999,  was $1.7
million, whereas, the average for the twelve months ended June 30, 1999 was $1.9
million.

      The Company, in consideration of the current economic  environment and the
condition of the loan  portfolio,  maintained  the  allowance for loan losses at
September 30, 1999 at $2.0 million.  Although loans on  non-accrual  status have
increased to $2.0  million at  September  30, 1999 from $1.5 million at June 30,
1999,  the  allowance  for loan  losses is  maintained  at an amount  management
considers  adequate  to cover  estimated  losses in loans  receivable  which are
deemed probable and estimable.  The allowance is based upon a number of factors,
including  current  economic  conditions,  actual loss  experience  and industry
trends.  The Company's  non-performing  loans are  primarily  made up of one- to
four-family residential mortgage loans.

                                       11



<PAGE> 14

      The following table sets forth the activity in the Company's allowance for
loan losses for the three months ended September 30, 1999:

<TABLE>
<CAPTION>
                                                  ACTIVITY FOR THE THREE MONTHS ENDED
                                                         SEPTEMBER 30, 1999
                                                  --------------------------------
                                                       (Dollars in thousands)
<S>                                                           <C>
Balance at June 30, 1999                                      $  1,845
Add:
    Provision for loan losses                                      210
    Recoveries of previous charge-offs                               2
Less:
    Charge-off of consumer loans                                    44
    Charge-off of real estate loans                                  -
                                                          ---------------
Balance at September 30, 1999                                 $  2,013
                                                          ===============
</TABLE>

      The Company's total  liabilities  increased to $461.7 million at September
30, 1999 from $436.4 million at June 30, 1999. Total deposit accounts  increased
$38.5  million to $362.6  million at September  30, 1999 from $324.1  million at
June 30, 1999, primarily as a result of the acquisition of deposit accounts from
Citibank in July 1999.  The Company  decreased its  borrowings  from the FHLB by
$14.0  million  during the three months ended  September 30, 1999 as the Company
used a  portion  of the cash  received  from  the  acquisition  of the  Citibank
deposits to allow  maturing  short-term  FHLB  borrowings to roll off.  Also, an
additional  $14.0  million in FHLB  borrowings  which  matured  during the three
months ending  September 30, 1999 were renewed into five-year terms to assist in
the lengthening of the average life of the Company's  liabilities and lessen its
interest-rate  sensitivity.  The Company  continues to utilize FHLB advances and
securities  sold  under  agreements  to  repurchase  as  part of its  asset  and
liability management strategy.

      The Company's stockholders' equity increased to $32.8 million at September
30, 1999 from $32.4  million at June 30, 1999  primarily  as a result of the net
earnings  for the three months  ending  September  30, 1999.  Although the total
assets of the  Company  increased  as a result of the deposit  acquisition,  the
Association's capital still is in excess of all regulatory requirements.

LIQUIDITY
---------

      The  Company's  primary  sources  of funds  are  deposits,  principal  and
interest  payments  on loans  and  mortgage-backed  securities,  FHLB  advances,
securities sold under agreements to repurchase,  increases in deposits and, to a
lesser extent, proceeds from the sale of loans and investments. While maturities
and scheduled  amortization of loans are predictable  sources of funds,  deposit
flows and mortgage prepayments are greatly influenced by general interest rates,
economic conditions and competition.

      The  Association,  by regulation,  must maintain its liquidity ratio at no
less than 4.0% of deposits and short-term borrowings.  Liquidity represents cash
and the majority of the Company's investments which are not committed or pledged
to specific liabilities. The Association's average liquidity ratio for September
30, 1999 and September 30, 1998 was 21.65% and 26.16%, respectively.

COMMITMENTS AND CONTINGENT LIABILITIES
--------------------------------------

      At September  30, 1999,  there were no material  changes to the  Company's
commitments  or  contingent  liabilities  from the period ended June 30, 1999 as
discussed  in the  Company's  notes  to the  consolidated  financial  statements
reflected in the audited consolidated financial statements of SGV Bancorp, Inc.,
for the year ended June 30, 1999  included in the Annual Report on Form 10-K for
the year ended June 30, 1999. At September 30, 1999, the Company had outstanding
commitments to originate or purchase mortgage loans of $2.2 million, as compared
to $4.8 million at June 30, 1999.

                                       12

<PAGE> 15


REGULATORY CAPITAL
------------------

      The Office of Thrift Supervision (OTS) capital regulations require savings
institutions to meet three minimum capital requirements: a 1.5% tangible capital
ratio, a 3% leverage  (core  capital) ratio and an 8% risk-based  capital ratio.
The core capital  requirement has been  effectively  increased to 4% because the
prompt corrective action  legislation  provides that institutions with less than
4% core capital will be deemed  "undercapitalized".  In addition, the OTS, under
the prompt  corrective  action  regulation  can impose  various  constraints  on
institutions   depending   on  their  level  of   capitalization   ranging  from
well-capitalized  to critically  undercapitalized.  At September  30, 1999,  the
Association was considered "well-capitalized".

      The Association was in compliance with the capital  requirements in effect
as of September 30, 1999. The following  table reflects the required  ratios and
the actual capital ratios of the Association at September 30, 1999:

<TABLE>
<CAPTION>
                                                              CAPITAL
                                                       ----------------------
                 Actual      Required      Excess       Actual      Required
                 Capital      Capital      Amount       Percent      Percent
               -----------  -----------  ----------    ---------    ---------
                       (Dollars in thousands)
<S>             <C>         <C>          <C>             <C>           <C>
Tangible        $  30,558   $   7,412    $  23,146        6.19%        1.50%

Core            $  30,558   $  19,745    $  10,813        6.19%        4.00%

Risk-based      $  32,305   $  20,780    $  11,525       12.44%        8.00%

</TABLE>


PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
--------------------------------------------------------------

      In  addition  to  historical  information,  this  Form  10-Q  may  include
forward-looking  statements  based  on  current  management  expectations.   The
Company's   actual  results  could  differ   materially  from  those  management
expectations.  Factors  that could  cause  future  results to vary from  current
management  expectations  include,  but are not  limited  to,  general  economic
conditions,  legislative and regulatory changes, monetary and fiscal policies of
the  federal  government,  changes in tax  policies,  rates and  regulations  of
federal,  state and local tax  authorities,  changes in interest rates,  deposit
flows,  the cost of  funds,  demand  for loan  products,  demand  for  financial
services,  competition,  changes in the quality or  composition of the Company's
loan and investment portfolios,  changes in accounting  principles,  policies or
guidelines,  and other economic,  competitive,  governmental  and  technological
factors  affecting  the Company's  operations,  markets  products,  services and
prices. Further description of the risks an uncertainties to the business of the
Company are  included in detail in the  Company's  Form 10-K for the fiscal year
ended June 30, 1999.

YEAR 2000
---------

      In recent  years the Company  has been  executing a formal plan to address
year  2000  issues  ("Y2K").  The Y2K  issues  relate  to the way  software  was
programmed through much of this Century. Specifically, years were coded with two
digits.  The Company's Y2K plan has been designed to address potential  problems
that could arise from software, hardware and equipment both within the Company's
direct  control  and  outside of the  Company's  control,  yet which the Company
relies upon, in that it  electronically  or  operationally  interfaces with such
software, hardware and equipment.

      The  Company   principally   utilizes   third-party  data  processors  and
third-party software for its information technology (IT) needs. As a result, the
year 2000 compliance of the company's  information  technology  assets,  such as
computer hardware,  software and systems,  is primarily  dependent upon the year
2000 compliance  efforts and results of its third-party  vendors.  The year 2000
compliance of the Company's  non-IT assets,  such as automated  teller machines,
telecommunication  systems, copiers, fax machines,  elevators, and HVAC systems,
is also primarily dependent upon the year 2000 compliance efforts and results of
third parties.

                                       13


<PAGE> 16

      Financial institution regulators have focused their attention on year 2000
issues and have published  guidance  concerning the  responsibilities  of senior
management and directors.  Year 2000 testing and certification,  liquidity risk,
customer awareness,  and contingency  planning have been addressed as key safety
and soundness issues in conjunction with regulatory Y2K examinations.

      The Company  has  appointed a year 2000 team that  includes  officers  and
staff from all operational  areas.  The team is responsible for the development,
implementation and monitoring of the Company's Year 2000 Plan. Also, the Company
has enlisted the services of outside  contractors to assist in the attainment of
year 2000  readiness.  In order to address the year 2000 issue,  the Company has
developed and implemented a five-phase plan, which is divided into the following
major components:

-  awareness

-  assessment

-  renovation

-  validation

-  implementation

      The Company  has  completed  all phases of this plan.  Because the Company
outsources its data  processing and item  processing  operations,  a significant
component  of the Year 2000 Plan is to work with  external  vendors  to test and
certify  their  systems  as year  2000  compliant.  The  software  used in these
systems, both purchased and related to our external data processing vendors, has
been tested for year 2000  readiness with minimal  issues  detected.  Any issues
detected have been  reported to the  respective  vendor or service  provider for
corrective action. None of the issues noted during the testing, if not corrected
by year 2000,  are  expected to have any  material  effect on the  Company.  The
Company's primary third-party service bureau provides data processing for all of
the Company's savings accounts,  lending operations and its general ledger. Upon
review of the test results,  the few issues  detected were forwarded to the data
processor for corrective action.  Although the Company is confident these issues
will be resolved,  none of the issues detected are expected to have any material
impact to the Company's successful transition to year 2000 even if they have not
been corrected by year 2000. The Company also completed testing with the Federal
Reserve  Bank  of  San  Francisco,  its  primary  ATM  processor,   primary  ATM
interchange provider, its accounting sub-systems, its front-end loan origination
system  and  Fannie Mae and  detected  no  date-related  issues  which  would be
expected to present any material Y2K problems to the Company.

      The Company surveyed its primary vendors and others with whom it relies on
to assure  their  systems  will be year 2000  ready.  Of the vendors the Company
considers critical to its operations, all have responded that they are year 2000
ready or are in process of becoming ready. Vendors the Company considers mission
critical include its primary data processor,  item processor,  ATM provider, the
Federal  Reserve  Bank and the FHLB,  as well as all utility  providers.  Of the
critical vendors the Company tested, no material year 2000  date-related  issues
were  identified.  In  addition,  the  majority of  critical  vendors not tested
(primarily  utility  providers) have represented that they are Y2K ready. If any
mission  critical  vendor were to fall out of Y2K  compliance,  the Company will
seek to switch to a new vendor. However, due to the timing required to change to
another vendor,  if mission  critical  vendors are not year 2000 ready (all have
represented  that they are or expect to be year 2000  ready),  the Company ma be
adversely  affected.  Further,  the Company  will be unable to seek  alternative
service  providers  with  respect  to some  critical  vendors  such  as  utility
providers.  The Company has  endeavored  to determine  such vendors will be year
2000  compliant  and at this  time,  based  upon  information  supplied  by such
vendors,  has no information  suggesting  utility  services will be interrupted.
However,  any disruption in utility  service would directly affect the Company's
ability to operate.

      In regard to vendors or service  providers the Company deems are important
for  the  normal  operations  of  the  Company,  but  not  considered  critical,
approximately  87% have represented that they are year 2000 ready or are working
towards readiness.  The Company is continuing to perform follow-up work on those
vendors or service providers (primarily title companies and appraisal firms) who
have not responded. For those vendors the Company believes will not be year 2000
ready,  the Company will evaluate the potential  impact on the operations of the
Company by such vendor to determine if changing  vendors or other  solutions are
necessary.  However,  there can be no  assurance  that  these  systems  or other
vendors will be year 2000 ready or that any such failure in readiness by

                                       14


<PAGE> 17



such vendors would not have an adverse effect on the Company's  operations.  The
Company has  completed  proxy  testing with its data  processor  in  third-party
interfaces for year 2000 readiness.

      Another  important segment of the Year 2000 Plan is to identify those loan
customers or deposit  customers  whose  possible lack of year 2000  preparedness
might  expose the  Company to  financial  loss.  The  Company  completes  a risk
analysis of their large dollar fund users and fund  providers  quarterly and has
determined  that such  customers  are not  expected to expose the Company to any
material impact by a lack of year 2000 preparedness.  Also, the analysis of fund
users indicates that the Company does not expect to have any material  financial
exposure in regard to its loan portfolio as the portfolio is comprised primarily
of loans to individuals and, to a lessor extent,  to businesses  secured by real
estate. Management believes that loans secured by real estate are less likely to
be impacted by any year 2000 issues.

      The Company has  completed  its Year 2000  Contingency  Plan for  handling
issues which may present concern to the Company if certain  processes or vendors
are  unable to  provide  services.  The  contingency  plan  provides a basis for
identifying and allocating  resources in the event of year 2000  disruptions and
the timely resumption and recovery of critical  functions.  The contingency plan
has been reviewed by an  independent  outside  consultant for  feasibility  with
management's  stated  business  resumption  goals and other plans adopted by the
Company.  Recommendations made by the consultant were reviewed by management and
incorporated  into the  contingency  plan.  The Company  conducted a test of its
contingency plan during the three months ended September 30, 1999 and based upon
the results of this test,  made minor  revisions to its  contingency  plan.  The
contingency  plan will  continue  to be reviewed  throughout  the  remainder  of
calendar 1999 and will be updated as new  information  becomes  available on the
Company's vendors and service providers.

      During the  execution of this  project,  the Company  will incur  internal
staff costs as well as consulting  and other  expenses  related to  enhancements
necessary to prepare the systems for the year 2000.  Since the Company  replaced
many of the internal  systems  with year 2000  compliant  personal  computers in
1997, the expenses incurred to bring the Company to year 2000 compliance will be
expensed as incurred,  with the majority of such costs being the reallocation of
current staff to bring about this readiness.  The Company  replaced the majority
of its internal  computer  hardware and software in early 1997. The  capitalized
costs of this  replacement  were in excess of $700,000  and are being  amortized
over several years in compliance with the Company's normal  depreciation of such
hardware or  software.  The future  expenses of the year 2000 project as well as
the related potential effect on the Company's earnings is not expected to have a
material effect on its financial position or results of operations.  Through the
three  months ended  September  30,  1999,  the Company has spent  approximately
$205,000 for year 2000 related issues which included  approximately  $151,000 of
internal staff resources. Management does not expect the total costs of the year
2000 project to exceed $260,000 (excluding the $700,000 in hardware and software
discussed above), the majority of which is primarily related to the reallocation
of internal staff resources.

      The Company  believes it has  developed an  effective  and prudent plan to
review,  renovate  and resolve any  potential  year 2000  issues.  In respect to
operations under the Company's direct control and due to management's  year 2000
readiness efforts and those of its strategic business partners,  management does
not expect that Year 2000 failures will have a material  effect on the financial
condition  or results  of  operations  of the  Company.  However,  the impact of
disruptions in the local or national  economy as a result of year 2000 issues is
not  quantifiable  at this time and could  adversely and  materially  affect the
Company.  In  addition,  the  Company  is  heavily  dependent  on the year  2000
readiness of infrastructure suppliers such as utilities, communication and other
such services.  As discussed above, if such infrastructure  suppliers would have
year 2000 disruptions,  this could adversely and materially affect the Company's
ability to provide services to its customers.


PENDING LEGISLATION
-------------------

      Pending legislation  designed to modernize the regulation of the financial
services  industry  expands the ability of bank  holding  companies to affiliate
with other types of financial services companies such as insurance companies and
investment banking companies.  However,  the legislation provides that companies
that acquire control of a single savings  association after May 4, 1999 (or that
filed an  application  for that purpose after that date) are not entitled to the
unrestricted  activities formerly allowed for a unitary savings and loan holding



                                       15


<PAGE> 18



company. Rather, these companies will have authority to engage in the activities
permitted "a financial  holding  company" under the new  legislation,  including
insurance  and  securities-related  activities,  and  the  activities  currently
permitted for multiple savings and loan holding companies,  but generally not in
commercial   activities.   The   authority   for   unrestricted   activities  is
grandfathered  for  unitary  savings  and loan  holding  companies,  such as the
Company,  that  existed  prior  to May  4,  1999.  However,  the  authority  for
unrestricted  activities  would  not  apply to any  company  that  acquired  the
Company.  Accordingly, it is likely that after the consummation of the Company's
acquisition by IndyMac Mortgage Holdings,  Inc., IndyMac will not be entitled to
engage  in the  unrestricted  activities  in  which  the  Company  is  currently
authorized to engage.


Item 3. Quantitative and Qualitative Disclosure about Market Risk
        ---------------------------------------------------------

MANAGEMENT OF INTEREST RATE RISK
--------------------------------

        The Company's  profitability is dependent to a large extent upon its net
interest  income,  which  is the  difference  between  its  interest  income  on
interest-earning assets, such as loans and investments, and its interest expense
on interest-bearing  liabilities, such as deposits and borrowings. To manage its
interest  rate risk,  the Company has utilized  the  following  strategies:  (i)
emphasizing  the  origination  and/or  purchase  of   adjustable-rate   one-  to
four-family  mortgage loans for portfolio;  (ii) selling to the secondary market
the majority of the fixed-rate  mortgage loans originated;  and (iii) attempting
to reduce the overall  interest rate  sensitivity  of liabilities by emphasizing
core and longer-term deposits, utilizing FHLB advances and securities sold under
agreements to repurchase.

        The  Company's  interest  rate  sensitivity  is monitored by  management
through  the use of an interest  rate risk (IRR)  model.  Based on internal  IRR
modeling,  management  does not believe that there has been a material change in
the  Company's  interest  rate  sensitivity  from June 30, 1999 to September 30,
1999. All methods used to measure interest rate  sensitivity  involve the use of
assumptions,  which may tend to  oversimplify  the manner in which actual yields
and costs respond to changes in market  interest rates.  The Company's  interest
rate sensitivity should be reviewed in conjunction with the financial statements
and notes thereto  contained in the Company's  Annual Report for the fiscal year
ended June 30, 1999.




                                       16



<PAGE> 19


PART II. OTHER INFORMATION


Item 1.     Legal Proceedings
            -----------------

      The Company is involved as plaintiff or defendant in various legal actions
incident to its business, none of which is believed by management to be material
to the financial condition of the Company.

Item 2.     Changes in Securities
            ---------------------
                  None.

Item 3.     Defaults in Securities
            ----------------------
                  None.

Item 4.     Submission of Matters to a Vote of Security Holders
            ---------------------------------------------------
                  None.

Item 5.     Other Information
            -----------------
                  None.

Item 6.     Exhibits and Reports on Form 8-K
            --------------------------------

      (a)   The following exhibits are filed as part of this report:

      2.1   Agreement  and  Plan  of Merger By and Between SGV Bancorp, Inc. and
            IndyMac Mortgage Holdings, Inc., Dated as of July 12, 1999**
      2.2   Amended and Restated Plan of Merger By and Between SGV Bancorp, Inc.
            and  IndyMac Mortgage Holdings, Inc., Dated as of July 12, 1999  and
            Amended and Restated as of October 25, 1999
      3.1   Certificate of Incorporation of SGV Bancorp, Inc. *
      3.2   Bylaws of SGV Bancorp, Inc. *
     11.0   Computation of per share earnings  (filed  herewith).
     27.0   Financial data schedule (filed herewith).
      (b)   Reports on Form 8-K
               (i)  On July 14 1999,  the  Company  filed a Form 8-K to announce
                    that it had  entered  into an  agreement  and plan of merger
                    with IndyMac Mortgage Holdings, Inc.
               (ii) On September 23,  1999,  the  Company  filed  a Form  8-K to
                    announce  the  completion  of its  acquisition  of  deposits
                    totaling   approximately   $36.8   million  from   Citibank,
                    California, a federal savings bank.
-------------------
*     Incorporated herein  by reference  from  the Exhibits to the  Registration
      Statement  on Form S-1,  as amended,  filed on March 6, 1995 and  declared
      effective on May 9, 1995, Registration No. 33-90018.
**    Incorporated  by  reference from  the  Form 8-K (File No. 000-25664) filed
      with the SEC on July 14, 1999.



                                       17


<PAGE> 20



                                   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.


                                          SGV BANCORP, INC.




November 9, 1999                          /s/ Barrett G. Andersen
---------------------------               -------------------------------------
Date                                      Barrett G. Andersen
                                          President and Chief Executive Officer



November 9, 1999                          /s/ Ronald A. Ott
---------------------------               -------------------------------------
Date                                      Ronald A. Ott
                                          Executive Vice President
                                          Chief Financial Officer and Treasurer





                                       18