<PAGE>
 
================================================================================

                      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 June 30, 1997

                                      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 0-28292
                            ----------------------

                             BANK PLUS CORPORATION
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

             DELAWARE                                  95-4571410
   (STATE OR OTHER JURISDICTION OF       (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
    INCORPORATION OR ORGANIZATION)

    4565 COLORADO BOULEVARD                                90039
    LOS ANGELES, CALIFORNIA                             (ZIP CODE)

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  (818) 241-6215
                            ----------------------

  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  
                                                -----      -----


  As of July 31, 1997, Registrant had outstanding 19,308,340 shares of Common
Stock, par value $.01 per share.

================================================================================
<PAGE>
 
                             BANK PLUS CORPORATION



                                     INDEX

<TABLE>
<CAPTION>
 
                                                                                                            PAGE
                                                                                                            ----
<S>                                                                                                         <C>
PART I.   FINANCIAL INFORMATION
 
Item 1.   Financial Statements

          Consolidated Statements of Financial Condition as of June 30, 1997 and
            December 31, 1996............................................................................     1

          Consolidated Statements of Operations for the quarters and six months ended June 30,
            1997 and 1996................................................................................     2

          Consolidated Statements of Cash Flows for the quarters and six months ended June 30,
            1997 and 1996................................................................................     3

          Notes to Consolidated Financial Statements.....................................................     4

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of
            Operations...................................................................................     8

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings..............................................................................    30

Item 2.   Changes in Securities..........................................................................    32

Item 3.   Defaults Upon Senior Securities................................................................    32

Item 4.   Submission of Matters to a Vote of Security Holders............................................    32

Item 5.   Other Information..............................................................................    32

Item 6.   Exhibits and Reports on Form 8-K...............................................................    33

            a. Exhibits..................................................................................    33

            b. Reports on Form 8-K.......................................................................    35
</TABLE>
<PAGE>
 
                         PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                    BANK PLUS CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                             JUNE 30,     DECEMBER 31,
                                               1997           1996
                                           ------------   -------------

<S>                                         <C>             <C>
ASSETS:
Cash and cash equivalents...............    $  169,559      $   70,126
Certificate of deposit..................         1,582              --
Investment securities available for            
 sale, at fair value....................       157,354         156,251 
Investment securities held to maturity
 at amortized cost (market value of              
 $5,338 and $5,198 at June 30, 1997 and
 December 31, 1996, respectively).......         5,332           5,178 
Mortgage-backed securities held for             
 trading................................        10,767          14,121 
Mortgage-backed securities available           
 for sale, at fair value................       196,942         179,403 
Mortgage-backed securities held to
 maturity, at amortized cost (market            
 value of $23,396 and $27,169 at 
 June 30, 1997 and December 31, 1996, 
 respectively)..........................        27,965          30,024 
Loans receivable, net of allowances of
 $59,964 and $57,508 at June 30, 1997        
 and December 31, 1996, respectively....     2,787,120       2,691,931  
Interest receivable.....................        20,809          20,201
Investment in Federal Home Loan Bank            
 ("FHLB") stock.........................        55,246          52,330 
Real estate owned, net..................        23,640          24,663
Premises and equipment, net.............        32,238          31,372
Other assets............................        45,448          54,690
                                            ----------      ----------
                                            $3,534,002      $3,330,290
                                            ==========      ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:

 Liabilities:
  Deposits..............................    $2,701,677      $2,495,933
  FHLB advances.........................       569,846         449,851
  Commercial paper......................            --          40,000
  Mortgage-backed notes.................            --         100,000
  Other liabilities.....................        31,661          31,099
                                            ----------      ----------
                                             3,303,184       3,116,883
                                            ----------      ----------
Minority Interest:  Preferred stock of          
 consolidated subsidiary................        51,750          51,750 
Stockholders' equity:
 Common Stock:
  Common stock, par value $.01 per share;
   78,500,000 shares authorized;
   19,308,340 and 18,245,265 shares                
   outstanding at June 30, 1997 and 
   December 31, 1996, respectively......           193             182 
  Paid-in capital.......................       273,942         261,902
  Unrealized (losses) gains on                  
   securities...........................        (1,061)          1,043 
  Accumulated deficit...................       (94,006)       (101,470)
                                            ----------      ----------
                                               179,068         161,657
                                            ----------      ----------
                                            $3,534,002      $3,330,290
                                            ==========      ==========
 
</TABLE>
                See notes to consolidated financial statements.

                                       1

<PAGE>
 
                    BANK PLUS CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                                                     QUARTER ENDED               SIX MONTHS ENDED      
                                                                       JUNE 30,                       JUNE 30,         
                                                              ---------------------------   ---------------------------
                                                                  1997           1996           1997           1996    
                                                              ------------   ------------   ------------   ------------
<S>                                                           <C>            <C>            <C>            <C>          
INTEREST INCOME:
  Loans.................................................      $    49,384    $    54,096    $    99,224    $   110,276   
  Mortgage-backed securities............................            4,673            756          8,977          1,260    
  Investment securities and other.......................            4,398          4,704          8,961          8,074    
                                                              -----------    -----------    -----------    -----------    
    Total interest income...............................           58,455         59,556        117,162        119,610    
                                                              -----------    -----------    -----------    -----------    
INTEREST EXPENSE:                                                                                                         
  Deposits..............................................           29,572         29,787         58,712         60,822    
  FHLB advances.........................................            8,034          3,175         13,977          6,842    
  Other borrowings......................................              523          4,828          3,790          8,342    
                                                              -----------    -----------    -----------    -----------    
    Total interest expense..............................           38,129         37,790         76,479         76,006    
                                                              -----------    -----------    -----------    -----------    
NET INTEREST INCOME.....................................           20,326         21,766         40,683         43,604    
  Provision for estimated loan losses...................            4,251          3,905          8,502          7,810    
                                                              -----------    -----------    -----------    -----------    
NET INTEREST INCOME AFTER PROVISION FOR                                                                                   
 ESTIMATED LOAN LOSSES..................................           16,075         17,861         32,181         35,794    
                                                              -----------    -----------    -----------    -----------    
NONINTEREST INCOME (EXPENSE):                                                                                             
  Loan fee income.......................................              512            560          1,020          1,374    
  Gains on loan sales, net..............................               21              6             28              6    
  Fee income from sale of uninsured investment products.            1,550          1,092          3,063          2,291    
  Fee income on deposits and other income...............              796            874          1,546          1,664    
  Gains on securities and trading activities, net.......              995            235          2,216            152   
                                                              -----------    -----------    -----------    -----------   
                                                                    3,874          2,767          7,873          5,487    
                                                              -----------    -----------    -----------    -----------    
  Provision for estimated real estate losses............             (620)          (578)        (1,362)        (1,246)   
  Direct costs of real estate operations, net...........           (1,205)        (1,237)        (2,764)        (3,024)  
                                                              -----------    -----------    -----------    -----------    
                                                                   (1,825)        (1,815)        (4,126)        (4,270)   
                                                              -----------    -----------    -----------    -----------    
  Total noninterest income..............................            2,049            952          3,747          1,217    
                                                              -----------    -----------    -----------    -----------    
OPERATING EXPENSE:                                                                                                        
  Personnel and benefits................................            7,086          6,833         13,787         13,806    
  Occupancy.............................................            2,788          2,689          5,288          5,406    
  FDIC insurance........................................              587          1,931          1,081          3,962    
  Professional services.................................            2,138          2,780          4,758          5,283    
  Office-related expenses...............................              832            846          1,680          1,932    
  Other.................................................            1,610          1,459          2,783          2,776    
                                                              -----------    -----------    -----------    -----------    
    Total operating expense.............................           15,041         16,538         29,377         33,165    
                                                              -----------    -----------    -----------    -----------    
EARNINGS BEFORE INCOME TAXES AND                                                                                          
  MINORITY INTEREST IN SUBSIDIARY.......................            3,083          2,275          6,551          3,846    
  Income tax (benefit) expense..........................           (2,500)            53         (4,800)            93    
                                                              -----------    -----------    -----------    -----------    
EARNINGS BEFORE MINORITY INTEREST IN SUBSIDIARY.........            5,583          2,222         11,351          3,753    
  Minority interest in subsidiary (dividends on 
    subsidiary preferred stock).........................            2,333          1,552          3,886          1,552   
                                                              -----------    -----------    -----------    -----------    
                                                                                                                          
NET EARNINGS............................................            3,250            670          7,465          2,201    
  Preferred stock dividends.............................               --             --             --          1,553    
                                                              -----------    -----------    -----------    -----------    
EARNINGS AVAILABLE FOR COMMON STOCKHOLDERS..............      $     3,250    $       670    $     7,465    $       648   
                                                              ===========    ===========    ===========    ===========    
EARNINGS PER COMMON SHARE...............................      $      0.18    $      0.04    $      0.41    $      0.04    
                                                              ===========    ===========    ===========    ===========    
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING..............       18,248,754     18,242,465     18,247,019     18,242,465    
                                                              ===========    ===========    ===========    ===========    
</TABLE>

                See notes to consolidated financial statements

                                       2
<PAGE>
 
                    BANK PLUS CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                     QUARTER ENDED                   SIX MONTHS ENDED
                                                                         JUNE 30,                        JUNE 30,
                                                               --------------------------   ------------------------------
                                                                  1997           1996          1997             1996
                                                               -----------   ------------   -----------   ----------------
<S>                                                            <C>           <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net earnings ...............................................  $   3,250      $     670    $    7,465           $  2,201
  Adjustments to reconcile net earnings to net cash provided
    by (used in) operating activities:
      Provisions for estimated loan and real estate losses....      4,871          4,483         9,864              9,056
      Gains on sale of loans and securities ..................     (1,016)          (241)       (2,244)              (158)
      Capitalized loan origination costs .....................         (4)            --           (13)                --
      Amortization of deferred items, net ....................     (1,593)          (568)       (2,075)            (1,009)
      FHLB stock dividend ....................................       (768)          (727)       (1,659)            (1,375)
      Depreciation and amortization ..........................        893            992         1,763              1,970
  Purchases of mortgage-backed securities (MBS")
    held for trading .........................................         --             --        (9,979)                --
  Principal repayments of MBS held for trading ...............        195             --           352                 --
  Proceeds from sales of MBS held for trading ................         --             --        13,074                 --
  Interest receivable decrease (increase) ....................       (121)          (285)          510             (1,206)
  Other assets decrease (increase) ...........................        120         (2,576)       31,420             (6,766)
  Deferred income tax benefit ................................     (2,597)            --        (5,001)                --
  Interest payable (decrease) increase .......................     (9,720)        (1,516)       (5,099)                82
  Other liabilities increase .................................        442          2,941         1,734              4,665
                                                                ---------      ---------    ----------          ---------
    Net cash (used in) provided by operating activities.......     (6,048)         3,173        40,112              7,460
                                                                ---------      ---------    ----------          ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Hancock acquisition .......................................     52,908             --        52,908                 --
   Purchases of investment securities available for sale......         --        (83,450)           --           (151,025)
   Maturities of investment securities available for sale.....         --         22,950            --             22,950
   Purchases of MBS available for sale .......................   (149,399)       (38,961)     (215,946)           (38,961)
   Principal repayments of MBS available for sale ............     10,368            852        15,990              2,759
   Proceeds from sales of MBS available for sale..............    142,254         20,158       185,949             20,158
   Principal repayments of MBS held to maturity...............      1,290             --         2,060                 --
   Loans receivable (increase) decrease.......................    (15,117)        53,642        19,610             98,196
   Net proceeds from sales of real estate owned...............      6,415         13,653        17,746             17,597
   Premises and equipment additions, net......................       (831)          (266)       (1,202)            (1,021)
                                                                ---------      ---------    ----------          ---------
     Net cash provided by (used in) investing activities......     47,888        (11,422)       77,115            (29,347)
                                                                ---------      ---------    ----------          ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Demand deposits and passbook savings, net increase..........    (13,945)       (34,887)       (7,609)          (101,740)
  Certificate accounts, net (increase) decrease...............     (4,940)         8,770         9,782             53,817
  Payments of preferred stock dividend........................        --             --            --              (1,553)
  Proceeds from FHLB advances.................................    435,941            --        485,941                 --
  Repayments of FHLB advances.................................   (253,246)           --       (365,946)           (60,000)
  Short-term borrowings (decrease) increase...................    (40,000)        42,457       (40,000)           102,357
  Repayments of long-term borrowings..........................   (100,000)           --       (100,000)                --
  Net proceeds from issuance of capital stock.................         38            --             38                 --
  Other financing activity....................................         --            (36)           --                (36)
                                                                ---------      ---------    ----------          ---------
   Net cash provided by (used in) financing activities........     23,848         16,304       (17,794)            (7,155)
                                                                ---------      ---------    ----------          ---------
      Net increase (decrease) in cash and cash equivalents....     65,688          8,055        99,433            (29,042)

   Cash and cash equivalents at the beginning of the period...    103,871         57,697        70,126             94,794
                                                                ---------      ---------    ----------          ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD....................  $ 169,559      $  65,752    $  169,559          $  65,752
                                                                =========      =========    ==========          =========
SUPPLEMENTAL CASH FLOW INFORMATION:
   Cash (paid) received during the period for:
       Interest on deposits, advances and other borrowings....  $  47,674        (38,631)   $   80,821          $ (74,570)
       Income tax payment (refund)............................        243            (81)          243                302

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
     Additions to real estate acquired through foreclosure....      8,111         12,346        20,777             21,220
     Loans originated to finance sale of real estate owned....      4,472          1,129         6,088              1,379
        
SUPPLEMENTAL CASH FLOW INFORMATION:
   Cash (paid) received during the period for:
       Interest on deposits, advances and other borrowings....      $47,674    $ (38,631)   $   80,821          $ (74,570)
       Income tax payment (refund)............................          243          (81)          243                302

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
     Additions to real estate acquired through foreclosure....        8,111       12,346        20,777             21,220
     Loans originated to finance sale of real estate owned....        4,472        1,129         6,088              1,379

DETAILS OF ACQUISITION:
     Fair value of assets and intangible acquired.............      212,693           --       212,693                 --
     Goodwill.................................................        6,589           --         6,589                 --         
     Liabilities assumed......................................      207,270           --       207,270                 --    
     Common stock issued......................................       12,012           --        12,012                 --
     Cash acquired............................................       52,908           --        52,908                 --  

</TABLE>
 
                See notes to consolidated financial statements.

                                       3
<PAGE>
 
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Principles of Consolidation

  In the opinion of Bank Plus Corporation ("Bank Plus") and Bank Plus together
with its subsidiaries (the "Company"), the accompanying unaudited consolidated
financial statements, prepared from the Company's books and records, contain all
adjustments (consisting of only normal recurring accruals) necessary for a fair
presentation of the Company's financial condition as of June 30, 1997 and
December 31, 1996, and the results of operations and statements of cash flows
for the three and six months ended June 30, 1997 and 1996.

  Bank Plus is the holding company for Fidelity Federal Bank, a Federal Savings
Bank, and its subsidiaries (the "Bank" or "Fidelity") and Gateway Investment
Services, Inc. ("Gateway").  The Company's headquarters are in Los Angeles,
California. The Company offers a broad range of consumer financial services,
including demand and term deposits, uninsured investment products, and loans to
consumers, through 38 full-service branches, all of which are located in
Southern California, principally in Los Angeles and Orange counties. All
significant intercompany transactions and balances have been eliminated. Certain
reclassifications have been made to prior years' consolidated financial
statements to conform to the 1997 presentation.

  In May 1996, the Bank completed a reorganization pursuant to which all of the
outstanding Class A Common Stock of Fidelity was converted on a one-for-one
basis into all of the outstanding common stock of Bank Plus and Bank Plus became
the holding company for Fidelity (the "Reorganization"). Bank Plus currently
has no significant business or operations other than serving as the holding
company for Fidelity and Gateway, which prior to the Reorganization was a
subsidiary of the Bank. All references to "Fidelity" prior to the
Reorganization include Gateway.

  The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and include all
information and footnotes required for interim financial statement presentation.
The financial information provided herein, including the information under the
heading Item 2. "Management's Discussion and Analysis of Financial Condition and
Results of Operations" ("MD&A"), is written with the presumption that the users
of the interim financial statements have read, or have access to, the most
recent Annual Report on Form 10-K which contains the latest available audited
consolidated financial statements and notes thereto, as of December 31, 1996,
together with the MD&A as of such date.

Supplementary Earnings/Loss per Share Data

  Net earnings per common share for the three and six months ended June 30,
1997, as adjusted to reflect the dividends on preferred stock of subsidiary, was
determined based on 18,248,754 and 18,247,019 shares outstanding, respectively,
and 18,242,465 for the three and six months ended June 30, 1996.  Common stock
equivalents for the three and six months ended June 30, 1997 and 1996 did not
impact the calculation of net earnings per common share.


2. ACQUISITION

  On July 29, 1997, the Company completed the acquisition of all of the
outstanding common stock of Hancock Savings Bank, F.S.B., A Federal Savings Bank
("Hancock"), a Los Angeles-based institution with five branches.  The total
consideration paid to the Hancock stockholders was 1,058,575 million shares of
Bank Plus Common Stock valued at $11.347 per share.

  The acquisition of Hancock was accounted for as a purchase and has been
reflected in the consolidated statement of condition of the Company as of June
30, 1997.  The Company's consolidated statement of operations will include the
revenues and expenses of the acquired business beginning July 1, 1997.  The
purchase price was allocated to the assets purchased (including identifiable
intangible assets) and the liabilities assumed based upon their estimated fair
values at the date of acquisition.  The Company identified a core deposit
intangible of approximately $8.6 million, which will be amortized over seven
years, the estimated average life of the deposits acquired.  The excess of the
purchase price over the estimated fair value of net assets acquired amounted to

                                       4
<PAGE>
 
approximately $6.6 million, which has been accounted for as goodwill and will be
amortized over 15 years using the straight-line method. This allocation was
based on preliminary estimates related to fair value of loans acquired and
acquisition transaction costs and may be revised at a later date.

  The following unaudited pro forma information presents a summary of
consolidated results of operations for the six months ended June 30, 1997 and
1996 of the Company and Hancock assuming the acquisition had occurred on January
1, 1997 and 1996, with pro forma adjustments to give effect to the amortization
of goodwill and the core deposit intangible.
<TABLE>
<CAPTION>
                                              FOR THE SIX MONTHS ENDED
                                                      JUNE 30,
                                ----------------------------------------------- 
                                           1997                      1996
                                ------------------------    -------------------
                                (Dollars in thousands, except per share amounts)
<S>                               <C>                       <C>
  Net interest income.............        $43,071                 $46,020
  Provisions for estimated loan
   losses.........................          9,012                   8,360
  Other income....................          3,914                   1,273
  Operating expenses..............         32,671                  36,074
  Net earnings....................          6,214                   1,262
  Net earnings (loss) per common
   share..........................           0.32                   (0.02)
</TABLE>

  These pro forma results have been prepared for comparative purposes only and
do not purport to be indicative of the results of operations which actually
would have resulted had the transaction been consummated on the above dates, nor
are they indicative of future results of operations of the consolidated
entities.


3. ALLOWANCE FOR ESTIMATED LOAN LOSSES

  The following summarizes the activity in the allowance of estimated loan
losses:
<TABLE>
<CAPTION>
                                                AT OR FOR THE SIX MONTHS ENDED          
                                                           JUNE 30,                     
                                        ----------------------------------------------  
                                                 1997                     1996           
                                       ----------------------    --------------------  
                                                    (Dollars in thousands)               
<S>                                       <C>                     <C>
Balance on January 1....................        $57,508                 $89,435      
  Provisions for losses.................          8,502                   7,805
  Charge-offs...........................        (22,504)                (25,010)
  Allowances related to acquisition.....         12,770(1)                   --
  Recoveries and other..................          3,688                   1,492
                                                -------                 -------
Ending balance..........................        $59,964                 $73,722
                                                =======                 =======
</TABLE>
-------------------
(1)  Included in the estimated loan losses related to the Hancock acquisition is
     $5.8 million associated with the Accelerated Asset Resolution Plan
     discussed below.

  In the fourth quarter of 1995, the Bank adopted the Accelerated Asset
Resolution Plan (the "Plan"), which was designed to aggressively dispose of,
resolve or otherwise manage a pool (the "AARP Pool") of primarily multifamily
loans and real estate owned ("REO") that at that time were considered by the
Bank to have higher risk of future nonperformance or impairment relative to the
remainder of the Bank's multifamily loan portfolio. The Plan reflected both
acceleration in estimated timing of asset resolution, as well as a potential
change in recovery method from the normal course of business. In an effort to
maximize recovery on loans and REO included in the AARP Pool, the Plan allowed
for a range of possible methods of resolution including, but not limited to, (i)
individual loan restructuring, potentially including additional extensions of
credit or write-offs of existing principal, (ii) foreclosure and sale of
collateral properties, (iii) securitization of loans, (iv) the bulk sale of
loans and (v) bulk sale or accelerated disposition of REO properties.

                                       5
<PAGE>
 
  The AARP Pool originally consisted of 411 assets with an aggregate gross book
balance of approximately $213.3 million, comprised of $137.0 million in gross
book balance of loans and $76.3 million in gross book balance of REO. As a
consequence of the adoption of the Plan, the Bank recorded a $45.0 million loan
portfolio charge in the fourth quarter of 1995, which was reflected as a credit
to the Bank's allowance for estimated loan and REO losses. This amount
represented the estimated additional losses, net of specific valuation
allowances ("SVAs"), anticipated to be incurred by the Bank in executing the
Plan. Such additional losses represented, among other things, estimated reduced
recoveries from restructuring loans and the acceptance of lower proceeds from
the sale of individual REO and the estimated incremental losses associated with
recovery through possible bulk sales of performing and nonperforming loans and
REO.

  In conjunction with the acquisition of Hancock, the Bank identified a pool of
Hancock assets, with similar risk profiles to the assets included in the Bank's
AARP Pool, for inclusion in the Plan.  The Bank identified 54 of Hancock assets
with an aggregate gross book balance of approximately $29.3 million, comprised
of $25.8 million in gross book balance of loans and $3.5 million in gross book
balance of REO.  Simultaneously with the consummation of the acquisition, the 
Bank recorded $5.8 million as an addition to the allowance for estimated loan
losses representing the estimated reduced recoveries in executing the Plan.

  Through June 30, 1997, (i) $38.2 million in gross book balances of AARP Pool
loans had been resolved through either a negotiated sale or discounted payoff,
(ii) $7.9 million in gross book balances of AARP Pool loans were collected
through normal principal amortization or paid off through the normal course
without loss, (iii) $22.5 million in gross book balances of AARP Pool loans had
been modified or restructured and retained in the Bank's mortgage portfolio,
(iv) $15.4 million in gross book balances of AARP Pool loans were removed from
the AARP Pool upon management's determination that such assets no longer met the
risk profile for inclusion in the AARP Pool or that accelerated resolution of
such assets was no longer appropriate and (v) $110.6 million in gross book
balances of REO were sold ($43.6 million in gross book balances of AARP Pool
loans were taken through foreclosure and acquired as REO since the inception of
the AARP). As of June 30, 1997, the AARP Pool consisted of 40 assets with an
aggregate gross book balance of $18.7 million, comprised primarily of accruing
and nonaccruing multifamily real estate loans totaling approximately $9.4
million and REO properties totaling approximately $9.3 million, which are
reported as real estate owned on the statement of financial condition. Through
June 30, 1997, of the $45.0 million of reserves established in connection with
the Plan, not including the $5.8 million established for the Hancock assets,
$28.2 million had been charged off and $9.5 million had been allocated to SVAs
or REO writedowns in connection with the Bank's estimate of recovery for AARP
Pool assets. Due to the addition of the Hancock assets to the Plan, it is now
anticipated that the remaining AARP Pool will be resolved by 1998.

  Notwithstanding the actions taken by the Bank in implementing the Plan, there
can be no assurance that the AARP Pool assets retained by the Bank will not
result in additional losses. The Bank's allowance for loan and REO losses and
the SVAs established in connection with such assets are ultimately subjective
and inherently uncertain. There can be no assurance that further additions to
the Bank's allowance for loan and REO losses will not be required in the future
in connection with such assets, which could have an adverse effect on the Bank's
financial condition, results of operations and levels of regulatory capital.

  The performance of the Company's loan portfolio has been adversely affected by
Southern California economic conditions. The performance of the Company's
multifamily loan portfolio is particularly susceptible to further declines in
the Southern California economy, increasing vacancy rates, declining rents,
increasing interest rates, declining debt coverage ratios, declining market
values for multifamily residential properties, and the possibility that
investors may abandon properties or seek bankruptcy protection with respect to
properties experiencing negative cash flow, particularly where such properties
are not cross-collateralized by other performing assets. There can be no
assurances that these economic conditions will improve in the near future as
many factors key to recovery may be impacted adversely by the Federal Reserve
Bank's interest rate policy as well as other factors. Consequently, rents and
real estate values may not stabilize which may affect future delinquency and
foreclosure levels and may adversely impact the Company's asset quality,
earnings performance and capital levels.

                                       6
<PAGE>
 
4. COMMITMENTS AND CONTINGENCIES

     As a result of the Hancock acquisition, the Company has assumed the
commitment to absorb losses from certain loan sales by Hancock to FNMA which
contained recourse provisions. Loans sold subject to recourse provisions had
remaining unpaid principal balances at June 30, 1997 of $28.4 million. At June
30, 1997, Hancock had pledged mortgage-backed securities of $4.8 million as
security for the recourse contingencies associated with the loans. The
corresponding contingent liability for credit losses secured by the pledged
assets was $0.8 million at June 30, 1997 and is included in other liabilities.

5. DERIVATIVE FINANCIAL INSTRUMENTS

     As part of its trading program, the Company has employed interest rate
swaps, caps, floors and commitments for forward purchase and sale of securities
to manage the risks and returns of the program. These financial instruments are
carried at fair value with realized and unrealized changes in fair value
recognized in earnings in the period in which the change occurs. The premiums
paid for interest rate caps and floors are capitalized and amortized over the
life of the contracts using the straight line method.

6. RECENT ACCOUNTING PRONOUNCEMENTS

     The Financial Accounting Standards Board ("FASB") issued Statement of
Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128") and "Disclosure
of Information about Capital Structure" ("SFAS 129") in February 1997, and
issued "Reporting Comprehensive Income" ("SFAS 130") and "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS 131") in June 1997.

SFAS 128 - Earnings Per Share

     SFAS 128 simplifies the standards for computing and presenting earnings per
share ("EPS") as previously prescribed by Accounting Principles Board Opinion
No. 15, "Earnings per Share."  SFAS 128 replaces primary EPS with basic EPS and
fully diluted EPS with diluted EPS.  Basic EPS excludes dilution and is computed
by dividing income available to common stockholders by the weighted average
number of common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted form
issuance of common stock that then shared in earnings.  SFAS 128, also requires
dual presentation of basic and diluted EPS on the face of the income statement
and a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation.
SFAS 128 is effective for financial statements issued for periods ending after
December 15, 1997, and earlier application is not permitted. If the Company had
adopted SFAS 128 as of January 1, 1997, proforma basic EPS and proforma diluted
EPS would have been $0.41 for the six months ending June 30, 1997.

SFAS 129 - Disclosure of Information about Capital Structure

     SFAS 129 consolidates existing reporting standards for disclosing
information about an entity's capital structure. SFAS 129 also supersedes
specific requirements found in previously issued accounting statements. SFAS 129
must be adopted for financial statements for periods ending after December 15,
1997.

SFAS 130 - Reporting Comprehensive Income
 
     SFAS 130 establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains and losses) in a full set
of general-purpose financial statements.  SFAS 130 requires that all items that
are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements.  SFAS 130 does not require a
specific format for that financial statement but requires that an enterprise
display an amount representing total comprehensive income for the period in that
financial statement.

     SFAS 130 requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and (b) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position.

     SFAS 130 is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods provided for
comparative purposes is required.

SFAS 131 - Disclosures about Segments of an Enterprise and Related Information

     SFAS 131 establishes standards for the reporting by public business
enterprises of information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers.  SFAS 131 supersedes FASB Statement No.
14, "Financial Reporting for Segments of a Business Enterprise," but retains the
requirements to report information about major customers. It amends FASB
Statement No. 94, "Consolidation of All Majority-Owned Subsidiaries," to remove
the special disclosure requirements for previously unconsolidated subsidiaries.

     SFAS 131 requires that a public business enterprise report financial and
descriptive information about its reportable operating segments.  Operating
segments are components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief operating
decision-maker in deciding how to allocate resources and in assessing
performance.  Generally, financial information is required to be reported on the
basis that it is used internally for evaluating segment performance and deciding
how to allocate resources to segments.

     SFAS 131 requires that a public business enterprise report a measure of
segment profit or loss, certain specific revenue and expense items, and segment
assets.  It requires reconciliations of total segment revenues, total segment
profit or loss, total segment assets, and other amounts disclosed for segments
to corresponding amounts in the enterprise's general-purpose financial
statements.  It requires that all public business enterprises report information
about the revenues derived from the enterprise's products or services (or groups
of similar products and services), about the countries in which the enterprise
earns revenues and holds assets, and about major customers regardless of whether
that information is used in making operating decisions.  However, SFAS 131 does
not require an enterprise to report information that is not prepared for
internal use if reporting it would be impracticable.

     SFAS 131 also requires that a public business enterprise report descriptive
information about the way that the operating segments were determined, the
products and services provided by the operating segments, differences between
the measurements used in reporting segment information and those used in the
enterprise's general-purpose financial statements, and changes in the
measurement of segment amounts from period to period.

     SFAS 131 is effective for financial statements for periods beginning after
December 15, 1997.  In the initial year of application, comparative information
for earlier years is to be restated.  This Statement need not be applied to
interim financial statements in the initial year of its application, but
comparative information for interim periods in the initial year of application
is to be reported in financial statements for interim periods in the second year
of application.

                                       7
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


OVERVIEW

     Bank Plus, through Fidelity, operates 38 full-service branches, all of
which are located in Southern California, principally in Los Angeles and Orange
Counties. The Company offers a broad range of consumer financial services
including demand and term deposits and loans to consumers. The Bank closed its
wholesale correspondent single family origination network and its multifamily
origination operations in the third quarter of 1994 due to the economic and
competitive environments. Since that time the Bank has entered into strategic
partnerships with established providers of consumer credit products pursuant to
which all consumer credit products made available to the Bank's customers are
referred to and underwritten, funded and serviced by the strategic partners. In
addition, through Gateway, a National Association of Securities Dealers, Inc.
("NASD") registered broker/dealer, the Company provides customers with uninsured
investment products, including a number of mutual funds, annuities and unit
investment trusts.


RECENT DEVELOPMENTS

 Registration of Common Stock

     In the first quarter of 1997, the Board of Directors of the Company
approved the filing of a Registration Statement on Form S-4 (the "Acquisition S-
4") of up to approximately $75.0 million in shares of Bank Plus Common Stock
(the "Acquisition Shares") that may be issued from time to time as consideration
(in whole or in part) for possible future acquisitions. The Securities and
Exchange Commission (the "SEC") declared the Acquisition S-4 effective on June
2, 1997. The Board of Directors of Bank Plus (the "Board") (or an authorized
committee thereof) will negotiate, determine and approve on behalf of the
Company the number of Acquisition Shares to be issued in any acquisition and the
terms and conditions of all agreements to be entered into by the Company in
connection therewith. Offers to sell any of the Acquisition Shares, if any, will
be made only pursuant to the prospectus constituting a part of the Acquisition
S-4. Under the Acquisition S-4 the Company, on July 29, 1997, has issued
1,058,575 shares of Bank Plus Common Stock in connection with the acquisition of
Hancock Savings Bank, F.S.B., A Federal Savings Bank ("Hancock") (see "--Hancock
Merger").

 Hancock Merger

     On July 29, 1997, the Company completed the acquisition of all of the
outstanding stock of Hancock, which had five branches, assets of approximately
$210.1 million and deposits of approximately $203.7 million at June 30, 1997.
The Company acquired all of the stock of Hancock in exchange for 1,058,575
shares of Bank Plus Common Stock in a transaction valued at approximately $12
million.

     The acquisition of Hancock was accounted for as a purchase and has been
reflected in the consolidated statement of condition of the Company as of June
30, 1997 and in all amounts and ratios reported as of June 30, 1997 throughout
Item 2. "Management's Discussion and Analysis of Financial Condition and Results
of Operations" ("MD&A").  The Company's consolidated statements of operations
will include the revenues and expenses of the acquired business beginning July
1, 1997.  The purchase price was allocated to the assets purchased (including
identifiable intangible assets) and the liabilities assumed based upon their
estimated fair market values at the date of acquisition.  The Company identified
a core deposit intangible of approximately $8.6 million, which will be amortized
over seven years, the estimated average life of the deposits acquired.  The
excess of the purchase price over the estimated fair value of net assets
acquired amounted to approximately $6.6 million, which has been accounted for as
goodwill and will be amortized over 15 years using the straight-line method.
This allocation was based on preliminary estimates related to fair value of
loans acquired and acquisition transaction costs and may be revised at a later
date.

     The acquisition of Hancock provides a number of benefits to the Company,
including, an increased customer base and larger branch network, lower yielding
deposits and possible operating efficiencies through consolidation.

                                       8
<PAGE>
 
     The acquired branch network and associated customer base, which includes
approximately 11.3 thousand and 6.0 thousand transaction and time deposit
accounts, respectively, will provide new territory to implement Fidelity's sales
platform of credit and alternative investment products.  Through strategic
alliances with third party providers, the Company will introduce to the Hancock
customer base a wide range of securities, insurance and consumer loan products
to enhance the Company's fee income.

     Hancock's assets at June 30, 1997, were $210.1 million funded through
$203.7 million of deposits, which had a yield of 4.52% or 23 basis points lower
than the yield on Fidelity deposits. Of the $203.7 million in deposits, $48.2
million were invested in overnight federal funds and were available to pay down
existing higher yielding borrowings at Fidelity or to invest in higher yielding
loans and securities than overnight federal funds.

     The Company anticipates a reduction in consolidated operating expenses as a
result of the merger through the closure and consolidation of the administrative
office of Hancock and the consolidation of two of the five branches acquired
into existing Fidelity branches.

 Proposed Deposit Purchase

     The Company and Coast Federal Bank, FSB ("Coast") have signed a definitive
agreement under which Fidelity will purchase the deposits of Coast's Westwood,
Los Angeles, branch for a price equivalent to a deposit premium of approximately
3.0%.  As of June 30, 1997, the balance of deposits at the Westwood branch was
approximately $57.1 million.  The proposed transaction has been approved by the
Office of Thrift Supervision (the "OTS") and is expected to close in the third
quarter  of 1997.  There can be no assurance that the transaction will be
completed as contemplated.

 Exchange Offer

     On June 18,1997, the Company commenced an exchange offer (the "Exchange
Offer") of up to approximately $51.8 million principal amount of the Company's
12% Senior Notes due July 18, 2007 (the "Senior Notes") for the outstanding
shares of 12% Noncumulative Exchangeable Perpetual Stock, Series A (the "Series
A Preferred Stock") issued by Fidelity in 1995.  The Exchange Offer expired at
12:00 midnight, New York City time, on July 18, 1997.  On July 28, 1997, the
Company accepted 2,059,120 shares of Series A Preferred Stock in exchange for
$51.5 million principal amount of Senior Notes.  The terms of the Series A
Preferred Stock expressly provided for the making of such an exchange offer.


BUSINESS STRATEGY

     The Company's business strategy is to be a consumer-focused provider of
financial services, by enhancing its franchise to integrate its traditional
services and products (deposit services, checking and savings accounts) with the
offering of investment products through Gateway and consumer credit products
through strategic partners. As a part of such strategy, management continues to
explore new opportunities to expand the integrated sales platform, to increase
fee income growth, and to build upon the use of technology in delivering
financial products and services. In addition, the Company is continuing to focus
on improving the quality of its loan portfolio by reducing the level of problem
assets through aggressive management (see "--Asset Quality--Accelerated Asset
Resolution Plan") and increasing operating efficiency by reducing and
maintaining lower levels of operating expenses.

     Gateway has been awarded the contract to serve as the Financial Education
Presenter for the California Public Employees' Retirement System ("CalPERS").
Under the terms of the contract Gateway's primary responsibility will be to
coordinate with CalPERS the development and production of financial planning
seminars to provide financial education information to CalPERS members.  The
contract is for an initial one-year term and is thereafter renewable for a two-
year period.

     Under the contract, Gateway will be responsible for providing, among other
services, experienced speakers at CalPERS-scheduled and coordinated financial
planning seminars throughout California, customized seminar materials, the offer
of personal consultations to seminar attendees (which will include the
development of a

                                       9
<PAGE>
 
personalized financial plan) and quarterly reports of all investment products
and services sold to CalPERS members.

     On June 12, 1997, Fidelity entered into an agreement pursuant to which it
will act as cash services provider for a national network of automatic teller
machines operated by Americash, L.L.C. The Bank has agreed to provide up to
$37.5 million of its cash for Americash ATMs throughout the United States, and
will be paid fees based on the volume of cash withdrawal transactions.

     Fidelity has formed a plan to develop affinity credit card issuance
programs with strategic allies. These programs will include unsecured credit
cards and credit cards secured by real estate or by cash deposits. The Bank has
recently entered into contracts to establish such programs with two separate
entities. Fidelity will serve as issuer and owner of certain credit card
accounts and will develop the card portfolio from prospects provided by the
strategic allies. As part of the affinity agreements, the strategic allies will
have the right to purchase outstanding receivables of these accounts at par and,
in exchange, will provide credit enhancements to guarantee full repayment of the
Bank's outstanding receivables in the event of cardholder defaults. The credit
enhancements will include the funding of a reserve account or pledging of
collateral as receivables are funded by the Bank. The Bank has committed to fund
up to an aggregate outstanding balance of $425 million under the current
programs, and at June 30, 1997, credit card balances associated with the
affinity program were $6.1 million. Two board members of one of the strategic
allies are also board members of Fidelity.

     Additionally, as a part of its business strategy, the Company has developed
but not yet fully implemented a plan to grow assets (loans and securities) by
approximately $600 million in 1997. This plan, in general terms, is based upon
certain risk adjusted return and liquidity objectives and is designed to
increase the Company's securities and loan portfolios to enhance the Company's
earning capabilities. The proposed increase in earning assets may be at a lower
interest rate spread than the Company's assets are currently yielding depending
on available financing sources. Accordingly, if the plan is implemented, the
Company's interest rate spread may decline. In conjunction with this plan, the
Company continues its exploration of other asset origination capabilities,
customer base expansion and acquisition opportunities for financial services
institutions. If such opportunities are pursued or if the interest rate
environment is not desirable for growth, these may limit the asset growth
strategy discussed above to an amount significantly less than $600 million.

 Consumer-Focused Provider of Financial Services

     Management believes that, given the highly competitive nature of the
financial services industry and the regulatory constraints that the Company
faces in competing with unregulated companies, the Company must continue to
expand from its historical business focus and provide customers with a wider
array of products through a variety of delivery channels. The Company is
pursuing the use of various electronic delivery systems, which include an
Internet bank, and software to enhance customer convenience and the Company's
fee income opportunities. The Company is currently negotiating with a provider
of electronic delivery services to begin implementing an Internet bank. The
Internet bank will offer on-line transactional capabilities for selected bank
services with plans to expand to the alternative investment products currently
sold through the Company's integrated sales platform.


RESULTS OF OPERATIONS

     The Company reported net earnings available to common stockholders of $3.3
million, after minority interest in subsidiary (dividend on subsidiary preferred
stock) of $2.3 million ($0.18 per common share; computed on the basis of
18,248,754 weighted average common shares outstanding) for the three months
ended June 30, 1997.  For the six months ended June 30, 1997, net earnings
available to common stockholders were $7.5 million, after minority interest in
subsidiary (dividends on subsidiary preferred stock) of $3.9 million ($0.41 per
common share; computed on the basis of 18,247,019 weighted average common shares
outstanding).  This compares to net earnings available to common stockholders of
$0.7 million after minority interest in subsidiary of $1.6 million ($0.04 per
common share; computed on the basis of 18,242,465 weighted average common shares
outstanding) for the three months ended June 30, 1996.  For the six months ended
June 30, 1996, net earnings available for

                                       10
<PAGE>
 
common stockholders were $0.6 million after minority interest in subsidiary and
dividends on preferred stock totaling $3.1 million ($0.04 per common share;
computed on the basis of 18,242,465 weighted average common shares outstanding).

     Net earnings for the three months ended June 30, 1997, as compared to the
same period in 1996, reflect: (a) decreased operating expenses of $1.5 million
primarily due to lower Federal Deposit Insurance Corporation ("FDIC")
insurance costs resulting from the recapitalization of the Savings Association
Insurance Fund (the "SAIF") in 1996 and an upgrade in the Bank's assessment
classification, (b) increased noninterest income of $1.1 million due primarily
to gains on sales of mortgage-backed securities ("MBS") and fee income from sale
of uninsured investment products and (c) increased income tax benefit of $2.6
million (see "--Income Taxes"). These favorable changes were partially offset by
(a) decreased net interest income of $1.4 million primarily due to lower rates
on average interest earning assets and higher levels of average borrowing
balances, (b) increased dividends on preferred stock of $0.8 million as a result
of the Exchange Offer (see "--Exchange Offer") and (c) increased provision for
estimated loan losses of $0.3 million

     Net earnings for the six months ended June 30, 1997, as compared to the
same period in 1996, reflect: (a) decreased operating expenses of $3.8 million
primarily due to lower Federal Deposit Insurance Corporation ("FDIC")
insurance costs resulting from the recapitalization of the Savings Association
Insurance Fund (the "SAIF") in 1996 and an upgrade in the Bank's assessment
classification, (b) increased noninterest income of $2.5 million due primarily
to gains on sales of mortgage-backed securities ("MBS") and fee income from sale
of uninsured investment products and (c) increased income tax benefit of $4.8
million (see "--Income Taxes"). These favorable changes were partially offset by
(a) decreased net interest income of $2.9 million primarily due to lower rates
on average interest earning assets and higher levels of average borrowing
balances, (b) increased dividends on preferred stock and minority interest in
subsidiary of $0.8 million as a result of the Exchange Offer (see "--Exchange
Offer") and (c) increased provision for estimated loan losses of $0.7 million.


NET INTEREST INCOME

     Net interest income is the difference between interest earned on loans, MBS
and investment securities ("interest-earning assets") and interest paid on
savings deposits and borrowings ("interest-bearing liabilities").  For the three
months ended June 30, 1997, net interest income totaled $20.3 million,
decreasing by $1.4 million from $21.7 million for the comparable period in 1996.
For the six months ended June 30, 1997, net interest income totaled $40.7
million, decreasing by $2.9 million from $43.6 million for the comparable period
in 1996.

  Net interest income is affected by (a) the average volume and repricing
characteristics of the Company's interest-earning assets and interest-bearing
liabilities, (b) the level and volatility of market interest rates, (c) the
level of nonaccruing loans ("NPLs") and (d) the interest rate spread between the
yields earned and the rates paid.

                                       11
<PAGE>
 
     The following table presents the primary determinants of net interest
income for the three months ended June 30, 1997 and 1996:
<TABLE>
<CAPTION>

                                                                  THREE MONTHS ENDED JUNE 30,
                                               ---------------------------------------------------------------------
                                                              1997                               1996
                                               ------------------------------      ---------------------------------
                                                 AVERAGE                AVERAGE      AVERAGE                AVERAGE
                                                  DAILY                  YIELD/       DAILY                  YIELD/
                                                 BALANCE     INTEREST     RATE       BALANCE     INTEREST     RATE
                                               -----------   --------   --------   -----------   --------   --------
<S>                                           <C>            <C>        <C>        <C>           <C>        <C>
                                                                  (DOLLARS IN THOUSANDS)
Interest-earning assets:
 Loans........................................ $2,716,010    $49,384      7.27%    $2,932,512    $54,096      7.38%
 MBS..........................................    254,851      4,673      7.33         42,642        756      7.09
 Investment securities........................    222,986      3,630      6.62        230,317      3,977      6.94
 Investment in FHLB stock.....................     53,602        768      5.83         50,638        727      5.77
                                               ----------    -------               ----------    -------
      Total interest-earning assets...........  3,247,449     58,455      7.21      3,256,109     59,556      7.32
                                                             -------                             -------
Noninterest-earning assets....................    110,228                              70,712
                                               ----------                          ----------
      Total assets............................ $3,357,677                          $3,326,821
                                               ==========                          ==========
Interest-bearing liabilities:
 Deposits:
  Demand deposits............................. $  294,489        817      1.13     $  300,560        761      1.02
  Savings deposits............................    115,318        903      3.18        142,438        918      2.59
  Time deposits...............................  2,085,341     27,852      5.42      2,109,557     28,108      5.34
                                               ----------    -------               ----------    -------
      Total deposits..........................  2,495,148     29,572      4.81      2,552,555     29,787      4.68
                                               ----------    -------               ----------    -------
  Borrowings..................................    609,357      8,557      5.70        509,699      8,003      6.30
                                               ----------    -------               ----------    -------
      Total interest-bearing liabilities......  3,104,505     38,129      4.98      3,062,254     37,790      4.95
                                               ----------    -------               ----------    -------
Noninterest-bearing liabilities...............     36,976                              38,334
Preferred stock issued by consolidated            
 subsidiary...................................     51,750                              51,750 
Stockholders' equity..........................    164,446                             174,483
                                               ----------                          ----------
Total liabilities and equity.................. $3,357,677                          $3,326,821
                                               ==========                          ==========
Net interest income; interest rate spread.....               $20,326      2.23%                  $21,766      2.37%
                                                             =======      ====                   =======     =====

Net yield on interest-earning assets
 ("net interest margin")......................                            2.45%                               2.66%
                                                                          ====                                ====
Average nonaccruing loan balance
 included in average loan balance............. $   45,344                          $   60,591
                                               ==========                          ==========
Net delinquent interest reserve removed
 from interest income.........................               $   994                             $ 1,627
                                                             =======                             =======
Reduction in net yield on interest-earning
 assets due to delinquent interest............                            0.12%                               0.20%
                                                                          ====                                ====
</TABLE>

                                       12
<PAGE>
 
     The following table presents the primary determinants of net interest
income for the six months ended June 30, 1997 and 1996:

<TABLE>
<CAPTION>

                                                                 SIX MONTHS ENDED JUNE 30,
                                            ----------------------------------------------------------------------
                                                         1997                                1996
                                            -------------------------------     ----------------------------------
                                              AVERAGE                AVERAGE      AVERAGE                 AVERAGE
                                               DAILY                  YIELD/       DAILY                   YIELD/
                                              BALANCE     INTEREST     RATE       BALANCE     INTEREST      RATE
                                            -----------   --------   --------   -----------   ---------   --------
                                                                   (DOLLARS IN THOUSANDS)
<S>                                         <C>           <C>        <C>        <C>           <C>         <C>

Interest-earning assets:
 Loans..................................... $2,732,790   $ 99,224      7.26%    $2,968,577    $110,276      7.43%
 MBS.......................................    246,462      8,977      7.28         36,536       1,260      6.90
Investment securities......................    225,407      7,302      6.53        188,978       6,699      7.13
 Investment in FHLB stock..................     53,266      1,659      6.28         50,252       1,375      5.50
                                            ----------   --------               ----------    --------
      Total interest-earning assets........  3,257,925    117,162      7.19      3,244,343     119,610      7.38
                                                         --------                             --------
Noninterest-earning assets.................     68,490                              61,364
                                            ----------                          ----------
      Total assets......................... $3,326,415                          $3,305,707
                                            ==========                          ==========
Interest-bearing liabilities:
 Deposits:
  Demand deposits.......................... $  293,637      1,605      1.10     $  302,602       1,516      1.00
  Savings deposits.........................    117,238      1,831      3.15        148,581       1,817      2.45
  Time deposits............................  2,086,722     55,276      5.34      2,112,847      57,489      5.46
                                            ----------   --------               ----------    --------
      Total deposits.......................  2,497,597     58,712      4.74      2,564,030      60,822      4.76
                                            ----------   --------               ----------    --------
 Borrowings................................    573,032     17,767      6.25        477,145      15,184      6.38
                                            ----------   --------               ----------    --------
      Total interest-bearing liabilities...  3,070,629     76,479      5.02      3,041,175      76,006      5.01
                                            ----------   --------               ----------    --------
Noninterest-bearing liabilities............     40,754                              37,153
Preferred stock issued by consolidated          
 subsidiary................................     51,750                              51,750 
Stockholders' equity.......................    163,282                             175,629
                                            ----------                          ----------
Total liabilities and equity............... $3,326,415                          $3,305,707
                                            ==========                          ==========
Net interest income; interest rate spread..              $ 40,683      2.17%                  $ 43,604      2.37%
                                                         ========      ====                   ========      ====

Net yield on interest-earning assets
 ("net interest margin")...................                            2.46%                                2.68%
                                                                       ====                                 ====
Average nonaccruing loan balance
 included in average loan balance.......... $   53,526                          $   66,458
                                            ==========                          ==========
Net delinquent interest reserve removed
 from interest income......................              $  2,575                             $  3,318
                                                         ========                             ========
Reduction in net yield on interest-earning
 assets due to delinquent interest.........                            0.16%                                0.20%
                                                                       ====                                 ====
</TABLE>

                                       13
<PAGE>
 
     The following tables present the dollar amount of changes in interest
income and expense for each major component of interest-earning assets and
interest-bearing liabilities and the amount of change attributable to changes in
average balances and average rates for the periods indicated. Because of
numerous changes in both balances and rates, it is difficult to allocate
precisely the effects thereof. For purposes of these tables, the change due to
volume is initially calculated as the change in average balance multiplied by
the average rate during the prior period and the change due to rate is
calculated as the change in average rate multiplied by the average volume during
the prior period. Any change that remains after such calculations is allocated
proportionately to changes in volume and changes in rates.

<TABLE>
<CAPTION>
 
                                                QUARTER ENDED JUNE 30, 1997                   SIX MONTHS ENDED JUNE 30, 1997
                                                 COMPARED TO JUNE 30, 1996                      COMPARED TO JUNE 30, 1996
                                                  FAVORABLE (UNFAVORABLE)                        FAVORABLE (UNFAVORABLE)
                                              --------------------------------              -----------------------------------
                                         VOLUME          RATE            NET           VOLUME           RATE              NET
                                       -----------   ------------   --------------   -----------   --------------   ---------------
                                                                       (DOLLARS IN THOUSANDS)
<S>                                    <C>           <C>            <C>              <C>           <C>              <C>
Interest income:
 Loans............................     $(3,921)      $  (791)         $(4,712)        $(8,580)       $(2,472)         $(11,052)
 Mortgage-backed securities.......       3,890            27            3,917           7,644             73             7,717
 Investment securities............        (144)         (203)            (347)          1,194           (591)              603
 Investment in FHLB stock.........          34             7               41              84            200               284
                                       -------       -------          -------         -------        -------          --------
    Total interest income.........        (141)         (960)          (1,101)            342         (2,790)           (2,448)
                                       -------       -------          -------         -------        -------          -------- 
Interest expense:
 Deposits:
  Demand deposits.................          17           (73)             (56)             48           (137)              (89)
  Savings deposits................         198          (183)              15             432           (446)              (14)
  Time deposits...................         477          (221)             256             797          1,416             2,213
                                       -------       -------          -------         -------        -------          --------
    Total deposits................         692          (477)             215           1,277            833             2,110
 Borrowings.......................      (1,511)          957             (554)         (1,753)          (830)           (2,583)
                                       -------       -------          -------         -------        -------          --------
  Total interest expense..........        (819)          480             (339)           (476)             3              (473)
                                       -------       -------          -------         -------        -------          --------
Decrease in net interest income...     $  (960)      $  (480)         $(1,440)        $  (134)       $(2,787)         $ (2,921)
                                       =======       =======          =======         =======        =======          ========  
</TABLE>

     The $1.4 million decrease in net interest income between the second quarter
1997 and the second quarter 1996 was primarily the result of decreased rates and
a decrease in the level of average interest-earning assets combined with an
increase in the average level of interest-bearing liabilities.  This was
partially offset by decreased rates on interest-bearing liabilities.  The $2.9
million decrease in net interest income between the six months ended June 30,
1997 and the comparable period in 1996 was primarily due to decreased rates on
average interest-earning assets combined with an increase in the average level
of interest-bearing liabilities.  This was partially offset by an increase in
the level of interest-earning assets.


ASSET/LIABILITY MANAGEMENT

     The objective of interest rate risk management is to maximize the net
interest income of the Company while controlling interest rate risk exposure.
Banks and savings institutions are subject to interest rate risk when assets and
liabilities mature or reprice at different times (duration risk), against
different indices (basis risk) or for different terms (yield curve risk). The
decision to control or accept interest rate risk can only be made with an
understanding of the probability of various scenarios occurring. Having
liabilities that reprice more quickly than assets is beneficial when interest
rates fall, but may be detrimental when interest rates rise.

     The Company manages interest rate risk by, among other things, maintaining
a portfolio consisting primarily of adjustable rate mortgage ("ARM") loans.
ARM loans comprised 96% of the total loan portfolio at June 30, 1997 and 97% at
June 30, 1996. The percentage of monthly adjustable ARMs to total loans was
approximately 74% and 76% at June 30, 1997 and 1996, respectively. Interest
sensitive assets provide the Company with a degree of long-term protection from
rising interest rates. At June 30, 1997, approximately 94% of Fidelity's total
loan portfolio consisted of loans which mature or reprice within one year,
compared to approximately 92% at June 30, 1996. Fidelity has in recent periods
been negatively impacted by the fact that increases in the interest rates
accruing on Fidelity's ARM loans lagged the increases in interest rates accruing
on its deposits due to reporting

                                       14
<PAGE>
 
delays and contractual look-back periods contained in the Bank's loan documents.
At June 30, 1997, 90% of the Bank's loans, which are indexed to the Eleventh
District Cost of Funds Index ("COFI"), as with all COFI portfolios in the
industry, do not reprice until some time after the industry liabilities
composing COFI reprice. The Company's liabilities reprice generally in line with
the cost of funds of institutions which comprise the Federal Home Loan Bank (the
"FHLB") Eleventh District. In the Company's case, the lag between the repricing
of its liabilities and its ARM loans indexed to COFI is approximately four
months. Thus, in a rising rate environment, as in the latter part of 1996 and
early 1997, there will be upward pressure on rates paid on deposit accounts and
wholesale borrowings, and the Company's net interest income will be adversely
affected until the majority of its interest-earning assets fully reprice.
Conversely, in a falling interest rate environment, such as the period in early
1996, interest income will be positively affected.

     The Company utilizes various financial instruments in the normal course of
its business. By their nature all such instruments involve risk, and the maximum
potential loss may exceed the value at which such instruments are carried. As is
customary for these types of instruments, the Company usually does not require
collateral or other security from other parties to these instruments. The
Company manages its credit exposure to counterparties through credit approvals,
credit limits and other monitoring procedures. The Company's Credit Policy
Committee makes recommendations regarding counterparties and credit limits which
are subject to approval by the Board of Directors.

     The Company may employ interest rate swaps, caps and floors in the
management of interest rate risk. An interest rate swap agreement is a financial
transaction where two counterparties agree to exchange different streams of
payments over time. An interest rate swap involves no exchange of principal
either at inception or upon maturity; rather, it involves the periodic exchange
of interest payments arising from an underlying notional principal amount.
Interest rate caps and floors generally involve the payment of a one-time
premium to a counterparty who, if interest rates rise or fall above or below a
predetermined level, will make payments to the Company at an agreed upon rate on
a notional amount of money for the term of the agreement, until such time as
interest rates fall below or rise above the cap or floor level.

     During the third quarter of 1996, the Company entered into a one-year
advisory agreement with an investment advisor, pursuant to which the advisor
will recommend investments, subject to prior approval and direction of the
Company, and execute investment purchases in accordance with the Company's
investment strategy. Under this agreement, outstanding forward commitments to
purchase adjustable rate MBS totaled $47.3 million at June 30, 1997. Also
outstanding in relation to this managed portfolio at June 30, 1997, were $48.0
million notional amount of interest rate caps which will mature in 2007, $5.0
million notional amount interest rate swaps which will mature in 2002 and $9.0
million notional amount of put options on treasury futures with an exercise date
in 1997.

     The Company is also considering plans to grow assets (loans and securities)
of approximately $600 million in 1997. See "--Business Strategy."

                                       15
<PAGE>
 
     The following table sets out the maturity and rate sensitivity of the
interest-earning assets and interest-bearing liabilities as of June 30, 1997.
"Gap," as reflected in the table, represents the estimated difference between
the amount of interest-earning assets and interest-bearing liabilities repricing
during future periods as adjusted for interest-rate swaps and other financial
instruments as applicable, and based on certain assumptions, including those
stated in the notes to the table.

                    MATURITY AND RATE SENSITIVITY ANALYSIS
<TABLE>
<CAPTION>
 
                                                                           AS OF JUNE 30, 1997
                                                                          MATURITY OR REPRICING
                                           --------------------------------------------------------------------------------------
                                             WITHIN 3          4-12            1-5            6-10         OVER 10
                                              MONTHS          MONTHS          YEARS           YEARS         YEARS         TOTAL
                                           -----------    ------------    ------------    -----------    ---------    ----------- 
                                                                          (DOLLARS IN THOUSANDS)
<S>                                       <C>             <C>             <C>             <C>             <C>         <C> 
INTEREST-EARNING ASSETS:
 Cash...................................   $  136,472      $    1,089     $        --      $      --    $      --     $  137,561
 Investment securities (1) (2)..........       55,246           2,239         117,891             --       42,556        217,932
 MBS (1)................................       53,118           1,783              --             --      180,773        235,674
 Loans receivable:
  ARMs and other adjustables (3)........    2,255,775         447,500          49,842          4,572          895      2,758,584
  Fixed rate loans......................          763           4,425           3,972         17,038       78,666        104,864
                                           ----------      ----------     -----------      ---------     --------     ----------
   Total gross loans receivable.........    2,256,538         451,925          53,814         21,610       79,561      2,863,448
                                           ----------      ----------     -----------      ---------     --------     ----------
    Total...............................    2,501,374         457,036         171,705         21,610      302,890     $3,454,615
                                           ----------      ----------     -----------      ---------     --------     ==========
INTEREST-BEARING LIABILITIES:
 Deposits:
  Checking and savings accounts (4).....      364,471              --              --             --           --     $  364,471
  Money market accounts (4).............       80,117              --              --             --           --         80,117
  Fixed maturity deposits:
   Retail customers.....................       42,624         931,524       1,256,396         13,717        1,578      2.245,839
   Wholesale customers..................           14           1,807           9,429             --           --         11,250
                                           ----------      ----------     -----------      ---------     --------     ----------
    Total deposits......................      487,226         933,331       1,265,825         13,717        1,578      2,701,677
                                           ----------      ----------     -----------      ---------     --------     ----------
 Borrowings:
  FHLB advances (3).....................      274,960         124,886          70,000        100,000           --        569,846
  Other.................................           --              --              --             --           --             --
                                           ----------      ----------     -----------      ---------     --------     ----------
   Total borrowings.....................      274,960         124,886          70,000        100,000           --        569,846
                                           ----------      ----------     -----------      ---------     --------     ----------
    Total...............................      762,186       1,058,217       1,335,825        113,717        1,578     $3,271,523
                                           ----------      ----------     -----------      ---------     --------     ==========
IMPACT OF HEDGING.......................        5,000              --          (5,000)            --           --
                                           ----------      ----------     -----------      ---------     --------
REPRICING GAP...........................   $1,744,188      $ (601,181)    $(1,169,120)     $ (92,107)    $301,312
                                           ==========      ==========     ===========      =========     ========
GAP TO TOTAL ASSETS.....................        52.63%         (18.14)%        (35.28)%        (2.78)%       9.09%
CUMULATIVE GAP TO TOTAL ASSETS..........        52.63%          34.49 %         (0.79)%        (3.57)%       5.52%
</TABLE>
--------------------
(1) Repricings shown are based on the contractual maturity or repricing
    frequency of the instrument.
(2) Investment securities include FHLB stock of $55.2 million.
(3) ARMs and variable rate borrowings from the FHLB system ("FHLB advances") are
    primarily in the shorter categories as they are subject to interest rate
    adjustments.
(4) These liabilities are subject to daily adjustments and are therefore
    included in the "Within 3 Months" category.


     Analysis of the Gap provides only a static view of the Company's interest
rate sensitivity at a specific point in time. The actual impact of interest rate
movements on the Company's net interest income may differ from that implied by
any Gap measurement. The actual impact on net interest income may depend on the
direction and magnitude of the interest rate movement, as well as competitive
and market pressures.

                                       16
<PAGE>
 
ASSET QUALITY

 General

     The Company's loan portfolio is primarily secured by assets located in
Southern California and is comprised principally of single family and
multifamily (2 units or more) residential loans. At June 30, 1997, 20% of
Fidelity's real estate loan portfolio consisted of California single family
residences, while another 11% and 61% consisted of California multifamily
dwellings of 2 to 4 units and 5 or more units, respectively.

     The performance of the Company's loans secured by multifamily and
commercial properties has been adversely affected by Southern California
economic conditions. These portfolios are particularly susceptible to the
potential for further declines in the Southern California economy, such as
increasing vacancy rates, declining rents, increasing interest rates, declining
debt coverage ratios, and declining market values for multifamily and commercial
properties. In addition, the possibility that investors may abandon properties
or seek bankruptcy protection with respect to properties experiencing negative
cash flow, particularly where such properties are not cross-collateralized by
other performing assets, can also adversely affect the multifamily loan
portfolio. There can be no assurances that current improved economic indicators
will have a material impact on the Bank's portfolio in the near future as many
factors key to recovery may be impacted adversely by the Federal Reserve Board's
interest rate policy as well as other factors.

     The Bank's internal asset review process reviews the quality and
recoverability of each of those assets which exhibit credit risk to the Bank
based on delinquency and other criteria in order to establish adequate general
valuation allowance ("GVA") and specific valuation allowance ("SVA").


 Accelerated Asset Resolution Plan

      In the fourth quarter of 1995, the Bank adopted the Accelerated Asset
Resolution Plan (the "Plan"), which was designed to aggressively dispose of,
resolve or otherwise manage a pool (the "AARP Pool") of primarily multifamily
loans and REO that at that time were considered by the Bank to have higher risk
of future nonperformance or impairment relative to the remainder of the Bank's
multifamily loan portfolio. The Plan reflected both acceleration in estimated
timing of asset resolution, as well as a potential change in recovery method
from the normal course of business. In an effort to maximize recovery on loans
and REO included in the AARP Pool, the Plan allowed for a range of possible
methods of resolution including, but not limited to, (i) individual loan
restructuring, potentially including additional extensions of credit or write-
offs of existing principal, (ii) foreclosure and sale of collateral properties,
(iii) securitization of loans, (iv) the bulk sale of loans and (v) bulk sale or
accelerated disposition of REO properties.

     The AARP Pool originally consisted of 411 assets with an aggregate gross
book balance of approximately $213.3 million, comprised of $137.0 million in
gross book balance of loans and $76.3 million in gross book balance of REO. As a
consequence of the adoption of the Plan, the Bank recorded a $45.0 million loan
portfolio charge in the fourth quarter of 1995, which was reflected as a credit
to the Bank's allowance for estimated loan and REO losses. This amount
represented the estimated additional losses, net of SVAs, anticipated to be
incurred by the Bank in executing the Plan. Such additional losses represented,
among other things, estimated reduced recoveries from restructuring loans and
the acceptance of lower proceeds from the sale of individual REO and the
estimated incremental losses associated with recovery through possible bulk
sales of performing and nonperforming loans and REO.

     In conjunction with the acquisition of Hancock, the Bank identified a pool
of Hancock assets, with similar risk profiles to the assets included in the
Bank's AARP Pool, for inclusion in the Plan. The Bank identified 54 Hancock
assets with an aggregate gross book balance of approximately $29.3 million,
comprised of $25.8 million in gross book balance of loans and $3.5 million in
gross book balance of REO. Simultaneously with the consummation of the
acquisition, the Bank recorded $5.8 million as an addition to the allowance for
estimated loan losses representing the estimated reduced recoveries in executing
the Plan.

                                       17
<PAGE>
 
     Through June 30, 1997, (i) $38.2 million in gross book balances of AARP
Pool loans had been resolved through either a negotiated sale or discounted
payoff, (ii) $7.9 million in gross book balances of AARP Pool loans were
collected through normal principal amortization or paid off through the normal
course without loss, (iii) $22.5 million in gross book balances of AARP Pool
loans had been modified or restructured and retained in the Bank's mortgage
portfolio, (iv) $15.4 million in gross book balances of AARP Pool loans were
removed from the AARP Pool upon management's determination that such assets no
longer met the risk profile for inclusion in the AARP Pool or that accelerated
resolution of such assets was no longer appropriate and (v) $110.6 million in
gross book balances of REO were sold ($43.6 million in gross book balances of
AARP Pool loans were taken through foreclosure and acquired as REO since the
inception of the AARP). As of June 30, 1997, the AARP Pool consisted of 40
assets with an aggregate gross book balance of $18.7 million, comprised
primarily of accruing and nonaccruing multifamily real estate loans totaling
approximately $9.4 million and REO properties totaling approximately $9.3
million, which are reported as real estate owned on the statement of financial
condition. Through June 30, 1997, of the $45.0 million of reserves established
in connection with the Plan, not including the $5.8 million established for the
Hancock assets, $28.2 million had been charged off and $9.5 million had been
allocated to SVAs or REO writedowns in connection with the Bank's estimate of
recovery for AARP Pool assets. Due to the addition of the Hancock assets to the
Plan, it is now anticipated that the remaining AARP Pool will be resolved by
1998.

     Notwithstanding the actions taken by the Bank in implementing the Plan,
there can be no assurance that the AARP Pool assets retained by the Bank will
not result in additional losses. The Bank's allowance for loan and REO losses
and the SVAs established in connection with such assets are ultimately
subjective and inherently uncertain. There can be no assurance that further
additions to the Bank's allowance for loan and REO losses will not be required
in the future in connection with such assets, which could have an adverse effect
on the Bank's financial condition, results of operations and levels of
regulatory capital.


 Classified Assets

     Total classified assets decreased $14.6 million or 8.4% from December 31,
1996, to $159.5 million at June 30, 1997. This decrease was primarily due to a
decrease in performing classified loans and the large volume of REO sales during
the six months ended 1997.  The ratio of nonperforming assets (''NPAs'') to
total assets decreased from 1.83% at December 31, 1996, to 1.61% at June 30,
1997.  This decrease is primarily due to decreased levels of NPAs at June 30,
1997, compared to December 31, 1996 and to an increase in total assets at June
30, 1997 compared to December 31, 1996.

                                       18
<PAGE>
 
     The following table presents net classified assets by property type at the
dates indicated:
<TABLE>
<CAPTION>

                                            JUNE 30,    MARCH 31,    DECEMBER 31,    SEPTEMBER 30,     JUNE 30,
                                              1997         1997          1996             1996           1996
                                           ----------   ----------   -------------   --------------   -----------
                                                                   (DOLLARS IN THOUSANDS)
<S>                                        <C>          <C>          <C>             <C>              <C>
Performing classified loans:
 Single family............................ $   3,331    $   2,75       $  4,555        $  10,054      $  8,098
 Multifamily:
  2 to 4 units............................     4,856        5,527         6,030            9,374        10,227
  5 to 36 units...........................    62,509       50,306        60,785          146,050       148,073
  37 units and over.......................    20,761       12,196        10,375           42,861        43,564
                                           ---------    ---------      --------         --------      --------
   Total multifamily properties...........    88,126       68,029        77,190          198,285       201,864
 Commercial and other.....................     9,788        9,342        29,503(1)        40,628(1)     41,885(1)
                                           ---------    ---------      --------         --------      --------
  Total performing classified loans.......   101,245       80,128       111,248          248,967       251,847
                                           ---------    ---------      --------         --------      --------
Nonperforming classified loans:
 Single family............................     5,980       7,001          8,019            7,478         6,306
 Multifamily:                                        
  2 to 4 units............................     2,677       5,527          5,959            4,897         4,453
  5 to 36 units...........................    15,745      21,041         18,071           19,200        24,989
  37 units and over.......................     4,929       4,162          2,671            1,665         4,019
                                           ---------    --------       --------         --------      --------
   Total multifamily properties...........    23,351      30,730         26,701           25,762        33,461
Commercial and other......................     3,845       1,982          1,405            3,240         3,525
                                           ---------    --------       --------         --------      --------
 Total nonperforming classified loans.....    33,176      39,713         36,125           36,480        43,292
                                           ---------    --------       --------         --------      --------
  Total classified loans..................   134,421     119,841        147,373          285,447       295,139
                                           ---------    --------       --------         --------      --------
REO:                                                 
 Single family............................     4,095       5,211          3,185            3,548         2,802
 Multifamily:                                        
  2 to 4 units............................     2,215       2,766          3,410            4,018         3,297
  5 to 36 units...........................    12,992      11,218         13,574           12,331         7,457
  37 units and over.......................     3,106       2,812          1,844            1,844         1,265
                                           ---------    --------       --------         --------      --------
   Total multifamily properties...........    18,313      16,796         18,828           18,193        12,019
 Commercial and other.....................     2,432       2,933          3,950            4,475         6,398
                                           ---------    --------       --------         --------      --------
  Net REO before REO GVA..................    24,840      24,940         25,963           26,216        21,219
 REO GVA..................................    (1,200)     (1,300)        (1,300)          (1,000)         (700)
                                           ---------    --------       --------         --------      --------
  Total REO...............................    23,640      23,640         24,663           25,216        20,519
                                           ---------    --------       --------         --------      --------
Other classified assets...................     1,404       1,382          2,060            2,503         3,100
                                           ---------    --------       --------         --------      --------
  Total classified assets.................  $159,465    $144,863       $174,096         $313,166      $318,758
                                           =========    ========       ========         ========      ========

</TABLE>
---------------------
(1)  Includes a hotel property loan with a balance of $18.4 million at December
     31, 1996.

                                       19
<PAGE>
 
 Delinquent Loans

     During the second quarter of 1997, total delinquent loans decreased $15.4
million, or 24.5%, from March 31, 1997. The following table presents loan
delinquencies by number of days delinquent and by property type as of the dates
indicated. All assets are reported net of specific reserves and writedowns.
<TABLE>
<CAPTION>
                                                                 JUNE 30,    MARCH 31,    DECEMBER 31,  
                                                                  1997         1997          1996       
                                                                ---------   ----------   -------------  
                                                                       (DOLLARS IN THOUSANDS)           
<S>                                                             <C>         <C>          <C>            
Delinquencies by number of days:                                                                        
  30 to 59 days.......................................              0.41%        0.63%           0.55%  
  60 to 89 days.......................................              0.26         0.24            0.43   
  90 days and over....................................              1.01         1.48            1.31   
                                                                 -------      -------         -------   
Loan delinquencies to net loan portfolio..............              1.68%        2.35%           2.29%  
                                                                 =======      =======         =======   
Delinquencies by property type:                                                                         
 Single family:                                                                                         
  30 to 59 days.......................................           $ 3,514      $ 4,933         $ 4,986   
  60 to 89 days.......................................             1,469        1,947           3,479   
  90 days and over....................................             5,617        6,770           7,747   
                                                                 -------      -------         -------   
                                                                  10,600       13,650          16,212   
                                                                 -------      -------         -------   
    Percent to applicable loan portfolio..............              1.85%        2.72%           3.15%  
Multifamily (2 to 4 units):                                                                             
  30 to 59 days.......................................             1,528        1,856           1,023   
  60 to 89 days.......................................               741          958           1,790   
  90 days and over....................................             2,544        5,527           5,959   
                                                                 -------      -------         -------   
                                                                   4,813        8,341           8,772   
                                                                 -------      -------         -------   
    Percent to applicable loan portfolio..............              1.52%        2.70%           2.79%  
Multifamily (5 to 36 units):                                                                            
  30 to 59 days.......................................             2,894        5,100           5,617   
  60 to 89 days.......................................             5,160        3,545           6,130   
  90 days and over....................................            13,406       21,041          18,071   
                                                                 -------      -------         -------   
                                                                  21,460       29,686          29,818   
                                                                 -------      -------         -------   
    Percent to applicable loan portfolio..............              1.54%        2.18%           2.15%  
Multifamily (37 units and over):                                                                        
   30 to 59 days......................................             3,156        1,755           2,460   
  60 to 89 days.......................................                --           --              --   
  90 days and over....................................             3,037        4,162           2,671   
                                                                 -------      -------         -------   
                                                                   6,193        5,917           5,131   
                                                                 -------      -------         -------   
    Percent to applicable loan portfolio..............              1.94%        1.94%           1.68%  
Commercial and Industrial:                                                                              
  30 to 59 days.......................................               545        3,184             873   
  60 to 89 days.......................................                --          115             269   
  90 days and over....................................             3,846        1,982           1,405   
                                                                 -------      -------         -------   
                                                                   4,391        5,281           2,547   
                                                                 -------      -------         -------   
    Percent to applicable loan portfolio..............              1.96%        2.70%           1.26%  
Total loan delinquencies, net.........................           $47,457      $62,875         $62,480   
                                                                 =======      =======         =======   
Loan delinquencies to net loan portfolio..............              1.68%        2.35%           2.29%  
                                                                 =======      =======         =======    
</TABLE>

                                       20
<PAGE>
 
     The following table presents net delinquent loans at the dates indicated:

<TABLE>
<CAPTION>
                                  JUNE 30,   MARCH 31,   DECEMBER 31,   SEPTEMBER 30,   JUNE 30,
                                    1997       1997          1996           1996          1996
                                  --------   ---------   ------------   -------------   --------
                                                      (DOLLARS IN THOUSANDS)
<S>                               <C>        <C>         <C>            <C>             <C>
Number of days delinquent:
     30 to 59 days.............   $11,638     $16,828       $14,959         $22,748    $23,467
     60 to 89 days.............     7,370       6,565        11,668           8,260      8,026
     90 days and over..........    28,449      39,482        35,853          36,249     43,292
                                  -------     -------       -------         -------    -------
       Total delinquencies.....   $47,457     $62,875       $62,480         $67,257    $74,785
                                  =======     =======       =======         =======    =======
</TABLE>

 Nonperforming Assets

     All assets and ratios are reported net of specific reserves and writedowns
unless otherwise stated.  The following table presents asset quality details at
the dates indicated:

<TABLE>
<CAPTION>

                                    JUNE 30,    MARCH 31,    DECEMBER 31,    SEPTEMBER 30,      JUNE 30,
                                      1997        1997          1996             1996            1996
                                   ----------   ----------   -------------   --------------   ------------
                                                           (DOLLARS IN THOUSANDS)
<S>                                 <C>          <C>          <C>             <C>              <C>
NPAs by Type:
 NPLs.............................  $ 33,176     $ 39,713       $ 36,125       $ 36,480        $ 43,292
 REO, net of REO GVA..............    23,640       23,640         24,663         25,216          20,519
                                    --------     --------       --------       --------        --------
   Total NPAs.....................  $ 56,816     $ 63,353       $ 60,788       $ 61,696        $ 63,811
                                    ========     ========       ========       ========        ========

NPAs by Composition:
 Single family residences.........  $ 10,075     $ 12,212       $ 11,204       $ 10,968        $  9,108
 Multifamily 2 to 4 units.........     4,892        8,293          9,369          8,974           7,750
 Multifamily 5 units and over.....    36,772       39,233         36,160         35,040          37,730
 Commercial and other.............     6,277        4,915          5,355          7,714           9,923
 REO GVA..........................    (1,200)      (1,300)        (1,300)        (1,000)           (700)
                                    --------     --------       --------       --------        --------
   Total NPAs.....................    56,816       63,353         60,788         61,696          63,811
 Total troubled debt restructuring
   ("TDR")........................    44,828       42,696         45,196         49,575          57,079
                                    --------     --------       --------       --------        --------
   Total TDRs and NPAs............  $101,644     $106,049       $105,984       $111,271        $120,890
                                    ========     ========       ========       ========        ========

Classified Assets:
 NPAs.............................  $ 56,816     $ 63,353       $ 60,788       $ 61,696        $ 63,811
 Performing classified loans......   101,245       80,128        111,248(1)     248,967(1)      251,847(1)
 Other classified assets..........     1,404        1,382          2,060          2,503           3,100
                                    --------     --------       --------       --------        --------
   Total classified asset.........  $159,465     $144,863       $174,096       $313,166        $318,758
                                    ========     ========       ========       ========        ========

Classified Asset Ratios:
 NPLs to total assets.............      0.94%        1.21%          1.08%          1.10%          1.31%
 NPAs to total assets.............      1.61%        1.92%          1.83%          1.86%          1.94%
 TDRs to total assets.............      1.27%        1.30%          1.36%          1.49%          1.73%
 NPAs and TDRs to total assets....      2.88%        3.22%          3.18%          3.35%          3.67%
 Classified assets to total assets      4.51%        4.40%          5.23%          9.42%          9.67%
 REO to NPAs......................     41.61%       37.31%         40.57%         40.87%         32.16%
 NPLs to NPAs.....................     58.39%       62.69%         59.43%         59.13%         67.84%
</TABLE>

---------------
(1)  Includes a hotel property loan with a balance of $18.4 million.  
                                                                      
                                       21
<PAGE>
 
  Direct costs of foreclosed real estate operations totaled $1.2 million for
both the three months ended June 30, 1997 and 1996, and $2.8 million and $3.0
million for the six months ended June 30, 1997 and 1996, respectively.  The
following table provides information about the change in the book value and the
number of properties owned and obtained through foreclosure for the periods
indicated:

<TABLE>
<CAPTION>
                                                                       AT OR FOR THE QUARTER          AT OR FOR THE
                                                                           ENDED JUNE 30,        SIX MONTHS ENDED JUNE 30,
                                                                       ---------------------    --------------------------
                                                                          1997       1996         1997           1996
                                                                       ---------  ----------    ---------     ------------
                                                                                   (DOLLARS IN THOUSANDS)
<S>                                                                    <C>        <C>           <C>           <C>
REO net book value...................................................  $ 23,640   $ 20,519      $ 23,640      $ 20,519
Net (decrease) increase in REO for the period........................  $     --     (3,014)       (1,023)       (1,302)

Number of real properties owned......................................       142        120           142           120
Increase (decrease) increase in number of properties
     owned for the period............................................         7        (11)           11            11

Number of properties foreclosed for the period.......................        76         53           149           122
Gross book value of properties foreclosed............................  $ 20,665   $ 15,819      $ 41,795      $ 36,383
Average gross book value of properties foreclosed....................  $    272   $    298      $    281      $    298
</TABLE>

                                       22
<PAGE>
 
 Allowance for Estimated Loan and REO Losses


  The following table summarizes the Bank's reserves, writedowns and certain
coverage ratios at the dates indicated:

<TABLE>
<CAPTION>
 
                                                                       JUNE 30,        DECEMBER 31,        JUNE 30,
                                                                        1997              1996               1996
                                                                     ------------    ----------------    ------------
Loans:                                                                            (DOLLARS IN THOUSANDS)
<S>                                                                    <C>               <C>              <C>
  GVA.............................................................     $33,490           $25,308          $32,053
  SVA.............................................................      26,474            32,200           41,669 (1)
                                                                       -------           -------          -------
   Total allowance for estimated losses (1) (2)...................     $59,964           $57,508          $73,722
                                                                       =======           =======          =======
  Writedowns (3)..................................................     $   183           $   146          $   316
                                                                       =======           =======          =======
  Total allowance and loan writedowns to gross loans (3)..........        2.10%             2.09%            2.54%
  Total loan allowance to gross loans (4).........................        2.09%             2.08%            2.53%
  Loan GVA to loans (4)...........................................        1.19%             0.93%            1.13%
  Loan GVA to NPLs................................................      100.95%            70.06%           74.04%
  NPLs to total loans.............................................        1.19%             1.34%            1.54%
                                                                                                           
 REO:                                                                                                      
  REO GVA.........................................................     $ 1,200           $ 1,300          $   700
  SVA.............................................................       1,399               781            3,050
                                                                       -------           -------          -------
   Total allowance for estimated losses...........................     $ 2,599           $ 2,081          $ 3,750
                                                                       =======           =======          =======
  Writedowns (3)..................................................     $10,736           $14,819          $17,321
                                                                       =======           =======          =======
  Total REO allowance and REO writedowns to                                                                
   gross REO......................................................       36.06%            40.66%           50.66%
  Total REO allowance to gross REO (5)............................        9.91%             7.78%           15.45%
  REO GVA to REO (4)..............................................        4.83%             5.01%            3.30%
                                                                                                           
Total Loans and REO:                                                                                       
  GVA.............................................................     $34,690           $26,608          $32,753
  SVA.............................................................      27,873            32,981           44,719
                                                                       -------           -------          -------
   Total allowance for estimated losses (2).......................     $62,563           $59,589          $77,472
                                                                       =======           =======          =======
  Writedowns (3)..................................................     $10,919           $14,965          $17,637
                                                                       =======           =======          =======
  Total allowance and writedowns to gross loans and                                                        
   REO............................................................        2.53%             2.66%            3.22%
  Total allowance to gross loans and REO (4)......................        2.17%             2.14%            2.64%
  Total GVA to loans and REO (4)..................................        1.22%             0.97%            1.14%
  Total GVA to NPAs...............................................       59.79%            42.86%           50.77%
------------------------
</TABLE>

(1) All allowances for loan losses are for the Bank's portfolio of mortgage
    loans.
(2) At June 30, 1997, December 31, 1996 and June 30, 1996, the allowance for
    estimated loan losses includes $18.1 million, $16.7 million and $24.4
    million, respectively, of remaining loan GVA and SVA for the Plan. See "--
    Asset Quality--Accelerated Asset Resolution Plan."
(3) Writedowns include cumulative charge-offs on outstanding loans and REO as of
    the dates indicated.
(4) Loans and REO, as applicable, in these ratios are calculated prior to their
    reduction for loan and REO GVA, respectively, but are net of specific
    reserves and writedowns.
(5) Net of writedowns.

                                       23
<PAGE>
 
  The following schedule summarizes the activity in the Bank's allowances for
estimated loan and real estate losses:
<TABLE>
<CAPTION>
 
                                                            THREE MONTHS ENDED JUNE 30,
                                    ------------------------------------------------------------------------------ 
                                                    1997                                     1996
                                    -------------------------------------    ------------------------------------- 
                                                 REAL ESTATE                              REAL ESTATE
                                    LOANS (1)       OWNED       TOTAL (2)    LOANS (1)       OWNED         TOTAL
                                    ---------    -----------    ---------    ---------    -----------    ---------
                                                                (DOLLARS IN THOUSANDS)
<S>                                 <C>               <C>       <C>          <C>             <C>         <C>  
 Balance on April 1,.............   $  52,882      $   2,186    $  55,068    $  81,430      $   3,093    $  84,523
   Provision for losses..........       4,251            620        4,871        3,905            579        4,484
   Charge-offs...................     (12,441)          (478)     (12,919)     (10,582)        (1,904)     (12,486)
   Allocation from GVA to REO....          --             --           --       (1,982)         1,982           --
   Allowances related to 
     acquisition.................      12,770            120       12,890           --             --           --
   Recoveries and other..........       2,502            151        2,653          951             --          951
                                    ---------      ---------    ---------    ---------      ---------    ---------
 Balance on June 30,.............   $  59,964      $   2,599    $  62,563    $  73,722      $   3,750    $  77,472
                                    =========      =========    =========    =========      =========    =========
</TABLE>
--------------
(1) All allowances for loan losses are for the Bank's portfolio of mortgage
    loans.
(2) Included in the estimated loan losses related to the Hancock acquistion is
    $5.8 million associated with the Plan. See "--Asset Quality-- Accelerated
    Asset Resolution Plan."
<TABLE>
<CAPTION>
 
 
                                                             SIX MONTHS ENDED JUNE 30,
                                    ------------------------------------------------------------------------------
                                                     1997                                     1996
                                    -------------------------------------    ------------------------------------- 
                                                 REAL ESTATE                              REAL ESTATE
                                    LOANS (1)       OWNED       TOTAL (2)    LOANS (1)       OWNED         TOTAL
                                    ---------    -----------    ---------    ---------    -----------    ---------
                                                              (DOLLARS IN THOUSANDS)
<S>                                 <C>             <C>         <C>          <C>             <C>         <C>  
 Balance on January 1,...........   $  57,508       $  2,081    $  59,589    $  89,435       $  3,492    $  92,927
   Provision for losses..........       8,502          1,362        9,864        7,805          1,247        9,052
   Charge-offs...................     (22,504)        (1,275)     (23,779)     (22,704)        (3,295)     (25,999)
   Allocation from GVA to REO....          --             --           --       (2,306)         2,306           --
   Allowances related to 
     acquisition.................      12,770            120       12,890           --             --           --
   Recoveries and other..........       3,688            311        3,999        1,492             --        1,492
                                    ---------       --------    ---------    ---------       --------    ---------
 Balance on June 30,.............   $  59,964       $  2,599    $  62,563    $  73,722       $  3,750    $  77,472
                                    =========       ========    =========    =========       ========    =========
</TABLE>
--------------
(1) All allowances for loan losses are for the Bank's portfolio of mortgage
    loans.
(2) Included in the estimated loan losses related to the Hancock acquistion is
    $5.8 million associated with the Plan. See "--Asset Quality-- Accelerated
    Asset Resolution Plan."


  The following table details the activity affecting specific loss reserves for
the periods indicated:
<TABLE>
<CAPTION>
 
                                                     THREE MONTHS ENDED                           SIX MONTHS ENDED
                                                       JUNE 30, 1997                               JUNE 30, 1997
                                           -----------------------------------      -----------------------------------   
                                                       REAL ESTATE                              REAL ESTATE
                                             LOANS        OWNED        TOTAL          LOANS        OWNED        TOTAL
                                           ---------   -----------   ---------      ---------   -----------   ---------
                                                                       (Dollars in thousands)
<S>                                        <C>         <C>           <C>            <C>         <C>           <C> 
 Balance at beginning of period........    $  30,332   $       886   $  31,218      $  32,200   $       781   $  32,981
  Allocations from GVA to specific
    reserves...........................        5,468           871       6,339         13,663         1,773      15,436
  Charge-offs..........................      (12,441)         (478)    (12,919)       (22,504)       (1,275)    (23,779)
  Specific loss reserves from
    acquisition........................        3,115           120       3,235          3,115           120       3,235 
                                           ---------   -----------   ---------      ---------   -----------   --------- 
 Balance at end of period indicated....    $  26,474   $     1,399   $  27,873      $  26,474   $     1,399   $  27,873
                                           =========   ===========   =========      =========   ===========   =========
</TABLE>

                                       24
<PAGE>
 
NONINTEREST INCOME (EXPENSE)

  Noninterest income has three major components: (a) noninterest income from
ongoing operations, which includes loan fee income, gains or losses on loans
held for sale, fees earned on the sale of uninsured investment products and
retail banking fees, (b) income/expenses associated with REO, which includes
both the provision for real estate losses as well as income/expenses incurred by
the Bank associated with the operation of its REO properties and (c) gains and
losses on the sales of loan servicing, investment securities and MBS. Items (b)
and (c) can fluctuate widely, and could therefore mask the underlying fee
generating performance of the Company on an ongoing basis.

  Net noninterest income increased by $1.1 million from $0.9 million in the
second quarter 1996 to $2.0 million in the second quarter 1997.  The major
components of this increase are:  (a) net gains from MBS activities in the
second quarter of 1997 increased by $0.8 million primarily as a result of
increased sales and (b) fee income from uninsured investment products increased
by $0.5 million primarily as a result of increased sales.

  Net noninterest income increased by $2.5 million from net noninterest income
of $1.2 million in the six months ended June 30, 1996 to net noninterest income
of $3.7 million in the six months ended June 30, 1997.  The major components of
this increase are: (a) net gains from securities activities in the first six
months of 1997 increased by $2.1 million primarily as a result of increased
sales and (b) fee income from uninsured investment product increased by $0.8
million primarily as a result of increased sales.


OPERATING EXPENSES

  Operating expenses decreased by $1.5 million to $15.0 million for the second
quarter 1997 compared to $16.5 million for the second quarter 1996.  The change
was primarily due to (a) a decrease of $1.3 million of FDIC insurance costs
resulting from the recapitalization of the SAIF in 1996 and an upgrade in the
Bank's assessment classification and (b) a decrease of $0.6 million in
professional services which was the result of an insurance reimbursement for
legal costs related to certain litigation.  These favorable variances were
partially offset by increases in personnel and benefits expense and other
expenses.

  Operating expenses decreased by $3.8 million to $29.4 million for the first
six months of 1997 compared to $33.2 million for the comparable 1996 period.
The change was primarily due to (a) a decrease of $2.9 million of FDIC insurance
costs resulting from the recapitalization of the SAIF in 1996 and an upgrade in
the Bank's assessment classification (b) a decrease of $0.5 million in
professional services which was the result of an insurance reimbursement for
legal costs related to certain litigation and (c) a decrease of $0.4 million in
occupancy and other office related costs which was largely tied to the overall
reduction in personnel and overhead costs.

  Decreased operating expenses resulted in a decrease in the annualized
operating expense ratio to 1.77% for the six months ended June 30, 1997 from
2.00% for the same period in 1996, based on the total average asset size of the
Company of approximately $3.3 billion for the six months ended June 30, 1997 and
1996.

  Due to the sensitivity of the operating expense ratio to changes in the size
of the balance sheet, management also looks at trends in the efficiency ratio to
assess the changing relationship between operating expenses and income. The
efficiency ratio measures the amount of cost expended by the Company to generate
a given level of revenues in the normal course of business. It is computed by
dividing total operating expense by net interest income and noninterest income,
excluding infrequent items.  A decrease in the efficiency ratio is favorable in
that it indicates less expenses were incurred to generate a given level of
revenue.

  The efficiency ratio improved to 64.82% for the second quarter 1997 from
68.06% for the second quarter 1996.  The efficiency ratio also improved between
the six months ended June 30, 1997 and 1996 from 67.77% to 63.39%, respectively.
This decrease was due to increased noninterest income and decreased operating
expense.

                                       25
<PAGE>
 
INCOME TAXES

  The Company's combined federal and state statutory tax rate is approximately
42.0% of earnings before income taxes. The effective tax benefit rates of 81.1%
and 73.3% on income before income taxes for the quarter and six months ended
June 30, 1997, respectively, reflect the federal and state tax benefit
attributable to the utilization of net operating loss carryforwards, and the
partial recognition of the deferred tax asset.  The deferred tax benefit of $2.5
million for the quarter ended June 30, 1997 consisted of a $2.6 million
reduction in the valuation allowance for the Company's deferred tax asset offset
by a $0.1 million current tax expense.  This is compared to the deferred tax
benefit of $5.0 million from the $5.2 million reduction of the related valuation
allowance offset by a $0.2 million current tax expense for the six months ended
June 30, 1997.  The effective tax rates of 2.3% and 2.4% on earnings before
income taxes for the quarter and six months ended June 30, 1996, respectively,
reflect the utilization of net operating loss carryforwards offset by
alternative minimum tax for financial reporting purposes.

  As of December 31, 1996 a valuation allowance was provided for the total net
deferred tax asset.  Under Statement of Financial Accounting Standards
("SFAS") No. 109, Accounting for Income Taxes, the reduction in valuation
allowance is dependent upon a "more likely than not" expectation of realization
of the deferred tax asset, based upon the weight of available evidence.  The
Company has realized book earnings, before unusual items, for each of the six
consecutive quarters ended June 30, 1997.  The loss reflected for the quarter
ended September 30, 1996, was attributable to a one-time $18 million SAIF
assessment which is considered a nonrecurring item.  After consideration of the
Company's recent earnings history and other available evidence, management of
the Company determined that under the criteria of SFAS No. 109 it was
appropriate to record a $2.5 million and $4.8 net tax benefit for the quarter
and six months ended June 30, 1997, respectively.

  The analysis of available evidence is performed each quarter utilizing the
"more likely than not" criteria required by SFAS 109 to determine the amount, if
any, of the deferred tax asset to be realized.  Accordingly, there can be no
assurance that the Company will recognize additional portions of its deferred
tax asset in future periods.  Moreover, the criteria of SFAS No. 109 could
require the partial or complete recapture of the $5.0 million deferred tax
benefit into expense in future periods.


REGULATORY CAPITAL COMPLIANCE

  The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
required the Office of Thrift Supervision (the "OTS") to implement a system
providing for regulatory sanctions against institutions that are not adequately
capitalized. The severity of these sanctions increases to the extent that an
institution's capital continues to decline. Under FDICIA, the OTS issued the
Prompt Corrective Action ("PCA") regulations which established specific
capital ratios for five separate capital categories as set forth below:
<TABLE>
<CAPTION>
 
                                     CORE CAPITAL TO      CORE CAPITAL
                                        ADJUSTED               TO               TOTAL CAPITAL
                                      TOTAL ASSETS        RISK-WEIGHTED              TO
                                    (LEVERAGE RATIO)         ASSETS          RISK-WEIGHTED ASSETS
                                   -------------------    --------------    ----------------------
<S>                                <C>                    <C>               <C>
Well capitalized.................     5% or above          6% or above          10% or above
Adequately capitalized...........     4% or above          4% or above           8% or above
Undercapitalized.................       Under 4%             Under 4%             Under 8%
Significantly undercapitalized...       Under 3%             Under 3%             Under 6%
Critically undercapitalized......  Ratio of tangible equity to adjusted total assets of 2% or
                                   less
</TABLE>

                                       26
<PAGE>
 
  The following table summarizes the capital ratios required by FDICIA for an
institution to be considered well capitalized and Fidelity's regulatory capital
at June 30, 1997 as compared to such ratios.

<TABLE>
<CAPTION>
                                               CORE CAPITAL TO       CORE CAPITAL TO        TOTAL CAPITAL TO      
                                                  ADJUSTED            RISK-WEIGHTED           RISK-WEIGHTED 
                                                TOTAL ASSETS              ASSETS                 ASSETS    
                                             ------------------    -------------------    ------------------ 
                                               BALANCE      %        BALANCE       %        BALANCE      %
                                             -----------   ----    -----------   -----    ----------   -----
                                                              (DOLLARS IN THOUSANDS)
<S>                                          <C>           <C>     <C>           <C>      <C>          <C>
Fidelity's regulatory capital.............    $  216,700   6.15%   $  216,700    10.50%   $  242,500   11.75%
Well capitalized requirement..............       176,000   5.00       123,800     6.00       206,300   10.00%
                                              ----------   ----    ----------    -----    ----------   -----
Excess capital............................    $   40,700   1.15%   $   92,900     4.50%   $   36,200    1.75%
                                              ==========   ====    ==========    =====    ==========   =====
                                          
Adjusted assets (1).......................    $3,519,500           $2,063,200             $2,063,200
                                              ==========           ==========             ==========
 </TABLE>

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

(1) The term "adjusted assets" refers to the term "adjusted total assets" as
    defined in 12 C.F.R. section 567.1(a) for purposes of core capital
    requirements, and refers to the term "risk-weighted assets" as defined in 12
    C.F.R. section 567.1(bb) for purposes of risk-based capital requirements.


    FDICIA also required the OTS and the federal bank regulatory agencies to
revise their risk-based capital standards to ensure that those standards take
adequate account of interest rate risk, concentration of credit risk, and risks
of nontraditional activities. On January 1, 1994, the OTS proposed an interest
rate risk component for its regulatory capital rule. Under the proposed rule,
savings institutions with "above-normal" interest rate risk exposure would be
subject to a deduction from total capital for purposes of calculating their
risk-based capital requirements.  No interest rate risk component would have
been required to be added to the Bank's risk-based capital requirement at June
30, 1997 had the rule been in effect.

    The Bank is also subject to OTS capital regulations under the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). These
regulations require Fidelity to maintain: (a) tangible capital of at least 1.5%
of adjusted total assets (as defined in the regulations), (b) core capital of at
least 3% of adjusted total assets (as defined in the regulations) and (c) total
capital of at least 8.0% of risk-weighted assets (as defined in the
regulations).

                                       27
<PAGE>
 
  The following table summarizes the regulatory capital requirements under
FIRREA for Fidelity at June 30, 1997. As indicated in the table, Fidelity's
capital levels at June 30, 1997 exceeded all three of the currently applicable
minimum FIRREA capital requirements.

<TABLE>
<CAPTION>
                                                                                                          RISK-BASED
                                             TANGIBLE CAPITAL                CORE CAPITAL                   CAPITAL
                                             ----------------                ------------                 -----------
                                           BALANCE           %            BALANCE         %            BALANCE        %
                                           -------          ---           -------        ---           -------       ---
                                                                        (DOLLARS IN THOUSANDS)
<S>                                      <C>                <C>         <C>              <C>         <C>             <C>

Stockholders' equity (1)................. $  227,500                    $  227,500                   $  227,500
Unrealized losses on securities..........      1,100                         1,100                        1,100
Adjustments
   Goodwill..............................     (6,600)                       (6,600)                      (6,600)
   Intangible assets.....................     (9,000)                         (300)                        (300)
   Nonqualifying mortgage servicing
       rights............................         --                            --                           --
   Nonincludable subsidiaries............         --                            --                           --
   Net deferred tax assets...............     (5,000)                       (5,000)                      (5,000)
   Equity investments....................         --                            --                         (100)
   GVA...................................         --                            --                       25,900
                                          ----------                    ----------                   ----------
Regulatory capital (2)...................    208,000        5.92%          216,700       6.15%          242,500      11.75
Required minimum.........................     52,700        1.50           105,600       3.00           165,100       8.00
                                          ----------        ----        ----------       ----        ----------       ----
Excess capital........................... $  155,300        4.42%       $  111,100       3.15%       $   77,400       3.75%
                                          ==========        ====        ==========       ====        ==========       ====
Adjusted assets (3)...................... $3,510,800                    $3,519,500                   $2,063,200
                                          ==========                    ==========                   ==========
</TABLE>

-----------------
(1) Fidelity's total stockholders' equity, in accordance with generally accepted
    accounting principles, was 6.44% of its total assets at June 30, 1997.

(2) Both the OTS and the FDIC may examine the Bank as part of their legally
    prescribed oversight of the industry. Based on their examinations, the
    regulators can direct that the Bank's financial statements be adjusted in
    accordance with their findings.

(3) The term "adjusted assets" refers to the term "adjusted total assets" as
    defined in 12 C.F.R. section 567.1(a) for purposes of tangible and core
    capital requirements, and refers to the term "risk-weighted assets" as
    defined in 12 C.F.R. section 567.1(bb) for purposes of risk-based capital
    requirements.


CAPITAL RESOURCES AND LIQUIDITY

  The Bank derives funds from deposits, FHLB advances, securities sold under
agreements to repurchase, and other short-term and long-term borrowings. In
addition, funds are generated from loan payments and payoffs as well as from the
sale of loans and investments.

 FHLB Advances

  The Bank had net increases of FHLB advances of $120.0 million for the six
months ended June 30, 1997. This compares to net repayments of $60.0 million for
the six months ended June 30, 1996.

 Commercial paper

  Commercial paper outstanding decreased by $40.0 million during the six months
ended June 30, 1997 compared to an increase of $49.0 million for the six months
ended June 30, 1996.

 Mortgage-backed bond

  The Bank retired its $100 million mortgage-backed bonds on April 15, 1997.
The funds were replaced with FHLB advances.

                                       28
<PAGE>
 
 Loan payments and payoffs


  Loan principal payments, including prepayments and payoffs, provided $114.2
million for the six months ended June 30, 1997 compared to $125.0 million for
the same period in 1996.  The Bank expects that loan payments and prepayments
will remain a significant funding source.


 Sales of securities


  The sale of investment securities and MBS provided $199.0 million for the six
months ended June 30, 1997 compared to $20.2 million for the six months ended
June 30, 1996.  The Bank held $349.5 million and $268.1 million of investment
securities and MBS in its available for sale portfolio as of June 30, 1997 and
1996, respectively.


 Undrawn sources


  Fidelity maintains other sources of liquidity to draw upon, which at June 30,
1997 included (a) a line of credit with the FHLB with $369.5 million available
(assuming all of the $150.0 million commercial paper capacity is used);  (b)
unused commercial paper facility capacity of $150.0 million;  (c) $234.6 million
in unpledged securities available to be placed in reverse repurchase agreements
or sold; and (d) $681.9 million of unpledged loans, some of which would be
available to collateralize additional FHLB or private borrowings, or be
securitized.


 Deposits


  At June 30, 1997, Fidelity had deposits of $2.7 billion.  The following table
presents the distribution of the Bank's deposit accounts:

<TABLE>
<CAPTION>
 
                                                JUNE 30, 1997            DECEMBER 31, 1996
                                           -----------------------   -------------------------
                                                          PERCENT                    PERCENT
                                             AMOUNT      OF TOTAL      AMOUNT        OF TOTAL
                                           -----------   ---------   -----------   -----------
                                                            (DOLLARS IN THOUSANDS)
<S>                                         <C>             <C>       <C>            <C>
Money market savings accounts...........    $   78,074        2.9 %   $   65,605       2.6  %
Checking accounts.......................       311,873       11.5        287,711      11.5
Passbook accounts.......................        54,636        2.0         53,665       2.2
                                            ----------     ------     ----------    ------
   Total transaction accounts...........       444,583       16.4        406,981      16.3
                                            ----------     ------     ----------    ------
Certificates of deposit $100,000 and           575,236       21.3        543,336      21.8
 over...................................
Certificates of deposit less than            1,681,858       62.3      1,545,616      61.9
 $100,000...............................    ----------     ------     ----------    ------
   Total certificates of deposit........     2,257,094       83.6      2,088,952      83.7
                                            ----------     ------     ----------    ------
   Total deposits.......................    $2,701,677      100.0 %   $2,495,933     100.0 %
                                            ==========     ======     ==========    ======
 
</TABLE>
  The Company is currently eligible to accept brokered deposits; however, there
were no brokered deposits outstanding at June 30, 1997 and December 31, 1996.


 Repurchase Agreements


  From time to time the Company enters into reverse repurchase agreements by
which it sells securities with an agreement to repurchase the same securities at
a specific future date (overnight to one year). The Company deals only with
dealers who are recognized as primary dealers in U.S. Treasury securities by the
Federal Reserve Board or perceived by management to be financially strong. There
were no reverse repurchase agreements outstanding at June 30, 1997 and December
31, 1996. In the six months ended June 30, 1997, the Company borrowed and repaid
funds from reverse repurchase agreements of $25.5 million compared to $53.4
million of funds borrowed and repaid during the six months ended June 30, 1996.

                                       29
<PAGE>
 
 Loan Fundings


  Fidelity originated and purchased $79.3 million of gross loans (excluding
Fidelity's refinancings) in the six months ended June 30, 1997 compared to $1.4
million in the same period of 1996.


 Contingent or potential uses of funds


  The Bank had unfunded loans totaling $3.3 million at June 30, 1997 and no
unfunded loans at December 31, 1996.  The unfunded loans at June 30, 1997 were
assumed as part of the Hancock acquisition.


 Liquidity


  The OTS regulations require the maintenance of an average daily balance of
liquid assets of at least 5% of the average daily balance of the net
withdrawable accounts and short term borrowings (the "regulatory liquidity
ratio").  The Bank's average regulatory liquidity ratio was 6.98% and 6.36% for
the six months ended June 30, 1997 and 1996, respectively.


 Holding Company Liquidity


     At June 30, 1997, Bank Plus had cash and cash equivalents of $0.9 million
and no material potential cash producing operations or assets other than its
investments in Fidelity and Gateway. Accordingly, Bank Plus is substantially
dependent on dividends from Fidelity and Gateway in order to fund its cash
needs, including its payment obligations on the $51.5 principal amount of Senior
Notes issued in exchange for Fidelity's Preferred Stock.  In connection
therewith, Fidelity's Board of Directors has approved the payment of a cash
dividend to Bank Plus in the approximate amount of $1.6 million, to assist in
funding Bank Plus' future payment obligations with respect to the Senior Notes.
See "--Recent Developments--Exchange Offer".  Both Gateway's and Fidelity's
ability to pay dividends or otherwise provide funds to Bank Plus are subject to
significant regulatory restrictions.



PART II.  OTHER INFORMATION



ITEM 1.   LEGAL PROCEEDINGS

  The Bank was named as a defendant in a purported class action lawsuit alleging
violations of federal securities laws in connection with the offering of common
stock by the Bank in 1994 as part of the Bank's previously reported 1994
Restructuring and Recapitalization. The suit was filed by Harbor Finance
Partners ("Harbor") in an alleged class action complaint in the United States
District Court-Central District of California on July 28, 1995 and originally
named as defendants the Bank, Citadel Holding Corporation ("Citadel"), Richard
M. Greenwood (the Bank's chief executive officer and Citadel's former chief
executive officer), J. P. Morgan Securities, Inc., and Deloitte & Touche LLP.
The suit alleged that false or misleading information was provided by the
defendants in connection with the Bank's 1994 Restructuring and Recapitalization
and stock offering and that the defendants knew and failed to disclose negative
information concerning the Bank. A motion to dismiss the original complaint was
filed by the Bank, and was granted without opposition. Thereafter, Harbor filed
an amended complaint which did not include J. P. Morgan Securities, Inc. and
Deloitte & Touche LLP as defendants and which contained some factual and legal
contentions which were different from those set forth originally. On May 21,
1996, the court granted the Bank's and Greenwood's motion to dismiss the first
amended complaint, but granted leave to amend. Following the filing of a second
amended complaint, the Bank and Greenwood filed a motion to dismiss. At a
hearing on July 22, 1996, the court ruled that the case should be dismissed with
prejudice and a formal order to that effect was submitted to the court for
execution. Harbor lodged certain objections to the proposed order, including
objections that the state law claims in the second amended complaint should not
be dismissed with prejudice. The court's order of dismissal was entered on
August 5, 1996 and provided that all claims asserted in the second amended
complaint under federal law were dismissed with prejudice and those under state
law were dismissed without prejudice to their renewal in state court pursuant to
28 U.S.C. (S)1367(b)(3). Harbor has filed a notice of appeal to the order of
dismissal. Briefing in the appeal is now concluded and the

                                       30
<PAGE>
 
appeal awaits hearing and disposition. On August 30, 1996, Harbor filed an
alleged class action complaint in state court containing allegations similar to
those raised in the federal court action as well as claims for unfair business
practices to which the Bank and Greenwood filed demurrers seeking to have the
case dismissed for failure to state a legally sufficient claim. These demurrers
were sustained without leave to amend on March 13, 1997. On May 5, 1997, an
order of dismissal was entered in the trial court in response to which Harbor
has filed a notice of appeal. The Bank has filed a motion to recover its
attorney fees in obtaining the order of dismissal, which was heard
on August 4, 1997. The court continued the motion to August 29, 1997 in order to
receive further evidence as to the attorney fees claim filed by the Bank.

  In addition, the Bank is a defendant in several individual and purported class
actions brought by several borrowers which raise claims with respect to the
manner in which the Bank serviced certain adjustable rate mortgages which were
originated during the period 1983 through 1988. The actions have been filed
between July 1, 1992 and February of 1995. In one case the Bank won a summary
judgment in Federal District Court. This judgment was appealed. On July 25,
1996, the Ninth Circuit Court of Appeals filed its opinion which affirmed in
part, reversed in part and remanded back to the Federal District Court for
further proceedings. The Federal District Court recently ruled in favor of
certifying a class in that action. In three Los Angeles Superior Court cases
judgments in favor of the Bank were entered in all three cases. The plaintiff
has appealed the judgments in all three cases. Two appeals, one decided on June
26, 1997, and one decided on July 30, 1997, affirmed the judgment of the
Superior Court in favor of the Bank and one appeal has been dismissed. Two other
cases are pending in the Los Angeles Superior Court. In these actions the
plaintiffs' principal claim is that the Bank selected an inappropriate review
date to consult the index upon which the rate adjustment is based that was one
or two months earlier than what was required under the terms of the notes. In a
declining interest rate environment, the lag effect of an earlier review period
defers the benefit to the borrower of such decline, and the reverse would be
true in a rising interest rate environment. The Bank strongly disputes these
contentions and is vigorously defending these suits. The legal responsibility
and financial exposure of these claims presently cannot be reasonably
ascertained and, accordingly, there is a risk that the final outcome of one or
more of these claims could result in the payment of monetary damages which could
be material in relation to the financial condition or results of operations of
the Bank. The Bank does not believe the likelihood of such a result is probable
and has not established any specific litigation reserves with respect to such
lawsuits.

  In the normal course of business, the Company and certain of its subsidiaries
have a number of other lawsuits and claims pending.  Although there can be no
assurance, the Company's management and its counsel believe that none of the
foregoing lawsuits or claims will have a material adverse effect on the
financial condition or business of the Company.

                                       31
<PAGE>
 
ITEM 2.   CHANGES IN SECURITIES

  Not applicable

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

  Not applicable

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


  At the annual meeting of shareholders held on April 30, 1997, the shareholders
elected Waldo H. Burnside, Lilly V. Lee and Mark Sullivan III to the Board of
Directors of Bank Plus to serve for three year terms, approved certain
amendments to and a restatement of the Company's 1996 Stock Option Plan, and
ratified the appointment of Deloitte & Touche LLP as the Company's independent
public accountants for 1997.  Of the 18,245,265 shares of Common Stock
outstanding as of the record date, March 26, 1997, the following indicates the
number of votes cast for and against, as well as the number of votes abstaining
and broker non-votes, with respect to each of the three directors, the
amendments and restatement of the Company's 1996 Stock Option Plan and the
ratification of Deloitte & Touche LLP:
<TABLE>
<CAPTION>
                                                         NUMBER OF VOTES
                                           --------------------------------------------
                                                                               BROKER
                                              FOR        AGAINST    ABSTAIN   NON-VOTES
                                           ----------   ---------   -------   ---------
<S>                                        <C>          <C>         <C>             <C>
Proposal 1 - Election of Directors:
   Waldo H. Burnside....................   15,746,911       2,225        --         N/A
   Lilly V. Lee.........................   15,746,911       2,225        --         N/A
   Mark Sullivan III....................   15,746,911       2,225        --         N/A
Proposal 2 - Amendments to, and a
 restatement of, the 1996 Stock
 Option Plan............................   12,016,047   3,722,079    11,010          -- 
Proposal 3 - Ratification of               
 Independent Public Accountants.........   15,733,646       7,150     8,340         N/A 
 
</TABLE>

ITEM 5.   OTHER INFORMATION

     Not applicable

                                       32
<PAGE>
 
ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

   (a) Exhibits

<TABLE>
<CAPTION>

 EXHIBIT
   NO.                                DESCRIPTION
---------  ---------------------------------------------------------------------
<S>        <C>
   2.1     Agreement and Plan of Reorganization, dated as of March 27, 1996,
           among Fidelity, Bank Plus Corporation and Fidelity Interim Bank.
           (incorporated by reference to Exhibit 2.1 to the Form 8-B of Bank
           Plus filed with the SEC on April 22, 1996 (the "Form 8-B")).*

   2.2     Agreement and Plan of Merger, dated June 25, 1997, among Bank Plus
           Corporation, Fidelity and Hancock Savings Bank, F.S.B (incorporated
           by reference to Exhibit 2.2 to the Form S-4 of Bank Plus filed with
           the SEC on June 30, 1997).*

   3.1     Certificate of Incorporation of Bank Plus Corporation (incorporated
           by reference to Exhibit 3.1 to the Form 8-B).*

   3.2     Bylaws of Bank Plus Corporation (incorporated by reference to Exhibit
           3.2 to the Form 8-B).*

   4.1     Specimen of Common Stock Certificate (incorporated by reference to
           Exhibit 4.1 to the Form 8-B).*

   4.2     Form of Indenture relating to senior notes of Fidelity (incorporated
           by reference to Exhibit 4.2 of the Form 8-B).*
         
   10.1    Settlement Agreement between Fidelity, Citadel and certain lenders,
           dated as of June 3, 1994 (the "Letter Agreement") (incorporated by
           reference to Exhibit 10.1 to the Form 8-B).*

   10.2    Amendment No. 1 to Letter Agreement, dated as of June 20, 1994
           (incorporated by reference to Exhibit 10.2 to the Form 8-B).*

   10.3    Amendment No. 2 to Letter Agreement, dated as of July 28, 1994
           (incorporated by reference to Exhibit 10.3 to the Form 8-B).*

   10.4    Amendment No. 3 to Letter Agreement, dated as of August 3, 1994
           (incorporated by reference to Exhibit 10.4 to the Form 8-B).*
         
   10.5    Mutual Release, dated as of August 4, 1994, between Fidelity, Citadel
           and certain lenders (incorporated by reference to Exhibit 10.5 to the
           Form 8-B).*

   10.6    Mutual Release between Fidelity, Citadel and The Chase Manhattan
           Bank, NA, dated June 17, 1994 (incorporated by reference to Exhibit
           10.6 to the Form 8-B).*
         
   10.7    Loan and REO Purchase Agreement (Primary), dated as of July 13, 1994,
           between Fidelity and Colony Capital, Inc. (incorporated by reference
           to Exhibit 10.7 to the Form 8-B).*

   10.8    Real Estate Purchase Agreement, dated as of August 3, 1994, between
           Fidelity and CRI (incorporated by reference to Exhibit 10.8 to the
           Form 8-B).*
         
   10.9    Loan and REO Purchase Agreement (Secondary), dated as of July 12,
           1994, between Fidelity and EMC Mortgage Corporation (incorporated by
           reference to Exhibit 10.9 to the Form 8-B).*
         
   10.10   Loan and REO Purchase Agreement (Secondary), dated as of July 21,
           1994, between Fidelity and International Nederlanden (US) Capital
           Corporation, Farallon Capital Partners, L.P., Tinicum Partners, L.P.
           and Essex Management Corporation (incorporated by reference to
           Exhibit 10.10 to the Form 8-B).*

   10.11   Purchase of Assets and Liability Assumption Agreement by and between
           Home Savings of America, FSB and Fidelity, dated as of July 19, 1994
           (incorporated by reference to Exhibit 10.11 to the Form 8-B).*
 
   10.12   Promissory Note, dated July 28, 1994, by CRI in favor of Fidelity and
           related loan documents (3943 Veselich Avenue) (incorporated by
           reference to Exhibit 10.12 to the Form 8-B).*
         
   10.13   Promissory Note, dated July 28, 1994, by CRI in favor of Fidelity and
           related loan documents (23200 Western Avenue) (incorporated by
           reference to Exhibit 10.13 to the Form 8-B).*
</TABLE>

                                       33
<PAGE>
 
<TABLE>
<CAPTION> 

 EXHIBIT 
   NO.                            DESCRIPTION
---------  ---------------------------------------------------------------------
   <S>     <C>
   10.14   Promissory Note, dated August 3, 1994, by CRI in favor of Fidelity
           and related loan documents (1661 Camelback Road) (incorporated by
           reference to Exhibit 10.14 to the Form 8-B).*

   10.15   Guaranty Agreement, dated August 3, 1994, by Citadel in favor of
           Fidelity (incorporated by reference to Exhibit 10.15 to the Form 
           8-B).*

   10.16   Tax Disaffiliation Agreement, dated as of August 4, 1994, by and
           between Citadel and Fidelity (incorporated by reference to Exhibit
           10.16 to the Form 8-B).*

   10.17   Option Agreement, dated as of August 4, 1994, by and between Fidelity
           and Citadel (incorporated by reference to Exhibit 10.17 to the Form 
           8-B).*
           
   10.18   Executive Employment Agreement, dated as of August 1, 1997, between
           Richard M. Greenwood and Fidelity.

   10.19   Guaranty of Employment Agreement, dated as of August 1, 1997, between
           Richard M. Greenwood and Bank Plus.
           
   10.20   Amended Service Agreement between Fidelity and Citadel dated as of
           August 1, 1994 (incorporated by reference to Exhibit 10.19 to the
           Form 8-B).*
           
   10.21   Side letter, dated August 3, 1994, between Fidelity and CRI
           (incorporated by reference to Exhibit 10.20 to the Form 8-B).*
           
   10.22   Placement Agency Agreement, dated July 12, 1994, between Fidelity,
           Citadel and J.P. Morgan Securities Inc. (incorporated by reference to
           Exhibit 10.21 to the Form 8-B).*
           
   10.23   Stock Purchase Agreement, dated as of August 3, 1994, between
           Fidelity and Citadel (incorporated by reference to Exhibit 10.22 to
           the Form 8-B).*
           
   10.24   Litigation and Judgment Assignment and Assumption Agreement, dated as
           of August 3, 1994, between Fidelity and Citadel (incorporated by
           reference to Exhibit 10.23 to the Form 8-B).*
           
   10.25   Amended and Restated 1996 Stock Option Plan (incorporated by
           reference to Exhibit 10.24 to the quarterly report on Form 10Q for
           the quarterly period ended March 31, 1997).*
           
   10.26   Retirement Plan for Non-Employee Directors (incorporated by reference
           to Exhibit 10.25 to the Form 8-B).*
           
   10.27   Form of Severance Agreement between the Bank and Mr. Sanders
           (incorporated by reference to Exhibit 10.26 to the Form 8-B).*
           
   10.28   Form of Change in Control Agreement between the Bank and Mr.
           Greenwood.
           
   10.29   Form of Severance and Change in Control Agreement between the Bank
           and each of Messrs. Austin, Evans & Taylor.

   10.30   Form of Severance and Change in Control Agreement between the Bank 
           and each of Messrs. Condon and Stutz.
           
   10.31   Form of Severance Agreement between the Bank and Mr. Renstrom
           (incorporated by reference to Exhibit 10.29 to the Form 8-B).*
           
   10.32   Form of Incentive Stock Option Agreement between the Bank and certain
           officers (incorporated by reference to Exhibit 10.30 to the Form 
           8-B).*
           
   10.33   Form of Amendment to incentive Stock Option Agreement between the
           Bank and certain officers (incorporated by reference Exhibit 10.31 to
           the Form 8-B).*
           
   10.34   Form of Non-Employee Director Stock Option Agreement between the Bank
           and certain directors (incorporated by reference to Exhibit 10.32 to
           the Form 8-B).*
           
   10.35   Form of Amendment to Non-Employee Director Stock Option Agreement
           between the Bank and certain directors (incorporated by reference to
           Exhibit 10.33 to the Form 8-B).*

   10.36   Loan and REO Purchase Agreement, dated as of December 15, 1994
           between Fidelity and Berkeley Federal Bank & Trust FSB (incorporated
           by reference to Exhibit 10.34 to the Form 8-B).*
           
   10.37   Standard Office Lease-Net, dated July 15, 1994, between the Bank and
           14455 Ventura Blvd., Inc. (incorporated by reference to Exhibit 10.35
           to the Form 8-B).*
           
   10.38   Standard Office Lease--Modified Gross, dated July 15, 1994, between
           the Bank and Citadel Realty, Inc. (incorporated by reference to
           Exhibit 10.36 to the Form 8-B).*
 
</TABLE> 

                                       34
<PAGE>
 
<TABLE> 
<CAPTION> 

 EXHIBIT 
   NO.                            DESCRIPTION
---------  ---------------------------------------------------------------------
   <S>     <C>    
   10.39   Loan Servicing Purchase and Sale Agreement dated March 31, 1995
           between the Bank and Western Financial Savings Bank, FSB
           (incorporated by reference to Exhibit 10.37 to the Form 8-B).*
           
   10.40   Supervisory Agreement dated June 28, 1995, between Fidelity and the
           OTS (incorporated by reference to Exhibit 10.38 to the Form 8-B).*
 
   10.41   Form of Indemnity Agreement between the Bank and its directors and
           senior officers (incorporated by reference to Exhibit 10.39 to the
           Form 8-B).*
           
   10.42   Letter from the OTS to the Bank dated December 8, 1995, terminating
           the Supervisory Agreement as of the date of the letter (incorporated
           by reference to Exhibit 10.40 to the Form 8-B).*
           
   10.43   Loan Servicing Purchase and Sale Agreement dated May 15, 1996 between
           Fidelity and Western Financial Savings Bank (incorporated by
           reference to Exhibit 10.37 to the quarterly report on Form 10-Q for
           the quarterly period ended June 30, 1996).*
           
   10.44   First Amendment to Standard Office Lease--Modified Gross, dated as of
           May 15, 1995 between the Bank and Citadel Realty, Inc (incorporated
           by reference to Exhibit 10.42 to the quarterly report on Form 10-Q
           for the quarterly period ended September 30, 1996).*
           
   10.45   Second Amendment to Standard Office Lease--Modified Gross, dated as
           of October 1, 1996, between the Bank and Citadel Realty, Inc
           (incorporated by reference to Exhibit 10.43 to the quarterly report
           on Form 10-Q for the quarterly period ended September 30, 1996).*
           
   10.46   Form of Indemnity Agreement between Bank Plus and its directors and
           senior officers (incorporated by reference to Exhibit 10.44 to the
           quarterly report on Form 10-Q for the quarterly period ended
           September 30, 1996).*
           
   10.55   Promissory Note, dated July 31, 1996, from Richard M. Greenwood to
           Bank Plus (incorporated by reference to Exhibit 10.55 to the 1996
           Form 10-K).*
  
   10.56   Bank Plus Corporation Deferred Compensation Plan.

   27.     Financial Data Schedule.
 
</TABLE>
-----------
* Indicates previously filed documents.

  (b)  Reports on Form 8-K
 
  A current report on Form 8-K was filed with the SEC on July 2, 1997 reporting
on Item 5. "Other Events" including pro forma financial statements for the
acquisition of Hancock.

  A current report on Form 8-K was filed with the SEC on August 13, 1997 
reporting on Item 2. "Acquisition or Disposition of Assets" and Item 7. 
"Financial Statements, Pro Forma Financial Information and Exhibits" related to 
the Hancock acquisition.

                                       35
<PAGE>
 
                                   SIGNATURES


     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
 
                                   BANK PLUS CORPORATION
                                   Registrant

 
Date:  August 14, 1997              /s/ Richard M. Greenwood
                                   --------------------------------------
                                            Richard M. Greenwood
                                   President and Chief Executive Officer;
                                         Vice Chairman of the Board
 

Date:  August 14, 1997              /s/ William L. Sanders
                                   --------------------------------------
                                          William L. Sanders
                                     Executive Vice President and
                                        Chief Financial Officer
 
                                       36