<PAGE>




                                  FORM 10-Q


                     SECURITIES AND EXCHANGE COMMISSION

                          Washington, D.C.   20549

        (X)       QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934

               for the quarterly period ended June 30, 1998

                                     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                        1-8930
                                                   ------------------

                         H. F. AHMANSON & COMPANY 
            -----------------------------------------------------
            (Exact name of registrant as specified in its charter)

                 Delaware                                95-0479700
       ------------------------------                 ---------------
      (State or other jurisdiction of                 (I.R.S. Employer
      incorporation or organization)                 Identification No.)

      4900 Rivergrade Road, Irwindale, California              91706
      -------------------------------------------            ---------
      (Address of principal executive offices)               (Zip Code)

      Registrant's telephone number, including area code. (626) 960-6311
                                                           -------------
                      Exhibit Index appears on page:      39

               Total number of sequentially numbered pages:      40

Indicate by check mark whether the Registrant (1) has filed all reports 
required to be filed by Section 13 and 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    .
    ----    ----    
Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of June 30, 1998:  $.01 par value - 112,747,641 shares.



<PAGE>

                      PART I.     FINANCIAL INFORMATION



ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

     The condensed consolidated financial statements included herein have been 
prepared by the Registrant, without audit, pursuant to the rules and 
regulations of the Securities and Exchange Commission.  In the opinion of the 
Registrant, all adjustments (which include only normal recurring adjustments) 
necessary to present fairly the results of operations for the periods covered 
have been made.  Certain information and note disclosures normally included in 
consolidated financial statements prepared in accordance with generally 
accepted accounting principles have been condensed or omitted pursuant to such 
rules and regulations, although the Registrant believes that the disclosures 
are adequate to make the information presented not misleading.
     These condensed consolidated financial statements should be read in 
conjunction with the consolidated financial statements and the notes thereto 
included in the Registrant's latest annual report on Form 10-K.  The results 
for the periods covered hereby are not necessarily indicative of the operating 
results for a full year.


<PAGE>
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(in thousands)
<TABLE>
<CAPTION>

Assets                                                     June 30, 1998      December 31, 1997
------                                                     -------------      -----------------
<S>                                                        <C>                <C>              
Cash and amounts due from banks                             $   689,940          $   603,797
Federal funds sold and securities purchased under
  agreements to resell                                          343,000              550,200
Other short-term investments                                     11,142                5,110
                                                            -----------          -----------
     Total cash and cash equivalents                          1,044,082            1,159,107
Other investment securities held to 
  maturity [market value 
  $2,423 (June 30, 1998) and
  $2,427 (December 31, 1997)]                                     2,415                2,421
Other investment securities available for 
  sale [amortized cost 
  $12,407 (June 30, 1998) and
  $6,440 (December 31, 1997)]                                    14,040                7,248
Investment in stock of Federal Home 
  Loan Bank (FHLB), at cost                                     529,572              411,978
Mortgage-backed securities (MBS) 
  held to maturity [market value 
  $4,116,280 (June 30, 1998) and
  $4,365,909 (December 31, 1997)]                             4,032,604            4,322,579
MBS available for sale [amortized cost 
  $9,439,028 (June 30, 1998) and
  $8,417,188 (December 31, 1997)]                             9,664,988            8,468,812
Loans receivable less allowance for losses of 
  $471,911 (June 30, 1998) and
  $377,351 (December 31, 1997)                               34,287,923           30,028,540
Loans held for sale [market value   
  $645,371 (June 30, 1998) and
  $461,620 (December 31, 1997)]                                 638,497              455,651
Accrued interest receivable                                     234,737              194,038
Real estate held for development and 
  investment (REI) less allowance for losses of 
  $93,334 (June 30, 1998) and
  $107,773 (December 31, 1997)                                  136,836              146,518
Real estate owned held for sale (REO)
  less allowance for losses of 
  $9,409 (June 30, 1998) and
  $11,400 (December 31, 1997)                                   154,468              162,440
Premises and equipment                                          414,868              364,626
Goodwill and other intangible assets                            767,541              280,296
Other assets                                                    903,765              674,498
                                                            -----------          -----------
                                                            $52,826,336          $46,678,752
                                                            ===========          ===========

Liabilities, Capital Securities of Subsidiary Trust
  and Stockholders' Equity
---------------------------------------------------

Deposits:
  Non-interest bearing                                      $ 1,642,045          $ 1,116,050
  Interest bearing                                           35,765,074           31,152,325
                                                            -----------          -----------
                                                             37,407,119           32,268,375
Securities sold under agreements to repurchase                1,650,000            1,675,000
Other short-term borrowings                                   1,113,000              837,861
FHLB and other borrowings                                     7,541,270            8,316,405
Other liabilities                                             1,338,545              954,470
Income taxes                                                    163,866               82,732
                                                            -----------          -----------
  Total liabilities                                          49,213,800           44,134,843
Company-obligated mandatorily redeemable capital 
  securities, Series A, of subsidiary trust holding 
  solely Junior Subordinated Deferrable Interest 
  Debentures of the Company                                     148,550              148,464
Stockholders' equity                                          3,463,986            2,395,445
                                                            -----------          -----------
                                                            $52,826,336          $46,678,752
                                                            ===========          ===========
</TABLE>


<PAGE>
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(dollars in thousands except per share data)
<TABLE>
<CAPTION>
                                              For the Three Months Ended       For the Six Months Ended
                                                       June 30,                       June 30,
                                              --------------------------      --------------------------
                                                 1998            1997            1998            1997
                                              -----------    -----------      -----------    -----------
<S>                                           <C>            <C>              <C>            <C>
Interest income:
  Loans                                       $   669,252    $   575,802      $ 1,302,144    $ 1,153,335
  MBS                                             261,835        259,429          518,434        527,102
  Investments                                      14,095         16,271           27,821         33,168
                                              -----------    -----------      -----------    -----------
    Total interest income                         945,182        851,502        1,848,399      1,713,605
                                              -----------    -----------      -----------    -----------

Interest expense:
  Deposits                                        415,547        374,187          803,442        749,326
  Short-term borrowings                            41,293         42,924           83,025         76,044
  FHLB and other borrowings                       131,643        126,322          264,383        262,547
                                              -----------    -----------      -----------    -----------
    Total interest expense                        588,483        543,433        1,150,850      1,087,917
                                              -----------    -----------      -----------    -----------
    Net interest income                           356,699        308,069          697,549        625,688
Provision for loan losses                             784         17,989            8,850         42,212
                                              -----------    -----------      -----------    -----------
    Net interest income after 
      provision for loan losses                   355,915        290,080          688,699        583,476
                                              -----------    -----------      -----------    -----------
Noninterest income:
  Loss on sales of MBS                               -               (74)            -               (74)
  Gain on sales of loans                           12,798          6,137           24,569         14,126
  Loan servicing income                            16,624         17,078           38,299         33,826
  Banking and other retail service fees            30,368         28,525           58,077         57,859
  Other fee income                                 23,253         17,059           42,403         33,440
  Gain on sale of retail deposit branch 
    systems                                          -            41,610             -            57,566
  Gain on sales of investment securities              350            135              350            135
  Other operating income                            3,160          1,322            4,149          3,783
                                              -----------    -----------      -----------    -----------
    Total noninterest income                       86,553        111,792          167,847        200,661
                                              -----------    -----------      -----------    -----------
Noninterest expense:
  Compensation and other employee expenses         93,958         84,368          191,656        179,836
  Occupancy expenses                               26,389         26,647           55,081         53,359
  Federal deposit insurance premiums and 
    assessments                                     7,757          6,269           14,536         12,818
  Other general and administrative expenses        71,927         63,180          155,462        121,224
                                               ----------    -----------      -----------    -----------
    Total general and administrative expenses     200,031        180,464          416,735        367,237
  Net acquisition costs                              -             5,475             -             5,475
  Operations of REI                                 1,173            399              854          2,258
  Operations of REO                                 7,620         21,884           15,627         43,992
  Amortization of goodwill and other
    intangible assets                              13,914          6,447           22,797         12,837
                                              -----------    -----------      -----------    -----------
    Total noninterest expense                     222,738        214,669          456,013        431,799
                                              -----------    -----------      -----------    -----------
Income before provision for income taxes          219,730        187,203          400,533        352,338
Provision for income taxes                         82,400         71,547          148,900        133,589
                                              -----------    -----------      -----------    -----------
Net income                                    $   137,330    $   115,656      $   251,633    $   218,749
                                              ===========    ===========      ===========    ===========
Net income attributable to common shares:
  Basic                                       $   133,426    $   107,249      $   240,743    $   201,934
  Diluted                                     $   137,330    $   111,561      $   248,903    $   210,559

Income per common share:
  Basic                                       $      1.21    $      1.11      $      2.27    $      2.03
  Diluted                                     $      1.12    $      1.01      $      2.09    $      1.86

Common shares outstanding, weighted average:
  Basic                                       110,544,030     96,602,800      106,117,457     99,559,185
  Diluted                                     123,148,072    110,022,428      119,139,883    113,084,856
</TABLE>




<PAGE>
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS, continued (Unaudited)
<TABLE>
<CAPTION>

                                             For the Three Months Ended    For the Six Months Ended
                                                       June 30,                    June 30,
                                             --------------------------    ------------------------
                                                1998            1997          1998          1997
                                             ----------      ----------    ----------    ----------
<S>                                          <C>             <C>           <C>           <C>   
Return on average assets (1)                    1.02%           0.96%         0.97%         0.90%
Return on average equity (1)                   16.50%          19.32%        16.36%        18.27%
Return on average tangible equity (1),(2)      21.86%          21.54%        20.72%        20.42%
Efficiency ratio (1), (3)                      46.85%          48.68%        49.83%        48.91%
<FN>
(1)  The following table summarizes the returns on average assets, average equity and average 
     tangible equity and the efficiency ratio excluding certain gains and expenses.  The three 
     months ended June 30, 1997 excludes the after-tax effects of the gain on sales of the West 
     Florida retail deposit branch system of $24.6 million and net acquisition costs of $3.2 
     million.  The six months ended June 30, 1998 excludes the after-tax effects of the Coast 
     charge of $13.7 million.  The six months ended June 30, 1997 excludes the after-tax effects 
     of the gains on sales of the Arizona and West Florida retail deposit branches of $34.1 
     million and net acquisition costs of $3.2 million.
</FN>
</TABLE>
<TABLE>
<CAPTION>
                                                                           For the Six Months Ended
                                                        For the Three              June 30,  
                                                         Months Ended      ------------------------
                                                        June 30, 1997         1998          1997
                                                        -------------      ----------    ----------
     <S>                                                <C>                <C>           <C>   
     Return on average assets                               0.78%             1.02%         0.77%
     Return on average equity                              15.89%            17.20%        15.90%
     Return on average tangible equity (2)                 17.86%            21.71%        17.89%
     Efficiency ratio (3)                                  48.68%            47.06%        48.91%
<FN>
(2)  Net income, excluding amortization of goodwill and other intangible assets (net of
     applicable tax), as a percentage of average equity excluding goodwill and other intangible
     assets (net of applicable tax).
(3)  Represents G&A expenses as a percentage of net interest income plus loan servicing and other
     fee income, all on a pre-tax basis.
</FN>
</TABLE>


<PAGE>
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)
<TABLE>
<CAPTION>

                                                                       For the Six Months Ended
                                                                                June 30, 
                                                                     -----------------------------
                                                                          1998           1997
                                                                     -------------   -------------
<S>                                                                  <C>             <C>        
Cash flows from operating activities:
 Net income                                                           $   251,633     $   218,749
 Adjustments to reconcile net earnings to net cash
  provided by operating activities:
   Interest capitalized on loans (negative amortization)                  (29,900)        (38,124)
   Provision for losses on loans and real estate                           17,703          60,343
   Depreciation and amortization                                           67,371          50,444
   Proceeds from sales of loans originated for sale                     2,697,727       1,667,394
   Loans originated for sale                                           (2,699,094)       (679,189)
   Loans repurchased from investors                                       (22,912)        (33,195)
   Increase in other liabilities                                          251,595         124,380
   Other, net                                                             (39,733)        (64,252)
                                                                      -----------     -----------
    Net cash provided by operating activities                             494,390       1,306,550
                                                                      -----------     -----------

Cash flows from investing activities:
 Principal payments on loans                                            3,780,067       1,661,649
 Principal payments on MBS                                              1,236,354         672,134
 Loans originated for investment (net of refinances)                   (2,292,215)     (1,728,924)
 Cash and cash equivalents from Coast acquisition                         399,591            -
 Purchase Great Western stock                                                -           (163,974)
 Proceeds from sale of Great Western common stock                            -            181,610
 Proceeds from sales of REO                                               176,130         241,502
 Other, net                                                               (29,816)        109,511
                                                                      -----------     -----------
    Net cash provided by investing activities                           3,270,111         973,508
                                                                      -----------     -----------
Cash flows from financing activities:
 Net decrease in deposits                                              (1,259,847)       (864,382)
 Deposits sold                                                               -         (1,167,693)
 Increase (decrease) in borrowings maturing in 90 days or less         (1,575,214)        263,844 
 Proceeds from other borrowings                                         3,308,777       3,377,761
 Repayment of other borrowings                                         (4,111,208)     (4,178,872)
 Redemption of Preferred Stock, Series C                                 (195,000)           -
 Common stock purchased for treasury                                      (24,082)       (210,048)
 Dividends to stockholders                                                (57,250)        (60,656)
 Other, net                                                                34,298          13,519
                                                                      -----------     -----------
    Net cash used in financing activities                              (3,879,526)     (2,826,527)
                                                                      -----------     -----------
Net decrease in cash and cash equivalents                                (115,025)       (546,469)

Cash and cash equivalents at beginning of period                        1,159,107       1,443,860
                                                                      -----------     -----------
Cash and cash equivalents at end of period                            $ 1,044,082     $   897,391
                                                                      ===========     ===========
</TABLE>


<PAGE>
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
NOTE TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


1.  COMPREHENSIVE INCOME

     The Company adopted SFAS No. 130, "Reporting Comprehensive Income" as 
of January 1, 1998.  SFAS No. 130 establishes standards for reporting 
comprehensive income and its components in the financial statements.  SFAS 
No. 130 is effective for fiscal years beginning after December 15, 1997.  
Included in the Company's calculation of comprehensive income is the 
unrealized gain (loss) on securities available for sale, net of tax effect.  
Comprehensive income for the second quarter ended June 30, 1998 and 1997 
totaled $194.5 million and $225.8 million, respectively, and for the six 
months ended June 30, 1998 and 1997 totaled $354.9 million and $281.9 
million, respectively.  Accumulated other comprehensive income at June 30, 
1998 totaled $134.4 million and at December 31, 1997 totaled $31.1 million.



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

                            BASIS OF PRESENTATION

     The preceding condensed consolidated financial statements present 
financial data of H. F. Ahmanson & Company and subsidiaries.  As used herein 
"Ahmanson" means H. F. Ahmanson & Company, a Delaware corporation, and the 
"Company" means Ahmanson and its subsidiaries.  The Company is a residential 
real estate and consumer oriented financial services company, and is engaged 
in consumer and business banking and related financial services activities.  
Home Savings of America, FSB ("Home Savings"), a wholly-owned subsidiary of 
Ahmanson, is currently one of the largest savings institutions in the United 
States.  Certain amounts in prior periods' financial statements have been 
reclassified to conform to the current presentation.

                                   OVERVIEW

MERGER WITH WASHINGTON MUTUAL, INC.

     Effective March 16, 1998, Ahmanson and Washington Mutual, Inc. 
("Washington Mutual") entered into an Agreement and Plan of Merger, pursuant 
to which Ahmanson will merge with and into Washington Mutual.

     Pursuant to the merger, Ahmanson's stockholders will receive, in a tax-
free exchange, 1.68 shares of Washington Mutual common stock (adjusted from 
the original exchange ratio of 1.12 shares to account for the effect of 
Washington Mutual's 3-for-2 stock split that was effective on June 1, 1998) 
for each share of Ahmanson Common Stock.  Based on the closing price of 
Washington Mutual stock on March 16, 1998 (the last trading day before 
announcement of the proposal), the exchange ratio would have produced a value 
of $80.36 for each share of Ahmanson common stock, or a premium of 22.7% over 
the closing market price of Ahmanson common stock on March 16, 1998.  As of 
June 30, 1998, the exchange ratio would have produced a value of $72.98 for 
each share of Ahmanson common stock based on the closing price of Washington 
Mutual common stock of $43.44.  Because the exchange ratio is fixed, this 
value will vary as the price of Washington Mutual stock changes.

     The transaction is subject to the approval of the Office of Thrift 
Supervision ("OTS") and the stockholders of both Ahmanson and Washington 
Mutual.  On July 20, 1998, the OTS deemed that the application for merger 
approval was informationally complete but had not yet approved or disapproved 
the application.  Stockholder meetings to vote on approval of the merger have 
been scheduled for August 28, 1998 by Ahmanson and Washington Mutual.

FINANCIAL RESULTS

     Net income for the second quarter of 1998 was $137.3 million, or $1.12 
per diluted common share, compared to $115.7 million, or $1.01 per diluted 
common share, for the second quarter of 1997.  The results for the second 
quarter of 1997 include an after-tax gain of $24.6 million, or $0.22 per 
diluted share, resulting from the sale of Home Savings' deposit branch system 
on the West Coast of Florida (the "West Florida gain"), and a net after-tax 
cost of $3.2 million, or $0.03 per diluted share, as a result of the Company's 
proposed merger with Great Western Financial Corporation (the "net acquisition 
costs").  That proposal was withdrawn on June 4, 1997.  Excluding the West 
Florida gain and the net acquisition costs in the second quarter of 1997, net 
income would have been $94.3 million or $0.82 per diluted common share.  
Return on average equity ("ROE") for the second quarter of 1998 was 16.5%, 
compared to 19.3% for the second quarter of 1997.  Excluding the West Florida


<PAGE>
gain and the net acquisition costs, ROE would have been 15.9% in the second 
quarter of 1997.

     Net income for the first six months of 1998 was $251.6 million, or $2.09 
per diluted common share, compared to $218.7 million, or $1.86 per diluted 
common share, for the first six months of 1997.  The results for the first six 
months of 1998 include an after-tax transaction-related charge (the "Coast 
charge") of $13.7 million, or $0.11 per diluted common share, associated with 
the acquisition of Coast Savings Financial, Inc. ("Coast"), which was 
consummated on February 13, 1998.  The results for the first six months of 
1997 include an after-tax gain of $9.5 million, or $0.08 per diluted common 
share, resulting from the sale of Home Savings' deposit branches in Arizona 
(the "Arizona gain"), as well as the West Florida gain and net acquisition 
costs (the "1997 items").  Excluding the Coast charge, net income for the 
first six months of 1998 would have been $265.3 million, or $2.20 per diluted 
common share.  Excluding the 1997 items, net income for the first six months 
of 1997 would have been $187.9 million, or $1.59 per diluted common share.  
ROE for the first six months of 1998 was 16.4%, compared to 18.3% for the 
first six months of 1997.  Excluding the Coast charge and the 1997 items, ROE 
for the first six months of 1998 and 1997 would have been 17.2% and 15.9%, 
respectively.

     Cash net income is computed by the Company by adding to net income the 
amortization of goodwill and core deposit intangibles (net of applicable tax 
benefit).  Cash net income for the second quarter of 1998 and 1997 was $147.3 
million and $119.5 million, respectively, and for the six months ended June 
30, 1998 and 1997, was $267.4 million and $226.3 million, respectively.  The 
Company's cash net income may not be necessarily comparable to similarly 
titled measures reported by other companies.  

     The Company's cash net income per diluted common share, cash return on 
average assets ("ROA") and cash return on average tangible equity (cash ROE) 
and the comparable reported data were as follows:
<TABLE>
<CAPTION>
                                                        Cash                Reported
                                                  -----------------     -----------------
                                                    For the Three         For the Three
                                                     Months Ended          Months Ended
                                                       June 30,              June 30,
                                                  -----------------     -----------------
                                                    1998      1997        1998      1997
                                                  -------   -------     -------   -------
<S>                                               <C>       <C>         <C>       <C>     
Net income per diluted common share               $ 1.20    $ 1.05      $ 1.12    $ 1.01
ROA                                                 1.12%     1.00%       1.02%     0.96%
ROE                                                21.86%    21.54%      16.50%    19.32%

Excluding the West Florida gain:
  Net income per diluted common share             $ 1.20    $ 0.85      $ 1.12    $ 0.82
  ROA                                               1.12%     0.82%       1.02%     0.78%
  ROE                                              21.86%    17.86%      16.50%    15.89%

                                                        Cash                Reported
                                                  -----------------     -----------------
                                                     For the Six           For the Six
                                                     Months Ended          Months Ended
                                                       June 30,              June 30,
                                                  -----------------     -----------------
                                                    1998      1997        1998      1997
                                                  -------   -------     -------   -------
Net income per diluted common share               $ 2.20    $ 1.93      $ 2.09    $ 1.86
ROA                                                 1.04%     0.94%       0.97%     0.90%
ROE                                                20.72%    20.42%      16.36%    18.27%

Excluding the Coast charge and  the 1997 items:
    Net income per diluted common share           $ 2.34    $ 1.66      $ 2.20    $ 1.59
    ROA                                             1.09%     0.81%       1.02%     0.77%
    ROE                                            21.71%    17.89%      17.20%    15.90%
</TABLE>


<PAGE>
RESULTS OF OPERATIONS

     Net interest income was $356.7 million for the second quarter of 1998, 
compared to $308.1 million for the second quarter of 1997 and $340.9 million 
for the first quarter of 1998, and was $697.5 million for first six months of 
1998, compared to $625.7 million for the first six months of 1997.  The 
increase in net interest income was a result of an increase in interest-
earning assets, due to the Coast acquisition, and a wider net interest margin.  
The average net interest margin was 2.80% for the second quarter of 1998, 
compared to 2.66% for the second quarter of 1997 and 2.77% for the first 
quarter of 1998, and was 2.79% for the first six months of 1998 compared to 
2.65% for the first six months of 1997.

     Noninterest income was $86.6 million for the second quarter of 1998, a 
decrease of $25.2 million, or 23%, from the $111.8 million for the second 
quarter of 1997 and an increase of $5.3 million, or 7%, from the $81.3 million 
for the first quarter of 1998.  Noninterest income for the first six months of 
1998 was $167.8 million, compared to $200.7 million for the first six months 
of 1997.  The 1997 results include the West Florida and Arizona gains.  
Excluding the West Florida gain, noninterest income would have been $70.2 
million for the second quarter of 1997.  Excluding the West Florida and 
Arizona gains, noninterest income would have been $143.1 million for the first 
six months of 1997.  

     During the second quarter of 1998, the Company had a gain on sales of 
loans of $12.8 million, compared to gains of $6.1 million and $11.8 million in 
the second quarter of 1997 and first quarter of 1998, respectively.  The 
increased gain on sales resulted from the funding and sale of a greater number 
of fixed rate residential loans originated for sale.  During the second 
quarter of 1998, the Company funded $2.2 billion of single family residential 
mortgage loans, 63% of which were fixed rate loans originated for sale.

     During the second quarter of 1998, banking and other retail service fees 
and other fee income was $53.6 million, compared to $45.6 million for the 
second quarter of 1997 and $46.9 million for the first quarter of 1998.  Total 
banking and other retail service fees and other fee income in the second 
quarter of 1998 reflects higher banking and loan fees as a result of the 
addition of the Coast customer base to the existing Home Savings network and 
increased fee income from the sales of nondeposit products by Griffin 
Financial Services.

     General and administrative ("G&A") expenses were $200.0 million for the 
second quarter of 1998, compared to $180.5 million for the second quarter of 
1997 and $216.7 million for the first quarter of 1998, and were $416.7 million 
for the first six months of 1998, compared to $367.2 million for the first six 
months of 1997.  Excluding the pre-tax Coast charge of $23.2 million related 
to severance, the closure and consolidation of certain Coast and Home Savings 
branches, data processing conversion costs and other integration costs, such 
as, customer retention and marketing programs, G&A expenses would have been 
$193.5 million and $393.5 million for the first quarter and first six months 
of 1998, respectively.  The increase in G&A expenses reflects the additional 
expenses associated with the acquired Coast branch network.  By the end of the 
second quarter of 1998, the Company realized substantially all of the expected 
cost savings from the Coast acquisition.

     The efficiency ratio, defined by the Company as G&A expenses as a 
percentage of net interest income, loan servicing and other fee income, was 
46.9% in the second quarter of 1998, compared to 48.7% and 52.9% in the second 
quarter of 1997 and the first quarter of 1998, respectively, and for the first 
six months of 1998, the Company's efficiency ratio was 49.8%, compared to 
48.9% for the first six months of 1997.  Excluding the Coast charge, the 
efficiency ratio would have been 47.3% and 47.1% for the first quarter and 
first six months of 1998, respectively.


<PAGE>
CREDIT COSTS/ASSET QUALITY

     Credit costs, consisting of the provision for loan losses plus the 
expenses for the operations of foreclosed real estate ("REO") continued their 
improving trend in the second quarter of 1998 as a result of the California 
economy.  Credit costs declined by 48% from the first quarter of 1998 and 79% 
from the second quarter of 1997.  Credit costs were $8.4 million for the 
second quarter of 1998, compared to $39.9 million for the second quarter of 
1997 and $16.1 million for the first quarter of 1998.  Net loan charge-offs 
for the second quarter of 1998 totaled $9.6 million, compared to $17.4 million 
for the second quarter of 1997 and $12.5 million for the first quarter of 
1998.  Approximately $5.2 million of the second quarter 1998 charge-offs were 
from previously established specific reserves.

     During the second quarter, nonperforming assets ("NPAs") declined by 
$59.0 million, to $644.2 million, and were 1.22% of total assets at June 30, 
1998, compared to $703.2 million, or 1.29%, at March 31, 1998.  The $644.2 
million of NPAs at June 30, 1998, which includes the effect of the Coast 
acquisition, was $46.3 million lower than the $690.5 million at June 30, 1997, 
which did not include any Coast related NPAs.  Loans classified as troubled 
debt restructurings ("TDRs") were $262.5 million at June 30, 1998.  The ratio 
of NPAs and TDRs to total assets was 1.72% at June 30, 1998, compared to 1.90% 
at June 30, 1997.

     At June 30, 1998, the allowances for loan losses and REO were $471.9 
million and $9.4 million, respectively. The ratio of allowances for losses to 
NPAs was 73.6% at June 30, 1998, compared to 57.8% at June 30, 1997 and 68.8% 
at March 31, 1998.

LOAN FUNDINGS

     During the second quarter of 1998, the Company funded $2.9 billion in 
loans compared to $1.4 billion in the second quarter of 1997 and $2.2 billion 
in the first quarter of 1998.

     The Company funded $2.6 billion of residential mortgage loans in the 
second quarter of 1998, compared to $1.1 billion in the second quarter of 1997 
and $1.9 billion in the first quarter of 1998.  All mortgage loans were funded 
through the Company's retail franchise.  The $2.6 billion of real estate 
mortgage loans funded during the second quarter of 1998 consisted of $1.5 
billion in fixed rate loans, substantially all of which were sold into the 
secondary market, and $1.1 billion of adjustable rate mortgages ("ARMs") which 
are being held in portfolio.

     The ARM fundings during the second quarter of 1998 were offset by an 
increase in prepayments as borrowers took advantage of lower interest rates to 
refinance into fixed rate loans.  The computed prepayment rate ("CPR") of 
loans for a period is defined by the Company as loan principal payments 
received during such period in excess of the normal scheduled principal 
payments, expressed as an annualized percentage of the principal balance of 
such loans at the beginning of the period.  The CPR is based on the Company's 
historical data and is not a projection of future prepayments.  The Company's 
three month and twelve month CPRs at June 30, 1998 for loans indexed to the 
Eleventh District Cost of Funds increased to 22% and 16%, respectively, from 
14% and 12%, respectively, at December 31, 1997.

     The Company also funded $306.8 million in consumer loans during the 
second quarter of 1998, compared to $224.4 million in the second quarter of 
1997, and $248.3 million in the first quarter of 1998.  In June 1998, the 
Company funded $108.6 million in consumer loans, its highest month ever.  The 
consumer loan portfolio totaled $1.3 billion at June 30, 1998.


<PAGE>
CAPITAL

     At June 30, 1998, Home Savings' capital ratios exceeded the regulatory 
requirements for an institution to be rated as "well-capitalized," the highest 
regulatory standard.

     On July 16, 1998 the Company announced that it is redeeming its 6% 
Cumulative Convertible Preferred Stock, Series D, at $51.50 per Depositary 
Share, plus accrued and unpaid dividends to and including the redemption date.  
Each Depositary Share is convertible into 2.05465 shares of the Company's 
common stock at any time prior to the close of business on August 24, 1998.  
The redemption date is set for September 1, 1998.

SALE OF EAST FLORIDA BRANCHES

     The sale of the Company's 27 East Coast Florida branches, with $3.2 
billion in deposits, was consummated on July 16, 1998 for an after-tax gain of 
approximately $165 million.  That gain will be reflected in the third quarter 
1998 results.

FORWARD LOOKING STATEMENTS

     This quarterly report on Form 10-Q contains certain statements which, to 
the extent they do not relate to historical results, are forward looking.  
These forward looking statements involve certain risks and uncertainties.  
Factors that may cause actual results to differ materially from those 
contemplated by such forward looking statements include, among others, the 
following possibilities:  (1) competitive pressure among depository 
institutions increases significantly; (2) changes in the interest rate 
environment reduce interest margins; (3) general economic conditions, either 
nationally or in the states in which the Company conducts business, are less 
favorable than expected; or (4) legislative or regulatory changes adversely 
affect the businesses in which the Company engages.  In addition, certain 
forward looking statements are based on assumptions of future events which may 
not prove to be accurate.  Further information on factors which could affect 
the financial results of the Company may be included in subsequent filings by 
the Company with the Securities and Exchange Commission.


<PAGE>
                             RESULTS OF OPERATIONS

NET INTEREST INCOME

     Net interest income was $356.7 million in the second quarter of 1998, an 
increase of $48.6 million, or 16%, from $308.1 million for the second quarter 
of 1997 and was $697.5 million for the first six months of 1998, an increase 
of $71.8 million, or 11%, from $625.7 million for the first six months of 
1997.  The following table presents the Company's Consolidated Summary of 
Average Financial Condition and net interest income for the periods indicated.  
Average balances on interest-earning assets and interest-costing liabilities 
are computed on a daily basis and other average balances are computed on a 
monthly basis.  Interest income and expense and the related average balances 
include the effect of discounts or premiums.  Nonaccrual loans are included in 
the average balances, and delinquent interest on such loans has been deducted 
from interest income.  The average loan balances are presented before the 
deduction of the allowance for loan losses.  The average MBS balances exclude 
the effect of the unrealized gain or loss on MBS available for sale.
<TABLE>
<CAPTION>
                                                     Three Months Ended June 30,
                                    --------------------------------------------------------------
                                                 1998                            1997
                                    ------------------------------  ------------------------------
                                      Average              Average    Average              Average
                                      Balance    Interest   Rate      Balance    Interest   Rate
                                    -----------  --------  -------  -----------  --------  -------
                                                         (dollars in thousands)
<S>                                 <C>          <C>       <C>      <C>          <C>       <C>
Interest-earning assets:
  Loans                             $35,918,112  $669,252   7.45%   $31,111,587  $575,802   7.40%
  MBS                                13,989,423   261,835   7.49     14,141,655   259,429   7.34
                                    -----------  --------           -----------  --------  
     Total loans and MBS             49,907,535   931,087   7.46     45,253,242   835,231   7.38
  Investment securities                 787,208    14,095   7.18        974,052    16,271   6.70
                                    -----------  --------           -----------  --------  
  Interest-earning assets            50,694,743   945,182   7.46     46,227,294   851,502   7.37
                                                 --------                        --------
Other assets                          2,920,309                       1,874,118
                                    -----------                     -----------
            Total assets            $53,615,052                     $48,101,412
                                    ===========                     ===========
Interest-costing liabilities:
  Deposits                          $38,008,434   415,547   4.39    $33,946,754   374,187   4.42
                                    -----------  --------           -----------  --------
  Borrowings:
     Short-term                       2,775,559    41,293   5.97      2,982,506    42,924   5.77
     FHLB and other borrowings        8,024,170   128,465   6.42      7,741,443   123,145   6.38
     Trust capital securities           148,522     3,178   8.52        148,350     3,177   8.53
                                    -----------  --------           -----------  --------
     Total borrowings                10,948,251   172,936   6.34     10,872,299   169,246   6.24
                                    -----------  --------           -----------  --------
  Interest-costing liabilities       48,956,685   588,483   4.82     44,819,053   543,433   4.86
                                                 --------                        --------
Other liabilities                     1,329,115                         888,383
Stockholders' equity                  3,329,252                       2,393,976
                                    -----------                     -----------
            Total liabilities and 
              stockholders' equity  $53,615,052                     $48,101,412
                                    ===========                     ===========
Excess interest-earning assets/
  Interest rate spread              $ 1,738,058             2.64    $ 1,408,241             2.51
                                    ===========                     ===========
Net interest income/ 
  Net interest margin                            $356,699   2.80                 $308,069   2.66
                                                 ========                        ========
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                                            Six Months Ended June 30,
                                    -------------------------------------------------------------------
                                                  1998                             1997
                                    --------------------------------  ---------------------------------
                                      Average                Average    Average                Average
                                      Balance     Interest    Rate      Balance     Interest     Rate
                                    -----------  ----------  -------  -----------  ----------  --------
                                                          (dollars in thousands)
<S>                                 <C>          <C>         <C>      <C>          <C>         <C>
Interest-earning assets:
  Loans                             $34,812,952  $1,302,144   7.48%   $31,345,058  $1,153,335    7.36%
  MBS                                13,796,178     518,434   7.52     14,305,395     527,102    7.37
                                    -----------  ----------           -----------  ----------  
     Total loans and MBS             48,609,130   1,820,578   7.49     45,650,453   1,680,437    7.36
  Investment securities                 793,122      27,821   7.07        978,941      33,168    6.83
                                    -----------  ----------           -----------  ----------  
  Interest-earning assets            49,402,252   1,848,399   7.49     46,629,394   1,713,605    7.35
                                                  ---------                        ----------
Other assets                          2,637,125                         1,932,551
                                    -----------                       -----------
            Total assets            $52,039,377                       $48,561,945
                                    ===========                       ===========
Interest-costing liabilities:
  Deposits                          $36,706,407     803,442   4.41    $34,306,517     749,326    4.40
                                    -----------   ---------           -----------  ----------
  Borrowings:
     Short-term                       2,696,028      83,025   6.21      2,644,764      76,044    5.80
     FHLB and other                   8,212,200     258,027   6.34      8,167,447     256,190    6.33
     Trust capital securities           148,501       6,356   8.52        148,356       6,357    8.53
                                    -----------   ---------           -----------  ----------
     Total borrowings                11,056,729     347,408   6.34     10,960,567     338,591    6.23
                                    -----------   ---------           -----------  ----------
  Interest-costing liabilities       47,763,136   1,150,850   4.86     45,267,084   1,087,917    4.84
                                                  ---------                        ----------
Other liabilities                     1,199,144                           900,229
Stockholders' equity                  3,077,097                         2,394,632
                                    -----------                       -----------
            Total liabilities and 
              stockholders' equity  $52,039,377                       $48,561,945
                                    ===========                       ===========
Excess interest-earning assets/
  Interest rate spread              $ 1,639,116               2.63    $ 1,362,310                2.51
                                    ===========                       ===========
Net interest income/ 
  Net interest margin                            $  697,549   2.79                 $  625,688    2.65
                                                 ==========                        ==========
</TABLE>

     Net interest income includes the effect of provisions for losses on 
delinquent interest of $4.6 million and $6.3 million for the second quarter of 
1998 and 1997, respectively, related to nonaccrual loans.  The provisions had 
the effect of reducing the net interest margin by four basis points and five 
basis points in the respective periods.  Such provisions were $11.2 million 
and $14.3 million for the first six months of 1998 and 1997, respectively, 
reducing net interest margin by five and six basis points for the first six 
months of 1998 and 1997, respectively.


<PAGE>
     The following table presents the changes for the second quarter and first 
six months of 1998 from the comparative periods of 1997 in the Company's 
interest income and expense attributable to various categories of its assets 
and liabilities as allocated to changes in average balances and changes in 
average rates.  Because of numerous and simultaneous changes in both balances 
and rates from period to period, it is not practical to allocate precisely the 
effects thereof.  For purposes of this table, the change due to volume is 
initially calculated as the current period change in average balance 
multiplied by the average rate during the preceding year's period and the 
change due to rate is calculated as the current period change in average rate 
multiplied by the average balance during the preceding year's period.  Any 
change that remains unallocated after such calculations is allocated 
proportionately to changes in volume and changes in rates.
<TABLE>
<CAPTION>
                                 Three Months Ended June 30,        Six Months Ended June 30,
                              ---------------------------------   ---------------------------------
                                      1998 Versus 1997                    1998 Versus 1997
                                 Increase/(Decrease) Due to          Increase/(Decrease) Due to
                              ---------------------------------   ---------------------------------
                                Volume       Rate       Total      Volume        Rate       Total
                              ---------    --------   ---------   ---------    --------   ---------
                                                         (in thousands)
<S>                           <C>          <C>        <C>         <C>          <C>        <C>  
Interest income on:
  Loans                       $ 89,534      $ 3,916    $ 93,450   $129,696      $19,113    $148,809
  MBS                           (2,677)       5,083       2,406    (20,241)      11,573      (8,668)
  Investments                   (3,474)       1,298      (2,176)    (6,562)       1,215      (5,347)
                              --------      -------    --------   --------      -------    --------
    Total interest income       83,383       10,297      93,680    102,893       31,901     134,794
                              --------      -------    --------   --------      -------    --------
Interest expense on: 
  Deposits                      43,847       (2,487)     41,360     52,413        1,703      54,116
  Short-term borrowings         (3,259)       1,628      (1,631)     1,502        5,479       6,981 
  FHLB and other borrowings      4,541          779       5,320      1,426          411       1,837
  Trust capital securities           5           (4)          1          6           (7)         (1)
                              --------      -------    --------   --------      -------    --------
    Total interest expense      45,134          (84)     45,050     55,347        7,586      62,933
                              --------      -------    --------   --------      -------    --------
      Net interest income     $ 38,249      $10,381    $ 48,630     47,546       24,315      71,861
                              ========      =======    ========   ========      =======    ========
</TABLE>

     The yield on a majority of the Company's interest-earning assets adjust 
monthly based on changes in the monthly weighted average cost of funds of 
savings institutions headquartered in the Federal Home Loan Bank System 
Eleventh District, which comprises California, Arizona and Nevada, as computed 
by the Federal Home Loan Bank ("FHLB") of San Francisco ("COFI").  COFI is 
currently announced on the last business day of the month following the month 
in which such cost of funds was incurred.  The Company's ARMs which adjust 
based upon changes in COFI ("COFI ARMs") generally commence accruing interest 
at the newly announced rate plus the contractual loan factor at the next 
payment due date following such announcement.

     In 1996, the Company introduced two adjustable rate loan products, 12 MAT 
ARMs, tied to the 12-month moving average of the monthly average one-year 
constant maturity treasury, and LAMA loans, tied to the London Interbank 
Offered Rate ("LIBOR") 12-month moving average of one-month LIBOR, to 
diversify the interest sensitivity profile of the Company's interest-earning 
assets.  The Company also offers loans which provide for interest rates that 
adjust based upon changes in the yields of certain U.S. Treasury securities 
("other Treasury ARMs").  The Company believes that the timing and degree of 
changes in rates on 12 MAT ARMs and LAMA loans provide a better match than 
COFI ARMs to the changes in rates of certain of the Company's interest-costing 
liabilities.


<PAGE>
     Net interest income in the second quarter of 1998 increased by $48.6 
million, or 16%, compared with the second quarter of 1997 as a result of  
increases in both the average balance of interest-earning assets and the net 
interest margin.  Average interest-earning assets were $4.5 billion higher in 
the second quarter of 1998 than the comparable period of 1997 due to the 
acquisition of approximately $8.1 billion of interest-earning assets from 
Coast in February of 1998.  Without the addition of the Coast interest-earning 
assets, the Company would have experienced a decrease in interest-earning 
assets as a result of paydowns on loans and MBS in excess of the loans 
originated by the Company for its portfolio.  The decrease in fixed rate 
mortgage interest rates beginning in the fourth quarter of 1997 and continuing 
through the second quarter of 1998 significantly influenced the Company's 
ability to maintain its portfolio asset size due to high levels of prepayments 
by borrowers converting primarily into fixed rate mortgages. While the Company 
enjoyed the benefits of higher loan originations resulting from significant 
refinancing activity and an increase in the home purchase market, 63% of its 
single family originations in the second quarter of 1998 were fixed rate loans 
which the Company normally sells in the secondary market rather than retain in 
its portfolio. 

     In the second quarter of 1998 the Company's net interest margin increased 
to 2.80% from 2.66% in the second quarter of 1997 and 2.77% in the first 
quarter of 1998. Despite the decrease in general market interest rates, the 
Company's yield on its loan and MBS portfolios increased by eight basis points 
in the second quarter of 1998 compared with the second quarter of 1997.  This 
increase was primarily the result of an increase in the real estate loan and 
MBS portfolio yield attributable to an increase in the average Eleventh 
District FHLB COFI in the second quarter of 1998 compared with the second 
quarter of 1997.  The increase in the three month average of COFI between the 
respective second quarters, despite general decreases in market interest 
rates, reflects the inherent lag in calculating and reporting COFI by the 
FHLB.  Despite the Company's emphasis on originating non-COFI indexed loans 
during the last two years, approximately 84% of the real estate loan and MBS 
portfolio as of June 30, 1998 were indexed to COFI.  Over 90% of the loans and 
MBS added in the Coast acquisition were indexed to COFI. 

     The Company's net interest margin also benefited in the second quarter of 
1998 by a reduction in the overall rate paid on interest-costing liabilities. 
The average cost of liabilities in the second quarter of 1998 decreased by 
four basis points compared with the second quarter of 1997 due primarily to an 
increase in the proportion of funding from deposits, which generally have 
interest rates lower than those of borrowed funds.  Additionally, excess 
interest-earning assets increased in the second quarter of 1998 by $329.8 
million compared with the second quarter of 1997. The discontinuance of the 
Company's stock repurchase program, the stock issued in connection with the 
Coast acquisition and the retention of earnings not paid as dividends were all 
contributing factors to the increase in equity and the corresponding increase 
in excess interest-earning assets between the respective second quarters of 
1998 and 1997.  The net interest margin will be affected by the sale of the 
East Florida branches as the Company replaces the deposits sold with wholesale 
borrowed funds.  Deposits comprised 78% of interest-costing liabilities at 
June 30, 1998 and is estimated to comprise approximately 72% after the sale of 
the East Florida branches.

     Net interest income increased by $71.9 million, or 11%, for the first six 
months of 1998 compared to the same period of 1997.  The increase for the six 
month period resulted from increases in interest-earning assets in 1998 as a 
result of the Coast acquisition and an increase in the net interest margin to 
2.79% for the first six months of 1998 compared to 2.65% for the same period 
of 1997.  For the first six months of 1998 the average yield on loans and MBS 
increased by 13 basis points and the average rate paid on interest-costing 
liabilities increased by two basis points.  Loan and MBS yields were higher in 
the first six months of 1998 compared with the first six months of 1997 as a


<PAGE>
result of an increase in the average COFI, to which a substantial portion of 
all the loan and MBS portfolios are still indexed.  The net interest margin 
for the first six months of 1998 also benefited from an increase of $276.8 
million in excess interest-earning assets compared to the first six months of 
1997.

     At June 30, 1998, 95% of the Company's loan and MBS portfolio were ARMs, 
including 81% which were COFI ARMs.  At December 31, 1997, 95% were ARMs, 
including 83% which were COFI ARMs.  The Company believes that its net 
interest income growth in 1998 was constrained by the interest rate 
environment of the last six to nine month period.  The relatively flat yield 
curve and the resulting narrow range between short-term and long-term rates on 
the yield curve have contributed to the compression of the spread between 
asset yields and funding costs.  Due to the low interest rates recently 
available on fixed rate mortgage loans and the narrow range between short-term 
and long-term interest rates (frequently referred to as a flat yield curve), 
borrowers have been displaying a preference for fixed rate mortgage loans 
compared to ARMs.  This preference has been manifested by prepayments of ARMs 
in the Company's portfolio by borrowers refinancing into fixed rate mortgage 
loans (which the Company generally does not retain in its portfolio) and by 
difficulty in originating new ARMs.  In response, the Company periodically has 
made pricing concessions on certain of its ARM products.

     The Company may experience further margin compression should the yield 
curve become even flatter or if further increases in market rates are not 
immediately reflected in the yields on the Company's adjustable and fixed rate 
assets or if conditions cause the Company to pay higher than market rates for 
its funds.  For information regarding the Company's strategies related to COFI 
and limiting its interest rate risk, see "Financial Condition--Asset/Liability 
Management and Market Risk."

CREDIT COSTS

     PROVISION FOR LOAN LOSSES.  The provision for loan losses was $0.8 
million for the second quarter of 1998, a decrease of $17.2 million, or 96%, 
from $18.0 million for the second quarter of 1997.  The provision for loan 
losses was $8.9 million for the first six months of 1998, a decrease of $33.3 
million, or 79% from $42.2 million for the first six months of 1997.  The 
decline in the provision was due to the continuing improvement in the 
California economy and California real estate market.  For additional 
information regarding the allowance for loan losses, see "Financial Condition-
-Asset Quality--NPAs and Potential Problem Loans" and "Financial Condition-
Asset Quality--Allowance for Loan Losses."

     OPERATIONS OF REO.  Losses from operations of REO were $7.6 million for 
the second quarter of 1998, a decrease of $14.3 million, or 65%, from losses 
of $21.9 million for the second quarter of 1997.  The decrease was due to 
declines in operating costs of $7.8 million, losses on sale of REO of $3.9 
million and provision for REO losses of $2.6 million.  Losses from operations 
of REO were $15.6 million for the first six months of 1998, a decrease of 
$28.4 million, or 65%, from losses of $44.0 million for the first six months 
of 1997.  The decrease was due to declines in operating costs of $13.7 
million, losses on sale of REO of $8.4 million and provision for REO losses of 
$6.3 million.  For additional information regarding REO, see "Financial 
Condition--Asset Quality--NPAs and Potential Problem Loans."


<PAGE>
NONINTEREST INCOME

     GAIN ON SALES OF LOANS.  During the second quarter of 1998 and 1997 and 
the first six months of 1998 and 1997, the Company sold loans and recognized 
gains on sales of loans as follows (in thousands):
<TABLE>
<CAPTION>
                                             Three Months Ended            Six Months Ended
                                                  June 30,                     June 30,
                                           -----------------------     -----------------------
                                              1998         1997           1998         1997
                                           ----------   ----------     ----------   ----------
<S>                                        <C>          <C>            <C>          <C>   
Book value of loans sold:
  Fixed rate                               $1,590,337   $  496,306     $2,626,413   $  736,556
  COFI ARMs                                      -         550,581            147      864,606
  12 MAT and other Treasury ARMs               19,620       23,228         45,970       50,106
  LAMA                                           -            -               625         _
                                           ----------   ----------     ----------   ----------
                                           $1,609,957   $1,070,115     $2,673,155   $1,651,268
                                           ==========   ==========     ==========   ==========

Pre-tax gain (loss) on sales of loans:
  Fixed rate                               $   12,643   $   (2,009)    $   24,223   $    3,116
  COFI ARMs                                      -           7,904             22       10,268
  12 MAT and other Treasury ARMs                  155          242            317          742
  LAMA                                           -            -                 7         -
                                           ----------   ----------     ----------   ----------
                                           $   12,798   $    6,137     $   24,569   $   14,126
                                           ==========   ==========     ==========   ==========
</TABLE>

     The Company intends to continue selling the majority of its fixed rate 
mortgage originations and certain ARM originations in the secondary market.

     The Company capitalizes mortgage servicing rights ("MSR") when the 
related mortgage loans are sold or securitized as MBS available for sale.  The 
MSR are amortized in proportion to and over the period of estimated loan 
servicing income.  The MSR are periodically reviewed for impairment based on 
their fair value and potential impairment losses, if any, are recognized 
through a valuation allowance and a charge to loan servicing income.  
Impairment is measured on a disaggregated basis based on predominant risk 
characteristics of the underlying mortgage loans.  The risk characteristics 
used by the Company for the purposes of capitalization and impairment 
evaluation include loan amount, loan type, loan origination date, loan 
interest rate, loan term, the state where the collateral is located and 
collateral type.  MSR totaling $27.3 million and $17.2 million were 
capitalized in the first six months of 1998 and 1997, respectively.  MSR 
totaling $27.6 million was acquired from Coast during the first quarter of 
1998.  The changes to the valuation allowance included a provision of $1.0 
million for the first six months of 1997.  There was no addition to the 
valuation allowance in the first six months of 1998 and no charge-offs against 
this valuation allowance during the first six months of 1998 and 1997.  The 
valuation allowance for MSR impairment was $5.5 million as of June 30, 1998.

     LOAN SERVICING INCOME.  Loan servicing income was $16.6 million for the 
second quarter of 1998, a decrease of $0.5 million, or 3%, from $17.1 million 
for the second quarter of 1997 and was $38.3 million for the first six months 
of 1998, an increase of $4.5 million, or 13%, from $33.8 million for the first 
six months of 1997.  The increase for the first six months of 1998 was due 
mainly to the acquisition of Coast's loan servicing operations, partially 
offset by an increase in amortization of MSR as a result of an increase in the 
related servicing asset.  At June 30, 1998, the portfolio of loans serviced 
for investors was $17.0 billion with a gross retained spread of 0.67% compared 
to the $14.4 billion portfolio and 0.67% gross retained spread at June 30, 
1997.  Approximately $3.1 billion of loans serviced for investors were 
acquired from Coast.


<PAGE>
     FEE INCOME.  Total fee income, consisting of banking and other retail 
service fees plus other fee income, was $53.6 million for the second quarter 
of 1998, an increase of $8.0 million, or 18%, from $45.6 million for the 
second quarter of 1997 and was $100.5 million for the first six months of 
1998, an increase of $9.2 million, or 10%, from $91.3 million for the first 
six months of 1997.

     Banking and other retail service fees were $30.4 million for the second 
quarter of 1998, an increase of $1.9 million, or 7%, from $28.5 million for 
the second quarter of 1997 and were $58.1 million for the first six months of 
1998, an increase of $0.2 million, or less than 1%, from $57.9 million for the 
first six months of 1997.  Both the second quarter of 1998 and the first six 
months of 1998 benefited from the Coast acquisition which was partially offset 
by the loss of fee income from the sale of the Arizona and West Florida retail 
branches.  The increase in the second quarter of 1998 was due to an increase 
of $1.9 million in service charges on deposit accounts.

     Fee income from other services was $23.3 million for the second quarter 
of 1998, an increase of $6.2 million, or 36%, from $17.1 million for the 
second quarter of 1997.  The increase was primarily due to increases of $3.3 
million in mortgage-related fees, due partially to the increase in loan 
prepayments, $2.0 million in commissions on the sales of investment and 
insurance products and services and $0.6 million in debit card-related fees.  
Fee income from other services was $42.4 million for the first six months of 
1998, an increase of $9.0 million, or 27%, from $33.4 million for the first 
six months of 1997.  The increase was primarily due to increases of $5.5 
million in mortgage-related fees, due partially to the increase in loan 
prepayments, $2.0 million in commissions on the sales of investment and 
insurance products and services and $1.0 million in debit card-related fees.

     GAIN ON SALE OF RETAIL DEPOSIT BRANCH SYSTEMS.  In March 1997, the 
Company sold deposits of $251.4 million and branch premises in Arizona 
resulting in a pre-tax gain of $16.0 million.  In June 1997, the Company sold 
deposits of $916.3 million and branch premises on the West Coast of Florida 
resulting in a pre-tax gain of $41.6 million.  The gains were net of expenses 
associated with the sales.

NONINTEREST EXPENSE

     GENERAL & ADMINISTRATIVE EXPENSES.  G&A expenses were $200.0 million for 
the second quarter of 1998, an increase of $19.5 million, or 11%, from $180.5 
million for the second quarter of 1997 and were $416.7 million for the first 
six months of 1998, an increase of $49.5 million, or 13%, from $367.2 million 
for the first six months.  The increase in G&A expenses reflects a higher 
volume of operating expenses associated with the net addition of 40 Coast 
branches.  In addition, the increase in G&A expenses in the first six months 
of 1998 also reflects pre-tax Coast charges of $23.2 million related to 
severance, the closure and consolidation of certain Home Savings branches, 
data processing conversion costs, and other integration costs, including 
customer retention and marketing programs, recognized in connection with the 
acquisition of Coast.  The following table presents the activity and remaining 
balance of the Coast acquisition related restructuring reserves (in 
thousands):


<PAGE>
<TABLE>
<CAPTION>
                              Reserve         Activity Between       Reserve
                             Balance at         April 1 and         Balance at
                           March 31, 1998      June 30, 1998       June 30, 1998
                           --------------     ----------------     -------------
<S>                        <C>                <C>                  <C>            
Severance and 
  employee benefits           $ 1,196             $   893             $  303
Occupancy                       3,335                 339              2,996
Equipment                       2,351               2,351               -
Data processing
   conversion costs             5,406               2,288              3,118
Other integration costs        10,871               8,709              2,162
                              -------             -------             ------
                              $23,159             $14,580             $8,579
                              =======             =======             ======
</TABLE>

     Management believes the restructuring reserve balance at June 30, 1998 is 
adequate.

     The efficiency ratio was 46.9% for the second quarter of 1998 compared to 
48.7% for the second quarter of 1997 and was 49.8% for the first six months of 
1998 compared to 48.9% for the first six months of 1997.  Excluding the Coast 
charges in the first six months of 1998, the efficiency ratio would have been 
47.1%.

     NET ACQUISITION COSTS.  The Company incurred net pre-tax costs of $5.5 
million in the second quarter of 1997 related to its unsuccessful proposal to 
acquire Great Western Financial Corporation.  Approximately $23.1 million of 
legal, printing, advisory and other expenses were incurred, partially offset 
by a $17.6 million gain on the sale of 3.6 million shares of Great Western 
Financial Corporation common stock purchased in connection with the proposal.

     OPERATIONS OF REI.  Losses from operations of REI were $1.2 million for 
the second quarter of 1998, an increase of $0.8 million from losses of $0.4 
million for the second quarter of 1997 due mainly to higher operating 
expenses.  Losses from operations of REI were $0.9 million for the first six 
months 1998, a decrease of $1.4 million, or 61%, from $2.3 million for the 
first six months of 1997 due primarily to declines of $2.0 million in 
provision of losses and $0.5 million in operating expenses.

     During the first quarter of 1998, the Company sold an office building 
located in Charlotte, North Carolina at a price equal to recorded value.  The 
Company also purchased property in Ventura County, California, as part of its 
planned disposition of the Ahmanson Ranch.

     At June 30, 1998, REI, consisting of six projects totaling $66.4 million, 
were classified as long-term.  Other REI, consisting of three projects 
totaling $70.4 million, were classified as held for sale.  Included in REI 
held for sale was the Ahmanson Ranch, which totaled $68.6 million at June 30, 
1998.  There were no specific impairment allowances recognized on these REI 
assets at June 30, 1998 as management believes that the general valuation 
allowance is adequate to cover impairment.

     The Company is continuing its strategy of exiting the real estate 
investment business.  Although the Company does not intend to acquire new 
properties, it intends to develop, hold and/or sell its current properties 
depending on economic conditions.  No new projects have been initiated since 
1990.


<PAGE>
     The Company may establish general valuation allowances based on 
management's assessment of the risk of further reductions in carrying values.  
The Company's basis for such estimates include project business plans 
monitored and approved by management, market studies and other information.  
Although management believes the carrying values of the REI and the related 
allowance for losses are fairly stated, declines in carrying values and 
additions to the allowance for losses could result from continued weakness in 
the specific project markets, changes in economic conditions and revisions to 
project business plans, which may reflect decisions by the Company to 
accelerate the disposition of the properties.

     AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS.  Amortization of 
goodwill and other intangible assets was $13.9 million for the second quarter 
of 1998, an increase of $7.5 million from $6.4 million for the second quarter 
of 1997, and was $22.8 million for the first six months of 1998, an increase 
of $10.0 million, or 78%, from $12.8 million for the first six months of 1997, 
reflecting the amortization of goodwill and core deposit intangible resulting 
from the acquisition of Coast.

     PROVISION FOR INCOME TAXES.  The changes in the provision for income 
taxes primarily reflected the changes in pre-tax income between the comparable 
periods.  The effective tax rates for the second quarter of 1998 and 1997 were 
37.5% and 38.2%, respectively, and for the first six months of 1998 and 1997 
were 37.2% and 37.9%, respectively, reflecting management's estimate of the 
Company's full year tax provision.


<PAGE>
                             FINANCIAL CONDITION

     The Company's consolidated assets were $52.8 billion at June 30, 1998, an 
increase of $6.1 billion, or 13%, from $46.7 billion at December 31, 1997.  
The increase is due to the acquisition of Coast in February 1998, which added 
approximately $8.9 billion of assets and $6.4 billion of deposits, partially 
offset by a decrease in the loan and MBS portfolio due to payments on loans 
and MBS.  The increase in loan and MBS payments during the first six months of 
1998 is primarily due to an interest rate environment which encourages 
borrowers to refinance ARM loans into fixed rate loans which the Company sells 
in the secondary market.  The Company's three month and twelve month CPRs at 
June 30, 1998 for COFI-indexed loans increased to 22% and 16%, respectively, 
from 14% and 12%, respectively, at December 31, 1997.

LOAN AND MBS PORTFOLIO

     The Company's loan and MBS portfolio was as follows (in thousands):
<TABLE>
<CAPTION>
                                  June 30, 1998       December 31, 1997
                                  -------------       -----------------
<S>                               <C>                 <C>
Real estate loans:
  Residential loans:
    Single family                  $21,827,182           $18,714,254
    Multi-family                    10,723,486             9,859,143
  Commercial and industrial          1,404,154             1,128,320
                                   -----------           -----------
                                    33,954,822            29,701,717
Consumer loans:
  Home equity                        1,069,220               860,573
  Savings account secured               60,106                65,256
  Other                                136,516               121,511
                                   -----------           -----------
                                     1,265,842             1,047,340
Business banking loans                  97,849                65,738
Other loans                             33,824                25,862
                                   -----------           -----------
    Total loans                     35,352,337            30,840,657
Deferred loan costs and interest        22,589                11,606
Unearned premiums                       23,405                 9,279
Allowance for loan losses             (471,911)             (377,351)
                                   -----------           -----------
Loans receivable                    34,926,420            30,484,191
MBS                                 13,697,592            12,791,391
                                   -----------           -----------
    Total loans and MBS            $48,624,012           $43,275,582
                                   ===========           ===========
</TABLE>

     The increase in loans and MBS is due to the acquisition of Coast loans 
and MBS totaling $8.1 billion, a majority of which were tied to COFI.  At June 
30, 1998, approximately 97% of the real estate loan and MBS portfolio was 
secured by residential properties, including 75% secured by single family 
properties.  The Company's loan and MBS portfolio is concentrated in 
California with approximately 81% of the portfolio secured by properties in 
the state.  No other state represents outstanding portfolio balances greater 
than 5% of the total.  Due to the concentration of the portfolio in 
California, the Company has been and will continue to be impacted, 
beneficially and adversely, by economic cycles of the state.


<PAGE>
     The real estate loan and MBS portfolio at June 30, 1998 includes 
approximately $6.0 billion in mortgage loans that were originated with loan-
to-value ("LTV") ratios exceeding 80%, or 13% of the portfolio at June 30, 
1998.  The majority of these higher LTV loans in the portfolio at June 30, 
1998 were secured by single family properties.  The Company takes the 
additional risk of originating real estate loans with LTV ratios in excess of 
80% into consideration in its loan underwriting and pricing policies.

     The Company's primary business continues to be the funding of loans on 
residential real estate properties.  The Company's loan fundings are 
summarized as follows (dollars in thousands):
<TABLE>
<CAPTION>
                                         Six months ended June 30,
                           ----------------------------------------------------
                                     1998                       1997
                           ------------------------    ------------------------
                              Loan       Percent of       Loan       Percent of
                            Fundings      Fundings      Fundings      Fundings
                           ----------    ----------    ----------    ----------
<S>                        <C>           <C>           <C>           <C>
Real estate loans:
  Single family:
    Fixed rate             $2,782,589       54.3%      $  695,939       27.5%
    COFI ARMs                  52,369        1.0          244,904        9.7
    12 MAT ARMs               891,796       17.4          470,950       18.6
    Other Treasury ARMs        29,758        0.6           87,543        3.5
    LAMA                       93,336        1.8           83,478        3.3
                           ----------      -----       ----------      -----
                            3,849,848       75.1        1,582,814       62.6
  Multi-family:
    Fixed rate                 77,359        1.5            4,530        0.2
    COFI ARMs                   8,409        0.2           37,887        1.4
    12 MAT ARMs               388,437        7.6          408,602       16.2
    LAMA                      171,746        3.3           69,311        2.7
                           ----------      -----       ----------      -----
                              645,951       12.6          520,330       20.5
Consumer loans:
  Home equity                 422,854        8.2          254,770       10.1
  Savings account secured      46,265        0.9           55,329        2.2
  Other                        86,008        1.7           78,229        3.1
                           ----------      -----       ----------      -----
                              555,127       10.8          388,328       15.4
Business banking loans         75,782        1.5           36,795        1.5
                           ----------      -----       ----------      -----
                           $5,126,708      100.0%      $2,528,267      100.0%
                           ==========      =====       ==========      =====
</TABLE>

     During the first six months of 1998, approximately 73% of real estate 
loan fundings were on properties located in California compared to 69% during 
the first six months of 1997.

     The Company originates consumer loans through its entire distribution 
network and originates business banking loans through its California branches.  
Both activities are intended to further the Company's objective of positioning 
itself as a full-service consumer and financial services company.

     For additional information regarding these loan products, see "Results of 
Operations--Net Interest Income" and "Financial Condition--Asset/Liability 
Management and Market Risk."


<PAGE>
     At June 30, 1998, the Company was committed to fund the following loans 
(dollars in thousands):
<TABLE>
<CAPTION>
                                       June 30, 1998
                                -------------------------
                                Outstanding   Percent of
                                Commitments   Commitments
                                -----------   -----------
<S>                             <C>           <C>
Real estate loans:
  Fixed rate                     $  373,418      54.9%
  COFI ARMs                           1,553       0.2
  12 MAT ARMs                       269,428      39.7
  Other Treasury ARMs                 2,734       0.4
  LAMA                               32,791       4.8
                                 ----------     -----
                                 $  679,924     100.0%
                                 ==========     =====
Consumer loans:
  Home equity:
    Lines of credit              $  695,985      54.9%
    Loans                            13,114       1.0
  Unsecured lines of credit         558,046      44.0
  Secured lines of credit               664       0.1
  Other                                 574        - 
                                 ----------     -----
                                 $1,268,383     100.0%
                                 ==========     =====
Business banking loans           $  151,496     100.0%
                                 ==========     =====
</TABLE>

     The Company expects to fund such loans from its liquidity sources.  It is 
likely that some of these loan commitments will expire without being drawn 
upon.

ASSET/LIABILITY MANAGEMENT AND MARKET RISK

     The Company's principal objective of asset/liability management is to 
maximize net interest income, subject to net interest margin volatility and 
liquidity constraints.  Net interest margin volatility results when the rate 
reset (or repricing) characteristics of the Company's assets are materially 
different from those of the Company's liabilities.  Liquidity risk results 
from the mismatching of asset and liability cash flows.  The Company manages 
various market risks in the ordinary course of business, including interest 
rate risk, liquidity risk and credit risk.

     In order to manage the interest rate risk inherent in its portfolios of 
interest-earning assets and interest-costing liabilities, the Company 
emphasizes the origination of ARMs for retention in the loan and MBS 
portfolios.  Until late 1996, the majority of originated ARMs were indexed to 
COFI.  The interest rates on COFI ARMs do not immediately reflect current 
market rate movements (referred to as the "COFI lag").  The COFI lag arises 
because (1) COFI is determined based on the average cost of all FHLB Eleventh 
District member savings institutions' interest-costing liabilities, some of 
which do not reprice immediately, and (2) the majority of the Company's COFI 
ARMs reprice monthly based on changes in the cost of such liabilities 
approximately two months earlier.  COFI is subject to influences in addition 
to changes in market interest rates, such as changes in the roster of FHLB 
Eleventh District member savings institutions, the aggregate liabilities and 
the mix of liabilities at such institutions, and legislative and regulatory 
developments which affect the business of such institutions.  Due to the 
unique characteristics of COFI, the secondary market for COFI loans and MBS is 
not as consistently liquid as it is for various other loans and MBS. 


<PAGE>
     To diversify the interest rate sensitivity and liquidity profile of the 
Company's interest-earning assets, the Company now offers and emphasizes the 
origination of other ARM loan products, such as 12 MAT ARMs and LAMA loans, 
over COFI ARMs.  Because 12 MAT and LAMA are moving averages of historic 
interest rates, the interest rates on 12 MAT ARMs and LAMA loans do not 
immediately reflect market interest rate movements.  However, the Company 
believes that the timing and degree of changes in rates on 12 MAT ARMs and 
LAMA loans provide a better match than COFI ARMs to the changes in rates of 
certain of the Company's interest-costing liabilities, in part because 12 MAT 
and LAMA are not normally subject to influences other than changes in market 
interest rates.  Due to the long-time emphasis on originating COFI ARMs and 
their predominant balance in the current portfolio, benefits from loans tied 
to other indices are being realized slowly as the composition of the loan and 
MBS portfolio changes.  At June 30, 1998, approximately 81% of the Company's 
$49.1 billion gross loan and MBS portfolio consisted of COFI ARMs, compared to 
approximately 83% of the $43.7 billion gross loan and MBS portfolio at 
December 31, 1997.  For information regarding the Company's loan 
diversification, see "Financial Condition--Loan and MBS Portfolio."

     The origination of consumer and business banking loans involves risks 
different from those associated with originating residential real estate 
loans.  For example, credit risk associated with consumer and business banking 
loans is generally higher than for mortgage loans, the sources and level of 
competition may be different and, compared to residential real estate lending, 
consumer and business banking lending are relatively new businesses for the 
Company.  These different risk factors are considered in the underwriting and 
pricing standards established for consumer and business banking loans.

     The Company's approach to managing interest rate risk includes the 
changing of repricing terms and spreading of maturities on term deposits and 
other interest-costing liabilities.  The Company manages the maturities of its 
borrowings to balance changes in the demand for deposit maturities and asset 
repricing characteristics.

     The Company has adopted a strategy to increase the percentage of 
transaction accounts in its deposit portfolio, which the Company believes are 
a lower costing funding source than other funding sources.  At June 30, 1998, 
transaction accounts comprised 37% of the deposit base compared to 33% at June 
30, 1997.  A portion of this increase is due to the Company's "money market 
index account," which was introduced in the third quarter of 1997.  This new 
product offers depositors some of the liquidity of a transaction account, with 
a higher interest rate, but at a lower cost to the Company than its 
traditional term accounts.  The Company's money market index account balance 
was $3.0 billion at June 30, 1998 compared to $1.4 billion at December 31, 
1997. For additional information regarding these and other transactions, see 
"Results of Operations--Net Interest Income" and "Financial Condition--
Liquidity and Capital Resources."


<PAGE>
     The components of the Company's interest rate sensitive asset and 
liability portfolios by repricing periods (contractual maturity as adjusted 
for frequency of repricing) as of June 30, 1998 are as follows (dollars in 
thousands):
<TABLE>
<CAPTION>
                                                                       Repricing Periods
                                                  Percent ----------------------------------------------------------------
                                                    of       Within        7-12          1-5          5-10         Years
                                        Balance    Total    6 Months      Months        Years         Years       Over 10
                                      ----------- ------- -----------   -----------  -----------   ------------  ----------
                                                                                (dollars in thousands)
<S>                                   <C>         <C>     <C>           <C>          <C>           <C>           <C>
Interest-earning assets:
Investment securities                 $   900,169    2%   $   892,754   $      -     $     7,415     $    -      $     -

Loans and MBS
  MBS    
    ARMs                               13,378,701   27     13,354,164        23,203          528          -             806
    Other                                 318,891    1           -             -           1,345          -         317,546
  Loans
    ARMs                               32,589,914   65     30,877,932       766,399      603,451       108,680      233,452
    Other                               2,336,506    5        176,408          -            -             -       2,160,098
                                      -----------  ---    -----------   -----------  -----------     ---------   ----------
    Total loans and MBS                48,624,012   98     44,408,504       789,602      605,324       108,680    2,711,902
                                      -----------  ---    -----------   -----------  -----------     ---------   ----------
      Total interest-earning assets   $49,524,181  100%   $45,301,258   $   789,602  $   612,739     $ 108,680   $2,711,902
                                      ===========  ===    ===========   ===========  ===========     =========   ==========
Interest-costing liabilities:
Deposits
  Transaction accounts                $13,655,473   28%   $13,655,473   $      -     $      -        $    -      $     -
  Term accounts                        23,751,646   50     13,581,230     8,095,235    2,068,443         6,687           51
                                      -----------  ---    -----------   -----------  -----------     ---------   ----------
    Total deposits                     37,407,119   78     27,236,703     8,095,235    2,068,443         6,687           51
                                      -----------  ---    -----------   -----------  -----------     ---------   ----------
Borrowings  
  Short-term                            2,763,000    6      2,763,000          -            -             -            -
  FHLB and other                        7,541,270   16      5,297,924       597,007    1,329,991       254,996       61,352
  Capital securities of
    subsidiary trust                      148,550    -           -             -            -          148,550         -
                                      -----------  ---    -----------   -----------  -----------     ---------   ----------
    Total borrowings                   10,452,820   22      8,060,924       597,007    1,329,991       403,546       61,352
                                      -----------  ---    -----------   -----------  -----------     ---------   ----------
      Total interest-costing
          liabilities                 $47,859,939  100%   $35,297,627   $ 8,692,242  $ 3,398,434     $ 410,233   $   61,403
                                      ===========  ===    ===========   ===========  ===========     =========   ==========
Interest-earning assets
  more/(less) than 
  interest-costing liabilities        $ 1,664,242         $10,003,631   $(7,902,640) $(2,785,695)    $(301,553)  $2,650,499 
                                      ===========         ===========   ===========  ===========     =========   ==========

Cumulative interest sensitivity gap                       $10,003,631   $ 2,100,991  $  (684,704)    $(986,257)  $1,664,242
                                                          ===========   ===========  ===========     =========   ==========
Percentage of interest-earning
  assets to interest-costing
  liabilities                              103.48%
Percentage of cumulative interest
  sensitivity gap to total assets            3.15%
</TABLE>



<PAGE>
     The Company continually evaluates interest rate risk management 
opportunities, including the use of derivative financial instruments.  
Interest rate swaps and other derivative instruments may be used to manage 
interest rate changes, duration and other credit and market risks.  The 
Company does not hold or issue derivative financial instruments for trading 
purposes.  The Company currently utilizes certain off-balance sheet financial 
instruments, including forward sales of and options to sell loans and MBS, to 
help manage its interest rate exposure with respect to fixed rate loans (or 
loans with certain periods at a fixed rate) in its loan origination pipeline 
and in its portfolio.

     The Securities and Exchange Commission has approved rule amendments to 
clarify and expand existing disclosure requirements for derivative financial 
instruments.  The amendments require enhanced disclosure of accounting 
policies for derivative financial instruments in the footnotes to the 
financial statements.  In addition, the amendments expand existing disclosure 
requirements to include quantitative and qualitative information about market 
risk inherent in market risk sensitive instruments.  The required quantitative 
and qualitative information are to be disclosed outside the financial 
statements and related notes thereto.  As the Company believes that the 
derivative financial instrument disclosures contained within the notes to the 
consolidated financial statements included in its Annual Report on Form 10-K 
for the year 1997 substantially conform with requirements of these amendments, 
no interim period disclosure has been provided herein.

ASSET QUALITY

     NPAS AND POTENTIAL PROBLEM LOANS.  When a borrower fails to make a 
required payment on a loan and does not cure the delinquency promptly, the 
loan is characterized as delinquent.  The procedural steps necessary for 
foreclosure vary from state to state, but generally if the loan is not 
reinstated within certain periods specified by statute and no other workout 
arrangements satisfactory to the lender are entered into, the property 
securing the loan can be acquired by the lender.  Although the Company 
generally relies on the underlying property to satisfy foreclosed loans, in 
certain circumstances and when permitted by law, the Company may seek to 
obtain deficiency judgments against the borrowers.  The Company reviews loans 
for impairment in accordance with SFAS No. 114, "Accounting by Creditors for 
Impairment of a Loan," as amended by SFAS No. 118, "Accounting by Creditors 
for Impairment of a Loan-Income Recognition and Disclosures."  Impaired loans, 
as defined by the Company, include nonaccrual major loans (i.e., multi-family 
and commercial and industrial loans) which are not collectively reviewed for 
impairment, TDRs and other impaired major loans.  Other impaired major loans 
are major loans which are less than 90 days delinquent which the Company 
believes will be collected in full, but which the Company believes it is 
probable will not be collected in accordance with the contractual terms of the 
loans and which may be dependent upon operation and/or sale of the collateral 
property for repayment.


<PAGE>
     The Company's NPAs, TDRs and other impaired major loans, net of related 
specific loss allowances, by type as of the dates indicated were as follows 
(dollars in thousands):
<TABLE>
<CAPTION>
                                               June 30,    December 31,   Increase
                                                 1998          1997      (Decrease)
                                            -------------  ------------  ----------
<S>                                         <C>            <C>           <C>      
Nonaccrual loans:
   Single family                               $420,440       $376,421    $ 44,019 
   Multi-family                                  42,413         20,631      21,782 
   Commercial and industrial real estate         22,817         32,171      (9,354)
   Consumer                                       4,099          3,608         491 
   Business banking                                  41             67         (26)
                                               --------       --------    --------
         Total                                 $489,810       $432,898    $ 56,912
                                               ========       ========    ========

REO:
   Single family                               $121,404       $137,114    $(15,710)
   Multi-family                                  24,464         15,657       8,807
   Commercial and industrial real estate          8,600          9,669      (1,069)
                                               --------       --------    --------
         Total                                 $154,468       $162,440    $ (7,972)
                                               ========       ========    ========
Total NPAs:  
   Single family                               $541,844       $513,535    $ 28,309 
   Multi-family                                  66,877         36,288      30,589 
   Commercial and industrial real estate         31,417         41,840     (10,423)
   Consumer                                       4,099          3,608         491
   Business banking                                  41             67         (26)
                                               --------       --------    --------
         Total                                 $644,278       $595,338    $ 48,940 
                                               ========       ========    ========

TDRs:
   Single family                               $161,883       $162,257    $   (374)
   Multi-family                                  46,241         32,636      13,605 
   Commercial and industrial real estate         54,332         17,406      36,926 
                                               --------       --------    --------
         Total                                 $262,456       $212,299    $ 50,157
                                               ========       ========    ========

Other impaired major loans:
   Multi-family                                $123,064       $107,814    $ 15,250
   Commercial and industrial real estate         21,772         36,816     (15,044)
                                               --------       --------    --------
         Total                                 $144,836       $144,630    $    206
                                               ========       ========    ========
Ratio of NPAs to total assets                      1.22%          1.28%
                                               ========       ========
Ratio of NPAs and TDRs to total assets             1.72%          1.73%
                                               ========       ========
Ratio of allowances for losses
   on loans and REO to NPAs                       73.63%         64.07%
                                               ========       ========
</TABLE>



<PAGE>
     The Company's NPAs, TDRs and other impaired major loans by state at June 
30, 1998 were as follows (in thousands):
<TABLE>
<CAPTION>
                                        NPAs
             -----------------------------------------------------------
                      Real Estate
             -----------------------------
                                                                                     Other
                                Commercial                                          Impaired
              Single    Multi-     and                Business                       Major
              Family    Family  Industrial  Consumer  Banking     Total     TDRs     Loans
             --------  -------  ----------  --------  --------  --------  --------  --------
<S>          <C>       <C>      <C>         <C>       <C>       <C>       <C>       <C>    
California   $415,364  $61,882    $27,246    $3,902     $41     $508,435  $223,948  $132,403
New York       34,610      250      1,239      -          -       36,099    11,243     2,580
Florida        33,284     -          -         -          -       33,284     5,771      -
Texas           8,263      693        369      -          -        9,325       689     1,217
Other          50,323    4,052      2,563       197       -       57,135    20,805     8,636
             --------  -------    -------    ------     ---     --------  --------  --------
             $541,844  $66,877    $31,417    $4,099     $41     $644,278  $262,456  $144,836
             ========  =======    =======    ======     ===     ========  ========  ========
</TABLE>

     Total NPAs were $644.3 million at June 30, 1998, or a ratio of NPAs to 
total assets of 1.22%, an increase of $49.0 million, or 8%, during the first 
six months of 1998 from $595.3 million, or 1.28% of total assets, at December 
31, 1997.  The increase in NPAs at June 30, 1998 is due to loans and REO 
acquired from Coast.

     Single family NPAs were $541.8 million at June 30, 1998, an increase of 
$28.3 million, or 6%, during the first six months of 1998 from $513.5 million 
at December 31, 1997, primarily due to single family NPAs acquired from Coast.  
Multi-family NPAs totaled $66.9 million at June 30, 1998, an increase of $30.6 
million, or 84%, during the first six months of 1998 from $36.3 million at 
December 31, 1997, primarily due to multi-family NPAs acquired from Coast.  
Commercial and industrial real estate NPAs totaled $31.4 million at June 30, 
1998, a decrease of $10.4 million, or 25%, during the first six months of 1998 
from $41.8 million at December 31, 1997, primarily due to the payoff of two 
commercial and industrial loans in California, partially offset by commercial 
and industrial NPAs acquired from Coast.

     TDRs were $262.5 million at June 30, 1998, an increase of $50.2 million, 
or 24%, during the first six months of 1998 from $212.3 million at December 
31, 1997 primarily due to multi-family and commercial and industrial TDRs 
acquired from Coast.

     Other impaired major loans at June 30, 1998 were $144.8 million, an 
increase of $0.2 million, or less than 1%, during the first six months of 1998 
from $144.6 million at December 31, 1997 primarily due to multi-family loans 
acquired from Coast, partially offset by declines in commercial and industrial 
loans of $15.0 million.

     The recorded investment in all impaired loans was as follows (in 
thousands):
<TABLE>
<CAPTION>
                                      June 30, 1998                      December 31, 1997
                              ---------------------------------   ---------------------------------
                                          Allowance                           Allowance
                               Recorded      for         Net       Recorded      for         Net
                              Investment    Losses   Investment   Investment   Losses    Investment
                              ----------  ---------  ----------   ----------  ---------  ----------
<S>                           <C>         <C>        <C>          <C>         <C>        <C>   
With specific allowances       $375,882    $70,650    $305,232     $330,412    $55,392    $275,020
Without specific allowances     141,120       -        141,120      103,352       -        103,352
                               --------    -------    --------     --------    -------    --------
                               $517,002    $70,650    $446,352     $433,764    $55,392    $378,372
                               ========    =======    ========     ========    =======    ========
</TABLE>


<PAGE>
     The Company is continuing its efforts to reduce the amount of its NPAs by 
aggressively pursuing loan delinquencies through the collection, workout and 
foreclosure processes and, if foreclosed, disposing rapidly of the REO.  The 
Company sold $143.2 million of single family REO and $26.9 million of multi-
family and commercial and industrial REO in the first six months of 1998.  In 
the first six months of 1997, the Company sold $215.3 million of single family 
REO and $31.7 million of multi-family and commercial and industrial REO.

     ALLOWANCE FOR LOAN LOSSES.  Management believes the Company's allowance 
for loan losses as determined through periodic analysis of the loan portfolio 
was adequate at June 30, 1998.  The Company's process for evaluating the 
adequacy of the allowance for loan losses includes the identification and 
detailed review of impaired loans, an assessment of the overall quality and 
inherent risk in the loan portfolio, and consideration of loss experience and 
trends in problem loans, as well as current economic conditions and trends.  
Based upon this process, management determines what it considers to be an 
appropriate allowance for loan losses.

     The changes in and a summary by type of the allowance for loan losses are 
as follows (dollars in thousands):
<TABLE>
<CAPTION>
                                            Three Months Ended         Six Months Ended
                                                  June 30,                  June 30,
                                           ---------------------     ---------------------
                                             1998         1997         1998         1997
                                           --------     --------     --------     --------
<S>                                        <C>          <C>          <C>          <C>     
Beginning balance                          $480,749     $387,688     $377,351     $389,135
Allowance for loan losses
  acquired from Coast                          -            -         107,830         -
Provision for loan losses                       784       17,989        8,850       42,212
                                           --------     --------     --------     --------
                                            481,533      405,677      494,031      431,347
                                           --------     --------     --------     --------
Charge-offs:
  Single family                              (9,206)     (20,175)     (19,431)     (44,405)
  Multi-family                               (5,440)      (5,423)     (11,280)     (15,047)
  Commercial and industrial real estate      (1,563)      (1,367)      (1,563)      (1,606)
  Consumer                                   (3,583)        (950)      (6,485)      (1,712)
  Business banking                             (524)        (157)        (852)        (157)
                                           --------     --------     --------     --------
                                            (20,316)     (28,072)     (39,611)     (62,927)
                                           --------     --------     --------     --------
Recoveries:
  Single family                               5,282        8,822        7,965       16,036
  Multi-family                                1,925        1,511        3,004        3,200
  Commercial and industrial real estate       3,451          349        6,461          598
  Business banking                               36         -              61           33
                                           --------     --------     --------     --------
                                             10,694       10,682       17,491       19,867
                                           --------     --------     --------     --------
    Net charge-offs                          (9,622)     (17,390)     (22,120)     (43,060)
                                           --------     --------     --------     --------
Ending balance                             $471,911     $388,287     $471,911     $388,287
                                           ========     ========     ========     ========
Ratio of net charge-offs to average
  loans and MBS outstanding during
  the periods (annualized)                     0.08%        0.15%        0.09%        0.19%
                                               ====         ====         ====         ====
</TABLE>

     The declines in the provision for loan losses and gross charge-offs 
during the second quarter and the first six months of 1998 are due to lower 
levels of the Company's NPAs and delinquent loans, excluding Coast related 
NPAs and delinquent loans.  Approximately $5.2 million of the second quarter 
of 1998 charge-offs were from previously established specific reserves.  The 
continuing improvement in the California economy and California real estate 
market has contributed to the significant improvement in the Company's credit 
quality.


<PAGE>
     The allocation of the Company's allowance for loan losses by loan and MBS 
category and the allocated allowance as a percent of the loan and MBS category 
at the dates indicated are as follows (dollars in thousands):
<TABLE>
<CAPTION>
                                            June 30, 1998        December 31, 1997
                                        ---------------------  ---------------------
                                                   Allowance              Allowance
                                                   as Percent             as Percent
                                                    of Loan                of Loan
                                                    and MBS                and MBS
                                        Allowance   Category   Allowance   Category
                                        ---------  ----------  ---------  ----------
<S>                                     <C>        <C>         <C>        <C>      
Single family                            $206,541     0.58%    $174,459       0.55%
Multi-family                              180,562     1.69      143,977       1.46
Commercial and industrial real estate      62,714     4.48       40,713       3.62
Consumer                                   17,294     1.30       13,402       1.21
Business banking                            4,800     4.90        4,800       7.28
                                         --------              --------
                                         $471,911     0.96     $377,351       0.86
                                         ========              ========
</TABLE>

     The increase in the allowance for loan losses at June 30, 1998 is due 
mainly to the loans acquired from Coast.  The increase in the allocation of 
allowance for loan losses in the multi-family and commercial and industrial 
portfolios is due to the increase in NPAs and TDRs in these portfolios related 
to loans acquired from Coast.  Although the Company believes it has a sound 
basis for its estimate of the appropriate allowance for loan losses, actual 
charge-offs and the level of NPAs incurred in the future are highly dependent 
upon the economies of the areas in which the Company lends and upon future 
events, including natural disasters, such as earthquakes.  Certain localized 
real estate markets in California have recently recorded appreciation in 
values to levels at or near the pre-recession highs of the early 1990's.  
Management believes that the principal risk factor which could potentially 
require an increase in the allowance for loan losses would be the reversal of 
the improvements in these and other California residential markets, 
particularly in Southern California, the Company's primary lending market. 

LIQUIDITY AND CAPITAL RESOURCES

     Liquidity refers to the Company's ability or financial flexibility to 
adjust its future cash flows to meet the demands of depositors and borrowers 
and to fund operations on a timely and cost-effective basis.  Sources of 
liquidity consist primarily of positive cash flows generated from operations, 
the collection of principal payments and prepayments on loans and MBS and 
increases in deposits.  Positive cash flows are also generated through the 
sale of MBS, loans and other assets for cash.  Sources of liquidity may also 
include borrowings from the FHLB, commercial paper and public and private debt 
issuances, borrowings under reverse repurchase agreements, commercial bank 
lines of credit and, under certain conditions, direct borrowings from the 
Federal Reserve System.  The Company actively manages its liquidity needs by 
selecting asset and liability maturity mixes that best meet its projected 
needs and by maintaining the ability to raise additional funds as needed.

     Liquidity as defined by the OTS for Home Savings consists of cash, cash 
equivalents and certain marketable securities which are not committed, pledged 
or required to liquidate specific liabilities.  Regulations of the OTS 
currently require each savings institution to maintain an average daily 
balance of liquid assets in each calendar quarter of not less than four 
percent of either (1) its liquidity base at the end of the preceding quarter, 
or (2) the average daily balance of its liquidity base during the preceding 
quarter.  Home Savings has elected to calculate its average liquidity ratio 
using the first method.  For June 1998 the average liquidity ratio of Home 
Savings was 7.32%.


<PAGE>
     Each of the Company's sources of liquidity is influenced by various 
uncertainties beyond the control of the Company.  Scheduled loan payments are 
a relatively stable source of funds, while loan prepayments and deposit flows 
vary widely in reaction to market conditions, primarily market interest rates.  
Asset sales are influenced by general market interest rates and other market 
conditions beyond the control of the Company.  The Company's ability to borrow 
at attractive rates is affected by its size, credit rating, the availability 
of acceptable collateral and other market-driven conditions.

     The Company continually evaluates alternate sources of funds and 
maintains and develops diversity and flexibility in the number and character 
of such sources.  The effect of a decline in any one source of funds generally 
can be offset by use of an alternate source, although potentially at a 
different cost to the Company.

     LOANS RECEIVABLE.  During the first six months of 1998 cash of $5.0 
billion was used to fund loans.  Principal payments on loans were $3.8 billion 
for the first six months of 1998, an increase of $2.1 billion from $1.7 
billion for the first six months of 1997.  During the first six months of 1998 
the Company sold loans totaling $2.7 billion.  At June 30, 1998, the Company 
had $638.5 million of loans held for sale.  The loans designated for sale 
included $503.0 million of fixed rate loans, $128.1 million in COFI ARMs and 
$7.4 million of 12 MAT and other Treasury ARMs.  For information regarding the 
Company's loan sales, see "Results of Operations--Noninterest Income--Gain on 
Sales of Loans."

     MBS.  The Company designates certain MBS as available for sale.  At June  
30, 1998, the Company had $9.7 billion of MBS available for sale, comprised of 
$9.4 billion of ARM MBS and $280.2 million of fixed rate MBS.  These MBS had 
an unrealized gain of $226.0 million at June 30, 1998.  The unrealized gain is 
due mainly to temporary market-related conditions and the Company expects no 
significant effect on its future interest income.

     DEPOSITS.  Deposits were $37.4 billion at June 30, 1998, an increase of 
$5.1 billion, or 16%, from $32.3 billion at December 31, 1997, due to the 
acquisition of Coast in February 1998 with $6.4 billion of deposits.  
Excluding this transaction, there was a net deposit outflow of $1.3 billion 
primarily due to maturities of term accounts which have more sensitivity to 
market interest rates than transaction accounts.  Term deposits decreased $2.2 
billion during the first six months of 1998, while transaction accounts 
increased $900.8 million during the same period.  The Company manages its 
borrowings to balance changes in deposits.

     Over the past several years, the Company has focused on enlarging its 
presence and enhancing its market share in its key market of California and 
has recognized that there are markets where the Company cannot economically 
achieve sufficient market share to be an effective competitor.  Such focus 
resulted in, among other things, the sale of the Company's retail deposit 
branch system in New York in 1995, the sale of three retail branches in Texas 
in 1996 and, in 1997, the sale of four retail branches in Arizona and 12 
retail branches in western Florida.  On July 16, 1998, the Company consummated 
the sale of its remaining 27 East Florida branches with deposits of 
approximately $3.2 billion for an after-tax gain of approximately $165 
million.

     At June 30, 1998, 85% of the Company's deposits were in California 
compared to 82% at December 31, 1997.  Excluding the East Florida branches, 
93% of the Company's remaining deposits at June 30, 1998 would have been 
located in California.


<PAGE>
     BORROWINGS.  Borrowings totaled $10.3 billion at June 30, 1998, a 
decrease of $525.0 million, or 5%, during the first six months of 1998 from 
$10.8 billion at December 31, 1997, reflecting declines in FHLB and other 
borrowings of $775.1 million and in securities sold under agreements to 
repurchase of $25.0 million, partially offset by an increase in short-term 
borrowings of $275.1 million.

     In February 1998, the Company issued a medium term note for $100 million 
which will mature on February 21, 2001, bearing an interest rate of 5.88%.

     During the first six months of 1998, medium term notes totaling $205 
million matured.  In April 1998, the Company redeemed all of the $57.5 million 
in 10% Senior Notes which had been issued by Coast.

     CAPITAL.  From January 1, 1998 through January 13, 1998, Ahmanson 
purchased 406,600 shares of its common stock.  Since January 13, 1998, 
Ahmanson has not purchased any of its common stock and on March 17, 1998, 
Ahmanson announced that it was terminating the stock purchase program as a 
result of the proposed merger with Washington Mutual.  On March 2, 1998, the 
Company redeemed at par the entire $195 million of its 8.40% Series C 
Preferred Stock, in accordance with the original terms.

     Stockholders' equity was $3.5 billion at June 30, 1998, an increase of 
$1.1 billion, or 46%, from $2.4 billion at December 31, 1997.  The increase is 
primarily due to the value of common shares issued to acquire Coast in 
February 1998 of approximately $925.1 million, net income of $251.6 million 
and an increase of $103.3 million in the net unrealized gain on securities 
available for sale, partially offset by the redemption of the Series C 
Preferred Stock of $195.0 million, dividends paid to common and preferred 
stockholders of $57.3 million and payments of $24.1 million to purchase the 
Company's common stock.  The net unrealized gain on securities available for 
sale at June 30, 1998 was $134.4 million.

     On July 16, 1998, Ahmanson announced that it will redeem, on September 1, 
1998, its 6% Cumulative Convertible Preferred Stock, Series D, at $51.50 per 
depositary share.  Each depositary share is convertible into 2.05465 shares of 
Ahmanson's common stock at any time prior to the close of business on August 
24, 1998.

     The OTS has adopted regulations that contain a three-part capital 
standard requiring savings institutions to maintain "core" capital of at least 
3% of adjusted total assets, tangible capital of at least 1.5% of adjusted 
total assets and risk-based capital of at least 8% of risk-weighted assets.  
Special rules govern the ability of savings institutions to include in their 
capital computations their investments in subsidiaries engaged in activities 
not permissible for national banks, such as real estate development.  In 
addition, institutions whose exposure to interest-rate risk as determined by 
the OTS is deemed to be above normal may be required to hold additional risk-
based capital.  Home Savings believes it does not have above-normal exposure 
to interest-rate risk.

     At June 30, 1998, Home Savings exceeded the regulatory standards 
required to be considered well-capitalized.  Home Savings' capital amounts 
and ratios at June 30, 1998 were as follows (dollars in thousands):
<TABLE>
<CAPTION>
                                                                             Well-
                                                      Capital             Capitalized
                                                       Amount     Ratio    Standard
                                                    -----------  -------  -----------
<S>                                                 <C>          <C>      <C>     
Tangible capital (to adjusted total assets)          $3,237,366    6.27%      N/A
Core capital (to adjusted total assets)               3,240,251    6.28      5.00%
Core capital (to risk-weighted assets)                3,240,251    9.74      6.00
Total risk-based capital (to risk-weighted assets)    4,104,654   12.34     10.00
</TABLE>


<PAGE>
ACCOUNTING DEVELOPMENTS

     The Company adopted SFAS No. 130, "Reporting Comprehensive Income" as of 
January 1, 1998.  SFAS No. 130 establishes standards for reporting of 
comprehensive income and its components in the financial statements.  SFAS No. 
130 is effective for fiscal years beginning after December 15, 1997.  For 
information regarding comprehensive income, see "Note to the Condensed 
Consolidated Financial Statements."

     The Company adopted SFAS No. 131, "Disclosures About Segments of an 
Enterprise and Related Information" as of January 1, 1998.  SFAS No. 131 
establishes standards to report information about operating segments in annual 
financial statements and requires reporting of selected information about 
operating segments in interim reports to shareholders beginning in 1999.  It 
also establishes standards for related disclosures about products and 
services, geographic areas and major customers.  SFAS No. 131 is effective for 
the Company for its December 31, 1998 financial statements, with comparative 
information for earlier years to be restated.

     The Company adopted SFAS No. 132, "Employers Disclosures About Pensions 
and Other Postretirement Benefits" as of January 1, 1998.  SFAS No. 132 
standardizes the disclosure requirements for pensions and other postretirement 
benefits; requires additional information on changes in the benefit 
obligations and fair values of plan assets; and eliminates certain disclosures 
required by SFAS No. 87, "Employers' Accounting for Pensions," SFAS No. 88, 
"Employers' Accounting for Settlements and Curtailments of Defined Benefit 
Pension Plans and for Termination of Benefits," and SFAS No. 106, "Employers' 
Accounting for Postretirement Benefits Other Than Pensions."  SFAS No. 132 is 
effective for the Company for its December 31, 1998 financial statements, with 
comparative information for earlier years to be restated.

     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative 
Instruments and Hedging Activities."  SFAS No. 133 establishes accounting and 
reporting standards for derivative instruments and for hedging activities.  It 
requires the recognition of all derivatives as either assets or liabilities in 
the statement of financial condition and the measurement of those instruments 
at fair value.  Recognition of changes in fair value will be recognized into 
income or as a component of other comprehensive income depending upon the type 
of the derivative and its related hedge, if any.  SFAS No. 133 is effective 
for the Company beginning January 1, 2000.

TAX CONTINGENCY

     The Company's financial statements do not contain any benefit related to 
the Company's determination that it is entitled to the deduction of the tax 
bases in certain state branching rights when the Company sells its deposit 
branch businesses, thereby abandoning such branching rights in those states.  
The Company's position is that the tax bases result from the tax treatment of 
property received as assistance from the Federal Savings and Loan Insurance 
Corporation ("FSLIC") in conjunction with FSLIC-assisted transactions.  From 
1981 through 1985, the Company acquired thrift institutions in six states 
through FSLIC-assisted transactions.  The Company's position is that 
assistance received from the FSLIC included out-of-state branching rights 
valued at approximately $740 million.  As of June 30, 1998, the Company had 
sold its deposit branching businesses and abandoned such branching rights in 
four of these states, the first of which was Missouri in 1993.  The potential 
tax benefit related to these abandonments as of June 30, 1998 could approach 
$167 million.  The potential deferred tax benefit related to branching rights 
not abandoned could approach $130 million. 


<PAGE>
     The Internal Revenue Service ("IRS") is currently examining the Company's 
federal income tax returns for the years 1990 through 1993, including the 
Company's proposed adjustment related to the abandonment of its Missouri 
branching rights.  The IRS field team recently informed the Company of their 
intent to request a Technical Advice Memorandum from the IRS National Office 
regarding the Missouri branching rights.  The Company, after consultation with 
its tax advisors, believes that its position with respect to the tax treatment 
of these rights is the correct interpretation under the tax and regulatory 
law.  However, the Company also believes that its position has never been 
directly addressed by any judicial or administrative authority.  It is 
therefore impossible to predict either the IRS response to the Company's 
position, or if the IRS contests the Company's position, the ultimate outcome 
of litigation that the Company is prepared to pursue.  Because of these 
uncertainties, the Company cannot presently determine if any of the above 
described tax benefits will ever be realized and there is no assurance to that 
effect.  Therefore, in accordance with generally accepted accounting 
principles, the Company does not believe it is appropriate at this time to 
reflect these tax benefits in its financial statements.  This position will be 
reviewed by the Company from time to time as these uncertainties are resolved.

HOME SAVINGS GOODWILL LITIGATION

     On August 9, 1989, the Financial Institutions Reform, Recovery and 
Enforcement Act ("FIRREA") was enacted.  Among other things, FIRREA raised the 
minimum capital requirements for savings institutions and required a phase-out 
of the amount of supervisory goodwill which could be included in satisfying 
certain regulatory capital requirements.  The exclusion of supervisory 
goodwill from regulatory capital led many savings institutions to either 
replace the lost capital by issuing new qualifying debt or equity securities 
or reduce assets.  On August 31, 1989, Home Savings had supervisory goodwill 
totaling $572.0 million resulting from its prior acquisitions of 18 savings 
institutions in Florida, Missouri, Texas, Illinois, New York and Ohio.  In 
September 1992, Home Savings filed a lawsuit against the U.S. government for 
unspecified damages involving supervisory goodwill related to its acquisitions 
of troubled savings institutions from 1981 to 1988.

     In March 1998, the U.S. government conceded that Home Savings had 
contracts with the U.S. government and that the U.S. government took actions 
that were inconsistent with those contracts.  These contracts relate to Home 
Savings' purchase of troubled savings institutions in Florida, Missouri, Texas 
and Illinois and the purchase of Century Federal Savings of New York, with 
associated unamortized supervisory goodwill of $374.8 million as of August 31, 
1989.  The government denied both the existence of additional contracts and 
any action inconsistent with a contract in connection with Home Savings' 
purchase of savings institutions in Ohio and The Bowery Savings Bank of New 
York, with associated unamortized supervisory goodwill of $197.2 million as of 
August 31, 1989.

     The U.S. government's response represents a concession of liability and 
is not a concession that Home Savings was damaged by the U.S. government's 
breach of contract.  In addition, there has been no determination as to the 
amount of damages that Home Savings may have sustained as a result of the 
breach of contract.  Home Savings is continuing to pursue its case with 
respect to supervisory goodwill claims including those for The Bowery Savings 
Bank and savings institutions in Ohio.

     If the proposed merger with Washington Mutual is consummated, Home 
Savings' rights in its litigation against the U.S. government will become an 
asset of Washington Mutual.


<PAGE>
YEAR 2000

     Many computer systems, including most of those used by the Company, 
identify dates using only the last two digits of the year.  These systems are 
unable to distinguish between dates in the year 2000 and dates in the year 
1900.  That inability (referred to as the "Year 2000 issue"), if not 
addressed, could cause these systems to fail or provide incorrect information 
after December 31, 1999 or when using dates after December 31, 1999.  This in 
turn could have a material adverse impact on the Company and its ability to 
process customer transactions or provide customer services.

     The Company has implemented a process for identifying, prioritizing and 
modifying or replacing systems that may be affected by the Year 2000 issue.  
The Company is also monitoring the adequacy of the processes and progress of 
third party vendors of systems that may be affected by the Year 2000 issue.  
While the Company believes its process is designed to be successful, because 
of the complexity of the Year 2000 issue, it is possible that the Company's 
efforts or those of third party vendors will not be satisfactorily completed 
in a timely fashion.  In addition, the Company interacts with a number of 
other entities, including government entities.  The failure of these entities 
to address the Year 2000 issue could adversely affect the Company.

     The Company currently estimates that its Year 2000 project, including 
costs incurred to date and through the year 2000, may cost approximately $45 
million.  These costs include estimates for employee compensation on the 
project team, consultants, hardware and software lease expense and 
depreciation of equipment purchased as part of the project.  Year 2000 costs 
are expensed as incurred.  Approximately $5.2 million was expensed during the 
second quarter of 1998 and $16.8 million for the project in total through the 
first six months of 1998.

     As the Company progresses in addressing the Year 2000 issue, estimates of 
costs could change, including as a result of the failure of third party 
vendors to address the Year 2000 issue in a timely fashion.  However, the 
Company's estimated Year 2000 expenses are not expected to result in a dollar 
for dollar increase in the Company's overall information systems expenditures  
because the Company is likely to initiate fewer other major systems projects 
during the pendency of the Year 2000 project.



<PAGE>
                          PART II.  OTHER INFORMATION

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.

      (a)  Exhibits.

           11  Statement of Computation of Income per Share.

           27  Financial Data Schedule. *

      (b)  Reports on Form 8-K.

           Date of Report    Items Reported

           April 22, 1998    ITEM 5.  OTHER EVENTS.

                             On April 22, 1998, H. F. Ahmanson & Company
                             (the "Registrant") issued a press release
                             reporting its results of operations during the
                             quarter ended March 31, 1998.

                             ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.

                             (c)  Exhibits.

                             99.1  Press release dated April 22, 1998
                             reporting results of operations during the
                             quarter ended March 31, 1998.

           April 23, 1998    ITEM 5.  OTHER EVENTS.

                             On February 13, 1998, H. F. Ahmanson & Company
                             ("Ahmanson") consummated a merger with Coast
                             Savings Financial, Inc.  ("Coast").  Ahmanson is
                             filing the consolidated statement of financial
                             condition of Coast and its subsidiaries as of
                             December 31, 1997 and 1996 and the related
                             consolidated statements of operations,
                             stockholders' equity and cash flows for each of
                             the years in the three-year period ended
                             December 31, 1997 and the accompanying notes.

                             ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.

                             (c)  Exhibits.

                             23  Consent of KPMG Peat Marwick LLP.

                             99  Consolidated statements of financial
                             condition of Coast and its subsidiaries as of
                             December 31, 1997 and 1996 and related
                             consolidated statements of operations,
                             stockholders' equity and cash flows for each of
                             the years in the three-year period ended December
                             31, 1997 and the accompanying notes.







*  Filed electronically with the Securities and Exchange Commission.


<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.

  

Date:  August 13, 1998               H. F. Ahmanson & Company



                                         /s/  Kevin M. Twomey
                                     -------------------------------
                                     Kevin M. Twomey
                                     Vice Chairman of the Board of
                                     Directors and Chief Financial
                                     Officer
                                     (Authorized Signer)



                                         /s/  George Miranda
                                     -------------------------------
                                     George Miranda
                                     First Vice President and
                                     Principal Accounting Officer








<PAGE>
                                EXHIBIT INDEX


     Exhibit                                                     Sequentially
     Number                      Description                     Numbered Page
     -------                     -----------                     -------------

       11        Statement of Computation of Income per Share.         40

       27        Financial Data Schedule.                               *



















































*  Filed electronically with the Securities and Exchange Commission.


<PAGE>