GREAT WESTERN FINANCIAL CORP, 10-Q, 1995-08-14

GREAT WESTERN FINANCIAL CORP
10-Q, 1995-08-14
SAVINGS INSTITUTION, FEDERALLY CHARTERED

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<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549 - 1004
FORM 10-Q

(Mark One)

/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1995

/ / 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 1-4075

GREAT WESTERN FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware 95-1913457
(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)

9200 Oakdale Avenue, Chatsworth, California 91311
(Address of principal executive offices) (Zip Code)

(818) 775-3411
(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed
since last report.)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the
Issuer's classes of common stock, as of July 31, 1995:
135,918,207
<PAGE>
<PAGE>

GREAT WESTERN FINANCIAL CORPORATION

TABLE OF CONTENTS

Page
----

Part I. Financial Information

Item 1. Financial Statements

Consolidated Condensed Statement of Financial
Condition - June 30, 1995, December 31, 1994
and June 30, 1994 4

Consolidated Condensed Statement of Operations -
Three Months and Six Months Ended June 30, 1995
and 1994 5

Consolidated Condensed Statement of Cash Flows -
Three Months and Six Months Ended June 30, 1995
and 1994 6

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations for the
Three Months and Six Months Ended June 30, 1995 8

Part II. Other Information

Item 4. Submission of Matters to a Vote of Security Holders 38

Item 5. Other Information 38

Item 6. Exhibits and Reports on Form 8-K 39

<PAGE>
<PAGE>
GREAT WESTERN FINANCIAL CORPORATION

PART I - FINANCIAL INFORMATION
------------------------------

PERSONS FOR WHOM THE INFORMATION IS TO BE GIVEN

The accompanying financial information is filed for the Registrant, Great
Western Financial Corporation, and its subsidiaries comprising a savings bank
and companies engaged in consumer lending, mortgage banking, securities
operations and certain other financial services ("GWFC" or "the Company").

PRESENTATION OF FINANCIAL INFORMATION

The financial information has been prepared in conformity with the accounting
principles or practices reflected in the financial statements included in the
Annual Report filed with the Commission for the year ended December 31, 1994.
The Registrant adopted Statement of Financial Accounting Standards No. 122,
"Accounting for Mortgage Servicing Rights" ("FAS 122") as of April 1, 1995.
FAS 122 requires the capitalization of servicing rights for loans originated
with the intent to sell or securitize such loans. The information further
reflects all adjustments which are, in the opinion of management, of a normal
recurring nature and necessary for a fair presentation of the results for the
interim periods.
<PAGE>
<PAGE>
Item 1. Financial Statements

GREAT WESTERN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL CONDITION
<TABLE>
<CAPTION>

June 30 December 31 June 30
Dollars in thousands 1995 1994 1994
------- ----------- -------
<S> <C> <C> <C>
ASSETS
Cash and securities
Cash $ 813,755 $ 983,440 $ 815,269
Certificates of deposit, repurchase agreements
and federal funds 312,125 165,125 255,125
Securities available for sale 996,769 917,095 501,114
----------- ----------- -----------
2,122,649 2,065,660 1,571,508
Mortgage-backed securities held to maturity
(fair value $8,166,765, $6,211,731 and $995,966) 8,053,898 6,335,104 1,014,720
Mortgage-backed securities available for
sale 2,827,602 2,934,503 2,266,584
----------- ----------- -----------
10,881,500 9,269,607 3,281,304
Loans receivable, less reserve for
estimated losses 28,851,335 28,079,620 31,133,601
Loans receivable available for sale 389,416 298,748 264,446
----------- ----------- -----------
29,240,751 28,378,368 31,398,047

Real estate available for sale or
development, net 195,771 256,967 293,129
Interest receivable 281,281 230,925 218,841
Investment in Federal Home Loan Banks 344,633 306,041 308,284
Premises and equipment, at cost,
less accumulated depreciation 604,447 616,116 632,786
Other assets 501,809 730,574 394,536
Intangibles arising from acquisitions 343,892 363,999 408,149
----------- ----------- -----------
$44,516,733 $42,218,257 $38,506,584
=========== =========== ===========
LIABILITIES
Customer accounts $29,246,964 $28,700,947 $30,208,548
Securities sold under agreements to repurchase 7,429,298 6,299,055 1,997,795
Short-term borrowings 1,879,244 1,210,461 477,793
Other borrowings 2,355,403 2,611,144 2,479,767
Other liabilities and accrued expenses 711,691 716,741 663,344
Taxes on income, principally deferred 283,658 196,123 254,612
STOCKHOLDERS' EQUITY 2,610,475 2,483,786 2,424,725
----------- ----------- -----------
$44,516,733 $42,218,257 $38,506,584
=========== =========== ===========
</TABLE>

Unaudited
<PAGE>
<PAGE>
GREAT WESTERN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------------ -------------------------
Dollars in thousands, except per share 1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME
Real estate loans $490,648 $482,122 $ 956,175 $ 963,631
Mortgage-backed securities 195,067 44,371 366,884 89,012
Consumer loans 99,063 94,908 196,488 185,749
Securities 13,250 5,105 25,833 11,719
Other 9,633 7,297 19,347 13,684
-------- -------- ---------- ----------
807,661 633,803 1,564,727 1,263,795
INTEREST EXPENSE
Customer accounts 307,819 229,578 586,735 461,717
Borrowings
Short-term 136,523 12,602 252,209 18,367
Long-term 52,722 53,900 108,094 111,744
-------- -------- ---------- ----------
497,064 296,080 947,038 591,828
-------- -------- ---------- ----------
NET INTEREST INCOME 310,597 337,723 617,689 671,967
Provision for loan losses 43,200 52,900 90,800 104,700
-------- -------- ---------- ----------
Net interest income after provision
for loan losses 267,397 284,823 526,889 567,267

Other operating income
Real estate services
Loan fees 5,705 7,707 11,904 15,518
Mortgage banking
Gain on mortgage sales 1,800 3,508 3,060 5,796
Servicing 13,876 13,326 27,674 27,014
-------- -------- ---------- ----------
21,381 24,541 42,638 48,328
Retail banking
Banking fees 37,862 35,732 73,890 68,662
Securities operations 4,286 11,213 8,253 21,789
-------- -------- ---------- ----------
42,148 46,945 82,143 90,451
Net gain on securities and investments 2,411 592 2,877 2,854
Net insurance operations 7,146 7,571 13,873 13,995
Other 1,771 1,729 3,507 3,215
-------- -------- ---------- ----------
Total other operating income 74,857 81,378 145,038 158,843
Noninterest expense
Operating and administrative
Salaries and related personnel 114,630 117,471 231,508 239,379
Premises and occupancy 46,134 53,079 92,261 104,641
FDIC insurance premium 14,355 19,147 32,994 38,294
Advertising and promotion 9,012 10,093 17,141 19,396
Other 63,815 47,290 123,921 97,696
-------- -------- ---------- ----------
247,946 247,080 497,825 499,406
Amortization of intangibles 10,089 11,765 20,108 23,529
Real estate operations 983 6,301 (2,726) 14,945
Provision for real estate losses - 6,000 1,500 9,000
-------- -------- ---------- ----------
Total noninterest expense 259,018 271,146 516,707 546,880
-------- -------- ---------- ----------
EARNINGS BEFORE TAXES 83,236 95,055 155,220 179,230
Taxes on income 32,800 39,200 61,300 73,900
-------- -------- ---------- ----------
NET EARNINGS $ 50,436 $ 55,855 $ 93,920 $ 105,330
======== ======== ========== ==========
Average common shares outstanding
Without dilution 136,746,783 133,515,722 135,876,365 133,444,187
Fully diluted 136,746,783 140,019,059 136,242,751 139,879,510
Earnings per share based on average
common shares outstanding
Primary $.32 $.38 $.60 $.70
Fully diluted .32 .38 .60 .70
Cash dividend per share .23 .23 .46 .46
</TABLE>
[FN]
Unaudited<PAGE>
<PAGE>
GREAT WESTERN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
-------------------------- -------------------------
Dollars in thousands 1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 50,436 $ 55,855 $ 93,920 $ 105,330
Noncash adjustments to net earnings:
Provision for loan losses 43,200 52,900 90,800 104,700
Provision for real estate losses - 6,000 1,500 9,000
Depreciation and amortization 18,899 20,215 38,492 39,269
Amortization of intangibles 10,089 11,765 20,108 23,529
Income taxes 25,289 24,357 35,616 99,035
Capitalized interest (17,479) (1,061) (23,114) (3,319)
Net change in accrued interest (2,576) 10,338 (45,316) (10,745)
Other 21,187 285,665 197,517 181,629
----------- ------------ ----------- -----------
149,045 466,034 409,523 548,428
----------- ------------ ----------- -----------
Sales and repayments of loans
receivable available for sale 137,250 334,023 182,867 1,042,236
Originations and purchases of loans
receivable available for sale (168,582) (172,236) (264,114) (714,783)
----------- ----------- ----------- -----------
(31,332) 161,787 (81,247) 327,453
----------- ----------- ----------- -----------
Net cash provided by operating
activities 117,713 627,821 328,276 875,881
----------- ----------- ----------- -----------
FINANCING ACTIVITIES
Customer accounts
Net (decrease) in transaction accounts (217,000) (263,377) (894,551) (9,253)
Net increase (decrease) in term
accounts 163,461 (594,231) 1,440,568 (1,313,762)
----------- ----------- ----------- -----------
(53,539) (857,608) 546,017 (1,323,015)
Borrowings
Repayments of long-term debt (175,279) (62,197) (255,741) (323,091)
Net change in securities sold
under agreements to repurchase 464,388 1,997,795 1,130,243 1,997,795
Net change in short-term debt 538,944 7,734 668,783 (198,690)
----------- ----------- ----------- -----------
828,053 1,943,332 1,543,285 1,476,014
Other financing activity
Proceeds from issuance of
common stock 18,949 4,183 29,980 10,413
Cash dividends paid (37,335) (36,840) (74,482) (73,612)
----------- ---------- ----------- -----------
(18,386) (32,657) (44,502) (63,199)
----------- ---------- ----------- -----------
Net cash provided by financing activities 756,128 1,053,067 2,044,800 89,800
----------- ---------- ----------- -----------

/TABLE
<PAGE>
<PAGE>
GREAT WESTERN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
-------------------------- -------------------------
Dollars in thousands 1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTING ACTIVITIES
Investment securities
Proceeds from maturities $ 445,316 $ 204,114 $ 687,416 $ 694,832
Purchases of securities (442,611) (213,869) (745,110) (337,073)
----------- ----------- ----------- -----------
2,705 (9,755) (57,694) 357,759
Lending
Loans originated for investment (2,031,146) (2,216,309) (4,844,476) (3,655,640)
Purchases of mortgage-backed securities - (530,974) - (581,287)
Payments 1,267,964 1,663,446 2,419,837 3,258,331
Repurchases (27,665) (459,329) (51,659) (479,605)
Other 6,363 (8,741) 11,038 6,232
----------- ----------- ----------- -----------
(784,484) (1,551,907) (2,465,260) (1,451,969)
Other investing activity
Purchases and sales of premises
and equipment, net (19,936) (21,072) (42,575) (34,106)
Sales of real estate 59,398 125,220 175,429 269,807
Net change in investment in
FHLB stock (2,495) 36 (38,592) (932)
Other 39,913 (4,962) 32,931 (11,552)
----------- ----------- ----------- -----------
76,880 99,222 127,193 223,217
----------- ----------- ----------- -----------
Net cash (used in) investing activities (704,899) (1,462,440) (2,395,761) (870,993)
----------- ----------- ----------- -----------
Net increase (decrease) in cash and
cash equivalents 168,942 218,448 (22,685) 94,688
Cash and cash equivalents at beginning
of period 956,938 851,946 1,148,565 975,706
----------- ----------- ----------- -----------
Cash and cash equivalents at end of period $ 1,125,880 $ 1,070,394 $ 1,125,880 $ 1,070,394
=========== =========== =========== ===========

SUPPLEMENTAL CASH FLOW DISCLOSURE
Cash paid for
Interest on deposits $ 295,199 $ 230,003 $ 573,721 $ 463,280
Interest on borrowings 181,638 54,251 368,277 135,442
Income taxes 6,914 15,404 23,274 25,784
Noncash investing activities
Loans transferred to foreclosed
real estate $ 106,143 $ 157,574 $ 213,888 $ 251,160
Loans originated to finance the sale
of real estate 18,940 23,030 65,361 41,779
Loans originated to refinance existing loans 52,618 176,598 109,012 354,877
Loans exchanged for mortgage-backed
securities - - 1,997,585 -

</TABLE>
[FN]
Unaudited
<PAGE>
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 1995

Great Western Financial Corporation reported net earnings of $50.4
million, or $.32 per share, in the 1995 second quarter compared with earnings
of $43.5 million, or $.28 per share, in the 1995 first quarter and $55.9
million, or $.38 per share, in the 1994 second quarter. For the six months
ended June 30, 1995, net earnings were $93.9 million, or $.60 per share,
compared with $105 million, or $.70 per share, for the same period a year
ago.

Provisions for loan and real estate losses during the 1995 second
quarter were $43.2 million compared with $49.1 million in the first quarter
of 1995 and $58.9 million in the second quarter of 1994 as credit quality
continued to show steady improvement. Provisions for loan and real estate
losses during the first six months of 1995 and 1994 were $92.3 million and
$114 million, respectively. The decrease in loan and real estate loss
provisions reflects a slower rate of deterioration in the real estate market
and a declining level of nonperforming real estate loans.

<PAGE>
<PAGE>
HIGHLIGHTS (Dollars in thousands, except per share)
<TABLE>
<CAPTION>

For the three months ended
June 30 1995 1994
-------------------------- ---- ----
<S> <C> <C>
Net interest income $ 310,597 $ 337,723
Net earnings 50,436 55,855
Fully diluted earnings per common share $.32 $.38
New loan volume 2,271,106 2,588,173
(Decrease) in customer accounts (53,539) (857,608)
Mortgage sales 102,825 315,833

Interest spread
Yield on interest earning assets 7.72% 7.15%
Cost of interest bearing liabilities 4.89 3.44
----- -----
Interest spread 2.83% 3.71%
===== =====
For the six months ended
June 30
------------------------
Net interest income $ 617,689 $ 671,967
Net earnings 93,920 105,330
Fully diluted earnings per common share $.60 $.70
New loan volume 5,282,783 4,767,079
Increase (decrease) in customer accounts 546,017 (1,323,015)
Mortgage sales 122,103 987,199

Interest spread
Yield on interest earning assets 7.61% 7.12%
Cost of interest bearing liabilities 4.74 3.43
----- -----
Interest spread 2.87% 3.69%
===== =====
At June 30
----------
Total assets $44,516,733 $38,506,584
Stockholders' equity 2,610,475 2,424,725
Stockholders' equity per common share $17.04 $15.99

</TABLE>

The Company's core business showed improvement in the second quarter
of 1995 compared to first quarter of 1995. Net interest income for the
second quarter of 1995 increased to $311 million from the $307 million in the
first quarter of 1995 and compared with $338 million in the second quarter
of 1994. While interest earning asset levels increased significantly, the
interest spread in the second quarter of 1995 decreased compared with both
the 1995 first quarter and the 1994 second quarter. The interest spread is
expected to widen if interest rates stabilize or decline.<PAGE>
<PAGE>

The following summarizes the contribution to pretax income from the
Company's principal business units:

Three Months Ended Six Months Ended
June 30 June 30
------------------- ---------------------
(Dollars in thousands) 1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Banking operations $56,101 $70,052 $104,185 $129,154
Consumer finance group 27,135 25,003 51,035 50,076
------- ------- -------- --------
Pretax earnings 83,236 95,055 155,220 179,230
Taxes on income 32,800 39,200 61,300 73,900
------- ------- -------- --------
Net earnings $50,436 $55,855 $ 93,920 $105,330
======= ======= ======== ========
</TABLE>

ADOPTION OF RECENTLY ISSUED ACCOUNTING STANDARD

The Company adopted Statement of Financial Accounting Standards No.
122, "Accounting for Mortgage Servicing Rights" ("FAS 122") as of April 1,
1995. FAS 122, an amendment to Statement of Financial Accounting Standards
No. 65, "Accounting for Certain Mortgage Banking Activities," requires an
entity that originates or purchases loans with the intent of selling or
securitizing such loans to capitalize the mortgage servicing rights. The
value of these servicing rights is based on the assumption that a normal
servicing fee will be received for the estimated life of the loans. The
adoption of FAS 122 did not have a material effect on the Company's financial
condition or results of operations for the second quarter of 1995.

FAS 122 also requires that all capitalized mortgage servicing rights
be measured for impairment. Impairment is measured by stratifying the
underlying loans based on one or more predominant risk characteristics.
Impairment is recognized through a valuation allowance.

INTEREST EARNING ASSETS

Interest earning assets comprise real estate loans and mortgage-backed
securities ("mortgages"), consumer finance loans and marketable securities.
The composition of interest earning assets at June 30, 1995 and June 30, 1994
follows:

<TABLE>
<CAPTION>
June 30
---------------------------------
1995 1994
-------------- --------------
(Dollars in millions) Amount % Amount %
------ --- ------ ---

<S> <C> <C> <C> <C>
Loans receivable
Real estate
Residential
Single-family $24,156 57% $26,515 73%
Apartments 1,670 4 1,736 5
Commercial and other 1,418 3 1,542 4
Consumer finance 2,004 5 1,860 5
Other 476 1 380 1
------- --- ------- ---
29,724 70 32,033 88
Mortgage-backed securities 10,903 26 3,288 9
Securities 1,249 3 697 2
Investment in FHLB stock 345 1 308 1
------- --- ------- ---
$42,221 100% $36,326 100%
======= === ======= ===
</TABLE>

Interest earning assets, primarily single-family mortgages, increased
$823 million during the 1995 second quarter and $1.2 billion during the 1994
second quarter due to a shift in the mix of single-family loan originations
toward the Adjustable Rate Mortgage ("ARM"). ARMs are held in the Company's
portfolio, whereas fixed-rate loans are sold shortly after origination.
Since September 1994, the Company has swapped $7.5 billion of single-family
residential ARM loans for mortgage-backed securities to provide collateral
for borrowings. These securities are recorded in the Company's held-to-
maturity portfolio and are subject to full credit recourse. During the first
six months of 1995, the Company swapped $2 billion of single-family ARMs.

The Company repurchases delinquent loans which were sold with recourse.
Repurchased loans totaled $51.7 million in the six months ended June 30, 1995
compared with $480 million in the six months ended June 30, 1994 which
included $437 million of loans repurchased for investment.

Commercial real estate loans continued to decrease as a result of the
Company's decision in 1987 to discontinue commercial real estate lending
except to finance the sale of foreclosed properties.
<PAGE>
<PAGE>

The ARM for single-family residential properties ("SFRs") is the
primary lending product held for investment. Approximately 78% of loans in
the portfolio were indexed to the 11th District Federal Home Loan Bank of San
Francisco ("FHLB") Cost of Funds Index ("COFI") at June 30, 1995. The
Company also originates ARM products which are indexed to one-year Treasury
bills, the prime rate and the Federal Cost of Funds Index ("FCOFI"). The
FCOFI is a combination of the average interest rate on the combined
marketable Treasury bills and the average interest rate on the combined
marketable Treasury notes. In March 1995, the Company introduced a new
product, the London Interbank Offered Rate ("LIBOR") Annual Monthly Average
("LAMA") ARM. The LAMA ARM is indexed to a 12 month average of the Federal
National Mortgage Association ("FNMA") One Month LIBOR. The FCOFI and LAMA
ARMs are similar to the COFI ARM product with respect to interest-rate caps
and payment changes. At June 30, 1995, ARMs comprised 95.4% of the mortgage
portfolio. A significant portion of the ARM portfolio is subject to lifetime
interest-rate caps and floors as well as periodic interest-rate caps. At
June 30, 1995, $1.7 billion of ARMs with an average yield of 7.30% had
reached their periodic cap rate. Without the cap, the average yield on these
loans would have been 7.66%. Periodic interest-rate caps are generally in
effect for three years. At June 30, 1995, $230 million of ARMs with an
average yield of 8.53% had reached their floor rate. Without the floor, the
average yield on these loans would have been 7.91%. The benefit to interest
income from real estate loans which have reached their floor interest rate
was approximately $4.7 million for the six months ended June 30, 1995
compared with $33.7 million in the same period of last year.

A significant source of loan originations includes wholesale brokers
and a network of correspondent relationships in which the Company purchases
loans originated by unaffiliated mortgage lenders. In the second quarter of
1995, third party originations were $442 million, or 26.0% of the new real
estate loans compared with $1.1 billion, or 43.1% of new real estate loans
in the first quarter of 1995.

The composition of new loan volume was as follows:

<TABLE>
<CAPTION>
Three Months Ended
---------------------------- Six Months Ended
June 30
June 30 March 31 June 30 ----------------
(Dollars in millions) 1995 1995 1994 1995 1994
------- -------- ------- ---- ----
<S> <C> <C> <C> <C> <C>

Real estate loans $1,700 $2,500 $2,035 $4,200 $3,706
Consumer loans 571 512 553 1,083 1,061
------ ------ ------ ------ ------
Total new loan volume $2,271 $3,012 $2,588 $5,283 $4,767
====== ====== ====== ====== ======
/TABLE
<PAGE>
<PAGE>

The composition of real estate loan originations by type was as follows:

Three Months Ended Six Months Ended
---------------------------- June 30
June 30 March 31 June 30 ----------------
1995 1995 1994 1995 1994
------- -------- ------- ---- ----
<S> <C> <C> <C> <C> <C>
ARM
COFI 55% 94% 74% 78% 64%
LAMA 31 - - 13 -
FCOFI 1 1 1 1 2
T-Bill - 1 12 - 11
Other 3 1 3 2 2
--- --- --- --- ---
Total ARM 90 97 90 94 79

Fixed rate 10 3 10 6 21
--- --- --- --- ---
100% 100% 100% 100% 100%
=== === === === ===
Refinances, included above 32% 32% 45% 32% 53%
=== === === === ===

</TABLE>

Fixed-rate lending, originated exclusively for sale, is negatively
influenced by a rising interest-rate environment. The portfolio of fixed-
rate loans designated as available for sale has been recorded at the lower
of cost or fair value. The Company sells loans forward into the secondary
market and, as fixed-rate commitments increase to a significant level,
purchases short-term hedge contracts for the commitment period to protect
against rate fluctuations on its commitments to fund fixed-rate loans
originated for sale. Hedge contracts are recorded at cost. At June 30,
1995, there were no open hedge contracts due to the low level of fixed-rate
commitments.

During the second quarter of 1995, ARMs comprised 90% of total real
estate loan originations compared with 90% in the same period of 1994 and 97%
for the first quarter of 1995. COFI ARMs were the primary adjustable rate
offering in the first six months of 1995 and 1994. The ARM differential over
the appropriate indices on new ARMs was 2.56% in the second quarter of 1995
compared with 2.57% a year ago. The ARM differential on the total ARM real
estate loan portfolio was 2.48% at June 30, 1995 and 2.42% at June 30, 1994.
Currently, interest rates on new real estate loans favor adjustable rate
products. If interest rates decline, it is expected that the demand for
fixed-rate loans would increase.
<PAGE>
<PAGE>

The cost of funds for Great Western Bank, a Federal Savings Bank
("GWB"), relative to COFI and FCOFI, is shown as follows:

<TABLE>
<CAPTION>
GWB Cost of
GWB Funds Less Than
Cost of ---------------
Funds COFI FCOFI COFI FCOFI
------- ---- ----- ---- -----
<S> <C> <C> <C> <C> <C>

June 30, 1995 4.815% 5.179% 6.352% .364% 1.537%
March 31, 1995 4.580 5.007 6.336 .427 1.756
December 31, 1994 4.019 4.589 5.971 .570 1.952
June 30, 1994 3.263 3.804 5.238 .541 1.975

</TABLE>

The contractual maturities of all loans receivable and mortgage-backed
securities as of June 30, 1995 follow:

Mortgage-Backed
Real Estate Loans Securities
----------------- ---------------
Fixed Fixed
(Dollars in millions) ARM Rate ARM Rate Consumer Total
--- ----- --- ----- -------- -----

<S> <C> <C> <C> <C> <C> <C>
One year or less $ 383 $ 46 $ 113 $314 $ 770 $ 1,626
Over one to two years 552 43 122 83 542 1,342
Over two to three years 755 56 131 26 389 1,357
Over three to five years 1,237 148 291 42 169 1,887
Over five to ten years 3,289 428 919 112 459 5,207
Over ten to fifteen years 4,168 140 1,292 56 149 5,805
Over fifteen years 15,754 245 7,388 14 2 23,403
------- ------ ------- ---- ------ -------
$26,138 $1,106 $10,256 $647 $2,480 $40,627
======= ====== ======= ==== ====== =======
/TABLE
<PAGE>
<PAGE>

INTEREST BEARING LIABILITIES

The composition of interest bearing liabilities at June 30, 1995 and
June 30, 1994 follows:

<TABLE>
<CAPTION>
June 30
-------------------------------
1995 1994
------------- -------------
(Dollars in millions) Amount % Amount %
------ --- ------ ---
<S> <C> <C> <C> <C>
Customer accounts
Retail accounts
Term $17,596 43% $16,349 47%
Transaction 11,086 27 13,408 38
Wholesale accounts 565 1 452 1
------- --- ------- ---
29,247 71 30,209 86
------- --- ------- ---
Borrowings
FHLB 115 - 229 1
Securities sold under
agreements to repurchase 7,429 19 1,998 5
Other 4,120 10 2,728 8
------- --- ------- ---
11,664 29 4,955 14
------- --- ------- ---
Total interest bearing liabilities $40,911 100% $35,164 100%
======= === ======= ===
</TABLE>

Borrowings at June 30, 1995 increased $6.7 billion compared with the
same period last year, primarily securities sold under agreements to
repurchase. The level of borrowings is influenced by customer account
activity, deposit acquisitions and changes in assets. Customer accounts and
borrowings have been utilized during the first six months of 1995 to fund
asset growth. In 1994, borrowings were the primary source of funds for asset
growth.
<PAGE>
<PAGE>

The following table shows the components of the change in customer
account balances:

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------ -------------------
(Dollars in millions) 1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Transaction
Demand accounts $(105) $ (63) $ (323) $ 117
Money market and other
transaction accounts (145) (190) (604) (86)
Certificates of deposit 200 (576) 1,472 (1,217)
Wholesale accounts (4) (29) 1 (137)
----- ----- ------ -------
$ (54) $(858) $ 546 $(1,323)
===== ===== ====== =======
</TABLE>

The Company concentrates its retail deposit-gathering activity in two
states: California and Florida.

Certificates of deposit have increased in each of the past three
quarters. Customers have shifted from money market accounts as a result of
higher interest rates offered on certificate of deposit accounts with terms
of one year and greater. Prior to the past three quarters, net certificate
of deposit account withdrawals had occurred for the previous eleven quarters.

A summary of customer certificates of deposit by interest rate and
maturity as of June 30, 1995 follows:

90 Days 180 Days One Year Two Years
Within to to to to Three Years June 30 December 31 June 30
(Dollars in millions) 90 Days 180 Days One Year Two Years Three Years and Over 1995 1994 1994
------- -------- -------- --------- ----------- ----------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Under 4% $ 575 $ 131 $ 48 $ 27 $ 3 $ 11 $ 795 $ 3,745 $ 9,859
4 to 6% 2,100 2,833 2,394 1,676 387 363 9,753 9,363 4,948
6 to 8% 772 1,621 1,689 2,456 242 433 7,213 3,197 1,616
Over 8% 6 10 3 185 1 5 210 225 244
------ ------ ------ ------ ---- ---- ------- ------- -------
$3,453 $4,595 $4,134 $4,344 $633 $812 $17,971 $16,530 $16,667
====== ====== ====== ====== ==== ==== ======= ======= =======
$100,000 accounts
included above $ 258 $ 244 $ 70 $ 21 $ 1 $ 5 $ 599 $ 748 $ 882

</TABLE>
<PAGE>
<PAGE>

INTEREST SPREAD AND NET INTEREST INCOME

While average interest earning assets have increased during the past
year, the interest spread has decreased as interest rates have risen. Net
interest income increased to $311 million in the second quarter of 1995
compared with $307 million in the first quarter of 1995. Net interest income
was $338 million in the second quarter of 1994. The Company's net interest
margin, the difference between the yield on interest earning assets (interest
on mortgages, consumer loans and securities) and the cost of funds (interest
on customer accounts and borrowings) was 3.06% at June 30, 1995 compared
with 3.79% a year ago. The interest spread for the 1995 second quarter was
2.83% compared with 2.90% in the first quarter and 3.71% in the 1994 second
quarter. The interest spread for the first six months of 1995 was 2.87%
compared with 3.69% in the same 1994 period. The repricing lag on COFI,
FCOFI and LAMA ARMs reduced the interest spread by approximately 10 basis
points in the second quarter of 1995 and 6 basis points in the second quarter
of 1994. For the first quarter of 1995, the repricing lag accounted for a
decrease of approximately 25 basis points to the interest spread. The
interest spread is compressed in a rising interest rate environment as
increases in COFI and FCOFI, to which most interest earning assets are tied,
lag behind deposit and borrowing rate increases.
<PAGE>
<PAGE>

The following table of net interest income displays the average monthly
balances, interest income and expense and average rates by asset and
liability component for the periods indicated:

Three Months Ended June 30
-------------------------------------------------------
1995 1994
-------------------------- --------------------------
Average Average Average Average
(Dollars in millions) Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Interest earning assets
Securities $ 1,548 $ 23 5.91% $ 962 $ 12 5.16%
Mortgage-backed securities 11,014 195 7.08 3,136 44 5.66
Loans receivable
Real estate 26,830 491 7.32 29,146 483 6.62
Consumer 2,463 99 16.09 2,224 95 17.07
------- ---- ----- ------- ---- -----
Total interest earning assets 41,855 808 7.72 35,468 634 7.15
Other assets 2,321 2,280
------- -------
Total assets $44,176 $37,748
======= =======
Interest bearing liabilities
Customer accounts
Term accounts $17,881 253 5.65 $16,972 172 4.04
Transaction accounts 11,360 55 1.95 13,643 58 1.71
------- ---- ----- ------- ---- -----
29,241 308 4.21 30,615 230 3.00
Borrowings
FHLB 125 2 5.34 242 3 5.15
Other 11,267 187 6.66 3,539 63 7.16
------- ---- ----- ------- ---- -----
Total interest bearing liabilities 40,633 497 4.89 34,396 296 3.44
Other liabilities 967 944
Stockholders' equity 2,576 2,408
------- -------
Total liabilities and equity $44,176 $37,748
======= =======
Interest spread 2.83% 3.71%
==== =====
Effective yield summary
Interest income/interest earning assets $41,855 $808 7.72% $35,468 $634 7.15%
Interest expense/interest earning assets 41,855 497 4.75 35,468 296 3.34
---- ----- ---- -----
Net yield on interest earning assets $311 2.97% $338 3.81%
==== ==== ==== ====
/TABLE
<PAGE>
<PAGE>
<TABLE>
<CAPTION>

Six Months Ended June 30

-------------------------------------------------------
1995 1994
-------------------------- --------------------------
Average Average Average Average
(Dollars in millions) Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Interest earning assets
Securities $ 1,498 $ 45 6.03% $ 1,057 $ 25 4.81%
Mortgage-backed securities 10,533 367 6.97 3,141 89 5.67
Loans receivable
Real estate 26,648 956 7.18 29,106 964 6.62
Consumer 2,450 197 16.04 2,219 186 16.74
------- ------ ----- ------- ------ -----
Total interest earning assets 41,129 1,565 7.61 35,523 1,264 7.12
Other assets 2,319 2,297
------- -------
Total assets $43,448 $37,820
======= =======
Interest bearing liabilities
Customer accounts
Term accounts $17,584 478 5.44 $17,295 341 3.94
Transaction accounts 11,502 109 1.89 13,562 121 1.78
------- ------ ----- ------- ------ -----
29,086 587 4.03 30,857 462 2.99
Borrowings
FHLB 143 4 5.46 262 8 6.03
Other 10,736 356 6.64 3,341 122 7.32
------- ------ ----- ------- ------ -----
Total interest bearing liabilities 39,965 947 4.74 34,460 592 3.43
Other liabilities 943 941
Stockholders' equity 2,540 2,419
------- -------
Total liabilities and equity $43,448 $37,820
======= =======
Interest spread 2.87% 3.69%
===== =====
Effective yield summary
Interest income/interest earning assets $41,129 $1,565 7.61% $35,523 $1,264 7.12%
Interest expense/interest earning assets 41,129 947 4.61 35,523 592 3.33
------ ----- ------ -----
Net yield on interest earning assets $ 618 3.00% $ 672 3.79%
====== ===== ====== =====

</TABLE>

The average balance of loans receivable above includes nonaccrual loans
and therefore the interest income and average rate, as presented, are
affected by the loss of interest on such loans. Interest foregone on
nonaccrual loans that were nonperforming declined to $10.2 million for the
quarter ended June 30, 1995 compared with $12.4 million for the quarter ended
June 30, 1994. For the first six months of 1995 and 1994, nonaccrual
interest was $19.3 million and $28.3 million, respectively.

ASSET LIABILITY MANAGEMENT

The Company monitors its asset and liability structure and interest-
rate/ maturity risks on a regular basis. In this process, consideration is
given to interest-rate trends and funding requirements. ARMs comprised
approximately 96% of the real estate loan portfolio at both June 30, 1995 and
June 30, 1994.

At June 30, 1995, mortgages totaling $2.9 billion were available for
sale, primarily mortgage-backed securities. Real estate loans available for
sale are valued at the lower of cost or fair value, generally on an
individual loan basis. As of June 30, 1995 and 1994, real estate loans
available for sale, all fixed rate, were $104 million and $79 million,
respectively. The increase in loans available for sale compared with the
same period a year ago resulted from higher fixed-rate loan originations late
in the 1995 second quarter. During the quarter and six months ended June 30,
1995, gains from this portfolio totaled $1.8 million and $3.1 million,
respectively, compared with $3.5 million and $5.8 million in the second
quarter and six months of 1994. Unrealized holding gains on real estate
loans available for sale totaled $1.3 million at June 30, 1995 and $2.6
million at June 30, 1994.

Mortgage-backed securities available for sale and other securities
available for sale are carried at fair value. At June 30, 1995, mortgage-
backed securities available for sale included $334 million of fixed-rate
loans and $2.4 billion of ARMs. There were no realized gains or losses in
the first six months of 1995. Unrealized holding gains were $29.3 million
at June 30, 1995. Unrealized holding losses were $77.3 million at December
31, 1994 and $32 million at June 30, 1994.

Marketable securities available for sale at June 30, 1995 had an
amortized cost of $993 million and a fair value of $997 million. There were
no gains realized during the 1995 second quarter. During the quarter and six
months ended June 30, 1994, gains from this portfolio totaled $12,000 and
$489,000, respectively. Unrealized holding gains on marketable securities
were $3.7 million at June 30, 1995. Unrealized holding losses were $18.3
million at December 31, 1994 and $5 million at June 30, 1994.

The unrealized holding gains and losses on securities available for
sale, net of income taxes, included as a component of stockholders' equity,
were as follows:
<PAGE>
<PAGE>
<TABLE>
<CAPTION>

Three Months Ended Six Months Ended
------------------ June 30
June 30 March 31 --------------------
(Dollars in thousands) 1995 1995 1995 1994
------- -------- ---- ----
<S> <C> <C> <C> <C>
Balance at beginning of period $(5,921) $(55,084) $(55,084) $ 22,651
Unrealized holding gains
(losses), net of taxes 26,138 49,163 75,301 (42,706)
------- -------- -------- --------
Balance at end of period $20,217 $ (5,921) $ 20,217 $(20,055)
====== ======== ======== ========
</TABLE>

The following table shows that the portfolio of short-term assets
exceeded liabilities maturing or subject to interest adjustment within one
year by $5.4 billion, or 12.7% of interest earning assets at June 30, 1995,
compared with $3.8 billion, or 9.5% of interest earning assets at December
31, 1994, and $3.1 billion, or 8.5% of interest earning assets at June 30,
1994. The Company is better protected against rising interest rates with an
excess of interest earning assets maturing or repricing within one year.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>

Maturity/Rate Sensitivity
-----------------------------------------------------------------
June 30, 1995 % of Within Over
(Dollars in millions) Rate Balance Total 1 Year 1-5 Years 5-15 Years 15 Years
---- ------- ----- ------ --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest earning assets
Securities 6.36% $ 1,249 3 $ 1,249 $ - $ - $ -
Mortgage-backed securities 7.34 10,903 26 10,685 218 - -
Investment in FHLB stock 4.75 345 1 - - - 345
Loans receivable
Real estate
Adjustable rate 7.56 26,138 62 25,363 775 - -
Fixed rate
Short-term 8.94 500 1 47 78 142 233
Long-term 8.65 606 1 113 111 180 202
Consumer 15.88 2,480 6 617 1,499 274 90
----- ------- --- ------- ------- ----- ----
7.97 42,221 100 38,074 2,681 596 870

Interest bearing liabilities
Customer accounts
Regular savings 2.03 1,876 5 1,876 - - -
Checking and limited access 2.07 9,210 22 9,210 - - -
Wholesale transaction - 190 - 190 - - -
Term accounts 5.72 17,971 44 12,182 5,783 6 -
----- ------- --- ------- ------- ----- ----
4.30 29,247 71 23,458 5,783 6 -
Borrowings
FHLB 5.15 115 - 114 1 - -
Other 6.45 11,549 29 9,252 1,526 723 48
Impact of interest-rate swaps - - - (109) 109 - -
----- ------- --- ------- ------- ----- ----
4.91 40,911 100 32,715 7,419 729 48
----- ------- --- ------- ------- ----- ----

Excess of interest earning
assets over interest bearing
liabilities at June 30, 1995 3.06% $ 1,310 $ 5,359 $(4,738) $(133) $822
===== ======= ======= ======= ===== ====
Excess of interest earning
assets over interest bearing
liabilities at December 31, 1994 3.08% $ 715 $ 3,757 $(3,573) $(105) $636
===== ======= ======= ======= ===== ====
Excess of interest earning
assets over interest bearing
liabilities at June 30, 1994 3.79% $ 1,162 $ 3,104 $(2,235) $ (93) $386
===== ======= ======= ======= ===== ====

June 30
------------
1995 1994
---- ----
<S> <C> <C>
Calculation of adjusted margin
Unadjusted margin 3.06% 3.79%
Benefit of net interest earning assets .15 .11
---- ----
Adjusted margin 3.21% 3.90%
==== ====
</TABLE>
<PAGE>
<PAGE>

ASSET QUALITY

The Company regularly reviews its assets to determine that each
category is reasonably valued. In this review process it monitors the loss
exposure relating to nonperforming assets, assets adversely classified for
regulatory purposes, the delinquency trend and market environment to identify
potential problems.

Loss reserves have been provided, where necessary in management's
judgment, for interest earning assets, including residential loans and
consumer loans. Valuation reserves for consumer loans are provided based
upon a percentage of the loans outstanding in relation to the loss experience
within the loan categories.

The Company assesses the status of general loss reserves on real estate
loans based upon its current loss experience as applied to the loan
portfolio, including loans that are delinquent or adversely classified
because of declining collateral values. In the first six months of 1995 and
throughout 1994, the Company reduced reserve levels on the real estate loan
and real estate portfolios as a result of decreasing nonperforming assets and
an improving economy.

The California real estate market requires continued review. There
appear to be regional differences in economic performance within California
and among property types which are attributable to differing recovery rates
for the wide range of economic activities within California.

On a regional basis, the economic factors affecting the single-family
market appear to be somewhat more favorable in Northern California than in
Southern California. In particular, the median metropolitan area sales price
of existing single-family homes in the San Jose area increased from the first
quarter of 1994 to the first quarter of 1995 by 1 percent. During the same
period, the median sales price for the Los Angeles and San Diego areas,
declined 6 percent and 3 percent, respectively.

In the Los Angeles area, the vacancy rate of the office space market
was 19 percent at both March 31, 1995 and March 31, 1994. In San Diego
County, the vacancy rate was 18 percent at March 31, 1995 compared with 20
percent at March 31, 1994.

In the Los Angeles area, the vacancy rate of the industrial space
market decreased to 8 percent at March 31, 1995 from 10 percent a year
earlier. San Diego County's industrial space market had a vacancy rate of
4 percent at both March 31, 1995 and March 31, 1994.

Loans delinquent over 30 days, together with restructured loans, have
been included in the process to determine estimated losses. The effects of
various loan characteristics such as geography, delinquency, date of
origination, property type and loan-to-value ratios ("LTV") are considered
in this review process.
<PAGE>
<PAGE>

As a monitoring device, the Company reviews the trends of loans
delinquent for periods of less than ninety days on a monthly (and within-
month) basis. The following summarizes loans delinquent for periods from
thirty to eighty-nine days:

<TABLE>
<CAPTION>
June 30 March 31 December 31 June 30
(Dollars in millions) 1995 1995 1994 1994
------- -------- ----------- -------
<S> <C> <C> <C> <C>
30-59 days delinquent
SFR loans $165.2 $183.4 $168.6 $240.0
Other 3.8 6.5 24.0 15.3
60-89 days delinquent
SFR loans 91.8 93.0 90.4 122.6
Other 12.7 16.9 6.7 18.9

</TABLE>

The significant reduction in thirty to eighty-nine day delinquencies
at June 30, 1995 compared with June 30, 1994 is primarily due to the decrease
in delinquencies which were a result of the January 17, 1994 Northridge
earthquake. These loans have either been brought current, paid off or to a
lesser degree, foreclosed.

The following table shows the trend in single-family residential
delinquencies (two or more payments delinquent) to the growth in the related
portfolio.

<TABLE>
<CAPTION>
June 30 March 31 December 31 June 30
1995 1995 1994 1994
------- -------- ----------- -------
<S> <C> <C> <C> <C>
SFR loans as a percent of
total real estate loans 91.0% 90.7% 90.3% 89.0%
SFR delinquency as a percent
of total single-family
residential loans 2.2 2.4 2.6 3.7

</TABLE>

The Company's real estate loan portfolio included approximately $2.9
billion of uninsured single-family mortgage loans at June 30, 1995, compared
with $3.2 billion a year ago, which were originated with terms where the LTV
exceeded 80% (but not in excess of 90%). During the second quarter of 1995,
losses on the higher LTV mortgages totaled $12 million, or 1.45%
(annualized), compared with $5.7 million, or .52% (annualized), for the same
period a year ago. For the year 1994, losses totaled $24.3 million, or .59%
<PAGE>
<PAGE>

of such loans, compared with $44.8 million, or .81%, for 1993. The Company
began to purchase mortgage insurance on all new single-family residential
mortgages originated with LTVs in excess of 80% in 1990. Therefore, this
portfolio of uninsured loans is becoming more seasoned and the balance is
declining.

The recorded investment in loans for which impairment has been
recognized in accordance with Statement of Financial Accounting Standards No.
114, "Accounting by Creditors for Impairment of a Loan" and the reserve for
estimated losses related to such loans follows:

<TABLE>
<CAPTION>
Impaired Loans
-------------------------------------------------------------------
Having Having
related Reserves for Net with no related
reserves estimated reserves reserves for Net of reserves
for losses losses for losses losses for losses
---------- ------------ ---------- ------------ ---------------
(Dollars in thousands) June 30, 1995
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Real estate loans
Residential
Single-family $ 30,676 $ 7,530 $ 23,146 $ 13,976 $ 37,122
Apartments 88,190 19,633 68,557 25,377 93,934
Commercial
Offices 22,638 8,045 14,593 13,137 27,730
Retail 27,974 6,240 21,734 9,019 30,753
Hotel/motel 38,889 9,296 29,593 - 29,593
Industrial 22,679 4,974 17,705 5,207 22,912
3,584 648 2,936 2,100 5,036
-------- ------- -------- -------- --------
$234,630 $56,366 $178,264 $ 68,816 $247,080
======== ======= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>

June 30, 1994
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Real estate loans
Residential
Single-family $ 20,773 $ 4,662 $ 16,111 $ 24,300 $ 40,411
Apartments 73,254 16,230 57,024 39,200 96,224
Commercial
Offices 33,816 8,756 25,060 14,327 39,387
Retail 22,871 4,665 18,206 9,159 27,365
Hotel/motel 48,285 4,636 43,649 65,601 109,250
Industrial 6,162 1,364 4,798 4,959 9,757
Other 3,311 1,018 2,293 2,176 4,469
-------- ------- -------- -------- --------
$208,472 $41,331 $167,141 $159,722 $326,863
======== ======= ======== ======== ========

</TABLE>
<PAGE>
<PAGE>

The impaired loan portfolio decreased at June 30, 1995 compared with
June 30, 1994. The decrease was primarily the result of both a sale and a
foreclosure in the last half of 1994, of two nonperforming loans with a
combined balance of approximately $92 million. The Company's policy for
recognizing income on impaired loans is to accrue earnings unless a loan is
in foreclosure or becomes nonperforming, at which time the accrued earnings
are reversed.

Single-family residential mortgage loans are generally evaluated for
impairment as homogeneous pools of loans. Certain situations may arise
leading to single-family residential mortgage loans being evaluated for
impairment on an individual basis.

A change in the fair value of an impaired loan is reported as an
increase or reduction to the provision for loan losses.

Certain loans (where GWB works with borrowers encountering economic
difficulty) meet the criteria of, and are classified as, troubled debt
restructurings ("TDRs") because of modification to loan terms. TDRs totaled
$134 million at June 30, 1995 compared with $224 million at June 30, 1994.
The decrease in TDR's is primarily the result of the previously mentioned
disposition of $92 million of nonperforming loans. TDRs which meet certain
conditions of repayment and performance have not been included in
nonperforming assets. At June 30, 1995, $23 million of TDRs were classified
as performing assets compared with $18 million at June 30, 1994.

Real estate available for sale is recorded at the lower of cost or fair
value and is included in a periodic review of assets to determine whether,
in management's judgment, there has been any deterioration in value. Real
estate held for development, also subject to the same review process, is
carried at the lower of cost or net realizable value. Properties where
future development is uncertain are carried at the lower of cost or fair
value. Real estate is also included in the general reserve evaluation. At
June 30, 1995, foreclosed real estate properties totaling $9 million are
operating profitably after provisions for interest and depreciation and are
performing assets.

Nonperforming assets include loans which are delinquent ninety days or
more, TDRs which do not meet certain performance criteria and certain real
estate owned which does not generate sufficient income to meet return on
investment criteria. The following table indicates the amount of the
Company's nonperforming assets and the ratio of nonperforming assets to total
assets:
<PAGE>
<PAGE>

<TABLE>
<CAPTION>
June 30 December 31 June 30
1995 1994 1994
------------- ------------- -------------
(Dollars in millions) Amount % Amount % Amount %
------ --- ------ --- ------ ---
<S> <C> <C> <C> <C> <C> <C>
Loans receivable
Real estate
Residential
Single-family $433 .97% $509 1.19% $ 615 1.57%
Apartments 53 .12 68 .16 75 .19
Commercial 91 .21 90 .21 210 .54
Consumer finance 22 .05 22 .05 20 .05
Other 1 - 1 - 2 .01
---- ---- ---- ---- ------ ----
600 1.35 690 1.61 922 2.36
Real estate 159 .36 156 .37 205 .52
---- ---- ---- ---- ------ ----
Total nonperforming assets $759 1.71% $846 1.98% $1,127 2.88%
==== ==== ==== ==== ====== ====
</TABLE>

The geographic distribution of the real estate loan and real estate
portfolios at June 30, 1995 follows:

<TABLE>
<CAPTION>
Oklahoma/
(Dollars in millions) Total California Florida Washington Texas Georgia Arizona Oregon Other
----- ---------- ------- ---------- -------- ------- ------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Real estate loans
Residential
Single-family $24,156 $16,226 $1,714 $1,098 $734 $411 $336 $363 $3,274
Apartments 1,670 1,340 80 7 29 53 63 2 96
Commercial
Offices 404 358 8 16 2 4 5 - 11
Retail 252 214 18 8 - - 2 1 9
Hotel/motel 224 142 4 - 2 - 3 - 73
Industrial 321 270 13 3 13 4 7 - 11
Other 217 162 17 4 1 2 11 3 17
------- ------- ------ ------ ---- ---- ---- ---- ------
27,244 18,712 1,854 1,136 781 474 427 369 3,491
------- ------- ------ ------ ---- ---- ---- ---- ------
Real estate available
for sale, net
Acquired through
foreclosure 163 138 17 1 1 1 - - 5
Other 13 12 1 - - - - - -
Property development 46 46 - - - - - - -
------- ------- ------ ------ ---- ---- ---- ---- ------
222 196 18 1 1 1 - - 5
------- ------- ------ ------ ---- ---- ---- ---- ------
Total real estate loans
and real estate $27,466 $18,908 $1,872 $1,137 $782 $475 $427 $369 $3,496
======= ======= ====== ====== ==== ==== ==== ==== ======
Percent of total 100.0% 68.8% 6.8% 4.2% 2.9% 1.7% 1.6% 1.3% 12.7%
/TABLE
<PAGE>
<PAGE>

The geographic distribution of nonperforming real estate loans and real
estate at June 30, 1995 follows:

Real estate loans
Residential
Single-family $433 $364 $14 $ 5 $ 5 $ 4 $ 3 $ 1 $37
Apartments 53 43 1 1 - 4 - - 4
Commercial
Offices 19 19 - - - - - - -
Retail 31 26 - 5 - - - - -
Hotel/motel 24 24 - - - - - - -
Industrial 13 12 1 - - - - - -
Other 4 2 1 - - - 1 - -
---- ---- --- --- --- --- --- --- ---
577 490 17 11 5 8 4 1 41
---- ---- --- --- --- --- --- --- ---
Real estate
Residential
Single-family 102 93 3 - 1 1 - - 4
Apartments 23 23 - - - - - - -
Commercial
Offices 21 11 10 - - - - - -
Retail 3 2 1 - - - - - -
Industrial 4 4 - - - - - - -
Other 6 4 1 - - - - - 1
---- ---- --- --- --- --- --- --- ---
159 137 15 - 1 1 - - 5
---- ---- --- --- --- --- --- --- ---

Total nonperforming real
estate loans and real
estate $736 $627 $32 $11 $ 6 $ 9 $ 4 $ 1 $46
==== ==== === === === === === === ===

Percent of total 100.0% 85.2% 4.4% 1.5% .8% 1.2% .5% .1% 6.3%

/TABLE
<PAGE>
<PAGE>

A comparison of the California real estate loan and real estate
portfolios and nonperforming real estate loans and real estate by region at
June 30, 1995 follows:

<TABLE>
<CAPTION>
California Northern California
------------------------------- --------------------------------
(Dollars in millions) Portfolio Nonperforming % Portfolio Nonperforming %
--------- ------------- --- --------- ------------- ---
<S> <C> <C> <C> <C> <C> <C>
Real estate loans
Residential
Single-family $16,226 $364 2.2 $4,933 $ 73 1.5
Apartments 1,340 43 3.2 165 3 1.8
Commercial
Offices 358 19 5.3 74 12 16.2
Retail 214 26 12.1 50 1 2.0
Hotel/motel 142 24 16.9 46 - -
Industrial 270 12 4.4 42 5 11.9
Other 162 2 1.2 53 2 3.8
------- ---- ----- ------ ---- -----
18,712 490 2.6 5,363 96 1.8
------- ---- ----- ------ ---- -----
Real estate
Residential
Single-family 93 93 100.0 11 11 100.0
Apartments 23 23 100.0 2 2 100.0
Commercial
Offices 14 11 78.6 4 4 100.0
Retail 4 2 50.0 - - -
Industrial 4 4 100.0 - - -
Other 58 4 6.9 21 - -
------- ---- ----- ------ ---- -----
196 137 69.9 38 17 44.7
------- ---- ----- ------ ---- -----
Total real estate loans
and real estate $18,908 $627 3.3 $5,401 $113 2.1
======= ==== ===== ====== ==== =====
/TABLE
<PAGE>
<PAGE>
<TABLE>
<CAPTION>

Central California Southern California
-------------------------------- --------------------------------
(Dollars in millions) Portfolio Nonperforming % Portfolio Nonperforming %
--------- ------------- --- --------- ------------- ---
<S> <C> <C> <C> <C> <C> <C>

Real estate loans
Residential
Single-family $1,331 $16 1.2 $ 9,962 $275 2.8
Apartments 243 9 3.7 932 31 3.3
Commercial
Offices 41 1 2.4 243 6 2.5
Retail 29 8 27.6 135 17 12.6
Hotel/motel 27 3 11.1 69 21 30.4
Industrial 15 - - 213 7 3.3
Other 18 - - 91 - -
------ --- ----- ------- ---- -----
1,704 37 2.2 11,645 357 3.1
------ --- ----- ------- ---- -----
Real estate
Residential
Single-family 4 4 100.0 78 78 100.0
Apartments 2 2 100.0 19 19 100.0
Commercial
Offices 3 1 33.3 7 6 85.7
Retail 1 1 100.0 3 1 33.3
Industrial - - - 4 4 100.0
Other 11 - - 26 4 15.4
------ --- ----- ------- ---- -----
21 8 38.1 137 112 81.8
------ --- ----- ------- ---- -----
Total real estate loans
and real estate $1,725 $45 2.6 $11,782 $469 4.0
====== === ===== ======= ==== =====
</TABLE>

Nonperforming real estate loans and real estate decreased by $55
million during the second quarter of 1995. Total nonperforming single-family
residential properties decreased $42 million in the second quarter of 1995
due primarily to a decrease in new ninety day delinquencies. Nonperforming
single-family residential properties in California decreased $40 million
while out of state properties declined $2 million. Nonperforming commercial
and apartment properties declined $13 million in the second quarter of 1995
as sales of commercial and apartment properties outpaced new delinquencies.

In the second quarter of 1995, bulk sales of foreclosed single-family
properties totaled $57.4 million compared with $60.4 million in the first
three months of 1995 and $70.3 million in the second quarter of 1994. In the
first six months of 1995, bulk sales of foreclosed single-family properties
totaled $118 million compared with $155 million in the same period of 1994.
Auction sales have also been utilized to accelerate the disposition of
foreclosed properties. Foreclosures continue to occur at relatively high
levels.

The Company provides a reserve for uncollected interest which is
essentially based upon loans delinquent ninety days or more or in
foreclosure. These loans are considered in "nonaccrual" status.
<PAGE>
<PAGE>

A summary of loan loss provisions, charge-offs and recoveries by loan
type follows:

<TABLE>
<CAPTION>
At or For The At or For the
Three Months Ended Six Months Ended
June 30 June 30
-------------------- -----------------------
(Dollars in thousands) 1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Beginning balance $419,387 $498,871 $ 438,051 $ 502,269

Provision for loss
Real estate loans
SFR 38,600 30,300 74,200 55,300
Other 1,000 19,700 2,000 34,693
Consumer finance 9,200 8,400 19,800 17,700
Other (5,600) (5,500) (5,200) (2,993)
-------- -------- --------- ---------
43,200 52,900 90,800 104,700
-------- -------- --------- ---------
Charge-offs
Real estate loans
SFR (52,265) (37,612) (102,630) (77,543)
Other (9,525) (10,868) (15,017) (17,757)
Consumer finance (13,832) (12,060) (28,633) (24,714)
Other (421) (667) (696) (1,043)
-------- -------- --------- ---------
(76,043) (61,207) (146,976) (121,057)
-------- -------- --------- ---------
Recoveries
Real estate loans
SFR 406 457 878 631
Other 396 353 420 690
Consumer finance 4,248 4,046 8,338 8,092
Other 58 384 141 479
-------- -------- --------- ---------
5,108 5,240 9,777 9,892
-------- -------- --------- ---------
Net charge-offs
Real estate loans
SFR (51,859) (37,155) (101,752) (76,912)
Other (9,129) (10,515) (14,597) (17,067)
Consumer finance (9,584) (8,014) (20,295) (16,622)
Other (363) (283) (555) (564)
-------- -------- --------- ---------
(70,935) (55,967) (137,199) (111,165)
-------- -------- --------- ---------
Ending balance $391,652 $495,804 $ 391,652 $ 495,804
======== ======== ========= =========

Ratio of net charge-offs
(annualized) to average loans
Real estate loans
SFR .67% .58% .67% .60%
Other 1.17 1.27 .94 1.02
Consumer finance 1.93 1.74 2.04 1.81
Other .30 .29 .24 .29
----- ----- ----- -----
.78% .71% .77% .71%
===== ===== ===== =====
/TABLE
<PAGE>
<PAGE>

Provisions for losses on the leasing portfolio, included in Other loan
loss provisions, for the three and six month periods ending June 30, 1995,
decreased as a result of the reversal of a $6 million reserve originally
established for expected losses which did not materialize.

Beginning in the third quarter of 1994, writedowns on foreclosed real
estate to estimated fair value are being recorded at acquisition. As a result,
charge-offs in the second quarter of 1995 have increased compared with the same
period last year.

The following table presents the Company's reserve for estimated losses
and the reserve as a percent of the respective loans receivable portfolios:

<TABLE>
<CAPTION>
June 30
-----------------------------------
1995 1994
--------------- --------------
(Dollars in millions) Amount % Amount %
------ --- ------ ---
<S> <C> <C> <C> <C>
Real estate loans
SFR $162 .52% $191 .72%
Commercial and other 172 5.59 242 7.38
Consumer finance 53 2.63 51 2.74
Other 5 1.06 12 3.23
---- ---- ---- ----
Total $392 1.06% $496 1.55%
==== ==== ==== ====

</TABLE>

A summary of real estate reserve activity by real estate type follows:

<TABLE>
<CAPTION>
At or For The At or For The
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
(Dollars in millions) 1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Beginning balance
SFR $ 3 $ 4 $ 3 $ 5
Commercial and other 64 114 74 119
--- ---- ---- ----
67 118 77 124

Provision for losses
SFR - 3 - 6
Commercial and other - 3 1 3
--- ---- ---- ----
- 6 1 9

Net charge-offs
SFR - (2) - (6)
Commercial and other (1) (17) (12) (22)
--- ---- ---- ----
(1) (19) (12) (28)

Ending balance
SFR 3 5 3 5
Commercial and other 63 100 63 100
--- ---- ---- ----
$66 $105 $ 66 $105
=== ==== ==== ====
</TABLE>

OPERATIONS

Net interest income totaled $311 million in the second quarter of 1995
compared with $338 million in the second quarter of 1994. For the six months
ending June 30, 1995 and 1994, net interest income totaled $618 million and
$672 million, respectively. The following table shows the components of the
change in net interest income between periods.
<PAGE>
<PAGE>

<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
-------------------------- --------------------------
(Dollars in millions) 1995 vs 1994 1994 vs 1993 1995 vs 1994 1994 vs 1993
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Mortgage-backed securities
Rate (1) $ 13 $ (7) $ 20 $(14)
Volume (2) 108 5 210 6
Rate/Volume (3) 30 (1) 48 (1)
---- ---- ---- ----
151 (3) 278 (9)
---- ---- ---- ----
Real estate loans
Rate (1) 50 (26) 80 (61)
Volume (2) (38) (8) (81) (12)
Rate/Volume (3) (4) 2 (7) 1
---- ---- ---- ----
8 (32) (8) (72)
---- ---- ---- ----
Consumer loans
Rate (1) (5) 2 (7) (3)
Volume (2) 10 (3) 19 (8)
Rate/Volume (3) (1) - (1) -
---- ---- ---- ----
4 (1) 11 (11)
---- ---- ---- ----
Securities and investments
Rate (1) 1 (5) 6 (9)
Volume (2) 8 1 11 4
Rate/Volume (3) 2 - 3 (1)
---- ---- ---- ----
11 (4) 20 (6)
---- ---- ---- ----
Interest earning assets
Rate 59 (36) 99 (87)
Volume 88 (5) 159 (10)
Rate/Volume 27 1 43 (1)
---- ---- ---- ----
174 (40) 301 (98)
---- ---- ---- ----
Customer accounts
Rate (1) 93 (16) 160 (47)
Volume (2) (10) 14 (26) 23
Rate/Volume (3) (5) (1) (9) (2)
---- ---- ---- ----
78 (3) 125 (26)
---- ---- ---- ----
Borrowings
Rate (1) (1) 9 (10) 17
Volume (2) 125 (31) 262 (56)
Rate/Volume (3) (1) (3) (22) (5)
---- ---- ---- ----
123 (25) 230 (44)
---- ---- ---- ----
Interest bearing liabilities
Rate 92 (7) 150 (30)
Volume 115 (17) 236 (33)
Rate/Volume (6) (4) (31) (7)
---- ---- ---- ----
201 (28) 355 (70)
---- ---- ---- ----
Change in net interest income $(27) $(12) $(54) $(28)
==== ==== ==== ====
</TABLE>

(1) The rate variance reflects the change in the average rate multiplied
by the average balance outstanding during the prior period.

(2) The volume variance reflects the change in the average balance
outstanding multiplied by the average rate during the prior period.

(3) The rate/volume variance reflects the change in the average rate
multiplied by the change in the average balance outstanding.

(4) Nonaccrual loans and amortized deferred loan fees are included in
the interest income calculations.

Real estate services income totaled $42.6 million for the six months
ended June 30, 1995 compared with $48.3 million for the six months ended June
30, 1994. The decrease in income was attributed to both lower loan fees and
lower gains on mortgage sales. Gains on mortgage sales decreased as a result
of lower sales activity. Mortgage sales in the first six months of 1995,
all fixed rate, totaled $122 million, at a gain of 1.73% of mortgage sales,
compared with $987 million in the first six months of last year at a gain of
.59% of mortgage sales. The increased gain as a percentage of mortgage sales
was a result of increased premiums received and the adoption of FAS 122. As
a result of the adoption of FAS 122, the amount of servicing capitalized in
the second quarter of 1995 and included in gain on mortgage sales was
$694,000. At June 30, 1995, the servicing spread was 43 basis points on the
$10.6 billion servicing portfolio compared with a servicing spread of 45
basis points on an $11.6 billion portfolio at June 30, 1994.

Retail banking fee and commission income decreased from $90.5 million
in the six months ended June 30, 1994 to $82.1 million in the six months
ended June 30, 1995. Banking fees increased to $73.9 million in the first
six months of 1995 compared with $68.7 million in the same period last year
due to an increase in customer transaction activity. Income from mutual fund
operations has been reduced as a result of a change in the commission and fee
structure as well as significantly reduced subscriptions. Net revenue from
these operations totaled $8.3 million in the six months ended June 30, 1995
compared with $21.8 million in the same period of 1994. The Company managed
mutual funds with assets aggregating $3.1 billion at June 30, 1995 compared
with $3.2 billion at June 30, 1994.

Other income was $20.3 million for the six months ended June 30, 1995
compared with $20.1 million for the same period a year ago.
<PAGE>
<PAGE>

Operating expenses were as follows:

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
(Dollars in millions) 1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>

Salaries and related personnel $115 $118 $232 $239
Premises and occupancy 46 53 92 105
FDIC insurance premiums 14 19 33 38
Advertising and promotion 9 10 17 19
Other 64 47 124 98
---- ---- ---- ----
$248 $247 $498 $499
==== ==== ==== ====
</TABLE>

The modest decline in operating expenses in the first six months of
1995 from the same period last year is a result of the on-going cost
containment program. Other operating expenses increased 35 percent from the
second quarter of 1994 to the second quarter of 1995, and increased 27
percent in the first half of 1995 from the same period last year. The
following summarizes the composition of other operating expenses:

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
(Dollars in millions) 1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>

Outside data processing $15 $ 8 $ 30 $16
Communications 11 8 23 18
Office supplies 5 5 9 9
Branch losses 4 3 7 5
Postage 3 4 7 9
Insurance 3 3 6 6
Other 23 16 42 35
--- --- ---- ---
$64 $47 $124 $98
=== === ==== ===

</TABLE>
<PAGE>
<PAGE>

The operating ratios were as follows:

Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>

Operating and administrative expenses
(annualized)
As a percent of average assets
Corporate 2.25% 2.62% 2.29% 2.64%
Banking operations 2.06 2.41 2.10 2.43
As a percent of average assets
and assets serviced for others
Corporate 1.81 1.99 1.84 2.00
Banking operations 1.64 1.80 1.67 1.81
As a percent of average retail
deposits
Banking operations 3.02 2.87 3.05 2.88
As a percent of revenue
Corporate 66.94 61.76 67.91 62.94
Banking operations 71.08 63.93 72.10 65.41

</TABLE>

In 1993, the Company embarked on a cost-reduction program at its
administrative headquarters designed to increase profits and improve
efficiency and recorded a related $30 million restructuring charge. The
program was substantially completed in 1994. Charges against this reserve
since the program was initiated, principally employee separation expenses and
associated costs, totaled $29.6 million. Approximately 2,000 positions have
been eliminated as of June 30, 1995 through layoffs, attrition and sale of
branches. Reductions in nonpersonnel related costs will also contribute to
the overall savings through renegotiation of existing vendor contracts and
elimination of other administrative expenses. Anticipated savings in 1995
and beyond will exceed $100 million annually.

The following table presents net earnings (annualized) as a percent of
average assets and as a percent of average equity:
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>

Return on average assets .46% .59% .43% .56%
Return on average equity 7.83 9.28 7.39 8.71

</TABLE>

The Company's effective tax rate for the first half of 1995 decreased
due to the reversal of certain tax liabilities no longer required. As a
result, the Company's effective tax rate was 39.5% in the first six months
of 1995 and 41.2% in the same period of 1994.

DEPOSIT INSURANCE PREMIUMS

Under current law, the Federal Deposit Insurance Corporation (the
"FDIC") is required to increase the reserves of both the Bank Insurance Fund
(the "BIF") and the Savings Association Insurance Fund (the "SAIF") to 1.25%
of insured deposits over a reasonable period of time and thereafter to
maintain such reserves at not less than that level. Based on current
experience, it is generally anticipated that the BIF will reach the required
reserve level in the near future. However, it is expected that the SAIF
reserves will not reach the required level for a number of years without
Congressional action to provide additional funding or merge the separate
insurance funds in some fashion. Accordingly, the FDIC has proposed that
future deposit insurance premiums of SAIF-insured institutions be assessed
at substantially higher premiums than the corresponding premium assessment
rates for BIF-insured institutions. The effect of this proposal would be
that the SAIF assessment rate to be paid by SAIF members would continue to
range from 23 cents per $100 of domestic deposits to 31 cents per $100 of
domestic deposits, depending on risk classification. The current assessment
rate for GWB is 23 cents per $100 of domestic deposits. In the first half
of 1995, GWB paid its assessment at a rate of 26 cents per $100 of domestic
deposits and, in the second quarter of 1995, GWB received a refund of the
deposit insurance premium for the first six months of 1995 amounting to 3
cents per $100 of domestic deposits, or $2.1 million related to the first
quarter of 1995. The FDIC has proposed that BIF members pay an assessment
rate in the range of 4 cents to 31 cents per $100 of domestic deposits. Such
a deposit insurance premium disparity could place SAIF-insured institutions,
such as GWB, at a competitive disadvantage with commercial banks and other
BIF-insured institutions.
<PAGE>
<PAGE>

The FDIC has proposed a one time assessment on all SAIF-insured
deposits, in the range of 85 cents to 90 cents per $100 of domestic deposits
held as of March 31, 1995. This one time assessment is intended to
recapitalize the SAIF to the required level of 1.25% of insured deposits and
could be payable in the fourth quarter of 1995 or early 1996. If the
assessment is made at the proposed rate, the effect on GWB would be a pretax
charge of approximately $250 million, or $150 million after tax. Should this
occur, the Company may issue preferred stock or debt at the holding company
to contribute to GWB to remain as well-capitalized institution.

On March 1, 1995, GWFC submitted applications to federal bank
regulators seeking the creation of two new national banks in California and
Florida. Both the proposed national banks would be insured by the Federal
Deposit Insurance Corporation through the BIF and would allow the Company to
offer a wide variety of banking products and services to its present and
future customers. GWFC will file an application with the Federal Reserve to
become a bank holding company.

If its applications are approved, GWFC will operate the banks at
existing branch locations and it is anticipated that a portion of GWB's
present deposit base will voluntarily flow to the national banks. The bank
applications are expected to be acted upon later in 1995 and require the
approval of the Office of the Comptroller of the Currency ("OCC"), the FDIC,
and the Federal Reserve Board.

CAPITAL RESOURCES AND LIQUIDITY

Capital (stockholders' equity) was $2.6 billion at June 30, 1995 and
$2.4 billion at June 30, 1994. At the end of the 1995 second quarter the
ratio of capital to total assets was 5.9% compared with 6.3% a year ago.

GWB is subject to certain capital requirements under applicable
regulations and meets all such requirements. At June 30, 1995, GWB's capital
was $2.8 billion, including eligible subordinated notes of $373 million.

The following ratios compare GWB with the fully phased-in capital
requirements under regulations issued by the Office of Thrift Supervision
("OTS"):

<TABLE>
<CAPTION>
Actual OTS Benchmark
-------------- ------------- Capital
(Dollars in millions) Amount % Amount % Excess
------ --- ------ --- -------
<S> <C> <C> <C> <C> <C>

Leverage/tangible ratio $2,165 5.16 $1,258 3.00 $907
Risk-based ratio 2,798 11.60 1,930 8.00 868

/TABLE
<PAGE>
<PAGE>

The OTS amended its risk-based capital rules to incorporate interest-
rate risk ("IRR") requirements which require a savings association to hold
additional capital if it is projected to experience an excessive decline in
"net portfolio value" in the event interest rates increase or decrease by two
percentage points. The additional capital required is equal to one-half of
the amount by which any decline in net portfolio value exceeds 2 percent of
the savings association's total net portfolio value. GWB does not expect the
interest-rate risk requirements to have a material impact on its required
capital levels.

The OTS has proposed to amend its capital rule on the leverage ratio
requirement to reflect amendments made by the OCC to the capital requirements
for national banks. The proposal would establish a 3% leverage ratio
(defined as the ratio of core capital to adjusted total assets) for savings
associations in the strongest financial and managerial condition. All other
savings associations would be required to maintain leverage ratios of at
least 4%. Only savings associations rated composite 1 under the OTS CAMEL
rating system will be permitted to operate at or near the regulatory minimum
leverage ratio of 3%. For all other savings associations, the minimum core
capital leverage ratio will be 3% plus at least an additional 100 to 200
basis points.

In determining the amount of additional capital, the OTS will assess
both the quality of risk management systems and the level of overall risk in
each individual savings association through the supervisory process on a
case-by-case basis. The OTS' supervisory judgment on a savings association's
capital adequacy, both in terms of risk-based capital and the minimum
leverage ratio, will continue to be based upon an assessment of the relevant
factors present in each institution.

Savings associations that do not pass the minimum capital standards
established under the new core capital leverage ratio requirements will be
required to submit capital plans detailing steps to be taken to reach
compliance.

GWB currently meets these proposed requirements.

As of June 30, 1995, real estate loan commitments totaled $865 million
compared with $882 million at December 31, 1994 and $869 million at June 30,
1994. These commitments included $741 million of ARMs and $124 million at
fixed rates at June 30, 1995. The Company has several sources for raising
funds for lending, among which are mortgage repayments, mortgage sales,
customer deposits, Federal Home Loan Bank borrowings and other borrowings.
Over the past five quarters, the Company has utilized short term borrowings
to fund asset growth.
<PAGE>
<PAGE>

The following table presents the debt ratings of the Company and GWB
at June 30, 1995:

<TABLE>
<CAPTION>
Moody's Investors
Standard & Poor's Service
----------------- -----------------
GWFC GWB GWFC GWB
---- --- ---- ---
<S> <C> <C> <C> <C>

Unsecured short-term debt A-2 A-2 P-2 P-1
Senior term debt BBB+ A- Baa1 A2
Subordinated term debt BBB+ A3
Preferred stock BBB- Baa2

</TABLE>

The origination and sale of real estate loans is dependent upon general
market conditions. In an active real estate market loan originations
increase. In such periods, mortgage sales are usually increased to fund a
portion of originations and to control asset growth. However, in some
periods mortgage sales occur to fund customer account outflows and repay
borrowings which result in asset shrinkage. Mortgage sales also occur to
limit interest-rate risk and for restructuring purposes.

As presented in the Consolidated Condensed Statement of Cash Flows, the
sources of liquidity vary between quarters. The primary sources of funds in
the second quarter of 1995 were principal payments on mortgages held for
investment of $1.3 billion and an increase in borrowings of $828 million.
New loans originated for investment required $2 billion in the second quarter
of 1995. Operating activities provided $118 million in the current quarter.

The Company continued to maintain liquidity balances each period in
excess of funding and legal requirements. Cash and securities totaled $2.1
billion at June 30, 1995 and $1.6 billion at June 30, 1994.

DIVIDENDS

Quarterly cash dividends have been paid since 1977. At its April 1995
meeting, the Board of Directors declared a quarterly cash dividend of $.23
per common share payable in May 1995. The quarterly cash dividend has been
paid at this level since the second quarter of 1992.

In the second quarter of 1995, the regular quarterly dividend on the
$129 million 8 3/4% cumulative convertible preferred stock, issued in May
1991, and the regular quarterly dividend on the $165 million 8.3% cumulative
preferred stock, issued in September 1992, were paid.
<PAGE>
<PAGE>

The Dividend Reinvestment and Stock Purchase Plan permits a 3% discount
on stock purchased with reinvested dividends. During the second quarter and
the first six months of 1995, reinvested dividends totaled $12.8 million and
$23.4 million, respectively.

Effective March 31, 1994, Bryant Financial Corporation ("Bryant"), a
property development subsidiary, became a wholly-owned direct subsidiary of
the Company. This realignment was in the form of a dividend from GWB to GWFC
in the amount of Bryant's book value of $38 million.

The principal source of operating income of the Company on an
unconsolidated basis is dividends from GWB and Aristar, Inc ("Aristar"). In
the second quarter of 1995, cash dividends received from GWB and Aristar
totaled $2.8 million and $7.5 million, respectively. In the first six months
of 1995, cash dividends received include $5.7 million from GWB, $15 million
from Aristar and $4 million from other subsidiaries. GWB is subject to the
regulations of the OTS and FDIC. The OTS regulations impose limitations upon
"capital distributions" by savings associations, including cash dividends.
The regulations establish a three-tiered system: Tier 1 includes savings
associations with capital at least equal to their fully phased-in capital
requirement which have not been notified that they are in need of more than
normal supervision; Tier 2 includes savings associations with capital above
their minimum capital requirement but less than their fully phased-in
requirement; and Tier 3 includes savings associations with capital below
their minimum capital requirement. Tier 1 associations may, after prior
notice but without approval of the OTS, make capital distributions up to the
higher of (1) 100% of their net income during the calendar year plus the
amount that would reduce by one half their "surplus capital ratio" (the
excess over their fully phased-in capital requirement) at the beginning of
the calendar year or (2) 75% of their net income over the most recent four-
quarter period. Tier 2 associations may, after prior notice but without
approval of the OTS, make capital distributions of up to 25% to 75% of their
net income over the most recent four-quarter period depending upon their
current risk-based capital position. Tier 3 associations may not make
capital distributions without prior approval. An association subject to more
stringent restrictions imposed by agreement may apply to remove the more
stringent restrictions.

The Company believes that GWB is a Tier 1 association. Notwithstanding
the foregoing, the regulatory authorities have broad discretion to prohibit
any payment of dividends and take other actions if they determine that the
payment of such dividends would constitute an unsafe or unsound practice.
Among the circumstances posing such risk would be a capital distribution by
a Tier 1 or Tier 2 association whose capital is decreasing because of
substantial losses.
<PAGE>
<PAGE>

AVERAGE SHARES OUTSTANDING

The average common shares outstanding, based upon daily amounts used
in the calculation of earnings per share, are shown below:

<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
-------------------------- --------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>

Primary 136,746,783 133,515,722 135,876,365 133,444,187
Fully diluted 136,746,783 140,019,059 136,242,751 139,879,510

</TABLE>

ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS

The Company's bylaws presently provide that shareholder nominations of
directors may be made and other business may be brought before the annual
meeting by shareholders only in compliance with certain advance notice and
informational requirements and any other applicable requirements.

The bylaws provide that the annual meeting of shareholders of the
Company shall be held on the fourth Tuesday in April in each year or on such
other date as the Board of Directors may designate. In order to be timely,
a shareholder's notice of director nominations or of business to be brought
before the annual meeting must be delivered to or mailed and received by the
Secretary of the Company at 9200 Oakdale Avenue, Chatsworth, California 91311
not less than 60 or more than 90 days prior to the anniversary date of the
immediately preceding annual meeting of stockholders.

If the annual meeting is called for a date that is not within the 30
days before or after such anniversary date notice by the stockholder to be
timely must be delivered to or received by the Secretary of the Company at
the above address not later than the close of business on the 15th day
following the day on which notice of the date of the annual meeting is mailed
to shareholders or public disclosure of the date of the meeting is made,
whichever first occurs. Any scheduled meeting of the shareholders may be
postponed or cancelled by the Board of Directors by giving public notice
prior to the scheduled meeting.

The 1995 annual meeting of shareholders was held on April 25, 1995.
Accordingly, unless the 1996 annual meeting is called for a date before March
26, 1996 or after May 25, 1996, a shareholder's notice of director
nominations or of business to be brought before the 1996 annual meeting must
be delivered to or mailed and received by the Secretary of the Company
between January 26, 1996 and February 25, 1996.
<PAGE>
<PAGE>

A shareholder's notice of director nominations or of business to be
brought before the annual meeting also must contain certain information
required by the bylaws of the Company. Copies of the Company's bylaws are
available upon request to the Secretary of the Company at the above address.

The present requirements described above do not supersede the
requirements or conditions established by the Securities and Exchange
Commission for shareholder proposals to be included in the Company's proxy
materials for a meeting of shareholders.

PART II - OTHER INFORMATION
---------------------------

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

See Item 4, Part II of the Company's quarterly report on Form 10-Q for
the quarter ended March 31, 1995 for a report on the voting at the Company's
Annual Meeting of Shareholders on April 25, 1995, which is incorporated
herein by reference.

ITEM 5. OTHER INFORMATION
--------------------------
The calculation of the Company's ratio of earnings to fixed charges as of
the dates indicated follows:

<TABLE>
<CAPTION>
Six Months Ended Twelve Months Ended Six Months Ended
(Dollars in thousands) June 30, 1995 December 31, 1994 June 30, 1994
---------------- ------------------- ----------------
<S> <C> <C> <C>
Earnings
--------
Net earnings $ 93,920 $ 251,234 $105,330
Taxes on income 61,300 155,300 73,900
---------- ---------- --------
Earnings before taxes $ 155,220 $ 406,534 $179,230
========== ========== ========
Interest Expense
----------------
Customer accounts $ 586,735 $ 950,299 $461,717
Borrowings 378,053 370,044 140,951
---------- ---------- --------
Total $ 964,788 $1,320,343 $602,668
========== ========== ========
Rent Expense
------------
Total $ 27,500 $ 55,011 $ 28,427
1/3 thereof 9,167 18,337 9,476

Capitalized Interest $ - $ 196 $ 117
--------------------
Preferred Stock Dividends $ 12,508 $ 25,015 $ 12,508
-------------------------

Ratio of earnings to fixed charges
----------------------------------
and preferred stock dividends
-----------------------------
Excluding customer accounts
---------------------------
Earnings before fixed charges $ 542,440 $ 794,875 $329,657
Fixed charges 407,892 429,015 171,828
Ratio 1.33 1.85 1.92

Including customer accounts
---------------------------
Earnings before fixed charges $1,129,175 $1,745,174 $791,374
Fixed charges 994,627 1,379,314 633,545
Ratio 1.14 1.27 1.25

Ratio of earnings to fixed charges
----------------------------------
Excluding customer accounts
---------------------------
Earnings before fixed charges $ 542,440 $ 794,875 $329,657
Fixed charges 387,220 388,537 150,544
Ratio 1.40 2.05 2.19

Including customer accounts
---------------------------
Earnings before fixed charges $1,129,175 $1,745,174 $791,374
Fixed charges 973,955 1,338,836 612,261
Ratio 1.16 1.30 1.29

</TABLE>
<PAGE>
<PAGE>

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

a. Exhibits
--------

3.1 Bylaws of the Company as in effect on the date of this report (filed
as an exhibit to the Company's Current Report on Form 8-K dated
June 30, 1995, event date June 27, 1995, and incorporated herein by
reference).

4.1 The Company has outstanding certain long-term debt as set forth in
Note 14 of the Notes to Consolidated Financial Statements included
in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994. The Company agrees to furnish copies of the
instruments representing its long-term debt to the Securities and
Exchange Commission (the "SEC") upon request.

10.1 Rights Agreement, dated as of June 24, 1986, between the Company and
First Chicago Trust Company of New York, as amended and restated on
June 27, 1995 (filed as an exhibit to the Company's Current Report on
Form 8-K dated June 30, 1995, event date June 27, 1995, and
incorporated herein by reference).

10.2 New Rights Agreement, dated as of June 27, 1995, between the Company
and First Chicago Trust Company of New York (filed as an exhibit to
the Company's Current Report on Form 8-K dated June 30, 1995, event
date June 27, 1995, and incorporated herein by reference).

10.3 Supplemental Executive Retirement Plan as amended.

10.4 Amendment to Employment Agreement between the Company and James F.
Montgomery dated as of April 25, 1995.

10.5 Consulting Agreement by and between the Company and James F.
Montgomery dated as of April 25, 1995.

10.6 Special Nonqualified Stock Option Agreement dated as of April 25,
1995.

10.7 Omnibus Amendment 1995-1 to the Supplemental Executive Retirement
Plan, Deferred Compensation Plans, Retirement Restoration Plan,
Supplemental Incentive Plan, and Umbrella Trusts replacing the Finance
Committee of the Board of Directors with the Compensation Committee
of the Board of Directors as the administrator of the plans.

11.1 Statement re computation of per share earnings.

27.1 Financial Data Schedule
<PAGE>
<PAGE>

b. Reports on Form 8-K
-------------------

A report on Form 8-K dated June 30, 1995, event dated June 27, 1995, was
filed with the SEC reporting that the Board of Directors of the Company
(1) had approved an amendment to the Rights Agreement lowering the
ownership threshold at which the rights issued under the Plan will become
exercisable from 25 percent of the Company's outstanding common stock to
15 percent, (2) had extended the term of the Rights Plan for an
additional 10 year period by adopting a substantially similar New Rights
Agreement to replace the Rights Agreement upon the expiration or
redemption of the existing rights, and (3) had approved certain
amendments to the Company's Bylaws, including an amendment providing the
Board with greater flexibility in determining the date of the Company's
annual meeting.<PAGE>
SIGNATURES
----------

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

GREAT WESTERN FINANCIAL CORPORATION
Registrant

/s/Carl F. Geuther
Carl F. Geuther
Executive Vice President and Chief
Financial Officer

DATE: August 10, 1995

<PAGE>

Exhibit 11.1

GREAT WESTERN FINANCIAL CORPORATION

Computation of Net Income Per Common Share
Primary and Fully Diluted

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------ -------------------
(Dollars in thousands) 1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>

Net income $50,436 $55,855 $ 93,920 $105,330
Preferred stock dividends - convertible
and nonconvertible (6,254) (6,254) (12,508) (12,508)
------- ------- -------- --------
Net income for computing earnings per
Common share - primary 44,182 49,601 81,412 92,822
Preferred stock dividends - convertible - 2,830 - 5,660
------- ------- -------- --------
Net income for computing earnings per
Common share - fully diluted $44,182 $52,431 $ 81,412 $ 98,482
======= ======= ======== ========

</TABLE>
<TABLE>
<CAPTION>

Computation of Average Number of
Common Shares Outstanding on Primary and Fully Diluted Basis
(In thousands, except per share amounts)

Three Months Ended Six Months Ended
June 30 June 30
------------------ ------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Average number of Common shares outstanding
during each period - without dilution 135,360 133,059 134,948 132,919
Common share equivalents outstanding at
the end of each period 1,387 457 928 525
------- ------- ------- -------
Average number of Common shares and Common
share equivalents outstanding during each
period on a primary basis 136,747 133,516 135,876 133,444
Common share equivalents outstanding at
the end of each period on a fully
diluted basis - 161 367 94
Addition from assumed conversion as of the
beginning of each period of the convertible
preferred stock outstanding at the end of
each period - 6,342 - 6,342
------- ------- ------- -------
Average number of Common shares outstanding
during each period on a fully diluted basis 136,747 140,019 136,243 139,880
======= ======= ======= =======
Net income per Common share

Primary $.32 $.38 $.60 $.70
Fully diluted .32 .38 .60 .70

</TABLE>

<ARTICLE> 9

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 813,755
<INT-BEARING-DEPOSITS> 125
<FED-FUNDS-SOLD> 312,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 3,824,371
<INVESTMENTS-CARRYING> 8,053,898
<INVESTMENTS-MARKET> 8,166,765
<LOANS> 29,632,403
<ALLOWANCE> 391,652
<TOTAL-ASSETS> 44,516,733
<DEPOSITS> 29,246,964
<SHORT-TERM> 9,212,954
<LIABILITIES-OTHER> 995,349
<LONG-TERM> 2,450,991
<COMMON> 135,895
0
294,375
<OTHER-SE> 2,180,205
<TOTAL-LIABILITIES-AND-EQUITY> 44,516,733
<INTEREST-LOAN> 1,164,567
<INTEREST-INVEST> 392,717
<INTEREST-OTHER> 19,347
<INTEREST-TOTAL> 1,576,631
<INTEREST-DEPOSIT> 586,735
<INTEREST-EXPENSE> 947,038
<INTEREST-INCOME-NET> 629,593
<LOAN-LOSSES> 90,800
<SECURITIES-GAINS> 2,877
<EXPENSE-OTHER> 516,707
<INCOME-PRETAX> 155,220
<INCOME-PRE-EXTRAORDINARY> 93,920
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 93,920
<EPS-PRIMARY> .60
<EPS-DILUTED> .60
<YIELD-ACTUAL> 3.06
<LOANS-NON> 489,382
<LOANS-PAST> 0
<LOANS-TROUBLED> 110,732
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 438,051
<CHARGE-OFFS> 146,976
<RECOVERIES> 9,777
<ALLOWANCE-CLOSE> 391,652
<ALLOWANCE-DOMESTIC> 391,652
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0

</TABLE>

<PAGE>
EXHIBIT 10.3

GREAT WESTERN
SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
(1988 RESTATEMENT)

THIS AGREEMENT, made and entered into effective the 1st day of
January, 1988, by GREAT WESTERN FINANCIAL CORPORATION, a Delaware
corporation ("Great Western"), evidences the terms of a Supplemental
Retirement Plan continuing the plan originally effective on January 1, 1987
for qualified executives of Great Western and Subsidiaries and superseding
all arrangements with respect to supplemental retirement benefits previously
entered into between Great Western and Anthony C. La Scala.

W I T N E S S E T H

ARTICLE I
TITLE, PURPOSE AND DEFINITIONS

1.1 - TITLE.

This plan shall be known as the "Great Western Supplemental Executive
Retirement Plan."

1.2 - PURPOSE.

The purpose of this Plan is to supplement retirement benefits payable
to certain participants in the Great Western Retirement Plan and to
compensate for Great Western Retirement Plan benefits which are reduced by
virtue of Section 415 of the Internal Revenue Code of 1986. No payment
shall be made under this Plan which duplicates a benefit payable under any
other deferred compensation plan or employment agreement provided by the
Company or a Subsidiary. This Plan was originally effective on January 1,
1987. This Restatement is adopted effective January 1, 1988.

1.3 - DEFINITIONS.

Unless defined herein, any word, phrase or term used in this Plan with
initial capitals shall have the meaning given therefor in the Great Western
Retirement Plan ("Retirement Plan").

"Accrued Benefit" means, at any time, the Participant's Normal
Retirement Benefit at Normal Retirement Date as provided in Section 4.1
multiplied by a fraction (not to exceed one), the numerator of which is the
Participant's Years of Service at the date of calculation and the
denominator of which is the number of Years of Service projected to his
Normal Retirement Date. The calculation of Normal Retirement Benefit for
this purpose shall be based on an estimation of the Participant's Social
Security Amount payable at age 65 under the Social Security Act in effect
<PAGE>
<PAGE>

at the time of calculation assuming level earnings to age 65. The
calculation of a Participant's Accrued Benefit shall be based on Average
Monthly Compensation as of the date of calculation. Years of Service shall
include all periods of Long-Term Disability counted for accruing Credited
Service under the Retirement Plan and, generally, Long-Term Disability shall
be treated under this Plan in a manner parallel to its treatment under the
Retirement Plan.

"Average Monthly Compensation" means Average Monthly Compensation as
defined in the Retirement Plan with the following modifications:

a. Average Monthly Compensation shall be computed on the basis of the
highest paid three years (i.e. non-overlapping twelve consecutive
calendar month periods) within the 60-month period immediately
preceding termination of employment, or Normal Retirement Date, if
earlier.

b. Average Monthly Compensation shall include no more than three
annual bonuses, whether or not deferred, but shall not include any
amounts paid during employment as a result of earlier deferral of
compensation included within the definition of Average Monthly
Compensation under this Plan.

"Change in Control" shall mean any transaction which will be
deemed to have taken place if:

a. Any person or entity (or group of affiliated persons or entities)
(including a group which is deemed a "person" by Section 13(d)(3)
of the Securities Exchange Act of 1934) acquires in one or more
transactions, whether before or after the date of this Agreement,
ownership of more than fifty percent (50%) of the outstanding
shares of stock entitled to vote in the election of directors of
the Company.

b. As a result of, or in connection with, any such acquisition or any
related proxy contest, cash tender or exchange offer, merger or
other business combination, sale of assets or any combination of
the foregoing transactions, the persons who were directors of the
Company immediately before such acquisition shall cease to
constitute five sixths of the membership of the Board or of the
board of directors of any successor to the Company after such
transaction (but not more than twelve (12) months after such
transaction).

c. "Ownership" means ownership, directly or indirectly, of more than
fifty percent (50%) of such outstanding voting stock of Company
other than:

(i) by a person owning such shares merely of record (such as a
member of a securities exchange, a nominee or a securities
depositary system),
<PAGE>
<page)

(ii) by a person as a bona fide pledgee of shares prior to a
default and determination to exercise powers as an owner of
the shares,

(iii) by a person who is not required to file statements on
Schedule 13D by virtue of Rule 13d-1(b) of the Securities
and Exchange Commission under the Securities Exchange Act of
1934, or

(iv) by a person who owns or holds shares as an underwriter
acquired in connection with an underwritten offering pending
and for purposes of their resale.

Without limitation, the right to acquire ownership shall not
of itself constitute ownership of shares.

"Committee" means the Compensation Committee of the Board of
Directors.

"Company" means Great Western Financial Corporation or any successor
corporation resulting from a merger, consolidation, or transfer of assets
substantially as a whole.

"Early Retirement Date" means the first day of any month following
termination of employment subsequent to the date of attainment of age 55.

"Eligible Employee" means each employee of the Company or a Subsidiary
who is both (1) a participant in the Retirement Plan and (2) an individual
specifically designated as eligible to participate in this Plan by the Board
of Directors.

"Normal Retirement Date" means the first day of any month subsequent
to the later of a Participant's attainment of age 62 or completion of
twenty-five Years of Service; provided however that the Normal Retirement
Date for James F. Montgomery and John F. Maher shall be the later of the
first day of the month following the later of attainment of age 60 or
completion of twenty Years of Service; and, provided further that for
purposes of this Plan, Years of Service attributed to Anthony C. La Scala
shall be no less than Years of Service attributable to Edward R. Hoffman.

"Participant" means any Eligible Employee who is or becomes eligible
for participation in this Plan.

"Plan" means the Great Western Supplemental Executive Retirement Plan
of Great Western Financial Corporation as set forth in this Agreement and
all subsequent amendments hereto.

"Plan Year" means the calendar year.

"Retirement Plan" means the Great Western Retirement Plan.
<PAGE>
<PAGE>

"Subsidiary" means any domestic corporation more than 50% of the
voting shares of which are now owned or shall hereafter be acquired by the
Company; also a like subsidiary of any such subsidiary.

"Years of Service" means years of Continuous Service except that all
Years of Service shall be credited under this Plan regardless of the Break
in Service rules contained in the Retirement Plan. For John F. Maher, his
Years of Service shall also include (to the extent not otherwise credited
hereunder) (a) years of service as a nonemployee director of the Company and
(b) the number of years during what would have been the remaining term of
his Employment Agreement with the Company if such Employment Agreement is
terminated by the Company without cause (as defined in his Employment
Agreement) or terminated by Mr. Maher within 60 days of any uncured material
breach of the Employment Agreement by the Company.

ARTICLE II
PARTICIPATION

2.1 - ELIGIBILITY REQUIREMENTS.

Any executive who is an Eligible Employee shall become a Participant
on the January 1 designated by the Board or such other date designated by
the Board. Individual Participants as of January 1, 1988 are James F.
Montgomery, John F. Maher, J. Lance Erikson, Carl F. Geuther, Edward R.
Hoffman, Anthony C. La Scala, William J. Marschalk, and Michael M. Pappas.

ARTICLE III
PAYMENT OF BENEFITS

3.1 - PAYMENT.

There shall be no funding of any benefit which may become payable
hereunder. The Company may, but is not obligated to, invest in any assets
or in life insurance policies which it deems desirable to provide assets for
payments under this Plan but all such assets or life insurance policies
shall remain the general assets of the Company. In connection with any such
investments and as a condition of further participation in this Plan,
Participants shall execute any documentation reasonably requested by the
Company.

ARTICLE IV
RETIREMENT BENEFITS

4.1 - NORMAL RETIREMENT BENEFIT.

Except as hereinafter provided, the amount of the monthly retirement
benefit payable to a Participant for life, commencing on or after his Normal
Retirement Date and payable for the period benefits are payable under the
Retirement Plan, will be:
<PAGE>
<PAGE>

(a) Sixty percent (60%) of the Participant's Average Monthly
Compensation (sixty-five percent (65%) in the case of James F.
Montgomery and John F. Maher), less

(b) 100% of the Participant's Social Security Amount reduced, for
Normal Retirement Dates preceding age 65, by the factors set
out in Section 4.4 (ii) of the Retirement Plan, less

4.2 - EARLY RETIREMENT BENEFIT.

Except as hereinafter provided, the amount of the monthly retirement
benefit, payable to a Participant for the period benefits are payable under
the Retirement Plan, on his Early Retirement Date, but before his Normal
Retirement Date, shall be the Participant's Accrued Benefit reduced by 5/12
of 1% for each month, if any, by which his Early Retirement Date precedes
his Normal Retirement Date. Except as provided in Section 4.3 and Section
4.6 of this Plan no benefits shall be payable to a Participant if his or her
employment is terminated prior to attaining age 55. Provided, however, if
John F. Maher's Employment Agreement is terminated by the Company without
"cause" (as defined in his Employment Agreement) or if Mr. Maher's
Employment Agreement is terminated by Mr. Maher within 60 days of any
uncured material breach of the Agreement by the Company, he shall be 100%
vested in his Accrued Benefit as of the date of such termination of
employment and his benefit shall be payable upon the attainment of age 60
or, at his election, at an earlier date after attaining age 55 with the
reduction provided by this Section except as provided in Section 4.3.

4.3 - BENEFIT AFTER CHANGE IN CONTROL.

If a Change in Control occurs and, within 24 months after such Change
in Control, a Participant is involuntarily terminated, suffers a significant
diminution of duties and responsibilities, has a downward change of title,
or is forced to relocate thereby resulting in his resignation, a monthly
retirement benefit shall be payable to such Participant as follows:

(a) If the Participant's employment is terminated on or after
attainment of age 55, his monthly retirement benefit, payable
commencing the first day of the month after termination of
employment and continuing for the period benefits are payable
under the Retirement Date will be his Normal Retirement
Benefit computed by crediting all Years of Service to his
Normal Retirement Date with no reduction to be made for
commencement of benefits before Normal Retirement Date.
<PAGE>
<PAGE>

(b) If a Participant's employment is terminated prior to
attainment of age 55, he shall be 100% vested in his Accrued
Benefit as of the date of termination of employment and his
benefit shall be payable upon the date which would have been
his earliest Early Retirement Date if he had continued
employment, with the benefit payable unreduced for
commencement before Normal Retirement Date.

4.4 - BENEFIT LIMITATION.

Notwithstanding any other provisions of the Plan, in the event that
any benefit provided under this agreement would, in the opinion of counsel
for the Company, not be deemed to be deductible in whole or in part in the
calculation of the federal income tax of the Company by reason of Section
280G of the Internal Revenue Code of 1986 (the "Code"), the aggregate
benefits provided hereunder shall be reduced so that no portion of any
amount which is paid to the Participant or Beneficiary is not deductible for
tax purposes by reason of Section 280G of the Code. The Company shall hold
such portions not paid in escrow. At the end of each calendar quarter
during the term of such escrow, the Company shall deposit into escrow an
amount equal to interest accrued during such calendar quarter on the amount
held in escrow during such calendar quarter at a rate equal to the rate then
payable on judgments in California. If it shall be determined at any point
in time, by a counsel mutually selected by the Company and Participant that
it is more likely than not that the payment of any or all of such amount
held in escrow would be deductible for tax purposes, such amount shall be
paid out of escrow to the Participant or Beneficiary. In the event of a
final determination by the Internal Revenue Service or of a final non-
appealable judicial decision that any such amount held in escrow will or
will not be deductible, such amount will be paid to the Company or
Participant or Beneficiary as appropriate. If it shall be determined at any
point in time, by a counsel mutually selected by the Company and
Participant, that it is more likely than not that the payment of any such
amount held in escrow would never be deductible for tax purposes, such
amount shall be paid out of escrow to the Company. For purposes of this
paragraph, the value of any benefit shall be conclusively determined by the
independent auditors of the Company in accordance with the principles of
Section 280G of the Code.

4.5 - PAYMENT OF RETIREMENT BENEFITS.

Upon a Participant's retirement the Company shall commence to pay to
such retired Participant the monthly retirement benefit to which he is
entitled under this Plan commencing on the date he elects to have benefits
commence, and payable for the period benefits are payable, under the
Retirement Plan. No benefits shall be payable under this Plan while the
Participant is accruing benefits under the Retirement Plan.
<PAGE>
<PAGE>

4.6 - AUGENTATION OF RETIREMENT PLAN BENEFITS.

To the extent not provided by this Plan, and not in duplication of
benefits otherwise payable under this Plan or any other deferred
compensation plan or employment agreement provided by the Company or a
Subsidiary, the benefit payable to a Participant on account of termination
of employment or to a Surviving Spouse, spouse or Contingent Beneficiary on
account of death of a Participant shall be augmented under this Plan to the
extent that any such benefit under the Retirement Plan otherwise payable is
reduced by the provisions of Article V of the Retirement Plan or Section 415
of the Code.

4.7 - OPTIONAL RETIREMENT BENEFITS.

The benefits determined under this Plan in the form of a single life
annuity may also be paid, at the election of an unmarried Participant, in
one of the alternative forms provided in the Retirement Plan which is the
Actuarial Equivalent of the benefit under this Plan.

4.8 - SMALL BENEFIT.

Notwithstanding any other provision or provisions of this Plan to the
contrary, if any Normal, or Early Retirement Benefit is for an amount of
less than fifty dollars per month, such benefit shall instead be paid in a
lump sum which is the Actuarial Equivalent of such monthly benefit.

4.9 - FORFEITURE OF BENEFITS.

Notwithstanding any provision of this Plan to the contrary, no
benefits shall be payable under this Plan with respect to any Participant
if the Participant confesses to, or is convicted of, any act of fraud, theft
or dishonesty arising in the course of, or in connection with, his
employment with the Company or any Subsidiary.

4.10 - SPOUSE DEATH BENEFIT.

The monthly benefit, if any, payable upon the death of a Participant
to the Participant's Surviving Spouse or spouse, commencing upon the date
that monthly benefits to such spouse commence under Section 4.8 of the
Retirement Plan and payable for the period such benefit is payable under the
Retirement Plan, shall be equal to the excess, if any, of:

(a) The monthly death benefit determined in accordance with Section 4.8
of the Retirement Plan using, however, the benefit being paid to such
Participant on his date of death under this Plan or which would have
been received on or after his Early Retirement Date under this Plan in
the form of single life annuity had the Participant retired on the day
immediately preceding the date of his death

over
<PAGE>
<PAGE>

(b) The amount of the monthly spouse death benefit payable to the
Participant's Surviving Spouse or spouse for life pursuant to
Section 4.8 of the Retirement Plan.

(c) In no event shall the Actuarial Equivalent of the amount
payable to such Surviving Spouse or spouse under this Plan be
less than twelve times 150% of a Participant's Average Monthly
Compensation calculated as of the earliest date benefits would
have been payable under this Plan on or after the date of his
death, less the Actuarial Equivalent of the Surviving Spouse
or spouse benefit payable under the Retirement Plan. Such an
amount shall be paid in a cash lump sum.

ARTICLE V
COMMITTEE

5.1 - Committee.

This Plan shall be administered by the Committee. The Committee shall
have the authority to make, amend, interpret, and enforce all appropriate
rules and regulations for the administration of this Plan and decide or
resolve any and all questions including interpretations of this Plan, as may
arise in connection with the Plan. The Committee members may be
Participants under this Plan.

5.2 - Agents.

The Committee may, from time to time, employ other agents and delegate
to them such administrative duties as it sees fit, and may from time to time
consult with counsel who may be counsel to the Company.

5.3 - Binding Effect of Decisions.

The decision or action of the Committee in respect of any questions
arising out of or in connection with the administration, interpretation and
application of the Plan and the rules and regulations promulgated hereunder
shall be final and conclusive and binding upon all persons having any
interest in the Plan.

5.4 - Indemnity.

To the extent permitted by applicable state law the Company shall
indemnify and save harmless the Board of Directors, the Committee and each
member thereof, and any agent or delegate appointed pursuant to Section 5.2,
against any and all expenses, liabilities and claims, including legal fees
to defend against such liabilities and claims, arising out of their
discharge in good faith and responsibilities under or incident to the Plan,
excepting only expenses and liabilities arising out of willful misconduct
<PAGE>
<PAGE>

or gross negligence. This indemnity shall not preclude such further
indemnities as may be available under insurance purchased by the Company or
provided by the Company under any Bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, as such indemnities are permitted
under state law.

ARTICLE VI
AMENDMENT AND TERMINATION

6.1 - Amendments and Termination.

The Company shall have the right to amend this Plan from time to time
by resolution of the Board of Directors and to amend or cancel any
amendments. Such amendment shall be stated in an instrument in writing,
executed by the Company in the same manner as this Plan. The Company also
reserves the right to terminate this Plan at any time.

6.2 - Protection of Accrued Benefits.

This Plan is strictly a voluntary undertaking on the
part of the Company and shall not be deemed to constitute a contract between
the Company and any Eligible Employee (or any other employee) or a
consideration for, or an inducement or condition of employment for the
performance of services by any Eligible Employee or employee. Although the
Company reserves the right to amend or terminate this Plan at any time and,
subject at all times to the provisions of Section 4.3, no such amendment or
termination shall result in the forfeiture of (i) any augmentation of
Retirement Plan benefits pursuant to Section 4.6 of this Plan or of (ii) an
Accrued Benefit which John F. Maher had already become entitled to pursuant
to Section 4.2 of this Plan or (iii) an Accrued Benefit (including a
Spouse's Death Benefit) which any Participant who has attained age 55 would
have been entitled to receive if he had terminated employment immediately
prior to the effective date of such amendment or termination.

ARTICLE VII
MISCELLANEOUS

7.1 - Unfunded Plan.

This Plan is intended to be an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of "management or
highly compensated employees" within the meaning of Section 201, 301 and 401
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and therefore to be exempt from the provisions of Parts 2, 3 and
4 of Title I of ERISA.

7.2 - Unsecured General Creditor.

In the event of Company's insolvency, Participants and their
Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interest or claims in any property or assets of Company,
<PAGE>
<PAGE>

nor shall they be Beneficiaries of, or have any rights, claims or interest
in any life insurance policies, annuity contracts or the proceeds therefrom
owned or which may be acquired by Company. In that event, any and all of
Company's assets and policies shall be, and remain, unrestricted by the
provisions of this Plan. Company's obligation under the Plan shall be that
of an unfunded and unsecured promise of Company to pay money in the future.

7.3 - Trust Fund.

The Company shall be responsible for the payment of all benefits
provided under the Plan. At its discretion, the Company may establish one
or more trusts, with such trustees as the Board may approve, for the purpose
of providing for the payment of such benefits. Such trust or trusts may be
irrevocable, but the assets thereof shall be subject to the claims of the
Company's creditors. To the extent any benefits provided under the Plan are
actually paid from any such trust, the Company shall have no further
obligation with respect thereto, but to the extent not so paid, such
benefits shall remain the obligation of, and shall be paid by, the Company.

7.4 - Nonassignability.

None of the benefits, payments, proceeds or claims of any Participant
or Beneficiary shall be subject to any claim of any creditor and, in
particular, the same shall not be subject to attachment or garnishment or
other legal process by any creditor, nor shall any Participant, Beneficiary
or Contingent Annuitant have any right to alienate, anticipate, commute,
pledge, encumber or assign any of the benefits or payments or proceeds which
he may expect to receive, contingently or otherwise, under this agreement.

7.5 - Limitation on Participants' Rights.

Participation in this Plan shall not give any Eligible Employee the
right to be retained in the Company's employ or any right or interest in the
Plan other than as herein provided. The Company reserves the right to
dismiss any Eligible Employee without any liability for any claim against
the Company, except to the extent provided herein.

7.6 - Participants Bound.

Any action with respect to this Plan taken by the Committee or by the
Company, or any action authorized by or taken at the direction of the
Committee or the Company, shall be conclusive upon all Participants,
Beneficiaries and Contingent Annuitants entitled to benefits under the Plan.

7.7 - Receipt and Release.

Any payment to any Participant or Beneficiary in accordance with the
provisions of this Plan shall, to the extent thereof, be in full
satisfaction of all claims against the Company and Subsidiaries and the
Committee, and the Committee may require such Participant, Beneficiary or
Contingent Annuitant, as a condition precedent to such payment, to execute
<PAGE>
<PAGE>

a receipt and release to such effect. If any Participant, Beneficiary or
Contingent Annuitant is determined by the Committee to be incompetent by
reason of physical or mental disability (including minority) to give a valid
receipt and release, the Committee may cause the payment or payments
becoming due to such person to be made to another person for his benefit
without responsibility on the part of the Committee or the Company to follow
the application of such funds.

7.8 - California Law Governs.

This Plan shall be construed, administered, and governed in all
respects under and by the laws of the State of California. If any provision
shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions hereof shall continue to be fully
effective.

7.9 - Headings and Subheadings.

Headings and subheadings in this agreement are inserted for
convenience of records only and are not to be considered in the construction
of the provisions hereof.

7.10 - Instrument in Counterparts.

This agreement has been executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute
but one and the same instrument, which may be sufficiently evidenced by one
counterpart.

7.11 - Gender.

The masculine gender as used herein includes the feminine and neuter
genders.

7.12 - Successors and Assigns.

This agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their successors and assigns.
<PAGE>
<PAGE>

IN WITNESS WHEREOF, the Company has caused these presents to be
executed by its duly authorized officers and the corporate seal to be
hereunto affixed this 11th day of April, 1988.

GREAT WESTERN FINANCIAL
CORPORATION

By ______________________
William J. Marschalk

By ______________________
J. Lance Erikson

EXHIBIT A

Inclusion of Clifford A. Miller in Great Western
Supplemental Executive Retirement Plan

WHEREAS, this Corporation maintains the Great Western Supplemental
Executive Retirement Plan (1988 Restatement) (the "SERP") for the benefit
of certain employees; and

WHEREAS, this Board is responsible for designating persons eligible
to participate in the SERP and the terms of their participation.

NOW, THEREFORE BE IT RESOLVED, THAT Clifford A. Miller is included in
the SERP effective January 1, 1988;

RESOLVED FURTHER that the following terms shall apply to Mr. Miller's
inclusion:

1. Mr. Miller's normal retirement benefit shall be the 60% benefit set out
in Section 4.1 of the SERP. Such benefit will be payable, except as
provided below, only upon his active employment with the corporation or its
affiliates until attainment of age 65.

2. In the event of a Change of Control as defined in the SERP, Mr. Miller
will be entitled to the protection provided by Section 4.3(a) of the SERP
subject to the benefit limitations contained in Section 4.4 of the SERP.

3. In the event of Long-Term Disability as defined in the Great Western
Retirement Plan, Mr. Miller will continue to be credited with Years of
Service through the period of Long-Term Disability.

4. In the event of Mr. Miller's death prior to attainment of age 65, his
Surviving Spouse, if any, as of the date of his death will be entitled to
receive a benefit for her life equal to 30 percent of Mr. Miller's Average
Monthly Compensation computed as of his date of death.

5. In the event of Mr. Miller's involuntary termination without cause
prior to attainment of age 65, he will be entitled to a percentage of the
full benefit payable pursuant to paragraph 1 above based on his age at the
time of such termination but with the benefit payable at attainment of age
65: 25% if so terminated after age 62; 50% if so terminated after age 63,
and; 75% if so terminated after age 64.

RESOLVED FURTHER that a copy of these resolutions shall be appended
to the copy of the SERP as Exhibit A.
<PAGE>
<PAGE>

EXHIBIT B
AMENDMENT 1992-1

GREAT WESTERN SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Special Provisions Concerning Dissolution
of Marriage of James F. Montgomery

WHEREAS, this corporation maintains the Great Western Supplemental
Executive Retirement Plan (1988 Restatement) (the "SERP") for the benefit
of certain employees; and

WHEREAS, the Board of Directors has the power, pursuant to Section 6.1
of the SERP to amend the SERP,

NOW, THEREFORE, BE IT RESOLVED, that this Amendment 1992-1 is hereby
adopted, to become effective upon the dissolution of marriage of James F.
Montgomery and Linda Montgomery, but only if these provisions reflect the
provisions of a final judgement or settlement agreement in the dissolution
proceeding.

The following, which, upon becoming effective, shall be added to the
SERP as Exhibit B and incorporated by reference as if set forth fully in the
SERP, sets forth the terms of the allocation of benefits between James F.
Montgomery and Linda Montgomery upon such dissolution. Upon becoming
effective, the provisions of this Exhibit B shall supersede any contrary or
inconsistent provisions of the SERP:

1. While James F. Montgomery is alive, the amount of benefit
payable from the SERP with respect to James F. Montgomery shall be
calculated as if all his accrued benefits under the Retirement Plan were
payable to him and without regard to any qualified domestic relation orders
pertaining to the Retirement Plan. While James F. Montgomery and Linda
Montgomery are both alive, the first $23,333.33 of any monthly benefit
otherwise payable to James F. Montgomery under the terms of the SERP shall
instead be payable to Linda Montgomery, who, upon the dissolution of her
marriage with James F. Montgomery, shall be the former spouse of James F.
Montgomery. Notwithstanding the preceding sentence, the monthly benefit
payable to Linda Montgomery from the SERP shall be reduced to the extent the
sum of the monthly benefits payable to her from the SERP, the Retirement
Plan and the Great Western Employee Savings Incentive Plan ("ESIP") exceeds
$23,333.33 per month. Such payments to Linda Montgomery shall commence when
payments to James F. Montgomery commence under the terms of the SERP and
shall continue until her death or the death of James F. Montgomery,
whichever occurs first. The payments made to Linda Montgomery shall reduce
the amounts otherwise payable to James F. Montgomery. If Linda Montgomery
predeceases James F. Montgomery on or after his retirement, the annual
benefit payable to Linda Montgomery under this Paragraph 1 shall be restored
to James F. Montgomery for as long as he lives.
<PAGE>
<PAGE>

2. This Paragraph 2 only applies if James F. Montgomery is survived
by Linda Montgomery and/or a subsequent spouse who would be treated as a
Surviving Spouse (for purposes of the pre-retirement Spouse's Death Benefit
under Section 4.10) or spouse (for purposes of the post-retirement Spouse's
Death Benefit under Section 4.10) (such subsequent spouse hereinafter
referred to as "Subsequent Spouse").

(a) The maximum monthly amount of the Spouse's Death Benefit
payable by the SERP to all persons under Section 4.10 and Exhibit B of the
SERP shall be calculated by assuming that James F. Montgomery is survived
by a Surviving Spouse (or spouse, as applicable) who is receiving the entire
pre-retirement or post-retirement spousal benefit provided by the Retirement
Plan with respect to James F. Montgomery, regardless of whether such a
spousal benefit is paid from the Retirement Plan. As described below, the
monthly amount of the total Spouse's Death Benefit payable to all persons
may be less than the amount described in the preceding sentence.

(b) If James F. Montgomery is survived by Linda Montgomery but not
by a Subsequent Spouse, then a Spouse's Death Benefit from the SERP shall
be paid to Linda Montgomery for her lifetime. Subject to subparagraph (a),
the monthly amount of such Spouse's Death Benefit shall be $23,333.00 minus
the sum of the monthly benefits payable to her from the Retirement Plan and
the ESIP. No other Spouse's Death Benefits shall be paid by the SERP.

(c) If James F. Montgomery is survived by a Subsequent Spouse but
not Linda Montgomery, then a monthly Spouse's Death Benefit from the SERP
shall be paid in an amount, if any, equal to the monthly amount described
in subparagraph (a) minus $23,333.33. Such monthly amount shall be divided
among such beneficiaries as are designated by James F. Montgomery in writing
to the Committee. No Subsequent Spouse shall be entitled to any of such
amounts under the SERP except to the extent such Subsequent Spouse is
designated by James F. Montgomery as a beneficiary. All Spouse's Death
Benefits (regardless of the beneficiary) shall cease upon the death of the
Subsequent Spouse. No other Spouse's Death Benefits shall be paid by the
SERP.

(d) If James F. Montgomery is survived by Linda Montgomery and a
Subsequent Spouse, then a Spouse's Death Benefit shall be paid as follows.

(1) Linda Montgomery shall receive a monthly Spouse's Death
Benefit in the amount described in subparagraph (b) for her lifetime. Linda
Montgomery shall not be entitled to any additional benefits even if she
outlives the Subsequent Spouse.
<PAGE>
<PAGE>

(2) Each month, for as long as Linda Montgomery and the
Subsequent Spouse are alive, any monthly amount of the Spouse's Death
Benefit (calculated under subparagraph (a)) remaining after payment of the
monthly amount described in subparagraph (d)(1) to Linda Montgomery, shall
be paid to (and divided among) such beneficiaries designated by James F.
Montgomery in writing to the Committee. No Subsequent Spouse of James F.
Montgomery shall be entitled to any of such amounts under the SERP except
to the extent such Subsequent Spouse is designated by James F. Montgomery
as a beneficiary.

(3) If Linda Montgomery outlives the Subsequent Spouse, all
monthly payments pursuant to subparagraph (d)(2) shall cease upon the death
of the Subsequent Spouse. Monthly payments to Linda Montgomery shall
continue pursuant to subparagraph (d)(1).

(4) If the Subsequent Spouse outlives Linda Montgomery, all
benefits under this subparagraph (d) shall cease. Upon the death of Linda
Montgomery, monthly payments shall be made in accordance with subparagraph
(c).

3. If James F. Montgomery is not survived by a Subsequent Spouse
or by Linda Montgomery, no Spouse's Death Benefit shall be payable under the
SERP.

GREAT WESTERN
SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
(1988 RESTATEMENT)

PRO FORMA
INCORPORATING ALL AMENDMENTS
THROUGH JULY 1, 1995

TABLE OF CONTENTS
Page

ARTICLE I TITLE, PURPOSE AND DEFINITIONS 1
1.1 Title 1
1.2 Purpose 2
1.3 Definitions 2

ARTICLE II PARTICIPATION 8
2.1 Eligibility Requirements 8

ARTICLE III PAYMENT OF BENEFITS 9
3.1 Payment 9

ARTICLE IV RETIREMENT BENEFITS 9
4.1 Normal Retirement Benefit 9
4.2 Early Retirement Benefit 10
4.3 Benefit After Change in Control 11
4.4 Benefit Limitation 12
4.5 Payment of Retirement Benefits 14
4.6 Augmentation of Retirement Plan
Benefits 14
4.7 Optional Retirement Benefits 15
4.8 Small Benefit 15
4.9 Forfeiture of Benefits 15
4.10 Spouse Death Benefit 16

ARTICLE V COMMITTEE 17
5.1 Committee 17
5.2 Agents 17
5.3 Binding Effect of Decisions 18
5.4 Indemnity 18

ARTICLE VI AMENDMENT AND TERMINATION 19
6.1 Amendments and Termination 19
6.2 Protection of Accrued Benefits 19

ARTICLE VII MISCELLANEOUS 20
7.1 Unfunded Plan 20
7.2 Unsecured General Creditor 20
7.3 Trust Fund 21
7.4 Nonassignability 22
7.5 Limitation on Participants' Rights 22
7.6 Participants Bound 22
7.7 Receipt and Release 23
7.8 California Law Governs 23
7.9 Headings and Subheadings 24
7.10 Instrument in Counterparts 24
7.11 Gender 24
7.12 Successors and Assigns 24
Exhibit A 26
Exhibit B 29

<PAGE>
EXHIBIT 10.4

AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment to Employment Agreement (the "Amendment") is entered
into as of April 25, 1995, by and between GREAT WESTERN FINANCIAL
CORPORATION, a Delaware corporation ("GWFC"), and JAMES F. MONTGOMERY
("Montgomery").

RECITALS

A. This Amendment is made with reference to that certain Employment
Agreement entered into as of December 19, 1989 (the "Employment Agreement"),
by and between Montgomery and GWFC. The terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the
Employment Agreement.

B. GWFC and Montgomery desire to amend the Employment Agreement as
hereinafter set forth in order to (i) redefine the term of employment so
that it will expire on December 28, 1995, unless terminated earlier in
accordance with the provisions of the Employment Agreement, (ii) confirm the
level of target bonus compensation under GWFC's Annual Incentive
Compensation Plan, (iii) provide for accelerated exercisability of certain
Stock Options, (iv) revise provisions for the vesting of shares of
Restricted Stock, and (v) confirm the authorization of the grant of a
Special Stock Option Grant for 300,000 shares to Montgomery.

NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto hereby agree that the Employment
Agreement is amended effective April 25, 1995, as follows:

AGREEMENT

1. TERM. The term of the Employment Agreement will expire effective
December 28, 1995. Montgomery hereby agrees that he will retire from GWFC
and its wholly-owned subsidiary Great Western Bank, a Federal Savings Bank
("GWB"), effective December 28, 1995, but no sooner. Montgomery and GWFC
hereby agree that they will announce, through the use of a jointly approved
press release, that Montgomery will cease to be Chief Executive Officer of
GWFC and GWB as of December 28, 1995. Such announcement also will be made
at the 1995 Annual Stockholders Meeting of GWFC, which will occur on
April 25, 1995.

2. BONUS COMPENSATION. It is hereby confirmed by GWFC and
Montgomery that bonus compensation for Montgomery for the calendar year 1995
will be determined and paid in accordance with the GWFC Annual Incentive
Compensation Plan for Executive Officers, with a target bonus equal to 60%
of base compensation as provided by the Plan. Any bonus that may be paid
to Montgomery in accordance with such Plan will be paid on or before March
31, 1996.
<PAGE>
<PAGE>

3. VESTING OF OUTSTANDING STOCK OPTIONS. The stock options
previously granted to Montgomery covering an aggregate of 197,500 shares of
GWFC Common Stock (except the Special Stock Option Award to be granted to
Montgomery as described in Section 5 below) which are outstanding on and
have not become exercisable by December 28, 1995, will become exercisable
on that date. Montgomery may exercise any such options at any time
thereafter until the earlier of (i) ten years after the initial grant date
of each option or (ii) two years following the later of the termination of
Montgomery's services as a member of the Board of Directors or as a
consultant under the Consulting Agreement of even date herewith (the
"Consulting Agreement").

4. VESTING OF RESTRICTED STOCK. The 175,000 shares of Restricted
Stock heretofore granted to Montgomery will vest in accordance with the
terms of the related Restricted Stock Award Agreement during the term of the
Consulting Agreement. At December 31, 2000, any shares of Restricted Stock
which have not theretofore vested will vest, provided Montgomery has
continued to provide services to GWFC in accordance with the terms of the
Consulting Agreement until that date (or, in the event of a termination
described in Section 8 of the Consulting Agreement, until the date of such
termination).

5. SPECIAL STOCK OPTION GRANT. On April 25, 1995, the Compensation
Committee of the Board (the "Committee") shall grant to Montgomery, under
the terms of the GWFC 1988 Stock Option and Incentive Plan, as amended (the
"1988 Plan"), a Special Stock Option covering 300,000 shares of its Common
Stock, the exercise price of which shall be the closing price for the Common
Stock on such date (the "Special Option"). The Special Option will become
exercisable at the rate of 25% per year commencing April 25, 1996, and, once
exercisable, the option may be exercised at any time thereafter until the
first to occur of (i) April 24, 2005, or (ii) a termination for cause of
services (A) under the Employment Agreement or the Consulting Agreement and
(B) as a director, or (iii) if the Consulting Agreement is terminated or
deemed terminated under Section 8 thereof or the Employment Agreement is
terminated or deemed terminated under Section 6 thereof, two years after the
Consulting Agreement would have otherwise terminated, until which assumed
date of termination the Special Option shall continue to vest as provided
therein, or (iv) two years after a termination of such services for any
other reason (except that the Special Option shall be exercisable only to
the extent exercisable on the date of a termination by reason of death or
Disability (as defined in the Consulting Agreement) or a termination of such
services by Montgomery (other than a termination described in clause (iii)
above)). The Special Option will include such other provisions not
inconsistent herewith as are set forth in GWFC's standard form of Non-
Qualified Stock Option Agreement under the 1988 Plan, in the form previously
approved by the Committee, with appropriate modifications to reflect the
foregoing terms.
<PAGE>
<PAGE>

6. RETIREE BENEFITS. Commencing December 29, 1995, Montgomery will
be eligible to participate in benefit programs available to retired
executive officers of GWFC (based, where applicable, on his position as the
former Chief Executive Officer of GWFC), in accordance with the terms of
such benefits programs as they may from time to time be in effect,
including, but not limited to, any retiree medical insurance plans and any
similar plans or programs for which he is eligible (collectively, "Retiree
Benefits").

Notwithstanding the foregoing, commencing December 29, 1995 no further
benefits shall accrue under any GWFC or GWB plan qualified under Section
401(a) of the Internal Revenue Code or under the Great Western Supplemental
Executive Retirement Plan (the "SERP") or under other plans covering active
(as distinguished from retired) executive officers and/or employees. No
benefits shall commence under the Great Western Retirement Plan (the
"Retirement Plan") until Montgomery ceases to perform services for GWFC and
GWB or such earlier date as GWFC in its sole discretion (consistent with
applicable qualification and other requirements) may permit. Commencing as
of January 1, 1996, Montgomery shall be entitled to receive payments under
the SERP and, until Montgomery's benefits under the Retirement Plan actually
commence, the amount of the SERP benefit shall be determined without the
offset for benefits payable under the Retirement Plan. Benefits to
Montgomery under the SERP shall be calculated according to the SERP
provisions in effect as of December 28, 1995, including amendments made on
April 10, 1995 (to change the formula base from (in effect) the highest
three consecutive of the last five years to the highest three of the last
five years), provided that Montgomery shall not be adversely affected by any
changes made between the date hereof and December 29, 1995 or (with respect
to any then accrued and vested benefits) by any changes thereafter.
Notwithstanding anything contained herein to the contrary, benefits payable
to Montgomery under the SERP, the Retirement Plan and any other plan
maintained by GWFC or GWB shall be subject to any applicable qualified
domestic relations order.

7. OTHER TERMS REMAIN IN FULL FORCE AND EFFECT. Except as amended
hereby, all the terms and provisions of the Employment Agreement will remain
in full force and effect through and including December 28, 1995; provided
that if the Employment Agreement is terminated by action of GWFC in
accordance with its terms on or before December 28, 1995 (A) the term of the
Employment Agreement shall be deemed to expire December 31, 1997, (B) this
Amendment and the Consulting Agreement and all benefits provided or
contemplated hereby or thereby shall be deemed rescinded without further
action, except that the Special Option shall not be rescinded but shall
remain subject to the terms of Section 5 hereof (without regard to this
clause (B)), (C) Montgomery will be entitled to all amounts payable by
reason of such termination under the Employment Agreement (without regard
to this Amendment), except that the exercisability of the Special Option
shall not be accelerated under the Employment Agreement or otherwise, and
(D) to the extent any payments or benefits have been paid hereunder, they
shall be offset against payments or benefits due or payable under the
Employment Agreement. Unless this Amendment is rescinded by reason of the
proviso in the preceding sentence, the provisions of Sections 2 through 6
of this Amendment shall survive the term of the Employment Agreement set
forth in Section 1 of this Amendment.<PAGE>
<PAGE>

IN WITNESS WHEREOF, the GWFC and Montgomery have executed this
Amendment to Employment Agreement as of the date first above written.

GREAT WESTERN FINANCIAL CORPORATION

By:

Title:

OFFICER

James F. Montgomery

APPROVED BY:

Chairman of the Compensation
Committee of the Board of Directors

AMENDMENT

EMPLOYMENT AGREEMENT

BY AND BETWEEN

GREAT WESTERN FINANCIAL CORPORATION

A DELAWARE CORPORATION,

AND

JAMES F. MONTGOMERY

DATED AS OF APRIL 25, 1995

<PAGE>
EXHIBIT 10.5

CONSULTING AGREEMENT

This Consulting Agreement (the "Consulting Agreement") is entered into
as of April 25, 1995, by and between GREAT WESTERN FINANCIAL CORPORATION,
a Delaware corporation ("GWFC") and JAMES F. MONTGOMERY ("Montgomery").

R E C I T A L S

A. Montgomery has ably served as a senior executive officer of GWFC
for 25 years and has made significant contributions to the benefit of its
shareholders.

B. GWFC and its Board of Directors desire that Montgomery continue
to serve GWFC after the term of his Employment Agreement dated December 19,
1989, as amended (the "Employment Agreement") expires on December 28, 1995,
in a number of important capacities which will benefit GWFC and its
shareholders. Montgomery is willing to do so subject to the terms of this
Consulting Agreement which, unless earlier terminated, will commence on
December 29, 1995 and continue for approximately five years, expiring on
December 31, 2000.

C. Subject to the conditions of this Consulting Agreement, in terms
of service, Montgomery will provide general consulting services and serve
as the Chairman of the Board of GWFC through December 31, 1997 and may serve
as Chair thereafter at the election of the Board and will represent GWFC and
its affiliates in connection with legislative, regulatory, and industry
matters which are of critical importance to GWFC.

D. In addition, under this Agreement, Montgomery will
agree not to compete with GWFC, not to solicit its employees for competing
companies and not to disclose its confidential or proprietary information
for other than permitted purposes.

NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained GWFC and Montgomery hereby agree as follows:

1. Engagement and Term. GWFC agrees to engage Montgomery, and
Montgomery agrees to serve GWFC, in accordance with the terms hereof as a
consultant, for a term beginning on December 29, 1995 (provided the
Employment Agreement has expired in accordance with its terms) and ending
December 31, 2000 (the "Consulting Period"), unless earlier terminated in
accordance with the provisions hereof. During the Consulting Period,
Montgomery shall provide consulting services to GWFC and to Great Western
Bank, a Federal Savings Bank ("GWB"). This Consulting Agreement shall be
null and void if the Employment Agreement does not expire in accordance with
its terms on December 28, 1995.

1. Independent Contractor Relationship, Services, and Memberships.
<PAGE>
<PAGE>

(a) Independent Contractor Relationship. This Consulting Agreement
establishes between Montgomery and GWFC an independent contractor
relationship and all the terms and conditions of this Consulting Agreement
shall be interpreted in light of that relationship. There is no intention
to create, by way of this Consulting Agreement, an employer-employee
relationship and Montgomery shall not serve as an officer or employee of
GWFC or GWB hereunder.

(b) Service as Chairman of GWFC and Chairman of GWB. For the period
December 29, 1995 through December 31, 1997, subject to his continued
election to the Board of Directors of GWFC and GWB, Montgomery shall serve
as Chairman of GWFC and GWB. In these capacities, Montgomery shall not be
an officer of either GWFC or GWB, and, in each case, shall perform the usual
and customary duties of the chairman of the board of a large, United States
financial institution. As of December 31, 1997, Montgomery will offer to
resign as the Chairman of GWFC and of GWB (but not as a director of either
GWFC or GWB), and each Board may, but shall not be obligated to, request
that he continue as its Chairman. Until December 31, 1997, GWFC agrees to
nominate Montgomery for membership on the Board (assuming his willingness
and ability to serve) and to vote shares of GWB owned by GWFC in favor of
his election to the GWB Board, but subject in each case to any applicable
fiduciary obligations.

(c) Board Service. For the period from December 29, 1995 through
December 31, 2000, Montgomery shall, subject to his continued election to,
the Board of Directors of GWFC and GWB, serve as a member of the Board of
Directors of GWFC and GWB.

(d) Consulting Services. During the Consulting Period, Montgomery
shall perform consulting services for GWFC and GWB consistent with his
experience and status in the financial services industry and his expertise
in matters of policy derived as the former chief executive officer of GWFC
and GWB. In this respect, Montgomery shall provide consulting services to
GWFC with respect to legislative and regulatory affairs of significance to
GWFC and the financial services industry and perform such additional
services as may reasonably be requested by the Chief Executive Officer. All
such duties as may be performed by Montgomery as consultant during the
Consulting Period shall be at the request of the Chief Executive Officer,
to whom Montgomery will report.

The places and times of performance of Montgomery's services
hereunder, except when expressly provided herein to the contrary, shall be
determined in good faith by Montgomery and GWFC and, except as otherwise
provided herein, he shall not be subject to the general rules and
restrictions imposed upon GWFC's employees. Except where expressly agreed
upon in writing by Montgomery and GWFC or authorized by the Board,
Montgomery shall not represent that he has general authority to enter into
agreements or obligations on behalf of or in the name of the GWFC.
<PAGE>
<PAGE>

(e) Other Services and Memberships. Montgomery shall also represent
GWFC and GWB in such national thrift associations and state thrift
associations as GWFC and GWB may choose to join, which presently include
America's Community Bankers and the Western League of Thrift Institutions.
GWFC acknowledges that Montgomery serves as a director of Local Initiative
Support Corporation and serves on the national board of directors of
Neighborhood Housing Services of America and of Social Compact, and also
serves as a director of the Federal Home Loan Bank of San Francisco and the
Federal Home Loan Mortgage Corporation. Subject to his continued election
to their respective boards of directors, GWFC agrees that Montgomery may
remain a director of (and, if requested by GWFC, agrees to serve) these
organizations during the Consulting Period consistent with the performance
of his general consulting services hereunder. Should Montgomery not be re-
elected to any of the committees, associations, institutions or boards
described in this Section 2(e) or should GWFC decide not to support any such
membership, neither event shall be regarded as a failure by GWFC or
Montgomery to perform their respective obligations under this Consulting
Agreement.

(f) Principal Business Address. During the Consulting Period,
Montgomery's principal business address shall be at GWFC's then principal
executive offices in southern California or in such other place, as with
Montgomery's and GWFC's consent, his office may be relocated.

(g) Secretarial and Support Staff. During the term of this
Consulting Agreement, GWFC shall provide Montgomery with appropriate
secretarial and support staff.

3. Amount and Nature of Service. During the Consulting Period,
Montgomery shall devote substantial time and attention as may be required,
but no less than half time (if and to the extent requested), to the
business, affairs and interests of GWFC and affiliates and shall use his
best efforts and abilities to promote GWFC's interests.

Montgomery's failure to discharge an order or perform a function
because he reasonably and in good faith believes such would violate a law
or regulation or be dishonest shall not be deemed a breach by him of his
obligations hereunder and shall not entitle GWFC to terminate this
Consulting Agreement pursuant to any of its provisions, including, without
limitation, Section 9 (c) hereof.

Montgomery may serve as a director or in any other capacity of any
business enterprise, including an enterprise whose activities may involve
or relate to the business of GWFC and/or its subsidiaries (the "Company"),
provided that such service is expressly approved by the Board of GWFC.
Montgomery may make and manage personal business investments of his choice
and serve in any capacity with any other organization without seeking or
obtaining approval by the Board of GWFC, provided such activities and
services do not materially interfere or conflict with the performance of his
duties hereunder or otherwise breach the commitments made hereunder.
<PAGE>
<PAGE>

1. Consulting Fee. During the Consulting Period, GWFC shall pay
Montgomery an annual consulting fee at the annual rate of $485,000, which
shall be payable in semi-monthly or bi-weekly installments. Montgomery
shall not be entitled to receive any new awards under any bonus plan or
incentive plan of GWFC during the Consulting Period, except for any plans
available to GWFC non-employee directors and other than any bonus earned for
1995 and payable in 1996 under GWFC's Annual Incentive Compensation Plan.

Commencing January 1, 1996, Montgomery will be entitled to receive any
compensation and benefits for service on the GWFC and GWB Boards of
Directors to which he is eligible as a non-employee director (except for
compensation and benefits not available to former officers), subject to his
continued election to and service on those Boards.

1. Perquisites and Special Benefits. Until the expiration of twelve
months after Montgomery ceases to be the Chairman of GWFC and GWB, he will
be permitted to utilize the tax and financial planning services of the AYCO
Company, L.P. (except for check writing services).

During his tenure as an officer of America's Community Bankers,
Montgomery will be entitled to the same air travel policy for business and
personal travel as is, from time to time, available to the Chief Executive
Officer of GWFC. Thereafter, the air travel policy then applicable to
Montgomery shall be determined by the Chief Executive Officer of GWFC.

During the Consulting Period, Montgomery will be entitled to benefits
equivalent to those that were available to him under the GWFC executive
medical program as of December 28, 1995.

During the Consulting Period, Montgomery will be entitled to the
continued use of the same type of company-owned automobile as currently
provided to him by GWFC and for so long as he remains Chairman of the Board
of GWFC and GWB a car and driver. At the end of the Consulting Period (or,
if applicable, at any time during the period described in Section 8(c))
Montgomery may purchase any Company-owned automobile that he is then using
for its depreciated book value. At the end of the Consulting Period (or,
if applicable, at any time during the period described in Section 8(b)) GWFC
will transfer to Montgomery, without charge, such interest as GWFC has in
his memberships in the Los Angeles Country Club and PGA West.

6. Split Dollar Life Insurance. Upon termination of this Consulting
Agreement (including any obligations of GWFC under Section 9(b)), Montgomery
shall have sixty (60) days thereafter in which to elect to purchase GWFC's
interest in the Split-Dollar Life Insurance Policy (the "Policy") covering
Montgomery. The amount of the purchase price shall be equal to the then
cash value of the Policy or the cumulative premium payments made by GWFC,
whichever amount is greater. Upon Montgomery's purchase of the Policy, the
Split Dollar Life Insurance Agreement and the related endorsement shall both
terminate. During the Consulting Period, GWFC will pay the premiums on the
Policy.
<PAGE>
<PAGE>

1. Personal, Unsecured Loan. Montgomery's outstanding $500,000
personal, unsecured loan, which is payable to GWFC and which is due and
payable on the earlier of May 23, 1998 or twelve months following the
termination of his employment, shall be extended through, and become due and
payable at the earlier of December 31, 1999 or, if Montgomery supplies
collateral for such loan reasonably satisfactory to GWFC on or before
December 15, 1999 or applies the consulting fee payable in the year 2000 to
repay the loan, at the end of the Consulting Period.

1. Termination By GWFC Without "Cause"; Termination by Montgomery.
GWFC shall have the right, at its election to be made by notice in writing
and delivered to Montgomery within sixty (60) days prior to the effective
date thereof, to terminate this Consulting Agreement without "cause" (as
defined in Section 9(c) below). Montgomery shall have the right, at his
election to be made in writing and delivered to GWFC within sixty (60) days
after such notice, to terminate this Consulting Agreement if a material
breach of this Consulting Agreement by GWFC occurs which GWFC fails to cure
within fifteen (15) days after receipt of notice of such breach. In the
event of a termination for either of the reasons enumerated in this
paragraph, Montgomery shall be entitled to the following:

(a) for what would have been the remaining term of this Consulting
Agreement absent such termination, consulting fees at the applicable rate
immediately prior to such election and benefits under Section 5 hereof;

(b) for a one-year period commencing with the effective date of such
termination, a continuation at GWFC's expense of such business and club
memberships as GWFC shall have maintained for Montgomery immediately prior
to such election, subject to Montgomery's right at any time during such one-
year period to require GWFC to take all necessary and appropriate actions
to assign any one or more of such memberships to Montgomery;

(a) for a one-year period commencing with the effective date of such
termination, a continuation at GWFC's expense of the use of the Company-
owned automobile provided by GWFC immediately prior to such election,
subject to Montgomery's right at any time during such one-year period to
purchase such automobile at its depreciated book value;

(a) for a three-month period commencing with the effective date of
such termination, a continuation, at GWFC's expense, of Montgomery's right
to use a car and driver; and

(b) for what would have been the remaining term of the Consulting
Period, if any, absent such termination, a continuation of the vesting of
the Special Stock Option granted by GWFC to Montgomery pursuant to the
Amendment to the Employment Agreement of even date herewith (the
"Amendment") and the continuation of vesting of his Restricted Stock Award,
in each case in accordance with the terms of each such grant or award as if
no election to terminate this Consulting Agreement had been made, provided
Montgomery continued to perform services hereunder to the date of
termination.
<PAGE>
<PAGE>
1. Other Events of Termination. Other than a termination pursuant
to Section 8 or Section 10, this Consulting Agreement shall be terminated
only as provided for below in this Section 9:

(b) Disability. In the event that Montgomery shall fail, because
of illness, injury or similar incapacity ("disability"), to render for six
(6) consecutive calendar months, or for shorter periods aggregating one
hundred thirty (130) or more business days in any twelve (12) month period,
services contemplated by this Consulting Agreement, Montgomery's services
hereunder may be terminated, by written notice of termination from GWFC to
Montgomery; thereafter, GWFC shall continue, (A) until Montgomery's death,
or until his sixty-fifth (65th) birthday, whichever first occurs, to pay
compensation to Montgomery at a rate and in an amount (payable at the times
and in the manner theretofore applicable to Montgomery's consulting fee)
equal to 50% of the applicable rate of Montgomery's annual consulting fee
payable to him immediately prior to such termination minus the amount of any
cash payments to which he is entitled under any disability insurance plan
provided to him as a retired executive officer, and (B) to afford to
Montgomery any retiree medical, dental and life insurance benefits to which
he is entitled pursuant to Section 6 of the Amendment and Section 5 hereof,
to the extent, at the time and in the manner otherwise provided thereunder.

(b) Death. Montgomery's services hereunder shall be terminated upon
his death. Fifty percent (50%) of Montgomery's annual consulting fee in
effect immediately prior to his death (or, if Montgomery's death occurs
while he is receiving payments under Section 9(a) hereof, at the rate of
such fee in effect immediately prior to his disability) shall be paid for
a period to and including the date that would have been Montgomery's sixty-
fifth (65th) birthday (but in no event shall such fee be paid for a period
of less than ten (10) years), at the times and in the manner otherwise
payable hereunder, to such person or persons as Montgomery shall have
directed in writing or, in the absence of a designation, to his estate (the
"Beneficiaries"). The Beneficiaries shall also be entitled to receive, as
soon as practicable following Montgomery's death, a lump-sum payment equal
to two hundred fifty percent (250%) of the applicable rate of Montgomery's
annual consulting fee in effect immediately prior to his death (or, if
Montgomery's death occurs while he is receiving payments under Section 9(a)
hereof, at the rate of such fee in effect immediately prior to his
disability), reduced (but not below zero) by the aggregate proceeds received
by the Beneficiaries (and received by any other person or persons as
Montgomery shall have directed in writing) from any GWFC-maintained group
or other GWFC-sponsored life insurance plan or other policy (including the
Policy) maintained by GWFC to the extent such proceeds are attributable to
plan or policy benefits arising from payments made by or on behalf of GWFC.
The proceeds from any split dollar life or other insurance then maintained
by GWFC on or in respect of Mr. Montgomery's life also may be applied by
GWFC to pay benefits contemplated by or to reduce GWFC's obligations under
the second sentence of this Section 9(b).
<PAGE>
<PAGE>

In addition to the Beneficiaries' rights hereunder to be paid
Montgomery's consulting fee and to receive a lump-sum payment, hospital,
surgical, major medical and dental benefits to which members of Montgomery's
family were entitled immediately prior to his death shall be continued to
the same extent until the second anniversary of his death. This Consulting
Agreement in all other respects shall terminate upon the death of
Montgomery.

(b) For Cause. Montgomery's services hereunder shall be terminated
and all of his rights to receive consulting fees, benefits and perquisites
hereunder shall terminate upon the occurrence of (i) a material breach of
this Consulting Agreement by Montgomery, (ii) Montgomery's conviction by a
court of competent jurisdiction of a felony or (iii) entry of an order duly
issued by the Office of Thrift Supervision or the Federal Deposit Insurance
Corporation, or the successor of either, removing Montgomery from the board
or of preventing him from providing services to GWFC or GWB or permanently
prohibiting him from participating in the conduct of the affairs of GWFC or
GWB. Notwithstanding the foregoing, Montgomery's services hereunder shall
not be subject to termination under subsection (c)(i) hereof without
(A) reasonable notice to Montgomery setting forth the reasons for GWFC's
intention to terminate, (B) an opportunity for Montgomery to cure any such
breach within fifteen (15) days after receipt of such notice, (C) an
opportunity for Montgomery, together with his counsel, to be heard before
the Board of Directors of GWFC and (D) delivery to Montgomery of a notice
of termination stating that a majority of the authorized number of GWFC's
directors has found that Montgomery was guilty of the conduct set forth
above and specifying the particulars thereof in detail.

If Montgomery shall be suspended and/or temporarily prohibited from
participating in the conduct of GWFC's or GWB's affairs by any regulatory
authority having jurisdiction in the premises, GWFC's obligations shall be
automatically suspended, subject to reinstatement in full if the charges
resulting in such suspension or prohibition are finally dismissed. Such
reinstatement shall provide Montgomery with the consulting fees, other
benefits and perquisites to which he would have been entitled absent such
suspension or prohibition to the same effect and extent as though such
suspension or prohibition had not occurred, including, without limitation,
accrued interest at the rate then payable on judgments on all amounts
thereupon paid to Montgomery and attributable to the suspension period.

In the event of any termination or suspension by GWFC pursuant to any
of the provisions of Section 9 (a) or (c) hereof, GWFC shall immediately so
notify Montgomery.
<PAGE>
<PAGE>

1. Change in Control.

(a) If, during the term of this Consulting Agreement, there should
occur a change in control of GWFC (as defined below), then Montgomery,
without limitation on any other rights he may have hereunder, may, within
six (6) months after he first has knowledge of such event, elect to
terminate this Consulting Agreement and to treat such termination as a
termination pursuant to Section 8 hereof except that the Special Option
shall immediately vest and (subject to Section 9(a) of the General
Provisions Applicable to Performance Restricted Stock Awards) the
restrictions applicable to the Restricted Stock shall thereupon lapse (the
"Change in Control Modification").

Notwithstanding Montgomery's entitlement to terminate as set forth in
the above paragraph, in no event shall the value of such aggregate
entitlement constituting "parachute payments" under Section 280G of the
Internal Revenue Code, as amended, and including any successor legislation
thereto (the "Code"), equal or exceed three (3) times the "base amount" as
determined under and in accordance with said Section 280G. In the event of
a termination pursuant to this paragraph, Montgomery shall have no duty to
seek other consulting assignments or to become employed, and GWFC agrees
that any fee received by Montgomery during or with respect to what would
have been the remaining term of this Consulting Agreement, and attributable
to services rendered by Montgomery to persons or entities other than GWFC
and any income realized by reason of self-employment during or with respect
to such period shall not be applied to reduce GWFC's obligation to make
payments hereunder and that any benefits of the kind referred to in
Section 5 hereof received by Montgomery, during or with respect to such
period and attributable to services rendered by Montgomery to persons or
entities other than GWFC, shall not be applied to reduce GWFC's obligation
to provide such benefits hereunder.

(b) If, during the term of this Consulting Agreement, there should
occur a change in control of GWFC (as defined below in Section 10(c)), and
if thereafter GWFC materially breaches this Consulting Agreement and fails
to cure such breach within fifteen (15) days after receipt of notice
thereof, then Montgomery, without limitation on any other rights he may have
hereunder, may, within one (1) year after he first has knowledge of such
breach, elect to terminate this Consulting Agreement and to treat such
termination as a termination pursuant to Section 8 hereof, subject, however,
to the Change in Control Modification which Montgomery may elect to waive
as to the Special Option and/or Restricted Stock.

Notwithstanding Montgomery's entitlement as set forth in this
paragraph, if the value of such aggregate entitlement constituting
"parachute payments" under Section 280G of the Code, after giving effect to
GWFC's rights of offset as provided for in the next succeeding sentence, is
<PAGE>
<PAGE>

less than the maximum amount Montgomery is entitled to receive without
incurring a liability under Section 4999 of the Code for any reason,
including that some or all of such entitlement constitutes reasonable
compensation for services rendered or to be rendered (and do not, therefore,
constitute "parachute payments"), then, in such event, Montgomery shall be
entitled to receive such maximum amount.

(a) For purposes of the foregoing provisions, a "change in control"
means, and shall be deemed to have taken place, if: (i) any person or
entity (or group of affiliated persons or entities) (including a group which
is deemed a "person" by Section 13(d)(3) of the Securities Exchange Act of
1934) acquires in one or more transactions, whether before or after the date
of this Consulting Agreement, ownership of twenty-five percent (25%) or more
of the outstanding shares of stock entitled to vote in the election of
directors of GWFC, and (ii) as a result of, or in connection with, any such
acquisition or any related proxy contest, cash tender or exchange offer,
merger or other business combination, sale of assets or any combination of
the foregoing transactions, the persons who were directors of GWFC
immediately before such acquisition shall cease to constitute five sixths
of the membership of the Board or of the board of directors of any successor
to GWFC after such transaction (but not more than twelve (12) months after
such transaction).

"Ownership" means ownership, directly or indirectly, of twenty-five
percent (25%) or more of such outstanding voting stock of GWFC other than
(A) by a person owning such shares merely of record (such as a member of a
securities exchange, a nominee or a securities depositary system), (B) by
a person as a bona fide pledgee of shares prior to a default and
determination to exercise powers as an owner of the shares, (C) by a person
who is not required to file statements on Schedule 13D by virtue of Rule
13d-1(b) of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, or (D) by a person who owns or holds shares as an
underwriter acquired in connection with an underwritten offering pending and
for purposes of their resale. Without limitation, the right to vote or
acquire ownership shall not of itself constitute ownership of shares.

(a) In the event that any payment, coverage or benefit provided under
this Consulting Agreement or otherwise provided to or on behalf of
Montgomery by or on behalf of GWFC would, in the opinion of counsel for
GWFC, not be deemed to be deductible in whole or in part in the calculation
of the Federal income tax of GWFC, or any other person making such payment
or providing such coverage or benefit, by reason of Section 280G of the
Code, the aggregate payments, coverage or benefits provided hereunder shall
be reduced so that no portion of such amount which is paid to Montgomery is
not deductible for tax purposes by reason of Section 280G of the Code. GWFC
shall hold such portions not paid to Montgomery in escrow. At the end of
each calendar quarter during the term of such escrow, GWFC shall deposit
into escrow an amount equal to interest accrued during such calendar quarter
on the amount held in escrow during such calendar quarter at a rate equal
to the rate then payable on judgments in California. If it is determined
at any point in time, by a counsel jointly selected by GWFC and Montgomery,
<PAGE>
<PAGE>

that it is more likely than not that the payment to Montgomery of any or all
of such amount held in escrow would be deductible for tax purposes, such
amount shall be paid out of escrow to Montgomery. In the event of a final
determination by the Internal Revenue Service, or of a final non-appealable
judicial decision, that any such amount held in escrow could never be
deductible for tax purposes if paid to Montgomery, or if it is determined
at any point in time, by a counsel jointly selected by GWFC and Montgomery,
that it is more likely than not that the payment to Montgomery of any such
amount held in escrow would never be deductible for tax purposes, such
amount shall be paid out of escrow to GWFC. For purposes of this paragraph,
the value of any non-cash benefit or coverage or any deferred or contingent
payment or benefit, shall be conclusively determined by the independent
auditors of GWFC, in accordance with the principles of Section 280G of the
Code.

(e) Notwithstanding anything to the contrary in this Consulting
Agreement:

(i) Following a change in control of GWFC, Montgomery shall be
entitled to modify, within pre-existing alternatives available under
the applicable plans, any irrevocable election to defer compensation
under any GWFC-sponsored deferred compensation plan which he may have
made prior to such change in control, so long as any such modification
is made prior to the year in which such compensation is to be earned;
and

(ii) At all times following a change in control of GWFC, GWFC shall
honor all elections validly made at any time by Montgomery (either
before or after such change in control) regarding the deferral of all
or any portion of his compensation under any such deferred compensation
plan (including, without limitation, elections made by Montgomery
pursuant to this Section 10 (e)) and GWFC shall comply with all of the
terms of such plan in existence as of the date of such change in
control.

1. Reimbursement of Business Expense. During the term of this
Consulting Agreement, to the extent that such expenditures are substantiated
by Montgomery as required by GWFC, GWFC shall reimburse Montgomery promptly
for all expenditures (including travel, entertainment, parking, business
meetings and the monthly costs (including dues) of maintaining memberships
at appropriate clubs and including expenditures by Montgomery prior to the
date hereof), in accordance with the rules and policies established from
time to time by the Board in pursuance and furtherance of GWFC's business
and goodwill.

12. Indemnity. To the extent permitted by applicable law and the
By-laws of GWFC (as from time to time in effect), and without in any way
impairing or affecting any rights to indemnification that Montgomery has by
reason of any agreement to which he is a party as of the date hereof, GWFC
shall indemnify Montgomery and hold him harmless for any acts or decisions
made by him in good faith while performing services for GWFC and, for so <PAGE>
<PAGE>

long as he is a director, GWFC shall cause him to be included under any
liability insurance policies now in force or hereafter obtained during the
term of this Consulting Agreement covering directors of GWFC. To the same
extent, GWFC shall pay all expenses, including reasonable attorneys' fees
and the amounts of court approved settlements, actually incurred by
Montgomery in connection with the defense of any action, suit or proceeding,
and in connection with any appeal thereon, which has been and/or may be
brought against Montgomery by reason of Montgomery's services as an officer,
director, agent or consultant of GWFC or of any subsidiary or affiliate of
GWFC.

1. Miscellaneous Provisions.

(a) Succession. This Consulting Agreement shall inure to the
benefit of and shall be binding upon GWFC, its successors and assigns, but
without the prior written consent of Montgomery this Consulting Agreement
may not be assigned other than in connection with a merger or sale of
substantially all the assets of GWFC, or a similar transaction, in which the
successor or assignee assumes (whether by operation of law or express
assumption) all obligations of GWFC hereunder (including, without
limitation, those in Section 10 hereof). The obligations and duties of
Montgomery hereunder shall be personal and not assignable.

(a) Notices. Any notices provided for in this Consulting Agreement
shall be sent to GWFC at 9200 Oakdale Avenue, Chatsworth, California 91311,
Attention: Executive Vice President, Legal, with a copy to the Chairman of
the Compensation Committee of the Board of Directors at the same address,
or to such other address as GWFC may from time to time in writing designate,
and to Montgomery at such address as he may from time to time in writing
designate (or his business address of record in the absence of such
designation). All notices shall be deemed to have been given two (2)
business days after they have been deposited as certified mail, return
receipt requested, postage paid, or one (1) business day after they have
been deposited as overnight mail, in either event properly addressed to the
designated address of the party to receive the notice, or shall be deemed
to have been given at the time receipt is acknowledged if given by any form
of electronic communication.

(a) Entire Consulting Agreement. This document contains the entire
agreement of the parties relating to Montgomery's consulting and director
services to and on behalf of the Company after December 28, 1995. No
modification of this Consulting Agreement shall be valid unless made in
writing and signed by the parties hereto. Nothing in this Consulting
Agreement is intended to affect adversely any benefits to which Montgomery
is entitled by reason of his former employment with GWFC. Any payments or
benefits to which Montgomery is entitled by reason of the Employment
Agreement shall be governed exclusively by the terms thereof.
Notwithstanding the foregoing, this Consulting Agreement may be rescinded
as provided in Section 7 of the Amendment.
<PAGE>
<PAGE>

(d) Waiver. The waiver of the breach of any term or of any
condition of this Consulting Agreement shall not be deemed to constitute the
waiver of any other breach of the same or any other term or condition.

(a) California Law. This Consulting Agreement shall be construed
and interpreted in accordance with the laws of California, to the extent
controllable by stipulation of the parties.

(f) Attorneys' Fees in Action on Consulting Agreement. If any
litigation or arbitration shall occur between Montgomery and GWFC, which
litigation or arbitration arises out of or as a result of this Consulting
Agreement or the acts of the parties hereto pursuant to this Consulting
Agreement, or which seeks an interpretation of this Consulting Agreement,
the prevailing party in such litigation or arbitration, in addition to any
other judgment or award, shall be entitled to receive such sums as the court
or arbitrator(s) hearing the matter shall find to be reasonable as and for
the attorneys' fees of the prevailing party.

(g) Confidentiality. Montgomery agrees that he shall not divulge
or otherwise disclose, directly or indirectly, any trade secret or other
confidential information concerning the business or policies of GWFC or any
of its affiliates which he may have learned as a result of his employment
during the term of this Consulting Agreement (including any extension
thereof) or prior thereto as an employee, officer or director of GWFC or any
of its affiliates, except to the extent such use or disclosure is
(i) necessary to the performance of this Consulting Agreement and in
furtherance of GWFC's best interests, (ii) required by applicable law,
(iii) lawfully obtainable from other sources or (iv) authorized by GWFC.
The provisions of this subsection shall survive the suspension or
termination, for any reason, of this Consulting Agreement.

(h) Remedies of GWFC. Montgomery acknowledges that the services he
is obligated to render under the provisions of this Consulting Agreement are
of a special, unique, unusual, extraordinary and intellectual character,
which gives this Consulting Agreement peculiar value to GWFC. The loss of
these services cannot be reasonably or adequately compensated in damages in
an action at law, and it would be difficult (if not impossible) to replace
such services. By reason thereof, Montgomery agrees and consents that, if
he violates any of the material provisions of this Consulting Agreement,
GWFC, in addition to any other rights and remedies available under this
Consulting Agreement or under applicable law, shall be entitled during the
remainder of the term to seek injunctive relief, from a tribunal of
competent jurisdiction, restraining Montgomery from committing or continuing
any violation of this Consulting Agreement, or from the performance of
services to any other business entity, or both.

(i) Severability. If this Consulting Agreement shall for any reason
be or become unenforceable by either party, this Consulting Agreement shall
thereupon terminate and become unenforceable by the other party as well.
In all other respects, if any provision of this Consulting Agreement is held
<PAGE>
<PAGE>

invalid or unenforceable, the remainder of this Consulting Agreement shall
remain in full force and effect, and, if any provision is held invalid or
unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other circumstances.
Nothing herein shall be construed to require any payment that would be
prohibited by Section 18(k) of the Federal Deposit Insurance Act.

(j) Responsibility for Taxes. Except as expressly provided herein
to the contrary, Montgomery agrees to accept exclusive liability for the
payment of taxes, contributions for unemployment insurance, old age pensions
or annuities, and social security payments, if any, which are measured by
or payable on the fees and benefits paid to Montgomery under this Consulting
Agreement. Montgomery also agrees to comply with all valid administrative
regulations respecting the assumption of liability for such tax.
Notwithstanding the foregoing, all payments to be made hereunder by GWFC
shall be net of any withholding required in its judgment under federal or
state law.

(a) Work-Product Owned by GWFC. All information developed under
this Consulting Agreement, of whatever type relating to the work performed
under this Consulting Agreement, shall be the exclusive property of GWFC.
All writings, instruments or other items produced or assembled by Montgomery
pursuant to this Consulting Agreement, shall be the exclusive property of
GWFC.

(l) Reports. Montgomery shall provide such information and reports
with respect to his services hereunder as GWFC may from time to time
reasonably request.

14. Non-Competition and Anti-Solicitation. During the Consulting
Period, Montgomery shall not, directly or indirectly, in any case without
the advanced written consent of the Chief Executive Officer of GWFC, compete
with the Company in the conduct of its business or engage or participate as
a principal, consultant, investor or otherwise (except for investments of
not more than 5% of the outstanding stock of any public company or as
expressly may be provided herein) in any business substantially similar to
the business conducted or to be conducted by GWFC. Also, Montgomery agrees
he will not solicit any officer or employee to join any competitor of GWFC
or GWB.

1. Representation and Review. Montgomery represents and agrees that
he has discussed this Consulting Agreement with an attorney of his choice,
that he has carefully read this Consulting Agreement, and that he is
voluntarily entering into this Agreement.

16. Compliance; Conflicts. In rendering services hereunder,
Montgomery shall obtain and maintain all necessary or appropriate licenses,
permits and registrations and shall comply with all applicable laws and
regulations and policies of the Company. Montgomery will not pursue any
business opportunities which constitute or may constitute or appear to
constitute a conflict of interest or which materially interfere with, delay,
<PAGE>
<PAGE>

jeopardize or otherwise conflict with his duties under this Consulting
Agreement, without the prior written consent of the Chief Executive Officer
of GWFC, which (in the case of possible or apparent conflicts (as
distinguished from actual conflicts)) shall not be unreasonably withheld.
Montgomery shall not, in the performance of services under this Consultant
Agreement, make or commit to make any political contributions or payments
for political purposes or make or commit, cause or allow the Company to
make, any political contributions or payments for political purposes,
directly or indirectly, in any case without the prior written approval of
an authorized officer of GWFC. Montgomery shall be entitled to make outside
the performance of his services hereunder any lawful political contributions
in his own name and on his own behalf.<PAGE>
<PAGE>

IN WITNESS WHEREOF, the parties have executed this Consulting
Agreement as of the date first above written.

GREAT WESTERN FINANCIAL CORPORATION

By ________________________________

MONTGOMERY

___________________________________
James F. Montgomery

APPROVED:

____________________________________
Charles D. Miller,
Chairman of the Compensation
Committee of the Board of Directors
<PAGE>
<PAGE>

CONSULTING AGREEMENT

BY AND BETWEEN

GREAT WESTERN FINANCIAL CORPORATION,

A DELAWARE CORPORATION,

AND

JAMES F. MONTGOMERY

DATED AS OF APRIL 25, 1995<PAGE>
<PAGE>

TABLE OF CONTENTS
FOR
CONSULTING AGREEMENT

Page

1. Engagement and Term. . . . . . . . . . . . . . . . . . . . . . . 1

2. Independent Contractor Relationship, Services, and Memberships . 2
(a) Independent Contractor Relationship . . . . . . . . . . . 2
(b) Service as Chairman of GWFC and Chairman of GWB . . . . . 2
(c) Board Service . . . . . . . . . . . . . . . . . . . . . . 2
(d) Consulting Services . . . . . . . . . . . . . . . . . . . 2
(e) Other Services and Memberships. . . . . . . . . . . . . . 3
(f) Principal Business Address. . . . . . . . . . . . . . . . 3
(g) Secretarial and Support Staff . . . . . . . . . . . . . . 3

3. Amount and Nature of Service . . . . . . . . . . . . . . . . . . 3

4. Consulting Fee . . . . . . . . . . . . . . . . . . . . . . . . . 4

5. Perquisites and Special Benefits . . . . . . . . . . . . . . . . 4

6. Split Dollar Life Insurance. . . . . . . . . . . . . . . . . . . 5

7. Personal, Unsecured Loan . . . . . . . . . . . . . . . . . . . . 5

8. Termination By GWFC Without "Cause"; Termination by Montgomery . 5

9. Other Events of Termination. . . . . . . . . . . . . . . . . . . 6
(a) disability. . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Death . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) For Cause . . . . . . . . . . . . . . . . . . . . . . . . 7

10. Change in Control . . . . . . . . . . . . . . . . . . . . . . . 8

11. Reimbursement of Business Expense . . . . . . . . . . . . . . . 11

12. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

13. Miscellaneous Provisions. . . . . . . . . . . . . . . . . . . . 12
(a) Succession. . . . . . . . . . . . . . . . . . . . . . . . 12
(b) Notices . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Entire Consulting Agreement . . . . . . . . . . . . . . . 12
(d) Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . 12
(e) California Law. . . . . . . . . . . . . . . . . . . . . . 13
(f) Attorneys' Fees in Action on Consulting Agreement . . . . 13
(g) Confidentiality . . . . . . . . . . . . . . . . . . . . . 13
(h) Remedies of GWFC. . . . . . . . . . . . . . . . . . . . . 13
(i) Severability. . . . . . . . . . . . . . . . . . . . . . . 13
(j) Responsibility for Taxes. . . . . . . . . . . . . . . . . 14
(k) Work-Product Owned by GWFC. . . . . . . . . . . . . . . . 14<PAGE>
<PAGE>

(l) Reports . . . . . . . . . . . . . . . . . . . . . . . . . 14

14. Non-Competition and Anti-Solicitation . . . . . . . . . . . . . 14

15. Representation and Review . . . . . . . . . . . . . . . . . . . 14

16. Compliance; Conflicts . . . . . . . . . . . . . . . . . . . . . 15

<PAGE>
EXHIBIT 10.6

GREAT WESTERN FINANCIAL CORPORATION

SPECIAL NONQUALIFIED STOCK OPTION AGREEMENT

THIS AGREEMENT dated as of the 25th day of April 1995, between GREAT
WESTERN FINANCIAL CORPORATION, a Delaware corporation (the "Corporation"),
and JAMES F. MONTGOMERY (the "Executive").

W I T N E S S E T H

WHEREAS, by authorization of the Compensation Committee of the Board,
pursuant to the 1988 Stock Option and Incentive Plan, as amended (the
"Plan"), and by authorization of the Board pursuant to the terms of an
Amendment to Employment Agreement by and between the Corporation and the
Executive of even date herewith (the "Amendment"), the Corporation has
granted to the Executive as of the 25th day of April, 1995 (the "Award
Date") a nonqualified stock option to purchase all or any part of 300,000
authorized but unissued or treasury shares of Common Stock, $1.00 par value,
of the Corporation upon the terms and conditions set forth herein and in the
Plan; and

WHEREAS, the Amendment and a concurrently executed Consulting
Agreement between the parties of even date herewith (the "Consulting
Agreement") contemplate the Executive's continued services to the
Corporation and its Subsidiaries, in various capacities.

NOW, THEREFORE, in consideration of the mutual promises and covenants
made herein and the mutual benefits to be derived herefrom and from these
other agreements, the parties hereto agree as follows:

1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meaning assigned to such terms in the Plan.

2. GRANT OF OPTION. This Agreement evidences the Corporation's
grant to the Executive of the right and option to purchase, on the terms and
conditions set forth herein and, to the extent expressly herein provided,
in the Plan, all or any part of an aggregate of 300,000 shares of the Common
Stock of the Corporation at the price of $20.25 per share (the "Option"),
exercisable from time to time, subject to the provisions of this Agreement,
prior to the close of business on the day before the tenth anniversary of
the Award Date (the "Expiration Date"). Such price equals the Fair Market
Value of the Corporation's Common Stock as of the Award Date.
<PAGE>
<PAGE>

3. EXERCISABILITY OF OPTION. Except as provided in Section 8 hereof
(but subject to the last sentence of Section 6 hereof), no shares may be
purchased by exercise of the Option until the expiration of one year after
the Award Date. The Option shall become exercisable in installments as to
25% of the aggregate number of shares set forth in Section 2 hereof (subject
to adjustment) on and after the first anniversary of the Award Date and as
to an additional 25% of the aggregate number of such shares (subject to
adjustment) on each of the second, third, and fourth anniversaries of the
Award Date. To the extent the Executive does not in any year purchase all
or any part of the shares to which the Executive is entitled, the Executive
has the right cumulatively thereafter to purchase any shares not so
purchased and such right shall continue until the Option terminates or
expires. No fewer than 25 shares may be purchased at any one time, unless
the number purchased is the total number at the time available for purchase
under the Option.

4. METHOD OF EXERCISE OF OPTION. The Option shall be exercisable by
the delivery to the Corporation of a written notice stating the number of
shares to be purchased pursuant to the Option and accompanied by payment in
(i) cash or by check payable to the order of the Corporation for the full
purchase price of the shares to be purchased, (ii) at the discretion of the
Administrator and pursuant to such conditions and restrictions as the
Committee may establish, by the exchange of shares of Common Stock of the
Corporation then owned by the Executive having a Fair Market Value equal to
such purchase price, (iii) at the discretion of the Administrator, by the
payment and exchange of part cash and part stock with the sum of the cash
and Fair Market Value of the stock equal to such purchase price, or (iv) by
the payment of such other form of legal consideration as may be approved by
the Board of Directors and the Administrator. In addition, the Executive
(or the Executive's Beneficiary or Personal Representative) shall furnish
any written statements required pursuant to Section 10 below.

5. CONTINUANCE OF SERVICE. As a condition of the Option, the
Executive hereby agrees to remain in the service of the Corporation or one
of its Subsidiaries, as an officer and/or consultant, for a period of one
year after the Award Date. Nothing contained in this Agreement or in the
Plan shall confer upon the Executive any right with respect to the
continuation of his or her employment or service by the Corporation or any
Subsidiary or interfere in any way with the right of the Corporation or of
any Subsidiary at any time to terminate such employment or service or to
increase or decrease the compensation of the Executive from the rate in
existence at any time, subject to the terms of any applicable other
agreements of the Corporation.

6. EFFECT OF TERMINATION OF SERVICE. The Option and all other rights
hereunder, to the extent not exercised, shall terminate and become null and
void at such time as the Executive neither is employed by, serving as a
consultant under the terms of his Consulting Agreement with, nor serving as
a director of the Corporation, except that
<PAGE>
<PAGE>

(a) if the Executive's services under either his Employment
Agreement (as amended or reinstated by the Amendment) or under his
Consulting Agreement and as a director terminate because of the
Executive's death, Disability (as defined in the Employment Agreement
or the Consulting Agreement, as the case may be) or a voluntary
termination by the Executive (other than a termination or deemed
termination by the Executive under Section 8 of the Consulting
Agreement or Section 6 of the Employment Agreement), the Executive
may at any time until the expiration of a period of two years after
the date of the later of such terminations of service exercise the
Option to the extent the Option was exercisable at such date of
service termination; and

(b) if the Consulting Agreement is terminated under Section 8
thereof or Executive's Employment Agreement (as amended or reinstated
by the Amendment) is terminated or deemed (by Section 8 thereof)
terminated under Section 6 thereof, the Executive may at any time
until the expiration of a period of two years after the Consulting
Agreement would have otherwise terminated but for such termination
exercise the Option to the extent that it from time to time is
exercisable and the Option shall continue to vest as provided in
Section 3 until the assumed date of termination of the Consulting
Agreement; and

(c) if the Consulting Agreement is terminated under Section 10
thereof (and thus deemed by Section 10 thereof terminated under
Section 8 thereof), the Executive may at any time until the
expiration of a period of two years after the Consulting Agreement
would have otherwise terminated but for such termination exercise the
Option to the extent it from time to time is exercisable, and the
Option shall be accelerated as contemplated by said Section 10, but
shall remain subject to all of the terms, conditions and limitations
on payments under said Section 10, incorporated herein by this
reference.

Notwithstanding the foregoing, in no event may the Option be
exercised by anyone under this Section or otherwise after the
Expiration Date or before December 29, 1995, nor shall the
exercisability of the Option be accelerated if the Executive's
Employment Agreement (as amended or reinstated by the Amendment) is
terminated for any reason on or before December 28, 1995.

7. Non-Transferability of Option. During the Executive's lifetime,
the Option and any other rights hereunder may be exercised only by the
Executive, except as otherwise expressly provided in Section 6.1.3 of, or
pursuant to, the Plan.
<PAGE>
<PAGE>

8. Adjustments and Other Effects (including Termination) upon Certain
Events. If the outstanding shares of the Corporation's Common Stock are
changed into or exchanged for cash or a different number or kind of shares
or securities of the Corporation, or if additional shares or new or
different shares or securities are distributed with respect to the
outstanding shares of the Corporation's Common Stock, through a
reorganization or merger in which the Corporation is the surviving entity
or through a combination, consolidation, recapitalization, reclassification,
stock split, stock dividend, reverse stock split, stock consolidation or
other capital change or adjustment, an appropriate proportionate equitable
adjustment shall be made in the number and kind of shares or other
consideration that is subject to or may be delivered pursuant to the Option.
A corresponding adjustment to the consideration payable with respect to the
Option shall also be made as appropriate. In addition, the Option and
rights of the Executive hereunder are subject to adjustment, modification
and termination in certain other circumstances and upon occurrence of
certain other events, as set forth in the provisions of Article II, Sections
6.3 and 6.4, and the last sentence of Section 6.2 of the Plan, to the extent
applicable to Options granted under the Key Employee Program.

9. Limitation of Executive's Rights. Neither the Executive nor any
other person entitled to exercise the Option shall have any of the rights
or privileges of a stockholder of the Corporation in respect of any shares
deliverable upon exercise of the Option unless and until a certificate
representing such shares shall have been issued in the name of the Executive
or such person.

10. Representations of the Executive. The Executive agrees that the
Corporation shall not be required to deliver shares upon the exercise of the
Option if prevented or prohibited from doing so under applicable law. If
the shares are not registered with the Securities and Exchange Commission
at the time of such exercise, the Executive shall be required to deliver an
investment letter in form acceptable to the Corporation and all certificates
representing shares issued shall bear appropriate legends reflecting
restrictions on transfer under applicable laws. The Executive agrees by
acceptance of the Option and, in such letter, the Executive shall represent
that he or she will acquire the shares issuable upon such exercise for his
or her own account, for the purpose of investment, and not with a view to
or for sale in connection with any distribution, and that he or she will not
offer, sell or otherwise transfer or dispose of such shares or any interest
therein except in compliance with all securities laws applicable to such
action. The Corporation may impose stop transfer instructions to implement
such limitations, if applicable. Any person or persons entitled to exercise
the Option under the provisions of Section 7 hereof shall be bound by and
obligated under the provisions of this Section 10 to the same extent as is
the Executive.
<PAGE>
<PAGE>

11. Tax Withholding. The Corporation shall be entitled to require
deduction from other compensation payable to the Executive any sums required
in its judgment by federal, state or local tax law to be withheld with
respect to the exercise of the Option, but, in the alternative, (i) the
Corporation may require the Executive or other person exercising the Option
to advance such sums in cash, or (ii) if the Executive or other person
exercising the Option elects, the Corporation may withhold shares of the
Corporation's Common Stock having a Fair Market Value equal to the sums
required to be withheld. If the Executive or other person exercising the
Option elects to advance such sums directly, written notice of that election
shall be delivered prior to such exercise and, whether pursuant to such
election or pursuant to a requirement imposed by the Corporation, payment
in cash or by check of such sums for taxes shall be delivered within ten
days after the date of exercise. If the Executive or other person
exercising the Option elects to have the Corporation withhold shares of the
Corporation's Common Stock having a Fair Market Value equal to the sums
required to be withheld, the value of the shares of the Corporation's Common
Stock to be withheld will be equal to the Fair Market Value of such shares
on the date that the amount of tax to be withheld is to be determined (the
"Tax Date"). Elections by the Executive to have shares of the Corporation's
Common Stock withheld for this purpose will be subject to the following
restrictions: (w) the election must be made prior to the Tax Date, (x) the
election must be irrevocable, (y) the election will be subject to the
approval or disapproval (as the case may be) of the Administrator, and (z)
if the Executive is an officer or director of the Corporation within the
meaning of Section 16 of the Exchange Act, the election, in addition, may
not be made within six months of the grant of the Option (except that this
limitation will not apply in the event that the death or Disability of the
Executive occurs prior to the expiration of the six month period) and either
must be made at least six months prior to the Tax Date or in one of the
periods beginning on the third business day following the date of release
of the Corporation's quarterly or annual summary statements of sales and
earnings and ending on the twelfth business day following such date. The
Corporation shall not be obligated to issue shares and/or distribute cash
to the Executive or other person exercising the Option upon exercise of the
Option until such payment has been received or shares have been so withheld,
unless withholding as of or prior to the date of such exercise is sufficient
to cover all such sums due or which may be due with respect to such
exercise.

12. Relationship to Employment Agreement. If the Executive's
Employment Agreement (as amended or reinstated by the Amendment), is
terminated by action of the Corporation in accordance with its terms or by
action of Executive under Section 6 or 8 thereof on or before December 28,
1995, the Option shall not be rescinded but shall remain subject to the
terms hereof, including the limitations under Section 6 hereof, and to the
limitations under Section 6 or 8 thereof, as the case may be.
<PAGE>
<PAGE>

13. Notices. Any notice to be given under the terms of this
Agreement shall be in writing and addressed to the Corporation at its
principal office in Chatsworth, California, to the attention of the
Corporate Secretary and to the Executive at the address given beneath the
Executive's signature hereto, or at such other address as either party may
hereafter designate in writing to the other.

14. Laws Applicable to Construction. The Option has been granted,
executed and delivered at Chatsworth, California, and the interpretation,
performance and enforcement of this Agreement shall be governed by the laws
of the State of California, except as otherwise provided in Section 6.8 of
the Plan.

15. Plan. The Option is subject to, and the Executive agrees to be
bound by, all of the terms and conditions of the provisions of Articles I
and II and Sections 4.2, 6.1, 6.3, 6.4, 6.5, 6.7 and 6.8 and the last
sentence of Section 6.2 of the Plan. The Executive acknowledges receipt of
a copy of the Plan, which, to the extent set forth in the preceding
sentence, is made a part hereof by this reference. Unless otherwise
expressly provided in other Sections of this Agreement, provisions of the
Plan that confer discretionary authority on the Administrator do not (and
shall not be deemed to) apply to the Option or create rights in the
Executive unless such application or rights are expressly so conferred by
appropriate action of the Administrator, in its sole discretion, under the
Plan after the date hereof.

16. Effect of Agreement on Successors. This Agreement shall not be
binding upon and shall not inure to the benefit of any successor or
successors of the Corporation, except as provided pursuant to Section 6.3
of the Plan.
<PAGE>
<PAGE>

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Executive has
hereunto set his or her hand.

GREAT WESTERN FINANCIAL
CORPORATION (a Delaware
corporation)

By _________________________

Title_______________________

JAMES F. MONTGOMERY

__________________________
(Signature)

__________________________
(Print Name)

__________________________
(Address)

Los Angeles, CA 90077
(City, State, Zip Code)

APPROVED:

By: _________________________
Charles D. Miller, Chair
Compensation Committee

Date of Execution: ____________________________<PAGE>
<PAGE>

CONSENT OF SPOUSE

In consideration of the execution of the foregoing Special
Nonqualified Stock Option Agreement by Great Western Financial Corporation,
I, DIANE MONTGOMERY, the spouse of the Executive herein named, do hereby
join with my spouse in executing the foregoing Special Nonqualified Stock
Option Agreement as of April 25, 1995 and do hereby agree to be bound by all
of the terms and provisions thereof and of the Plan.

DATED: ______________, 1995. _____________________________
Signature of Spouse

<PAGE>
EXHIBIT 10.7

OMNIBUS AMENDMENT 1995-1

WHEREAS, this Corporation maintains the following plans and the trusts
for the benefit of its employees and/or directors: Great Western
Supplemental Executive Retirement Plan, Great Western Financial Corporation
Deferred Compensation Plan, Great Western Financial Corporation Directors'
Deferred Compensation Plan, Great Western Financial Corporation Senior
Officers' Deferred Compensation Plan, Great Western Retirement Restoration
Plan, Great Western Supplemental Incentive Plan, Great Western Financial
Corporation Umbrella Trust for Senior Officers and Great Western Financial
Corporation Umbrella Trust for Directors (collectively, the "Plans");

WHEREAS, this Corporation also maintains the Great Western Retirement
Plan and Great Western Employee Savings Incentive Plan (the "Tax-Qualified
Plans");

WHEREAS, each of the Plans is administered by the Finance Committee
of the Board of Directors and certain functions under the Tax-Qualified
Plans are also administered by the Finance Committee.

NOW, THEREFORE, the respective Plans and Tax-Qualified Plans are
amended, effective as of July 1, 1995, as follows:

1. Each of the Plans is amended to provide that the Committee is the
Compensation Committee of the Board of Directors of this Corporation.

2. Each of the Tax-Qualified Plans is amended to provide that the
Compensation Committee of the Board of Directors of this Corporation shall
have all of the duties, powers and responsibilities previously held by the
Finance Committee.

3. The phrase "Compensation Committee" shall replace the phrase
"Finance Committee" in each place it appears in each of the Plans and Tax-
Qualified Plans.

4. The Compensation Committee will also assume responsibility for
all functions previously held by the Finance Committee with respect to the
trust agreements and any other ancillary agreements with respect to the Tax-
Qualified Plans.
<PAGE>
<PAGE>

IN WITNESS WHEREOF, this Corporation has caused these presents to be
executed by its duly authorized officers and the corporate seal to be
hereunder affixed as of this 30th day of June, 1995.

GREAT WESTERN FINANCIAL CORPORATION

By __________________________________
J. Lance Erikson

By __________________________________
Stephen F. Adams