SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549
                     ------------------------------------

                                   FORM 10-Q
   (Mark One)

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

     For the quarterly period ended September 30, 2002
                                      OR

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

          For the transition period from________ to_________

                       Commission file number: 000-50015

                            TierOne Corporation
-------------------------------------------------------------------------------
            (Exact Name of Registrant as Specified in Its Charter)

            Wisconsin                                        04-3638672
----------------------------------------                ---------------------
   (State or Other Jurisdiction of                         (I.R.S. Employer
   of Incorporation or Organization)                     Identification No.)

           1235 "N" Street
          Lincoln, Nebraska                                    68508
----------------------------------------                ---------------------
(Address of Principal Executive Offices)                     (Zip Code)

                                  (402) 475-0521
               ----------------------------------------------------
               (Registrant's Telephone Number, Including Area Code)

     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     No X
                                                             ---

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).        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 the latest practicable date:  As of November 8, 2002, a
total of 22,575,075 shares of the Registrant's common stock were issued and
outstanding.



                        PART I - FINANCIAL INFORMATION

Interim financial information required by Rule 10-01 of Regulation S-X and
Item 303 of Regulation S-K is included in this Form 10-Q as referenced below.

                                                                        Page
                                                                        ----

Item 1 - Financial Statements..........................................    3

Item 2 - Management's Discussion and Analysis of Financial Condition
         and Results of Operations.....................................   16

Item 3 - Quantitative and Qualitative Disclosures About Market Risk....   28

Item 4 - Controls and Procedures.......................................   28

                        PART II - OTHER INFORMATION

Item 1 - Legal Proceedings.............................................   28

Item 2 - Changes in Securities and Use of Proceeds.....................   28

Item 3 - Defaults Upon Senior Securities...............................   29

Item 4 - Submission of Matters to a Vote of Security Holders...........   29

Item 5 - Other Information.............................................   29

Item 6 - Exhibits and Reports on Form 8-K..............................   29

Signatures.............................................................   31






                                  2



                  TierOne Bank and Subsidiaries
         Consolidated Statements of Financial Condition
      September 30, 2002 (Unaudited) and December 31, 2001
                     (dollars in thousands)




                                        September 30,          December 31,
                                            2002                  2001
                                        -------------          ------------
                                        (unaudited)             (audited)
Assets
Cash and due from banks                  $    29,043          $    24,141
Federal funds sold                            42,000               10,300
                                         -----------          -----------
    Total cash and cash equivalents           71,043               34,441
Investment securities:
  Held-to-maturity                               160                  221
  Available-for-sale                          68,346               90,811
Loans receivable, net                      1,592,809            1,379,066
Loans held for sale                           37,064               14,373
Accrued interest receivable                    8,019                7,834
Federal Home Loan Bank stock                  19,630               14,836
Premises and equipment                        24,932               18,201
Other assets                                  15,460               10,230
                                         -----------          -----------
    Total assets                         $ 1,837,463          $ 1,570,013
                                         ===========          ===========
Liabilities and Retained Earnings
Liabilities:
  Deposits                               $ 1,168,810          $ 1,096,242
  Advances from Federal Home Loan
   Bank and other borrowings                 276,999              303,315
  Advances from borrowers for taxes
   and insurance                              16,633               15,535
  Accrued interest payable                     5,493                8,734
  Stock subscription proceeds                213,333                   --
  Accrued expenses and other
   liabilities                                21,823               24,432
                                         -----------          -----------
    Total liabilities                      1,703,091            1,448,258
                                         -----------          -----------
Retained earnings:
  Retained earnings, subject
   to certain restrictions                   134,626              121,678
  Cumulative other comprehensive
   income (loss), net                           (254)                  77
                                         -----------          -----------
    Total retained earnings                  134,372              121,755
Commitments and contingent liabilities
    Total liabilities and retained
     earnings                            $ 1,837,463          $ 1,570,013
                                         ===========          ===========

See accompanying notes to consolidated financial statements.

                                 3



<TABLE>

                       TierOne Bank and Subsidiaries
                     Consolidated Statements of Income
                          (dollars in thousands)




                                            For the Three Months Ended    For the Nine Months Ended
                                                   September 30,                September 30,
                                            --------------------------    -------------------------
                                                 2002         2001            2002         2001
                                            ------------- ------------    ------------ ------------
                                                                   (unaudited)
<S>                                               <C>          <C>             <C>          <C>
Interest income:
  Loans receivable                                $25,329      $23,653         $72,480      $70,666
  Investment securities                             1,095        1,993           3,778        7,052
  Other interest-earning assets                       118          435             325        1,164
                                                  -------      -------         -------      -------
     Total interest income                         26,542       26,081          76,583       78,882
                                                  -------      -------         -------      -------
Interest expense:
  Deposits                                          7,941       11,114          23,963       37,937
  Advances from Federal Home Loan Bank
   and other borrowings                             3,323        2,567           9,347        6,988
                                                  -------      -------         -------      -------
     Total interest expense                        11,264       13,681          33,310       44,925
                                                  -------      -------         -------      -------
     Net interest income                           15,278       12,400          43,273       33,957
Provision for loan losses                           1,262          953           2,469        1,893
                                                  -------      -------         -------      -------
     Net interest income after provision
      for loan losses                              14,016       11,447          40,804       32,064
                                                  -------      -------         -------      -------
Other income:
  Fees and service charges                          2,279        2,007           6,218        5,109
  Mortgage servicing rights impairment             (1,160)         (50)         (1,620)         (50)
  Income from real estate operations, net             224          137             583          401
  Other operating income                              761          398           1,893        1,563
  Net gain (loss) on sales of:
   Investments                                         --            5              --           --
   Loans held for sale                                806          511           2,120        1,247
   Real estate owned                                    4           (1)              3            8
                                                  -------      -------         -------      -------
     Total other income                             2,914        3,007           9,197        8,278
                                                  -------      -------         -------      -------
Other expense:
  Salaries and employee benefits                    5,640        5,121          16,127       14,546
  Occupancy, net                                    1,393        1,629           4,297        4,223
  Data processing                                     358          344           1,070        1,031
  Advertising                                         848          486           2,737        1,344
  Legal services                                      107          149             259          544
  Other operating expense                           1,687        1,418           5,253        4,292
                                                  -------      -------         -------      -------
     Total other expense                           10,033        9,147          29,743       25,980
                                                  -------      -------         -------      -------
     Income before income taxes                     6,897        5,307          20,258       14,362
Income tax expense                                  2,487        1,899           7,310        5,114
                                                  -------      -------         -------      -------
     Net income                                   $ 4,410      $ 3,408         $12,948      $ 9,248
                                                  =======      =======         =======      =======
</TABLE>

See accompanying notes to consolidated financial statements.

                                  4


                      TierOne Bank and Subsidiaries
Consolidated Statements of Changes in Retained Earnings and Comprehensive Income
              Nine Months Ended September 30, 2002  (Unaudited) and
                      Year Ended December 31, 2001
                         (dollars in thousands)

<TABLE>

                                                           Cumulative other
                                                           comprehensive        Total retained
                                     Retained earnings     income (loss)        earnings
                                     -----------------     ----------------     --------------
<S>                                           <C>                    <C>             <C>
Balance at December 31, 2000                  $108,636               $ (764)         $ 107,872
                                              --------               ------          ---------
Comprehensive income:
Net income                                      13,042                   --             13,042
Change in unrealized loss on
 available-for-sale securities, net                 --                  841                841
                                              --------               ------          ---------
Total comprehensive income                      13,042                  841             13,883
                                              --------               ------          ---------
Balance at December 31, 2001                   121,678                   77            121,755
                                              --------               ------          ---------
Comprehensive income:
Net income                                      12,948                   --             12,948
Change in unrealized gain on
 available-for-sale securities, net                 --                 (331)              (331)
                                              --------               ------          ---------
Total comprehensive income (loss)               12,948                 (331)            12,617
                                              --------               ------          ---------
Balance at September 30, 2002                 $134,626               $ (254)         $ 134,372
                                              ========               ======          =========

</TABLE>









See accompanying notes to consolidated financial statements.

                                  5



                    TierOne Bank and Subsidiaries
                Consolidated Statements of Cash Flows
           Nine Months Ended September 30, 2002 and 2001
                       (dollars in thousands)


                                                            September 30,
                                                      -------------------------
                                                          2002         2001
                                                      ------------ ------------
                                                             (unaudited)


Cash flows from operating activities:
 Reconciliation of net income to cash provided by
  (used in) operating activities:
   Net income                                              $12,948       $9,248
   Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
    Amortization of investment and mortgage-backed
     securities, net                                           236           23
    Depreciation and amortization                            1,678        1,595
    Amortization on loans receivable, net                      229           43
    Deferred income tax benefit                               (654)        (511)
    Provision for loan losses                                2,469        1,893
    Proceeds from sales of loans held for sale             277,491      214,120
    Originations and purchases of loans held for sale     (298,062)    (223,311)
    Net (gain) loss on sales of:
      Loans receivable held for sale                        (2,120)      (1,247)
      Real estate owned and held for investment                 (8)          (8)
      Premises and equipment                                  (206)          36
    Changes in certain assets and liabilities:
      Accrued interest receivable                             (185)        (849)
      Other assets                                          (4,331)      (2,303)
      Accrued interest payable                              (3,241)      (4,179)
      Accrued expenses and other liabilities                (2,609)       6,248
                                                           -------      -------

         Total adjustments                                 (29,313)      (8,450)
                                                           -------      -------

         Net cash provided by (used in) operating
          activities                                       (16,365)         798
                                                           -------      -------
Cash flows from investing activities:
 Purchase of investment securities:
   Held-to-maturity                                            (27)          (8)
   Available-for-sale                                      (67,759)     (75,377)
 Proceeds from maturity of investment securities,
    available-for-sale                                      67,554       81,500



See accompanying notes to consolidated financial statements.

                                  6



                            TierOne Bank and Subsidiaries
                   Consolidated Statements of Cash Flows (continued)
                      Nine Months Ended September 30, 2002 and 2001
                                (dollars in thousands)

<TABLE>

                                                                 September 30,
                                                           -------------------------
                                                               2002         2001
                                                           ------------ ------------
                                                                  (unaudited)
<S>                                                            <C>          <C>
Proceeds from principal repayments of investment and
 mortgage-backed securities                                      22,013       23,055
Increase in loans receivable                                   (217,401)    (154,836)
Proceeds from sale of real estate owned and held for
 investment                                                         886        1,232
Additions to premises and equipment                              (8,596)      (1,914)
Proceeds from sale of premises and equipment                        408           --
Sale of Federal Home Loan Bank stock                              3,102        5,138
Purchase of Federal Home Loan Bank stock                         (7,896)      (2,214)
                                                                -------      -------
   Net cash used in investing activities                       (207,716)    (123,424)
                                                                -------      -------
Cash flows from financing activities:
 Net increase in deposits                                        72,568       38,502
 Net increase (decrease) in advances from borrowers for
  taxes and insurance                                             1,098         (760)
 Proceeds from Federal Home Loan Bank long-term advances         50,000       80,000
 Repayment of Federal Home Loan Bank long-term advances             (16)         (16)
 Net paydowns on Federal Home Loan Bank line of credit
  and Federal Home Loan Bank short-term advances                (76,300)      (7,700)
 Proceeds from stock subscription                               213,333           --
                                                                -------      -------
   Net cash provided by financing activities                    260,683      110,026
                                                                -------      -------
   Net increase (decrease) in cash and cash equivalents          36,602      (12,600)

Cash and cash equivalents at beginning of period                 34,441       30,779
                                                                -------      -------
Cash and cash equivalents at end of period                      $71,043      $18,179
                                                                =======      =======
Supplemental disclosure of cash flow information - cash
 paid during the period for:
   Interest                                                     $36,551      $49,104
                                                                =======      =======
   Income taxes, net of refunds                                 $ 7,734      $ 3,242
                                                                =======      =======
Supplemental schedules of noncash investing activities
 transfers from loans to real estate owned and other
 assets through foreclosure                                     $   949      $   711
                                                                =======      =======
</TABLE>

See accompanying notes to consolidated financial statements.

                                  7



                       TierOne Bank and Subsidiaries
                 Notes to Consolidated Financial Statements
                                (unaudited)

1.   Basis of Presentation

     On April 3, 2002, TierOne Bank (the "Bank") (formerly known as First
Federal Lincoln Bank) incorporated TierOne Corporation, a Wisconsin
corporation (the "Company" or "registrant") to facilitate the conversion of
the Bank from a federally chartered mutual savings bank to a federally
chartered stock savings bank (the "Conversion").  The Conversion was completed
on October 1, 2002, at which time the Company became the holding company for
the Bank and issued 22,575,075 shares of its common stock to members of the
general public, the Company's employee stock ownership plan and to certain
directors, officers and employees of the Company and the Bank. Included in
such amount were 500,000 shares contributed to the TierOne Charitable
Foundation.  The Company owns all the outstanding common stock of the Bank.
As of September 30, 2002, the registrant was in organization and had engaged
in no operations at that date; accordingly, no financial statements of the
Company have been included herein.

     References in this document to "we," "our" or "us" refer to the Company
together with the Bank, unless the context requires otherwise.

2.   Basis of Consolidation

     The consolidated financial statements include the accounts of the Bank
and its wholly owned subsidiary, TMS Corporation of the Americas ("TMS").  TMS
is the holding company of TierOne Investments and Insurance, Inc., a wholly
owned subsidiary that administers the sale of insurance and securities
products.  In April 2000, TMS created a new subsidiary, TierOne Reinsurance
Company, which reinsures credit life and accident and health insurance
policies.

     The accompanying unaudited consolidated financial statements as of
September 30, 2002  and for the three and nine month periods ended September
30, 2002 and 2001 have been prepared in accordance with the instructions to
Form 10-Q and therefore do not include all information and notes necessary for
complete financial statements in conformity with accounting principles
generally accepted in the United States of America.  All significant
intercompany accounts and transactions have been eliminated in consolidation.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation.  The results of
operations for interim periods are not necessarily indicative of the results
to be expected for the entire year.  These interim financial statements should
be read in conjunction with the Company's consolidated audited financial
statements and the notes thereto contained in the Company's prospectus dated
August 12, 2002.

                                  8




                                     TierOne Bank and Subsidiaries
                               Notes to Consolidated Financial Statements
                                             (unaudited)

3.   Investment Securities

Investment securities at September 30, 2002 and December 31, 2001 are
summarized below:

<TABLE>
                                                             Gross Unrealized
                                                       -----------------------------
                                          Amortized
        September 30, 2002                  Cost          Gain               Loss         Fair Value
-----------------------------------       ---------    ----------         ----------     ------------
                                                          (dollars in thousands)
                                                               (unaudited)
<S>                                         <C>              <C>              <C>             <C>
Held to Maturity:

  Municipal obligations                     $   160          $ --             $   --          $   160

Available for Sale:

  Mortgage-backed securities                 43,541           645                 39           44,147

  U.S. government agency obligations          7,983            26                 --            8,009

  Corporate securities                       11,213            --              1,023           10,190

  Mutual fund                                 6,000            --                 --            6,000
                                            -------          ----             ------          -------
                                            $68,897          $671             $1,062          $68,506
                                            =======          ====             ======          =======
</TABLE>


<TABLE>
                                                             Gross Unrealized
                                                       -----------------------------
                                          Amortized
        December 31, 2001                   Cost          Gain               Loss         Fair Value
-----------------------------------       ---------    ----------         ----------     ------------
                                                          (dollars in thousands)
                                                                 (audited)
<S>                                         <C>              <C>              <C>             <C>
Held to Maturity:

  Municipal obligations                     $   221          $ --             $   --          $   221

Available for Sale:

  Mortgage-backed securities                 45,788           528                 29           46,287

  U.S. government agency obligations         26,691            --                 --           26,691

  Corporate securities                       12,214            --                381           11,833

  Mutual fund                                 6,000            --                 --            6,000
                                            -------          ----             ------          -------
                                            $90,914          $528             $  410          $91,032
                                            =======          ====             ======          =======
</TABLE>


                                  9



                                     TierOne Bank and Subsidiaries
                               Notes to Consolidated Financial Statements
                                             (unaudited)

4.   Loan Portfolio Composition

     Loans receivable at September 30, 2002 and December 31, 2001 are
     summarized below.

<TABLE>
                                            September 30, 2002              December 31, 2001
                                       -----------------------------    ----------------------------
                                           Amount               %           Amount              %
                                       --------------    -----------    --------------    ----------
                                                             (dollars in thousands)

                                                  (unaudited)                      (audited)
<S>                                        <C>                <C>           <C>               <C>
Real estate loans:
 One- to four-family residential(1)        $  544,813          30.94%       $  502,502         33.13%
 Multi-family residential                      68,008           3.86            74,209          4.89
 Commercial real estate and land              341,335          19.38           258,277         17.03
 Residential construction                     144,851           8.23           113,300          7.47
 Commercial construction                      129,084           7.33            95,614          6.30
                                           ----------         ------        ----------        ------
   Total real estate loans                  1,228,091          69.74         1,043,902         68.82
                                           ----------         ------        ----------        ------
Commercial business                            21,375           1.21            12,193          0.80
Warehouse mortgage lines of credit            225,236          12.79           224,067         14.77
Consumer loans:
 Home equity                                   41,092           2.33            45,398          2.99
 Home equity line of credit                    90,648           5.15            61,839          4.08
 Home improvement                              82,841           4.70            76,555          5.05
 Automobile                                    59,331           3.37            42,547          2.80
 Other                                         12,511           0.71            10,486          0.69
                                           ----------         ------        ----------        ------
   Total consumer loans                       286,423          16.26           236,825         15.61
                                           ----------         ------        ----------        ------
     Total loans                            1,761,125         100.00%        1,516,987        100.00%
                                           ----------         ======        ----------        ======
Less:
 Unearned premiums and discounts                2,253                              558
 Discounts on loans acquired through merger      (196)                            (270)
 Undisbursed portion of construction and
  land loans in process                      (117,615)                        (109,852)
 Deferred loan fees                              (540)                            (520)
 Allowance for loan losses                    (15,154)                         (13,464)
                                           ----------                       ----------
   Net loans (1)                           $1,629,873                       $1,393,439
                                           ==========                       ==========
</TABLE>
______________________
(1)  Includes loans held for sale of $37.1 million and $14.4 million at
     September 30, 2002 and December 31, 2001, respectively.

                                  10



                       TierOne Bank and Subsidiaries
                  Notes to Consolidated Financial Statements
                              (unaudited)


     The following table sets forth the activity in the Bank's allowance for
loan losses during the periods indicated.


                                                 At or For the Nine Months
                                                    Ended September 30,
                                                 -------------------------
                                                     2002         2001
                                                 ------------ ------------
                                                   (dollars in thousands)

Allowance for loan losses, beginning
  of period                                           $13,464      $ 9,947
Provision for loan losses                               2,469        1,893
Charge-offs                                              (839)        (361)
Recoveries on loans previously
  charged off                                              60           10
                                                      -------      -------
Allowance for loan losses, end of period              $15,154      $11,489
                                                      =======      =======
Allowance for loan losses as a percent
  of total loans receivable (1)                          0.92%        0.88%
                                                      =======      =======


(1)  Total loans receivable consists of loans receivable, including loans
     held for sale, less undisbursed loan funds, deferred loan fees and
     unamortized premiums and discounts.














                                  11



                         TierOne Bank and Subsidiaries
                    Notes to Consolidated Financial Statements
                                 (unaudited)

     The following table sets forth information with respect to non-performing
assets and troubled debt restructurings at the dates indicated.  It is the
Bank's policy to cease accruing interest on loans 90 days or more past due and
to charge off all accrued interest.


                                       September 30, 2002    December 31, 2001
                                       ------------------    -----------------
                                               (dollars in thousands)
                                           (unaudited)           (audited)
Non-accruing loans:
 One- to four-family residential                   $2,625               $  898
 Multi-family residential                              --                   --
 Commercial real estate and land                       --                   --
 Residential construction                             131                   --
 Commercial construction                               --                   --
 Commercial business                                   --                   --
 Warehouse mortgage lines of credit                    --                   --
 Consumer                                             552                  767
                                                   ------               ------
 Total non-accruing loans                           3,308                1,665
 Real estate owned, net (1)                           248                  168
                                                   ------               ------
   Total non-performing assets                      3,556                1,833
Troubled debt restructurings                          210                  345
                                                   ------               ------
Total non-performing assets and troubled debt
 restructurings                                    $3,766               $2,178
                                                   ======               ======
Allowance for loan losses as a percent of non-
 performing loans                                  458.10%              808.65%
                                                   ======               ======
Non-performing loans as percent of total loans
 receivable (2)                                      0.20%                0.12%
                                                   ======               ======
Non-performing assets as a percent of total
 assets                                              0.19%                0.12%
                                                   ======               ======
Allowance for loan losses as a percent of
 total loans receivable (2)                          0.92%                0.96%
                                                   ======               ======
______________________

(1)  Real estate owned balances are shown net of related loss allowances.
     Includes both real property and other repossessed collateral consisting
     primarily of automobiles.

(2)  Total loans receivable consists of loans receivable, including loans
     held for sale, less undisbursed loan funds, deferred loan fees and
     unamortized premiums and discounts.

                                  12



                      TierOne Bank and Subsidiaries
                 Notes to Consolidated Financial Statements
                              (unaudited)


5.   Mortgage Servicing Rights

Mortgage servicing rights are included in the Consolidated Statements of
Financial Condition under the caption "Other Assets."  The activity of
mortgage servicing rights is summarized as follows for the following periods:


                                   Three Months Ended       Nine Months Ended
                                      September 30,           September 30,
                                   ------------------       -----------------
                                   2002          2001       2002         2001
                                   ----          ----       ----         ----
                                             (dollars in thousands)

Beginning balance                  $5,664      $2,424       $4,577     $1,101
Mortgage servicing rights
 capitalized                        1,333       1,312        3,480      3,047
Amortization expense                 (607)       (216)      (1,207)      (628)
                                   ------      ------       ------     ------
                                    6,390       3,520        6,850      3,520
Valuation adjustment               (1,160)        (50)      (1,620)       (50)
                                   ------      ------       ------     ------
Ending balance                     $5,230      $3,470       $5,230     $3,470
                                   ======      ======       ======     ======

   The activity of the valuation allowances on mortgage servicing rights is
summarized as follows for the following periods:


                                   Three Months Ended       Nine Months Ended
                                      September 30,           September 30,
                                   ------------------       -----------------
                                   2002          2001       2002         2001
                                   ----          ----       ----         ----
                                             (dollars in thousands)

Beginning balance                $  810        $   --     $  350       $   --
Amounts charged to operations     1,160            50      1,620           50
                                 ------        ------     ------       ------
Ending balance                   $1,970        $   50     $1,970       $   50
                                 ======        ======     ======       ======

   The estimated fair value of the Bank's mortgage servicing rights at
September 30, 2002 totaled approximately $5.2 million on a balance of $592.9
million of serviced loans at such date.

   The following table compares the key assumptions used in measuring the
fair values of mortgage servicing rights for the periods presented:

                                       September 30, 2002   December 31, 2001
                                       ------------------   -----------------
                                               (dollars in thousands)
Fair value                                      $5,230              $5,069
Prepayment speed                             11.1% - 46.1%        8.7% - 37.8%
Weighted average prepayment speed                 29.7%               14.0%
Discount rate                                 9.0% - 15.0%       10.5% - 15.0%

                                  13



                      TierOne Bank and Subsidiaries
                 Notes to Consolidated Financial Statements
                               (unaudited)

   6. Recent Accounting Pronouncements

     In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets."  This Statement addresses financial accounting and reporting for the
impairment or disposal of long-lived assets and supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of."  However, the Statement retains the fundamental provisions
of Statement 121 for (a) recognition and measurement of the impairment of
long-lived assets to be held and used and (b) measurement of long-lived assets
to be disposed of by sale.  This Statement supersedes the accounting and
reporting provisions of APB Opinion No. 30, "Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions,"
for the disposal of a segment of a business.  However, this Statement retains
the requirement of Opinion 30 to report discontinued operations separately
from continuing operations and extends that reporting to a component of an
entity that either has been disposed of (by sale, by abandonment, or in
distribution to owners) or is classified as held for sale.  This Statement
also amends APB No. 51, "Consolidated Financial Statements," to eliminate the
exception to consolidation for a temporarily controlled subsidiary.  The
provisions of this Statement are effective for financial statements issued for
fiscal years beginning after December 15, 2001 and interim periods within
those fiscal years.  The provisions of this Statement generally are to be
applied prospectively.  The adoption of Statement No. 144 did not have an
impact on our earnings, financial condition or equity.

     In April 2002, the FASB issued Statement No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections."  This Statement rescinds FASB Statement No. 4,
"Reporting Gains and Losses from Extinguishment of Debt," and an amendment of
that Statement, FASB Statement No. 64, "Extinguishments of Debt Made to
Satisfy Sinking-Fund Requirements."  This Statement also rescinds FASB
Statement No. 44, "Accounting for Intangible Assets of Motor Carriers."  This
Statement amends FASB Statement No. 13, "Accounting for Leases," to eliminate
an inconsistency between the required accounting for sale-leaseback
transactions and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions.  This
Statement also amends other existing authoritative pronouncements to make
various technical corrections, clarify meanings, or describe their
applicability under changed conditions.  The adoption of Statement No. 145 is
not expected to have a material effect on our financial position or results of
operation.

     In October 2002, the FASB issued Statement No. 147, "Acquisition of
Certain Financial Institutions," which amends SFAS No. 72, "Accounting for
Certain Acquisitions of Banking or Thrift Institutions," SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets," and FASB
Interpretation No. 9.  Except for transactions between two or more mutual
enterprises, this Statement removes acquisitions of financial institutions
from the scope of both Statement No. 72 and Interpretation 9 and requires that
those transactions be accounted for in accordance with FASB Statements No.
141, "Business Combinations," and No. 142, "Goodwill and Other Intangible
Assets."  Thus, the requirement in paragraph 5 of Statement No. 72 to
recognize

                                  14



                      TierOne Bank and Subsidiaries
                Notes to Consolidated Financial Statements
                              (unaudited)

any excess of the fair value of liabilities assumed over the fair value of
tangible and identifiable intangible assets acquired as an unidentifiable
intangible asset no longer applies to acquisitions within the scope of
this Statement.  In addition, this Statement amends Statement No. 144 to
include within its scope long-term customer-relationship intangible assets
of financial institutions such as depositor- and borrower-relationship
intangible assets and credit cardholder intangible assets.  Consequently,
those intangible assets are subject to the same undiscounted cash flow
recoverability test and impairment loss recognition and measurement provisions
that Statement No. 144 requires for other long-lived assets that are held and
used.  The adoption of Statement No. 147 is not expected to have a material
effect on our financial position or results of operations.



















                                  15




                      TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations

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

General

     The Bank, which is a wholly owned subsidiary of the Company as a result
of the completion of the Bank's conversion to stock form, is a $1.8 billion
federally chartered savings bank headquartered in Lincoln, Nebraska.
Established in 1907, the Bank offers a wide variety of full-service consumer
and commercial banking products and services to customers through a
geographically diverse network of 58 offices in Nebraska, Iowa and Kansas.
Leading products offered include residential and commercial real estate
financing, consumer, construction and business loans and lines of credit,
consumer and business checking and savings plans, investment and insurance
services, and telephone and Internet banking access.

     The Company was formed by the Bank in connection with the Bank's
conversion and as of September 30, 2002, had not yet commenced operations. The
Company's results of operations initially will be primarily dependent on the
results of the Bank, which became a wholly owned subsidiary of the Company
upon completion of the conversion on October 1, 2002.  The Bank's results of
operations depend, to a large extent, on net interest income, which is the
difference between the income earned on its loan and investment portfolios and
the cost of funds, consisting of the interest paid on deposits and borrowings.
Results of operations are also affected by provisions for loan losses, loan
sale activities and loan servicing.  Non-interest expense principally consists
of compensation and employee benefits, office occupancy and equipment expense,
data processing, advertising and business promotion and other expense.  Our
results of operations are also significantly affected by general economic and
competitive conditions, particularly changes in interest rates, government
policies and actions of regulatory authorities.  Future changes in applicable
law, regulations or government policies may materially impact our financial
condition  and results of operations.

Forward-Looking Statements

     This Form 10-Q contains forward-looking statements, which can be
identified by the use of such words as "estimate, "project, "believe,"
"intend," "anticipate," "plan," "seek," "expect" and similar expressions.
These forward-looking statements include: statements of our goals, intentions
and expectations; statements regarding our prospects and business strategy;
statements regarding our asset quality and market risk; and estimates of
future costs, benefits and results.  These forward-looking statements are
subject to significant risks, assumptions and uncertainties, including, among
other things, the following important factors that could affect the actual
outcome of future events: changes in demand for loans, deposits and other
financial services in our market area; changes in interest rates; changes in
general economic conditions; changes in the monetary and fiscal policies of
the U.S. Government; legislative or regulatory changes that adversely affect
our business; changes in our asset quality; changes in accounting policies and
practices, as may be adopted by the bank regulatory agencies and the FASB; and
changes in our organization, compensation and benefit plans.  Because of these
and other uncertainties, our actual future results may be materially different
from

                                  16




                      TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations


the results indicated by these forward-looking statements.  We have no
obligation to update or revise any forward-looking statements to reflect any
changed assumptions, any unanticipated events or any changes in the future.

Critical Accounting Policies

     We have identified the evaluation of the allowance for loan losses as a
critical accounting policy where amounts are sensitive to material variation.
This policy is significantly affected by our judgment and uncertainties and
there is a likelihood that materially different amounts would be reported
under different, but reasonably plausible, conditions or assumptions.  We
establish provisions for loan losses, which are charges to our operating
results, in order to maintain a level of total allowance for losses that
management believes covers all known and inherent losses that are both
probable and reasonably estimable at each reporting date.  Management performs
reviews no less than quarterly in order to identify these inherent losses and
to assess the overall collection probability for the loan portfolio.  Our
reviews consist of a quantitative analysis by loan category, using historical
loss experience, and consideration of a series of qualitative loss factors.
For each primary type of loan, we establish a loss factor reflecting our
estimate of the known and inherent losses in each loan type using both the
quantitative analysis as well as consideration of the qualitative factors.
Our evaluation process includes, among other things, an analysis of
delinquency trends, non-performing loan trends, the levels of charge-offs and
recoveries, prior loss experience, total loans outstanding, the volume of loan
originations, the type, size, terms and geographic concentration of loans held
by us, the value of collateral securing loans, the number of loans requiring
heightened management oversight, general economic conditions and loan loss
information for other institutions.  The amount of the allowance for loan
losses is only an estimate and actual losses may vary from these estimates.

















                                  17




                      TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations


Comparison of Financial Condition at September 30, 2002 and December 31, 2001

     Our total assets were $1.8 billion at September 30, 2002, a $267.5
million, or 17.0%, increase from December 31, 2001.  A decrease in investment
securities available for sale was substantially offset by increases in cash
and cash equivalents and net loans receivable (including loans held for sale).
Our available-for-sale investment securities amounted to $68.3 million at
September 30, 2002, a $22.5 million decrease from December 31, 2001 primarily
due to a $18.7 million or 70.0% decline in U.S. government agency obligations
to $8.0 million.  During the nine months ended September 30, 2002, we
purchased $67.8 million in investment securities which were partially offset
by the maturing of an aggregate of $67.6 million of securities.  Cash and cash
equivalents totaled $71.0 million at September 30, 2002, a $36.6 million
increase from December 31, 2001 and our net loan portfolio, including loans
held for sale, totaled $1.6 billion at September 30, 2002, a $236.4 million
increase compared to December 31, 2001.  The composition of the loan portfolio
continued to change reflecting our emphasis on originating or purchasing
commercial real estate, construction and consumer loans.  As a result,
commercial real estate and land, construction (both commercial and
residential) and consumer loans increased by $83.1 million, $65.0 million and
$49.6 million, respectively, at September 30, 2002 as compared to December 31,
2001. During the nine months ended September 30, 2002, we purchased for
portfolio retention a total of $378.0 million of loans, including $160.5
million of adjustable-rate single-family residential loans, $67.0 million of
commercial real estate and land loans, $82.5 million of construction loans and
$68.0 million of consumer loans.  A substantial portion of the commercial real
estate and land loans purchased during this period consisted of our purchase
of 75% to 95% participation interests in loans originated by two financial
institutions headquartered in the State of Washington with the underlying
collateral located in several states.

     Our total deposits increased by $72.6 million to $1.2 billion during the
nine months ended September 30, 2002 as we continued our efforts to increase
the level of our core deposits, especially checking accounts.  At September
30, 2002, our interest-bearing and non-interest-bearing checking accounts
amounted to $323.3 million in the aggregate, a $71.4 million, or 28.3%,
increase from the aggregate amount at December 31, 2001.  In addition, during
the nine-month period ended September 30, 2002, our total certificates of
deposit declined to $534.6 million at September 30, 2002 compared to $535.3
million at December 31, 2001.  Our FHLB advances and other borrowings amounted
to $277.0 million at September 30, 2002 compared to $303.3 million at December
31, 2001.

     Our total retained earnings increased by $12.6 million to $134.4 million
at September 30, 2002 compared to $121.8 million at December 31, 2001
primarily reflecting $12.9 million in net income earned for the nine months
ended September 30, 2002.


                                  18



                      TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations


Comparison of Operating Results for the Three and Nine Months Ended September
30, 2002 and 2001

     General.  Our net income increased by $1.0 million, or 29.4%, to $4.4
million for the three months ended September 30, 2002 compared to $3.4 million
for the three months ended September 30, 2001.  For the nine months ended
September 30, 2002, our net income increased by $3.7 million, or 40.0%, to
$12.9 million compared to $9.2 million for the same period in 2001.  Our net
income increased during 2002 due primarily to greater declines in our cost of
funds than the yield on our interest-earning assets which resulted in an
improved net interest income.  Our average interest rate spread increased to
3.34% for the quarter ended September 30, 2002 compared to 3.19% for the three
months ended September 30, 2001.  For the nine months ended September 30,
2002, our average interest rate spread was 3.36% as compared to 2.85% for the
same period in 2001.  Our net interest margin improved to 3.76% and 3.75% for
the three and nine months ended September 30, 2002, respectively, compared to
3.56% and 3.30% for the three and nine months ended September 30, 2001,
respectively.  Our ratio of average interest-earning assets to average
interest-bearing liabilities increased to 115.31% and 113.55% for the three
and nine month periods ended September 30, 2002, respectively, compared to
109.46% and 110.11% for the same periods in 2001.  The improvement in the
average interest rate spread and net interest margin during 2002 reflected
both the effects of the decline in our cost of funds as a result of the low-
interest rate environment which exceeded the decline in the yields earned on
our interest-earning assets as well as the continued growth of the loan
portfolio.

     As previously disclosed, the Company formed the TierOne Charitable
Foundation in connection with the Conversion.  The Company contributed 500,000
shares of common stock on October 1, 2002.  As a consequence, the Company will
record a charge of $5.0 million ($3.2 million net of taxes) which will
substantially reduce our net income for the fourth quarter of fiscal 2002.

     Interest Income.  Our total interest income for the three months ended
September 30, 2002 was $26.5 million compared to $26.1 million for the three
months ended September 30, 2001 while for the nine month periods ended
September 30, 2002 and 2001, our total interest income amounted to $76.6
million and $78.9 million, respectively.  Total interest income during the
three months ended September 30, 2002 increased due to the increase in the
average balance of interest-earning assets, primarily loans, partially offset
by a decline in the average yield. The average balance of loans during the
three months ended September 30, 2002 and 2001 was $1.5 billion and $1.2
billion, respectively.  The primary reason for the decrease in total interest
income during the nine months ended September 30, 2002 was the decline in
market rates of interest throughout 2001 partially  offset by the growth in
the loan portfolio.  The average yield earned on net loans receivable was
6.73% for the three months ended September 30, 2002 compared to 7.78% for the
three months ended September 30, 2001 and was 6.85% for the nine months ended
September 30, 2002 as compared to 7.90% for the same period in 2001.  Average
yields also were lower on our investment securities and mortgage-backed
securities during the three months and the nine months ended September 30,
2002 compared to the same periods in 2001.

                                  19



                      TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations

     Interest Expense.  Our total interest expense for the three and nine
months ended September 30, 2002 was $11.3 million and $33.3 million,
respectively, compared to $13.7 million and $44.9 million for the three months
and nine months ended September 30, 2001, respectively.  The primary reason
for the decrease in our interest expense during 2002 was a reduction in the
average rate on deposits to 2.86% and 2.93% during the three and nine months
ended September 30, 2002, respectively, compared to 4.14% and 4.74% during the
same periods in 2001 combined with the continued emphasis on increasing the
amount of core deposits.  The average rate on our certificates of deposit was
3.99% and 4.01% for the three months and the nine months ended September 30,
2002, respectively, compared to 5.25% and 5.84% for the same periods in 2001.
The average rates on our interest-bearing checking accounts, money market
accounts and savings accounts also declined during the 2002 periods compared
to the same periods in 2001.  Interest expense on FHLB advances and other
borrowings increased by $756,000 and $2.4 million during the three and nine
months ended September 30, 2002 compared to the same periods in 2001 as a
result of a higher average balance of borrowings in 2002 which more than
offset a reduction in the average rate paid.  The average balance of
borrowings increased in 2002 as the Bank continued to fund loan growth in part
through borrowings in connection with the implementation of its business plan.















                                  20



                       TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations

     Average Balances, Net Interest Income, and Yields Earned and Rates Paid.
The following tables show for the periods indicated the total dollar amount of
interest from average interest-earning assets and the resulting yields, as
well as the interest expense on average interest-bearing liabilities,
expressed both in dollars and rates, and the net interest margin.  Tax-exempt
income and yields have not been adjusted to a tax-equivalent basis.  All
average balances are based on month end balances.  Management does not believe
that the monthly averages differ significantly from what the daily averages
would be.

<TABLE>

                                                                    Three Months Ended September 30,
                                              -----------------------------------------------------------------------
                                                         2002                                          2001
                                              -------------------------------       ---------------------------------
                                              Average                Average        Average                 Average
                                              Balance    Interest  Yield/Rate       Balance      Interest  Yield/Rate
                                              -------    --------  ----------       -------      --------  ----------
                                                                   (dollars in thousands)
<S>                                        <C>            <C>          <C>       <C>             <C>           <C>
Interest-earning assets:
 Federal funds sold                        $   26,430     $   113        1.71%   $   46,113      $    430        3.73%
 Investment securities                         57,612         628        4.36        65,594         1,083        6.60
 Mortgage-backed securities                    35,258         472        5.35        64,084           915        5.71
 Loans receivable                           1,504,440      25,329        6.73     1,216,714        23,653        7.78
                                           ----------     -------                ----------      --------
 Total interest-earning assets              1,623,740      26,542        6.54%    1,392,505        26,081        7.49%
                                                          -------      ------                    --------      ------
Non-interest-earning assets                    56,261                                52,469
                                           ----------                            ----------
 Total assets                              $1,680,001                            $1,444,974
                                           ==========                            ==========
Interest-bearing liabilities:
 Interest-bearing checking accounts        $  283,773     $ 1,223        1.72%   $  187,408      $  1,188        2.54%
 Regular savings accounts                      15,626          50        1.28        11,844            46        1.55
 Money market accounts                        286,073       1,418        1.98       304,751         2,391        3.14
 Certificate accounts                         525,944       5,250        3.99       570,463         7,489        5.25
                                           ----------     -------                ----------      --------
    Total interest-bearing deposits         1,111,416       7,941        2.86     1,074,466        11,114        4.14
 FHLB advances and other borrowings           296,786       3,323        4.48       197,657         2,567        5.19
                                           ----------     -------                ----------      --------
    Total interest-bearing liabilities      1,408,202      11,264        3.20     1,272,123        13,681        4.30
                                                          -------      ------                    --------      ------
 Non-interest-bearing accounts                 31,293                                24,796
Other liabilities                             107,998                                31,609
                                           ----------                            ----------
    Total liabilities                       1,547,493                             1,328,528
Retained earnings                             132,508                               116,446
                                           ----------                            ----------
  Total liabilities and retained earnings  $1,680,001                            $1,444,974
                                           ==========                            ==========
Net interest-earning assets                $  215,538                            $  120,382
                                           ==========                            ==========
Net interest income; average interest
 rate spread                                              $15,278        3.34%                   $ 12,400        3.19%
                                                          =======      ======                    ========      ======
Net interest margin                                                      3.76%                                   3.56%
                                                                       ======                                  ======
Average interest-earning assets to
 average interest-bearing liabilities                                  115.31%                                 109.46%
                                                                       ======                                  ======

</TABLE>

                                  21



                       TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations

<TABLE>

                                                                    Nine Months Ended September 30,
                                              -----------------------------------------------------------------------
                                                         2002                                          2001
                                              -------------------------------       ---------------------------------
                                              Average                Average        Average                 Average
                                              Balance    Interest  Yield/Rate       Balance      Interest  Yield/Rate
                                              -------    --------  ----------       -------      --------  ----------
                                                                   (dollars in thousands)
<S>                                        <C>            <C>          <C>       <C>             <C>           <C>
Interest-earning assets:
 Federal funds sold                        $   24,006     $   310      1.72%     $   36,982      $  1,143        4.12%
 Investment securities                         67,639       2,254      4.44          78,889         4,065        6.87
 Mortgage-backed securities                    36,728       1,539      5.59          64,865         3,008        6.18
 Loans receivable                           1,410,569      72,480      6.85       1,193,255        70,666        7.90
                                           ----------     -------                ----------       -------
Total interest-earning assets               1,538,942      76,583      6.64%      1,373,991        78,882        7.65%
                                                          -------    ------                       -------      ------
Non-interest-earning assets                    52,137                                42,709
                                           ----------                            ----------
 Total assets                              $1,591,079                            $1,416,700
                                           ==========                            ==========
Interest-bearing liabilities:
 Interest-bearing checking accounts          $264,046      $3,627      1.83%       $166,924        $3,663        2.93%
 Regular savings accounts                      14,580         140      1.28          10,948           129        1.57
 Money market accounts                        287,419       4,391      2.04         308,096         8,737        3.78
 Certificate accounts                         525,283      15,805      4.01         580,357        25,408        5.84
                                           ----------     -------                ----------       -------
Total interest-bearing deposits             1,091,328      23,963      2.93       1,066,325        37,937        4.74
FHLB advances and other borrowings            263,964       9,347      4.72         181,458         6,988        5.13
                                           ----------     -------                ----------       -------
Total interest-bearing liabilities          1,355,292      33,310      3.28       1,247,783        44,925        4.80
                                                          -------    ------                       -------      ------
Non-interest-bearing accounts                  28,608                                21,777
Other liabilities                              79,090                                34,054
                                           ----------                            ----------
 Total liabilities                          1,462,990                             1,303,614
Retained earnings                             128,089                               113,086
                                           ----------                            ----------
Total liabilities and retained earnings    $1,591,079                            $1,416,700
                                           ==========                            ==========
Net interest earning assets                $  183,650                            $  126,208
                                           ==========                            ==========
Net interest income; average interest
 rate spread                                              $43,273      3.36%                      $33,957        2.85%
                                                          =======    ======                       =======      ======
Net interest margin                                                    3.75%                                     3.30%
                                                                     ======                                    ======
Average interest-earning assets to
 average interest-bearing liabilities                                113.55%                                   110.11%
                                                                     ======                                    ======

</TABLE>

                                  22



                       TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations


     Rate/Volume Analysis.  The following table shows the extent to which
changes in interest rates and changes in volume of interest-related assets and
liabilities affected our interest income and expense during the periods
indicated.  For each category of interest-earning assets and interest-bearing
liabilities, information is provided on changes attributable to (1) changes in
rate (change in rate multiplied by prior year volume) and (2) changes in
volume (change in volume multiplied by prior year rate).  The combined effect
of changes in both rate and volume has been allocated proportionately to the
change due to rate and the change due to volume.


<TABLE>

                                            Three Months Ended September 30, 2002 vs.   Nine Months Ended September 30, 2002 vs.
                                              Three Months Ended September 30, 2001       Nine Months Ended September 30, 2001
                                            ----------------------------------------    ----------------------------------------
                                            Increase (Decrease)                          Increase (Decrease)
                                                  Due to                                       Due to
                                            -------------------                         --------------------
                                                                  Total Increase                               Total Increase
                                            Rate         Volume     (Decrease)          Rate          Volume     (Decrease)
                                            ----         ------   --------------        ----          ------   --------------
                                                                           (dollars in thousands)

<S>                                       <C>            <C>          <C>             <C>             <C>           <C>
Interest income:
 Federal funds sold                       $ (177)        $ (140)      $ (317)         $ (520)         $ (313)       $ (833)
 Investment securities                      (335)          (120)        (455)         (1,290)           (521)       (1,811)
 Mortgage-backed securities                  (54)          (389)        (443)           (267)         (1,202)       (1,469)
 Loans receivable, net                    (2,190)         3,866        1,676          (4,822)          6,636         1,814
                                          -------        ------       ------          ------          ------        ------
   Total interest-earning assets          (2,756)         3,217          461          (6,899)          4,600        (2,299)
                                          -------        ------       ------          ------          ------        ------
Interest expense:
 Interest-bearing checking accounts          (58)            93           35              65            (101)          (36)
 Savings accounts                             (5)             9            4             (14)             25            11
 Money market accounts                      (834)          (139)        (973)         (3,794)           (552)       (4,346)
 Certificate accounts                     (1,689)          (550)      (2,239)         (7,368)         (2,235)       (9,603)
                                          -------        ------       ------          ------          ------        ------
   Total deposits                         (2,586)          (587)      (3,173)        (11,111)         (2,863)      (13,974)
 FHLB advances and other borrowings         (287)         1,043          756            (508)          2,867         2,359
                                          -------        ------       ------          ------          ------        ------
   Total interest-bearing liabilities     (2,873)           456       (2,417)        (11,619)              4       (11,615)
                                          -------        ------       ------          ------          ------        ------
Increase in net interest income           $  117         $2,761       $2,878          $4,720          $4,596        $9,316
                                          =======        ======       ======          ======          ======        ======

</TABLE>

                                  23



                       TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations



     Provision for Loan Losses.  We made a provision for loan losses of $1.3
million for the three months ended September 30, 2002 compared to $953,000 for
the three months ended September 30, 2001.  For the nine months ended
September 30, 2002, our provision for loan losses was $2.5 million as compared
to $1.9 million for the same period in 2001.  Our portfolios of commercial
real estate and land loans, construction loans (both residential and
commercial), commercial business loans and consumer loans, which generally are
deemed to have higher inherent levels of known and inherent losses than
single-family residential mortgage loans, due to, among other things, the
nature of the collateral, the areas in which the security property is located
and the dependency on economic conditions for successful completion or
operation of the project, have continued to grow, both in terms of total
dollar amounts and as a percentage of our total loan portfolio.  Such loans
totaled $923.1 million or 52.4% of the total loan portfolio as compared to
$716.2 million or 47.2% at December 31, 2001.  At September 30, 2002, our
total non-performing assets amounted to $3.6 million compared to $1.8 million
at December 31, 2001.  The increase in non-performing assets was due primarily
to a $1.7 million increase in non-accrual single-family residential mortgage
loans substantially all of which related to loans we took possession of from a
broker participating in our mortgage warehouse line of credit program. During
the three and nine months ended September 30, 2002, we charged off an
aggregate of $461,000 and $839,000, respectively, of loans, primarily related
to consumer loans, and had $34,000 and $60,000, respectively, in recoveries of
previous charge-offs.

     Other Income.  Our other income decreased by $93,000, or 3.1%, to $2.9
million for the three months ended September 30, 2002 compared to $3.0 million
for the three months ended September 30, 2001.  For the nine months ended
September 30, 2002, such income amounted to $9.2 million as compared to $8.3
million for the same period in 2001, an 11.1% increase.  The primary reason
for the decrease in other income for the three months ended September 30, 2002
was a $1.1 million increase to the valuation allowance on our mortgage
servicing rights.  We increased our mortgage servicing rights valuation
allowance due to increased prepayments in our loan servicing portfolio due to
the current low interest rate environment and the likelihood of its
continuation.  For the nine months ended September 30, 2002, the $919,000
increase in other income over the same period in 2001 reflected a $1.1 million
increase in fee and service charges due primarily to the increase in
transaction accounts as well as an $873,000 increase in gains on sale of
loans, substantially all of which consist of long-term fixed-rate single-
family mortgages sold with servicing retained, offset in part by a $1.6
million increase in the valuation allowance on our mortgage servicing rights.

     Other Expense.  Our other expense increased by $886,000, or 9.7%, to
$10.0 million for the three months ended September 30, 2002 compared to $9.1
million for the three months ended September 30, 2001.  The primary reasons
for the increase in other expense for the three months ended September 30,
2002 were a $362,000 increase in advertising expense, a $269,000 increase in

                                  24



                       TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations


other operating expense and a $519,000 increase in salaries and employee
benefits due to an increase in the number of staff, increased health insurance
costs and normal salary increases.  During the nine months ended September 30,
2002, our other expense increased $3.8 million, or 14.5%, to $29.7 million
compared to $26.0 million for the same period in 2001 in large part due to
expenses incurred in connection with our name change to TierOne Bank in early
2002, the promotion of our "High Performance" checking product line and
increased employee salary and benefit expense as previously discussed.

     Income Tax Expense.  Our income tax expense increased by $588,000 to
$2.5 million and by $2.2 million to $7.3 million for the three and nine months
ended September 30, 2002, respectively, compared to the same periods in 2001.
The increases in income tax expense in the three-and nine-month periods ended
September 30, 2002 over the comparable periods in the prior year primarily
reflect the increases in net income.

Liquidity and Commitments

     Our primary sources of funds are from deposits, amortization of loans,
loan and investment security prepayments and the maturity of loans, mortgage-
backed securities and other investments, and other funds provided from
operations. While scheduled payments from the amortization of loans and
mortgage-backed securities and maturing investment securities are relatively
predictable sources of funds, deposit flows and loan prepayments can be
greatly influenced by general interest rates, economic conditions and
competition. We also maintain excess funds in short-term, interest-bearing
assets that provide additional liquidity. TierOne Bank also utilizes outside
borrowings, primarily from the FHLBank Topeka (formerly known as the Federal
Home Loan Bank of Topeka), as an additional funding source.

     We use our liquidity to fund existing and future loan commitments, to
fund maturing certificates of deposit and demand deposit withdrawals, to
invest in other interest-earning assets, and to meet operating expenses.  At
September 30, 2002, we had certificates of deposit maturing within the next 12
months amounting to $372.6 million. Based upon historical experience, we
anticipate that a significant portion of the maturing certificates of deposit
will be redeposited with us.

     In addition to cash flow from loan and securities payments and
prepayments as well as from sales of available for sale securities, we have
significant borrowing capacity available to fund our liquidity needs.  We have
increased our utilization of borrowings in recent years as a cost efficient
addition to deposits as a source of funds.  The average balance of our
borrowings was $296.8 million and $264.0 million for the three and nine months
ended September 30, 2002, respectively, compared to $197.7 million and $181.5
million for the same periods in 2001.  To date, substantially all of our
borrowings have consisted of advances from the FHLBank Topeka, of which we are
a member.

                                  25



                       TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations

Under terms of the collateral agreement with the FHLBank Topeka, we
pledge residential mortgage loans and mortgage-backed securities as well as
our stock in the FHLBank Topeka as collateral for such advances.

     We have not used, and have no present intention to use, any significant
off-balance sheet financing arrangements for liquidity purposes.  Our primary
financial instruments with off-balance sheet risk are limited to loan
servicing for others, our obligations to fund loans to customers pursuant to
existing commitments and commitments to purchase and sell mortgage loans.  In
addition, we have certain risks due to limited recourse arrangements on loans
serviced for others.  At September 30, 2002, the maximum total amount of such
recourse was approximately $4.9 million.  Based on historical experience, at
September 30, 2002, we had established a reserve of $332,000 with respect to
this recourse obligation.  In addition, we have not had, and have no intention
to have, any significant transactions, arrangements or other relationships
with any unconsolidated, limited purpose entities that could materially affect
our liquidity or capital resources.  We have not traded, and do not intend to
trade, in commodity contracts.

     We anticipate that we will continue to have sufficient funds and
alternative funding sources to meet our current commitments.












                                  26



                       TierOne Bank and Subsidiaries
         Management's Discussion and Analysis of Financial Condition
                        and Results of Operations

Selected Operating Ratios

     Set forth below are selected operating ratios of the Bank for the three
and nine months ended September 30, 2002.

<TABLE>

                                                Three Months Ended        Nine Months Ended
                                                   September 30,            September 30,
                                               ----------------------   ---------------------
                                                 2002          2001       2002         2001
                                               --------      --------   --------     --------
<S>                                             <C>            <C>        <C>          <C>
Average yield on interest-earning assets          6.54%          7.49%      6.64%        7.65%
Average rate on interest-bearing liabilities      3.20           4.30       3.28         4.80
Average interest rate spread                      3.34           3.19       3.36         2.85
Net interest margin                               3.76           3.56       3.75         3.30
Average interest-earning assets to average
 interest-bearing liabilities                   115.31         109.46     113.55       110.11
Net interest income after provision for loan
 losses to noninterest expense                  139.70         125.14     137.19       123.42
Total noninterest expense to average assets       2.39           2.53       2.49         2.45
Efficiency ratio                                 55.15          59.37      56.69        61.51
Return on average assets                          1.05           0.94       1.09         0.87
Return on average equity                         13.31          11.71      13.48        10.90
Average equity to average assets                  7.89           8.06       8.05         7.98

</TABLE>

                                  27




Item 3 - Quantitative and Qualitative Disclosures About Market Risk.

     For a discussion of the Bank's asset and liability management policies
as well as the methods used to manage its exposure to the risk of loss from
adverse changes in market prices and rates market, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations How
We Manage Our Risks" and "Quantitative and Qualitative Disclosures About
Market Risk" in the Company's Prospectus dated August 12, 2002.  There has
been no material change in the Bank's asset and liability position or the
market value of the Bank's equity since March 31, 2002.

Item 4 - Controls and Procedures.

     Our chief executive officer and chief financial officer directly
supervised and participated in evaluating the effectiveness of the design and
operation of our disclosure controls and procedures (which evaluation was
conducted within 90 days of the filing date of this quarterly report) and
concluded that these controls and procedures are effective.  There were no
significant changes in our internal controls or in other factors that could
significantly affect these controls subsequent to the date of their
evaluation.

     Disclosure controls and procedures are our controls and other procedures
that are designed to ensure that information required to be disclosed by us in
the reports that we file or submit under the Securities Exchange Act of 1934
(the "Exchange Act") is recorded, processed, summarized and reported, within
the time periods specified in the Securities and Exchange Commission's rules
and forms.  Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by us in the reports that we file under the Exchange Act is
accumulated and communicated to our management, including our chief executive
officer and chief financial officer, as appropriate to allow timely decisions
regarding required disclosure.

                         PART II - OTHER INFORMATION

Item 1 - Legal Proceedings.

     There are no matters required to be reported under this item.  Reference
is made to the Bank's ongoing litigation regarding its goodwill claims against
the U.S. Government as described in "Business of TierOne Bank Legal
Proceedings" in the Company's Prospectus dated August 12, 2002.  There is no
change in the status of the litigation.

Item 2 - Changes in Securities and Use of Proceeds.

       (a), (b) and (c) Not applicable.

                                  28



       (d)   Use of Proceeds
             (1)  The effective date of the Company's Form S-1 was August 12,
                  2002; and the Commission file number was 333-85838.
             (2)  The offering commenced on August 22, 2002.
             (3)  Not applicable.
             (4)  (i)    The offering subscription period ended on September
                         12, 2002;
                  (ii)   The name of the managing underwriter: Sandler O'Neill
                         & Partners, L.P.;
                  (iii)  Common stock, par value $.01 per share was registered;
                  (iv)   Amount registered - 22,575,075 shares;
                           Aggregate price of offering amount registered -
                             $225,750,750;
                           Amount sold - 22,075,075 shares; and
                           Aggregate offering price of stock sold -
                             $220,750,750;
                  (v)    Expenses of the offering which were direct or indirect
                           payments to others:
                           Estimated expenses paid to or for the underwriter -
                             $2,226,023;
                           Estimated other expenses - $2,187,767; and
                           Estimated total expenses - $4,413,790;
                  (vi)   Estimated net offering proceeds - $216,336,960; and
                  (vii)  Direct or indirect payments to others - None.

Item 3 - Defaults Upon Senior Securities.

    There are no matters required to be reported under this item.

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

    There are no matters required to be reported under this item.

Item 5 - Other Information.

    There are no matters required to be reported under this item.

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

    (a)   List of exhibits: (filed herewith unless otherwise noted)

          2.1   Plan of Conversion, as amended*
          3.1   Articles of Incorporation of TierOne Corporation*
          3.2   Bylaws of TierOne Corporation*
          4.0   Form of Stock Certificate of TierOne Corporation*

                                  29




          10.1  Employment Agreement between TierOne Bank and Gilbert G.
                Lundstrom*
          10.2  Employment Agreement between TierOne Bank and James A.
                Laphen*
          10.3  Form of Proposed Employment Agreement between TierOne
                Corporation and Gilbert G. Lundstrom*
          10.4  Form of Proposed Employment Agreement between TierOne
                Corporation and James A. Laphen*
          10.5  Supplemental Retirement Plan*
          10.6  Form of Proposed Change in Control Agreement between TierOne
                Bank and certain executive officers*
          10.7  Form of Proposed Change in Control Agreement between TierOne
                Bank and certain executive officers*
          10.8  Form of Proposed TierOne Bank Employee Severance Plan*
          10.9  Form of Proposed Employee Stock Ownership Plan Supplemental
                Executive Retirement Plan*
          10.10 Form of Proposed 401(k) Plan Supplemental Executive
                Retirement Plan*
          10.11 Directors' Deferred Compensation Program*
          10.12 Amended and Restated Consultation Plan for Directors*
          10.13 Management Incentive Compensation Plan*
          99.1  Certification Pursuant to 18 U.S.C. Section 1350 as Adopted
                Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
          99.2  Certification Pursuant to 18 U.S.C. Section 1350 as Adopted
                Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

__________________

*    Incorporated by reference from the Company's Registration Statement on
     Form S-1, filed on April 3, 2002, as amended, and declared effective
     on August 12, 2002 (File No. 333-85838).

     (b)  Reports on Form 8-K:

          No reports on Form 8-K were filed by the Registrant during the
          quarter ended September 30, 2002.

                                  30



                               SIGNATURES


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


                                     TIERONE CORPORATION



Date: November 14, 2002              By: /s/ Gilbert G. Lundstrom
                                        -----------------------------------
                                        Gilbert G. Lundstrom
                                        Chairman of the Board and
                                          Chief Executive Officer



Date: November 14, 2002              By: /s/ Eugene B. Witkowicz
                                        -----------------------------------
                                        Eugene B. Witkowicz
                                        Executive Vice President and
                                          Chief Financial Officer















                                  31



                 CERTIFICATION PURSUANT TO RULE 13a-14
           OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
                        AS ADOPTED PURSUANT TO
            SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Gilbert G. Lundstrom, the Chairman of the Board and Chief Executive Officer
of TierOne Corporation, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of TierOne Corporation;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and
     cash flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as
     defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
     we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within
          those entities, particularly during the period in which this
          quarterly report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure
          controls and procedures as of a date within 90 days prior to the
          filing date of this quarterly report (the "Evaluation Date"); and

     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on
          our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based
     on our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   all significant deficiencies in the design or operation of
          internal controls which could adversely affect the registrant's
          ability to record, process, summarize and report financial data
          and have identified for the registrant's auditors any material
          weaknesses in internal controls; and

                                  32



     b)   any fraud, whether or not material, that involves management or
          other employees who have a significant role in the registrant's
          internal controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: November 14, 2002                  /s/ Gilbert G. Lundstrom
                                         -----------------------------------
                                         Gilbert G. Lundstrom
                                         Chairman of the Board and Chief
                                           Executive Officer















                                  33




                 CERTIFICATION PURSUANT TO RULE 13a-14
           OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
                        AS ADOPTED PURSUANT TO
            SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eugene B. Witkowicz, the Executive Vice President and Chief Financial
Officer of TierOne Corporation, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of TierOne Corporation;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and
     cash flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as
     defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
     we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within
          those entities, particularly during the period in which this
          quarterly report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure
          controls and procedures as of a date within 90 days prior to the
          filing date of this quarterly report (the "Evaluation Date"); and

     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on
          our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based
     on our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   all significant deficiencies in the design or operation of
          internal controls which could adversely affect the registrant's
          ability to record, process, summarize and report financial data
          and have identified for the registrant's auditors any material
          weaknesses in internal controls; and

                                  34



     b)   any fraud, whether or not material, that involves management or
          other employees who have a significant role in the registrant's
          internal controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: November 14, 2002                  /s/ Eugene B. Witkowicz
                                         -----------------------------------
                                         Eugene B. Witkowicz
                                         Executive Vice President
                                           and Chief Financial Officer


























                                  35