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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2004

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 Incorporation or Organization) (I.R.S. Employer 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   X    No    

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes   X    No    

At August 3, 2004, the registrant had 18,285,811 shares of common stock, $.01 par value per share, outstanding.

PART I - FINANCIAL INFORMATION  

 		 Page

Item 1 -		 Financial Statements   3

Item 2 -		 Management's Discussion and Analysis of Financial Condition
and Results of Operations 22

Item 3 -		 Quantitative and Qualitative Disclosures About Market Risk 39

Item 4 -		 Controls and Procedures 39

 		 PART II - OTHER INFORMATION  

Item 1 -		 Legal Proceedings 40

Item 2 -		 Changes in Securities, Use of Proceeds and Issuer Purchases
of Equity Securities  40

Item 3 -		 Defaults Upon Senior Securities 41

Item 4 -		 Submission of Matters to a Vote of Security Holders 42

Item 5 -		 Other Information 42

Item 6 -		 Exhibits and Reports on Form 8-K 43

Signatures		 44

Exhibit Index		 45





2

TierOne Corporation and Subsidiaries
Consolidated Balance Sheets
June 30, 2004 (Unaudited) and December 31, 2003

(Dollars in thousands, except per share data)
 June 30, 2004
 December 31, 2003
ASSETS            
Cash and cash equivalents   $ 34,616   $ 34,901  
Investment securities:  
   Held to maturity, at cost which approximates fair value    135    142  
   Available for sale, at fair value    37,678    43,515  
Mortgage-backed securities, available for sale, at fair value    12,804    15,712  
Loans receivable:  
   Net loans (includes loans held for sale of $10,864 and $7,083 at  
      June 30, 2004 and December 31, 2003, respectively)    2,088,846    2,036,182  
   Allowance for loan losses    (20,886 )  (19,586 )
      Net loans after allowance for loan losses    2,067,960    2,016,596  
Federal Home Loan Bank stock    37,792    37,143  
Premises and equipment, net    28,975    27,587  
Accrued interest receivable    9,477    9,678  
Other assets    25,832    22,594  
      Total assets   $ 2,255,269   $ 2,207,868  
LIABILITIES AND SHAREHOLDERS' EQUITY  
Liabilities:  
   Deposits   $ 1,324,074   $ 1,216,763  
   Advances from Federal Home Loan Bank and other borrowings    619,752    645,696  
   Advance payments from borrowers for taxes, insurance and  
      other escrow funds    21,274    22,206  
   Accrued interest payable    5,166    5,259  
   Accrued expenses and other liabilities    21,407    22,855  
      Total liabilities    1,991,673    1,912,779  
Shareholders' equity:  
   Preferred stock, $0.01 par value. 10,000,000 shares authorized;  
      none issued    --    --  
   Common stock, $0.01 par value. 60,000,000 shares authorized;  
      18,285,811 and 20,317,568 shares issued and outstanding at  
         June 30, 2004 and December 31, 2003, respectively    226    226  
   Additional paid-in capital    355,051    354,054  
   Retained earnings, substantially restricted    35,699    25,833  
   Treasury stock, at cost; 4,289,264 and 2,257,507 shares at  
      June 30, 2004 and December 31, 2003    (98,300 )  (53,613 )
   Unallocated common stock held by Employee Stock  
      Ownership Plan    (15,426 )  (16,179 )
   Unearned common stock held by Management  
      Recognition and Retention Plan    (13,618 )  (14,982 )
   Accumulated other comprehensive income (loss), net    (36 )  (250 )
         Total shareholders' equity    263,596    295,089  
Commitments and contingent liabilities  
         Total liabilities and shareholders' equity   $ 2,255,269   $ 2,207,868  

See accompanying notes to consolidated financial statements.

3

TierOne Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)

For the Three Months Ended
June 30,
 For the Six Months Ended
June 30,
(Dollars in thousands, except per share data)
 2004
 2003
 2004
 2003
Interest income:                    
   Loans receivable   $ 27,074   $ 27,373   $ 54,237   $ 54,166  
   Investment securities    903    1,115    1,830    2,147  
   Other interest-earning assets    --    --    --    99  
         Total interest income    27,977    28,488    56,067    56,412  
Interest expense:  
   Deposits    5,877    5,866    11,532    12,089  
   Advances from Federal Home Loan Bank and other  
      borrowings    4,965    4,530    9,652    8,594  
         Total interest expense    10,842    10,396    21,184    20,683  
            Net interest income    17,135    18,092    34,883    35,729  
Provision for loan losses    1,105    515    2,039    1,687  
            Net interest income after provision for loan losses    16,030    17,577    32,844    34,042  
Noninterest income:  
   Fees and service charges    4,697    612    7,810    1,579  
   Income (loss) from real estate operations, net    (32 )  26    (109 )  8  
   Net gain on sales of:  
      Investment securities    312    --    312    --  
      Loans held for sale    705    2,653    1,021    4,608  
      Real estate owned    44    (93 )  44    (79 )
   Gain on pension plan curtailment    --    --    1,456    --  
   Other operating income    569    695    1,202    1,406  
         Total noninterest income    6,295    3,893    11,736    7,522  
Noninterest expense:  
   Salaries and employee benefits    7,808    7,096    15,672    13,415  
   Occupancy, net    1,551    1,328    3,017    2,759  
   Data processing    463    407    967    818  
   Advertising    948    904    1,641    1,628  
   Other operating expense    2,632    2,007    4,701    4,215  
         Total noninterest expense    13,402    11,742    25,998    22,835  
            Income before income taxes    8,923    9,728    18,582    18,729  
Income tax expense    3,348    3,593    6,947    6,899  
            Net income   $ 5,575   $ 6,135   $ 11,635   $ 11,830  
Net income per common share, basic   $ 0.33   $ 0.29   $ 0.67   $ 0.57  
Net income per common share, diluted   $ 0.32   $ 0.29   $ 0.66   $ 0.57  
Dividends declared per common share   $ 0.05   $ -   $ 0.10   $ -  
Average common shares outstanding, basic (000's)    16,998    20,828    17,396    20,824  
Average common shares outstanding, diluted (000's)    17,283    21,012    17,733    20,929  

See accompanying notes to consolidated financial statements.

4

TierOne Corporation and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income
Six Months Ended June 30, 2004 and June 30, 2003
(Unaudited)

(Dollars in thousands)
 Common
Stock
 Additional
Paid-In
Capital
 Retained
Earnings,
Substantially
Restricted
 Treasury
Stock
 Unallocated
Common Stock
Held by the
Employee Stock
Ownership Plan
 Unearned
Common Stock
Held by the
Management
Recognition and
Retention Plan
 Accumulated Other
Comprehensive
Income (Loss), Net
 Total
Shareholders'
Equity
Balance at December 31, 2002     $ 226   $ 355,741   $ 2,018   $ --   $ (17,684 ) $ --   $ (405 ) $ 339,896  
Common stock earned by  
   employees in Employee  
   Stock Ownership Plan    --    557    --    --    753    --    --    1,310  
Common stock purchased by the  
   Management Recognition and  
   Retention Plan    --    (97 )  ~    --    --    (1,357 )  --    (1,454 )
Amortization of awards under the  
   Management Recognition and  
   Retention Plan    --    --    --    --    --    500    --    500  
Comprehensive income:  
   Net income    --    --    11,830    --    --    --    --    11,830  
   Change in unrealized loss on  
      available for sale securities,  
      net of tax and  
      reclassification adjustment    --    --    --    --    --    --    20    20  
Total comprehensive income    --    --    11,830    --    --    --    20    11,850  
Balance at June 30, 2003   $ 226   $ 356,201   $ 13,848   $ --   $ (16,931 ) $ (857 ) $ (385 ) $ 352,102  
Balance at December 31, 2003   $ 226   $ 354,054   $ 25,833   $ (53,613 ) $ (16,179 ) $ (14,982 ) $ (250 ) $ 295,089  
Common stock earned by  
   employees in Employee  
   Stock Ownership Plan    --    914    --    --    753    --    --    1,667  
Amortization of awards under  
   the Management Recognition  
   and Retention Plan    --    83    --    --    --    1,364    --    1,447  
Repurchase of common  
   stock (2,031,757 shares)                (44,687 )              (44,687 )
Dividends paid ($0.10 per common share) </