In preparation for sale of all the nonperforming loans previously originated by Florida-based TransLand Financial Services (“TransLand”), the Bank recorded a $14.5 million provision for loan losses, wrote down the fair value of the remaining nonperforming TransLand portfolio and is working with an investment banking firm that specializes in the sale of mortgage and consumer loan and REO portfolios who is marketing these TransLand loans. The $14.5 million provision was part of a $39.9 million provision for loan losses recorded during the three months ended March 31, 2008.

As a result of these charges, the Company recorded a net loss of $60.9 million, or $3.60 per diluted share, for the three months ended March 31, 2008. This compares to net income of $9.4 million, or $0.55 per diluted share, for the same period one year ago.

“Today’s financial and credit environment is one of the most challenging our country has experienced in decades,” said Gilbert G. Lundstrom, chairman and chief executive officer. “We have taken a number of steps to address the challenging issues facing TierOne. We remain focused on our fundamental core operations, combined with our financially solid capital position, to lead us through this unprecedented period of market disruption.”

Synopsis of First Quarter 2008 Performance

Net Interest Income

For the three months ended March 31, 2008, net interest income totaled $23.1 million, a decrease of 26.0 percent, compared to $31.2 million for the same period in 2007. The quarter-over-quarter decrease resulted primarily from declines in interest income generated by net loans receivable due to the declining interest rate environment and the Bank’s increased level of nonperforming loans.

Average interest rate spread and net interest margin were 2.47 percent and 2.85 percent, respectively, for the three months ended March 31, 2008 compared to 3.50 percent and 3.93 percent, respectively, for the same period one year ago. The decline in average interest rate spread and net interest margin primarily resulted from declines in yields earned on loans receivable and higher levels of nonperforming loans.

Noninterest Income

Noninterest income for the three months ended March 31, 2008 increased 17.6 percent to $8.2 million compared to $7.0 million earned during the comparable period one year ago. The period-over-period increase was attributable primarily to a $681,000 gain associated with VISA Inc.’s initial public offering and a $626,000 increase in the gain on sale of loans held for sale.

Noninterest Expense

For the three months ended March 31, 2008, total noninterest expense was $64.6 million, an increase of $43.1 million, compared to $21.5 million for the three months ended March 31, 2007. The increase in noninterest expense was primarily the result of a one-time $42.1 million non-cash write-off of goodwill.

In 2004, the Company recorded goodwill and other intangible assets following its acquisition of United Nebraska Financial Co. Under applicable accounting rules, goodwill is an asset which must be supported by the Company’s market value. Under these same rules, the Company is also required to periodically assess goodwill in relationship to its market capitalization and shareholders’ equity.

The Company performed a goodwill impairment test as of March 31, 2008 due to adverse changes in the business climate. As a result of a decline in the market value of the Company’s common stock, the Company determined that the entire goodwill amount was impaired, and recorded a $42.1 million goodwill impairment charge to write-off goodwill at March 31, 2008. Since the write-off of goodwill is a non-cash accounting charge, it had no impact on the Company’s liquidity or cash flows. In addition, the charge did not impact the Company’s regulatory capital.

Asset Quality

Deterioration in the nation’s economic conditions, which began in the latter half of 2007 and has continued into the first quarter of 2008, has negatively impacted the Bank’s asset quality. Total nonperforming loans at March 31, 2008 were $127.1 million, or 4.40 percent of net loans, compared to $128.5 million, or 4.32 percent of net loans, at December 31, 2007. The decrease in first quarter 2008 nonperforming loans was primarily the result of an $8.1 million decline in nonperforming residential construction loans partially offset by a $5.4 million increase in nonperforming land development loans. The Bank’s $127.1 million of nonperforming loans at March 31, 2008 consisted of $49.6 million of residential construction loans, $44.1 million of land development loans, $19.2 million of commercial construction loans and $14.2 million of other loans.

After charge-offs, nonperforming residential construction loans totaled $49.6 million at March 31, 2008; a decline of $8.1 million, or 14.0 percent, compared to $57.7 million at December 31, 2007. Included within the $49.6 million of nonperforming residential construction loans at March 31, 2008 were $13.2 million of TransLand-related loans which were reclassified as held for sale at March 31, 2008.

Total nonperforming land development loans increased $5.4 million, or 13.8 percent, to $44.1 million at March 31, 2008 compared to $38.7 million at December 31, 2007. The nonperforming land development loans consisted of five residential properties in the Las Vegas, Nevada area totaling $38.5 million, six residential properties in Nebraska amounting to $2.8 million and one residential land development property each in Minnesota and Illinois totaling $1.5 million and $1.2 million, respectively.

At March 31, 2008, nonperforming commercial construction loans totaled $19.2 million; the same level as reported at December 31, 2007. The $19.2 million in nonperforming commercial construction loans relates to one upscale, 113-unit condominium project located within a suburban area of Las Vegas, Nevada. The multi-phase project, with units in various stages of construction including the substantially completed 33-unit first phase, was funded by the Bank and three other financial institutions with total committed loans by all institutions of $84.8 million. Many of the units were under contract for purchase prior to the commencement of the construction project. Following the builder’s voluntary bankruptcy, a court-appointed trustee working in conjunction with the four financial institutions has identified a local builder and sales agent to complete the project and sell the remaining units.

The Company’s allowance for loan losses was $78.5 million at March 31, 2008, inclusive of provision for loan losses and offsetting net charge-offs, compared to $66.5 million at December 31, 2007. The allowance for loan losses as a percentage of net loans increased to 2.72 percent at March 31, 2008 compared to 2.24 percent at year-end 2007. Provisions for loan losses recorded during the three months ended March 31, 2008 totaled $39.9 million compared to $1.5 million for the three months ended March 31, 2007. The first quarter 2008 provision for loan losses was primarily related to Las Vegas, Nevada and TransLand-related loans.

Charged-off loans, net of recoveries, for the three months ended March 31, 2008 were $28.5 million compared to $691,000 for the same period one year ago. The quarter-over-quarter net increase was primarily attributable to charging off $23.0 million of TransLand-related loans during the three months ended March 31, 2008.

The Bank maintains a corporate policy of not participating in subprime residential real estate lending or negative amortizing mortgage products. The Office of Thrift Supervision (“OTS”), the Bank’s federal regulatory agency, defines subprime loans as loans to borrowers displaying one or more credit risk characteristics including lending to a borrower with a credit bureau risk score (“FICO”) of 660 or below. Furthermore, the Bank has not participated in collateralized loan obligations, collateralized debt obligations, structured investment vehicles or asset-backed commercial paper.

The Bank has taken a series of additional steps to realign certain credit administration functions, including the addition of personnel with extensive background and expertise in credit analysis. Furthermore, the Bank has tightened credit policies and limited exposure in selected business lines and geographic markets.

Consolidated Statements of Financial Condition

Total assets at March 31, 2008 were $3.4 billion, a decrease of 4.6 percent, compared to $3.5 billion at December 31, 2007. The decline in total assets during the first three months of 2008 was primarily the result of an $89.6 million decrease in net loans receivable, the write-off of $42.1 million of goodwill and an $18.0 million reduction in cash and cash equivalents.

Total liabilities declined 3.2 percent to $3.1 billion at March 31, 2008, compared to $3.2 billion at year-end 2007. Decreases of $74.8 million in total deposits and $21.3 million in FHLBank advances and other borrowings contributed to the decline in first quarter 2008 total liabilities.

Stockholders’ equity declined $60.4 million to $285.2 million at March 31, 2008 compared to $345.6 million at December 31, 2007. The 2008 year-to-date decrease in stockholders’ equity resulted primarily from a $62.3 million decline in retained earnings primarily related to the write-off of $42.1 million in goodwill.

During the three months ended March 31, 2008, the Company did not repurchase any of its common stock. On March 20, 2008, the Company’s Board of Directors announced it had authorized a buyback of up to ten percent, or 1,797,592 shares, of its common stock to be repurchased on the open market from time to time as conditions warrant.

The Company paid an $0.08 per share quarterly cash dividend on March 31, 2008 to shareholders of record at March 14, 2008.

During the three months ended March 31, 2008, the Bank’s levels of tangible, core and risk-based capital continue to exceed all federally mandated capital requirements. Since becoming a public company in 2002, the Bank has consistently been recognized as “well capitalized” by the federal government; the highest rating awarded to federally insured financial institutions.

Other Developments

On March 20, 2008, the Company terminated its merger agreement with CapitalSource Inc. Pursuant to the terms of the agreement, which was initially executed on May 17, 2007, the Company had the right to terminate the merger agreement if the proposed merger was not completed by February 17, 2008. No termination fee was payable by the Company as a result of its termination of the merger agreement.

Corporate Profile

TierOne Corporation is the parent company of TierOne Bank, a $3.4 billion federally chartered savings bank and the largest publicly-traded financial institution headquartered in Nebraska. Founded in 1907, TierOne Bank offers customers a wide variety of full-service consumer, commercial and agricultural banking products and services through a network of 69 banking offices located in Nebraska, Iowa and Kansas and nine loan production offices located in Arizona, Colorado, Florida, Minnesota, Nevada and North Carolina.

Statements contained in this news release which are not historical facts may be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. Factors which could result in material variations include, but are not limited to, changes in interest rates or other competitive factors which could affect net interest margins, net interest income and noninterest income; changes in demand for loans, deposits and other financial services in the Company’s market area; changes in asset quality and general economic conditions; unanticipated issues associated with the execution of the Company’s strategic plan, including issues associated with a more diversified loan portfolio; unanticipated issues associated with increases in the levels of losses, customer bankruptcies, claims and assessments; unanticipated issues that may arise relative to loan loss provisions and charge-offs in connection with the Company’s loan portfolio and the resolution of the TransLand matter, as well as other factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.