PL Capital DEFC14A Proxy in contested solicitation

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No. ____)

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x	Definitive Proxy Statement

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o	Soliciting Material under Rule 14a-12

HF FINANCIAL CORP.

(Name of Registrant as Specified in its Charter)

PL Capital, LLC

Goodbody/PL Capital, LLC

Financial Edge Fund, L.P.

Financial Edge-Strategic Fund, L.P.

PL Capital/Focused Fund, L.P.

Goodbody/PL Capital, L.P.

PL Capital Advisors, LLC

Richard J. Lashley

Beth R. Lashley

Dr. Robin Lashley

John W. Palmer

PL Capital Defined Benefit Pension Plan

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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HF FINANCIAL CORP.

ANNUAL MEETING OF SHAREHOLDERS

DECEMBER 13, 2011

PROXY STATEMENT OF THE PL CAPITAL GROUP

IN OPPOSITION TO

THE BOARD OF DIRECTORS OF HF FINANCIAL CORP.

WHY YOU WERE SENT THIS PROXY STATEMENT

The PL Capital Group (sometimes referred to herein as “we,” “us,” “our” and variants of those words) is seeking your support to elect John W. Palmer to the board of directors of HF Financial Corp. (“HF Financial” or the “Company”), in opposition to the candidates nominated by the incumbent board of directors of HF Financial. The members of the PL Capital Group are identified below under the heading “Certain Information Regarding the Participants.” This proxy statement and form of proxy are first being mailed to shareholders on or about November 16, 2011.

We are taking this action for the reasons noted in this proxy statement, including our disappointment with HF Financial’s financial results and capital management. For example, in fiscal 2011, HF Financial earned $0.10 per share, a decrease of 90% from the $1.00 per share earned in fiscal 2010 and 94% from the $1.61 earned in fiscal 2009. Non-performing assets have increased from 0.73% at June 30, 2010 to 3.12% at June 30, 2011. In addition, HF Financial’s tangible book value per share was diluted by HF Financial’s late 2009 capital raise, a move we opposed at the time. The 2009 capital raise decreased HF Financial’s tangible book value per share from $16.20 on September 30, 2009 (pre-capital raise) to $12.59 on December 31, 2009 (post-capital raise). This tangible book value dilution still remains, as the most recent tangible book value per share was $12.92 as of June 30, 2011, still well below the $16.20 level enjoyed by shareholders before the capital raise.

We are also nominating Mr. Palmer because HF Financial is at a critical juncture in its history, due to the departure of its long-time Chairman and Chief Executive Officer (CEO) Curt Hage. Before the Company hires a permanent replacement, we believe the board of directors of HF Financial (sometimes referred to herein as the “board”) should fully examine all of the strategic alternatives available to the Company, including, by way of example, a sale of HF Financial, a merger of equals, acquisitions by HF Financial (including acquisitions of failed banks from the FDIC), stock buybacks, and franchise expansion into new markets.

The PL Capital Group has owned a position in the common stock, par value $0.01 per share (“Common Stock”), of HF Financial since 2008. Currently, the PL Capital Group collectively owns 8.2% of the Common Stock. Our investment strategy is to acquire significant stakes in undervalued and/or underperforming banks, and when necessary we nominate director candidates we believe will advocate for improvements in financial performance and corporate governance, for the benefit of ALL shareholders. We believe that our nominee to HF Financial’s board of directors is highly qualified (as discussed below) and will add a fresh perspective to the current board. We urge you to read his biography contained herein and make your own decision.

This proxy statement and the accompanying WHITE proxy card are being furnished to the Company’s shareholders in connection with our solicitation of proxies to elect Mr. Palmer. Since there are two directors up for re-election, we are “rounding out” our slate of one candidate by permitting shareholders to also vote for the HF Financial nominee other than Christine E. Hamilton. Additional voting instructions are contained herein.

MEETING DETAILS AND PROXY MATERIALS

We are soliciting proxies to be used at the 2011 annual meeting of shareholders of HF Financial, including any adjournments or postponements thereof and any meeting which may be called in lieu thereof (the “Annual Meeting”). The Annual Meeting will be held at the Best Western Ramkota Inn, located at 3200 West Maple Street, Sioux Falls, South Dakota 57107, on December 13, 2011 at 2:00 p.m., Central Standard Time. The principal executive offices of the Company are located at 225 South Main Avenue, Sioux Falls, South Dakota 57104. At the Annual Meeting, the shareholders of HF Financial are being asked to consider and vote upon (1) the election of two Class III directors to the board to serve until the 2014 annual meeting of shareholders, (2) the ratification of the appointment of Eide Bailly, LLP, as HF Financial’s independent registered public accounting firm for the fiscal year ending June 30, 2012, and (3) any other matters that may properly come before the Annual Meeting or any adjournments or postponements thereof.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on December 13, 2011. This proxy statement and the accompanying form of WHITE proxy card are available at www.dfking.com/hffc.

IT IS IMPORTANT THAT YOU RETURN YOUR PROXY PROMPTLY. IF YOU ARE A RECORD HOLDER, PLEASE SIGN AND DATE YOUR WHITE PROXY CARD PROMPTLY AND RETURN IT IN THE ENCLOSED ENVELOPE TO AVOID UNNECESSARY EXPENSE AND DELAY. NO POSTAGE IS NECESSARY. IF YOUR SHARES ARE HELD IN “STREET NAME” BY A BROKER, NOMINEE, FIDUCIARY OR OTHER CUSTODIAN, PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THEM TO VOTE THE WHITE PROXY CARD ON YOUR BEHALF (YOUR BROKER, NOMINEE, FIDUCIARY OR OTHER CUSTODIAN MAY PERMIT YOU TO VOTE BY THE INTERNET OR BY TELEPHONE).

This proxy statement and the accompanying form of WHITE proxy card are available at www.dfking.com/hffc. If you have any questions, require any assistance, or would like to request copies of these documents, please contact D.F. King & Co., Inc., proxy solicitors for the PL Capital Group, at the following address and telephone number:

D.F. KING & CO., INC.

48 Wall Street

New York, NY 10005

Toll Free: 1-800-859-8509

Please also feel free to call or email the PL Capital Group at the following:

Mr. Richard J. Lashley, Principal	Mr. John W. Palmer, Principal
PL Capital, LLC	PL Capital, LLC
466 Southern Blvd.	20 East Jefferson Avenue
Chatham, NJ 07928	Suite 22
(973) 360-1666	Naperville, IL 60540
(973) 360-1720 (fax)	(630) 848-1340
RLashley@PLCapitalllc.com	(630) 848-1342 (fax)
	JPalmer@PLCapitalllc.com

A Word of Caution: We are not responsible for the accuracy of the Company’s disclosures in its proxy materials. In particular, you may have read in HF Financial’s proxy statement that their board of directors has determined that the PL Capital Group has violated federal banking laws because it did not seek prior regulatory approval from the Federal Reserve Board (“FRB”) before initiating this proxy solicitation. The PL Capital Group does not believe that it needed, or needs, regulatory approval to proceed with its proxy solicitation. See the discussion under the heading “Background of the Solicitation” for a more detailed discussion of this matter.

THE PL CAPITAL GROUP IS SEEKING ONE BOARD SEAT

FOR THE FOLLOWING REASONS

We are seeking shareholder support to elect John W. Palmer as a director of the board, in opposition to the candidates nominated by HF Financial because of the following concerns about HF Financial’s performance and management:

HF FINANCIAL’S EARNINGS AND CREDIT QUALITY HAVE DETERIORATED:

·	Fiscal 2011 EPS Declined 90% vs. Fiscal 2010

·	Fiscal 2011 EPS Declined 94% vs. Fiscal 2009

·	Nonperforming Assets (NPAs) Have Increased From 0.73% of Total Assets as of 6/30/10 to 3.12% as of 6/30/11

HF FINANCIAL’S 2009 CAPITAL RAISE WAS DILUTIVE TO SHAREHOLDERS:

·	HF Financial Issued 2.875 Million Shares in the 2009 Capital Raise at $8.00 per Share ($7.22 per share net of issuance costs)

·	Tangible Book Value (TBV) Was $16.20 per Share Before the Capital Raise (9/30/09)

·	TBV Was Diluted to $12.59 per Share After the Capital Raise (12/31/09); a Decrease of 22%

·	This TBV Dilution Remains; TBV was $12.92 per Share (6/30/11)

·	The Effective Net Issuance Price ($7.22 per share) Was 45% of TBV per Share; That is the LOWEST VALUATION LEVEL that HF Financial’s Common Stock EVER TRADED For in its History (compared to its Tangible Book Value per Share)

HF Financial Held 2.083 Million Shares in its Treasury Prior to the 2009 Capital Raise (9/30/09) Which Were Repurchased Over the Years at an Average Price of $14.82 Per Share—The 2009 Capital Raise Issued Shares at a Price of $8.00 Per Share ($7.22 per share net of issuance costs) – We Believe This Was Poor Capital Management

·	We Have Not Seen or Heard Any Plan from HF Financial on How They Will Recover This Dilution

·	PL Capital Opposed the 2009 Capital Raise at That Time But HF Financial Effected the Capital Raise in Spite of Such Opposition

HF FINANCIAL IS AT A CRITICAL JUNCTURE IN ITS HISTORY AS IT IS SEEKING TO REPLACE ITS CEO.

WE BELIEVE IT’S AN APPROPRIATE TIME FOR THE BOARD TO LOOK AT ALL STRATEGIC ALTERNATIVES:

·	In Our View, Before Hiring a CEO, the Board Should Actively Consider All Strategic Alternatives, Including a sale of HF Financial, a Merger of Equals, Acquisitions by HF Financial, Stock Buybacks, and Franchise Expansion into New Markets

HF FINANCIAL’S STOCK PRICE HAS DECLINED(1):

·	One Year Period Ended 10/20/11: -10%

·	Three Year Period Ended 10/20/11: -23%

·	Five Year Period Ended 10/20/11: -48%

·	Ten Year Period Ended 10/20/11: -9%

(1)

Covers the periods ending on October 20, 2011; On 10/20/11 HF Financial closed at $9.05; one year earlier (October 20, 2010) it closed at $10.11; three years earlier (10/20/08) it closed at $11.81; five years earlier (10/20/2006) it closed at $17.27; ten years earlier (on 10/19/01) it closed at $9.92

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If you share our concerns and views about HF Financial, please vote for John Palmer on

PL Capital Group’s WHITE proxy card.

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IF YOU ARE A SHAREHOLDER OF RECORD YOU MAY VOTE BY MARKING YOUR VOTE

ON THE WHITE PROXY CARD WE HAVE ENCLOSED, SIGNING AND DATING IT, AND

MAILING IT IN THE POSTAGE-PAID ENVELOPE WE HAVE PROVIDED.

IF YOUR SHARES ARE HELD IN “STREET NAME” BY A BROKER, NOMINEE, FIDUCIARY

OR OTHER CUSTODIAN, FOLLOW THE DIRECTIONS GIVEN BY THE BROKER,

NOMINEE, FIDUCIARY OR OTHER CUSTODIAN REGARDING HOW TO INSTRUCT THEM

TO VOTE YOUR SHARES. YOUR BROKER, NOMINEE, FIDUCIARY OR OTHER

CUSTODIAN MAY PERMIT YOU TO VOTE BY THE INTERNET OR BY TELEPHONE.

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BACKGROUND OF THE SOLICITATION

The following is a chronology of events leading up to this proxy solicitation:

·	The PL Capital Group began acquiring the Common Stock in early 2008.

In October 2008, the PL Capital Group filed its initial Schedule 13D with the SEC, which disclosed beneficial ownership of 7.0% of HF Financial. The PL Capital Group stated that it acquired the Common Stock because it believed HF Financial was undervalued. The PL Capital Group also disclosed its intent to ask HF Financial’s management what management’s plans were with regard to: (1) the pooled trust preferred securities held by the Company’s main operating subsidiary, Home Federal Bank, (2) capital raised through the U.S. Treasury’s previously announced TARP, and (3) maximizing the value of the Common Stock over the intermediate to long term.

During 2009, the PL Capital Group had several discussions with the management of HF Financial regarding the Company’s corporate governance policies. On August 26, 2009, the PL Capital Group entered into a Standstill Agreement (the “Standstill Agreement”) with HF Financial after HF Financial’s board of directors decided to adopt a majority voting policy. Among other things, the PL Capital Group agreed to vote its shares in favor of the directors nominated by HF Financial and to not nominate or recommend a candidate for election to the board of directors at the 2009 and 2010 annual meetings. The Standstill Agreement has now expired pursuant to its terms.

On September 18, 2009, just twenty three days after entering into the Standstill Agreement with the PL Capital Group, HF Financial filed a registration statement announcing HF Financial’s intent to raise capital through an underwritten offering of approximately $15 million. On the day before the filing, the Common Stock was trading for $12.50. (The PL Capital Group believes that the initiation of a capital raise so shortly after it agreed to enter into the Standstill Agreement was a sign of bad faith on the part of HF Financial.)

During the period from September 18, 2009 (the date the capital raise registration statement was filed) through November 20, 2009 (the capital raise completion date), the PL Capital Group engaged in numerous discussions with Curt Hage, Chairman and CEO of HF Financial, over the pros and cons of pursuing a capital raise at that time. After listening to Mr. Hage’s rationale for pursuing the capital raise (including the potential of getting an FDIC assisted bank deal, even though none was in hand), the PL Capital Group told Mr. Hage that the PL Capital Group was opposed to the capital raise at that time for numerous reasons, including among other things, a weak market for bank stocks, the likely low price at which the raise would likely get done, the potential dilution to existing shareholders including the PL Capital Group and the lack of a specific use for the capital. We suggested HF Financial defer the capital raise until a more appropriate time, such as when the stock price had improved to a price closer to its tangible book value or an actual FDIC assisted bank deal was in place. Mr. Hage verbally stated that the management and board of HF Financial would have the discipline to walk away from the capital raise if the price was not attractive.

·	On November 20, 2009, HF Financial announced that it sold 2.875 million shares at a price of $8.00 per share (net proceeds of $7.22 per share).

·	On December 1, 2009, the PL Capital Group sent a letter to the board of directors which expressed our deep concern about the capital raise. The detailed letter contained the following sections:

o	The Board Inexplicably Allowed the Stock to be Sold at the Lowest Historical Valuation Ever.

In Our View the Board Breached its Fiduciary Duty to Shareholders by Inexplicably Issuing Stock at $8.00 Per Share ($7.22 of net proceeds); Effectively Re-Issuing Treasury Stock that Took 14 Years to Acquire at an Average Cost of $14.82 per Share; This Cost the Company and its Shareholders $20 Million or More.

o	We Reject Management’s View That the Dilution Can Be Earned Back in any Reasonable Time Frame.

o	The Company’s Local Retail Investors Were Hurt.

o	Since Shareholders Have Been Diluted, it is Time for Shared Sacrifice by the Board and Management.

o	PL Capital Regrets Previously Trusting the Company’s Management and the Board.

After reading disparaging remarks by HF Financial Chairman and CEO Curt Hage about the PL Capital Group in the local Sioux Falls newspaper, the PL Capital Group sent a letter dated January 8, 2010 to the board of directors outlining concerns related to HF Financial’s lack of compliance with the non-disparagement provisions of the Standstill Agreement.

In mid-July 2011, the PL Capital Group reached out to Vice Chairman Michael Vekich and Chairman/CEO Curt Hage to notify them of the PL Capital Group’s desire to have two nominees elected to the board of directors. Additional discussions among the parties were held in late July and early August. No agreement was reached.

·	On August 17, 2011, in compliance with the Company’s charter documents, Mr. Lashley timely submitted written notice to the Company of his intent to nominate two individuals as nominees for election as directors at the Annual Meeting.

On September 16, 2011, the PL Capital Group sent a letter to the Company requesting, among other things, that the Company delay the ongoing search for a new Chief Executive Officer until the newly elected board of directors was seated and able to participate in the search process, because the Annual Meeting was only two months away. The letter also noted that the PL Capital Group believed that, after the Annual Meeting, the newly elected board should conduct a full scope review of the Company’s strategic alternatives (for example, a sale or merger of the Company now or in the future, remain independent, pursue acquisitions, grow organically, etc.). The letter also said that the PL Capital Group believed the majority of HF Financial shareholders supported this approach and suggested that the board contact its major shareholders to solicit their views. In its letter the PL Capital Group also encouraged all other shareholders to express their views to the board of HF Financial. The PL Capital Group subsequently mailed a copy of its September 16, 2011 letter to the major shareholders (holders of 5,000 shares or more) as part of its proxy solicitation efforts.

On September 30, 2011, HF Financial issued a press release in which it announced the date of the Annual Meeting and the PL Capital Group’s intention to nominate two directors. The Company’s press release further noted, among other things, that HF Financial’s “Board of Directors, in consultation with its outside counsel, has determined that PL Capital Group’s proxy solicitation and other recent actions are in violation of the federal banking laws because PL Capital Group has failed to obtain the required prior regulatory approval under the Federal Reserve Board’s control regulations.”

·	On October 4 2011, the PL Capital Group sent a letter to the board of HF Financial which requested that HF Financial retract its press release dated September 30, 2011 unless it could provide a supportable basis for its determinations.

·	On October 7, 2011, the board of directors of HF Financial sent a letter to Richard Lashley which reiterated its belief that the PL Capital Group’s actions were in violation of Regulation LL and

offering to provide the PL Capital Group access to HF Financial’s outside counsel. On that date HF Financial also filed a Form 8-K which essentially restated the claims made in its September 30, 2011 press release.

On October 11, 2011 the PL Capital Group sent a letter to the board of HF Financial, in which it responded to HF Financial’s claims in its September 30, 2011 press release and October 7, 2011 Form 8-K and reiterated PL Capital Group’s intention to proceed with its proxy solicitation efforts. Among other things, the PL Capital Group stated “it appears HF Financial’s press release is an attempt to deflect shareholders’ attention away from the Company’s poor performance and lagging stock price, and improperly interfere with shareholder rights.” The letter also included detailed explanations refuting HF Financial’s claims, as noted in the following section headings in the letter:

o	HF Financial has no authority to determine whether or not we have violated federal banking laws and regulations, and to suggest otherwise is misleading and inappropriate.

o	We are not seeking to control, or have a controlling influence over the management and policies of, the Company or Home Federal Bank (the “Bank”).

o	We do not believe we had, or have, an obligation to seek prior regulatory approval for our actions, and for the Company to state otherwise is misleading.

o	The Company’s misleading statements and accusations have unfairly impugned our character and integrity. The truth is that PL Capital and its principals have a long and successful track record in the banking industry and an unblemished regulatory record.

o	It is misleading to state that our nominations are somehow invalid.

On October 14, 2011, HF Financial announced that it was shrinking its board from seven directors to six, and nominating Christine Hamilton and Thomas Van Wyhe for election at the Annual Meeting. In light of HF Financial’s decision to reduce the size of its board of directors, the PL Capital Group subsequently decided to solicit proxies for only one of its two nominees. If elected, Mr. Palmer would hold only one of six board seats, a minority position.

At various times during October, the PL Capital Group, through its counsel, discussed with counsel at the FRB the Company’s allegation that the PL Capital Group violated banking laws by not seeking prior approval of this proxy solicitation. We also notified the FRB of our decision to seek only one seat after HF Financial reduced the size of the board from seven to six members, and discussed with counsel at the FRB the issue of whether we would be deemed to have a controlling influence over HF Financial. The FRB indicated that it could not give comfort as to whether the FRB would or would not find that PL Capital Group has a controlling influence over HF Financial since the FRB has not acted one way or the other (despite suggestions by the Company to the contrary). So, while the FRB always reserves the right, based on the facts and circumstances, to find that any investor in a bank has a controlling influence, the FRB stated that it was up to the PL Capital Group to decide whether to proceed with its planned actions.

Under these circumstances, the PL Capital Group is proceeding with its proxy solicitation. In the event that the Company refuses to seat Mr. Palmer, or does not allow Mr. Palmer’s nomination to be voted upon, the PL Capital Group would institute a declaratory judgment action in Delaware to insure that Mr. Palmer is seated, and that shareholders have the opportunity to vote for or against Mr. Palmer. Delaware law requires that the action be heard as expeditiously as possible. The PL Capital Group notes that if the Company unlawfully fails to seat Mr. Palmer and is later compelled by a Delaware court to seat Mr. Palmer, at least one of the Company’s nominees will have to be removed from office, at the Company’s expense.

·	On November 3, 2011, the PL Capital Group received a letter from the Chairman of the Company’s board of directors offering to expand the size of the Board and appoint Mr. Palmer as a director.

·	On November 7, 2011, the PL Capital Group responded to the November 3 letter and outlined the reasons it is compelled to reject the offer. The letter contained the following section headings:

o	The Board’s Actions Since July Do Not Evidence Good Faith.

o	The Board’s Changes to the By-Laws, Board Size and Board Composition Appear to Be an Attempt to Elevate You to Chairman and Entrench the Incumbent Board Nominees.

o	The Board’s Motives are Tainted by the Lack of Meaningful Stock Ownership by You and Certain Other Board Members, Other Recent Board Actions and Disproportionate Compensation Among Board Members.

o	Shareholders Deserve the Right to Express Their Views Through the Election of Board Members at the Annual Meeting

OUR NOMINEE

HF Financial’s board of directors currently consists of seven members, but will be reduced to six members following the Annual Meeting. At the Annual Meeting, the PL Capital Group will seek to elect Mr. Palmer to fill one of the two open seats, in opposition to the candidates nominated by the Company’s incumbent board of directors. The election of Mr. Palmer requires the affirmative vote of a plurality of the votes cast. (The Company’s “Majority Voting Standard and Director Resignation Policy” does not apply because we are submitting our nominee in opposition to the Company’s nominees.) If elected, Mr. Palmer would be entitled to serve a three-year term ending in 2014.

In our opinion, the Company would benefit from fresh perspectives, fresh ideas, fresh viewpoints and new energy as it seeks to confront the current challenges and the challenges that lie ahead. At present, Mr. Palmer intends to act to have the Company conduct a meaningful review of its operational and strategic plans to ensure that the enhancement of shareholder value is one of the Company’s ultimate objectives (such plans may change subject to Mr. Palmer’s fiduciary duty to shareholders, if elected). Other than the plans discussed above, we do not have any specific plans at this time, as we do not have access to the information necessary to formulate meaningful plans for the Company. If elected, Mr. Palmer will be able to work with the Company to formulate specific goals and plans to maximize the value of the Company for all of its shareholders.

INDEPENDENCE AND QUALIFICATIONS OF OUR DIRECTOR

We believe that our nominee would be deemed “independent” under the NASDAQ Marketplace Rules. We also believe that our nominee would qualify as an “audit committee financial expert,” as that term is defined by the Securities and Exchange Commission (SEC) and the NASDAQ Marketplace Rules.

Mr. Palmer’s extensive financial and accounting background, combined with his extensive knowledge of the banking industry and prior experience on other bank boards, qualify him to serve on the Company’s board of directors. Specifically, his extensive experience with, and understanding of, financial and accounting issues will allow him to provide the board with valuable recommendations and ideas. In addition, Mr. Palmer’s extensive knowledge of the banking industry makes him a valuable source of information, and will allow him to provide useful insight and advice.

Furthermore, the role of an effective director inherently requires certain personal qualities, such as integrity, as well as the ability to comprehend, discuss and critically analyze materials and issues that are presented so that the director may exercise judgment and reach conclusions in fulfilling his duties and fiduciary obligations. The PL Capital Group believes that Mr. Palmer’s background and expertise, as set forth below, evidence those abilities and are appropriate to his serving on the Company’s board of directors.

MR. JOHN W. PALMER

Mr. Palmer is the co-founder and a principal of PL Capital, LLC, an investment firm specializing in the banking industry. PL Capital focuses on small-capitalization and mid-capitalization publicly-traded banks, such as HF Financial.

Prior to co-founding PL Capital in 1996, Mr. Palmer was employed by KPMG LLP, an international public accounting firm, from 1983 to 1996. While at KPMG, Mr. Palmer was a Certified Public Accountant (CPA) who specialized as an auditor and a strategic advisor to companies in the commercial banking, consumer finance, thrift, mortgage banking and discount brokerage industries, serving public and privately held clients ranging in size from $25 million to $25 billion in assets. He has extensive involvement in merger and acquisition transactions, public and private securities offerings, and filings with the SEC and other regulatory authorities, including offerings to convert mutual thrift organizations to stock form thrifts. He has advised numerous banking organizations in strategic decisions regarding acquisition alternatives, mergers of equals and opportunities to enhance or expand existing lines of business. In 1994, Mr. Palmer was promoted to the position of Director, KPMG Financial Services - Capital Strategies Group, a corporate finance practice providing merger and acquisition advisory services to thrifts, banks, mortgage companies and other financial services companies nationwide. In this capacity, Mr. Palmer developed expertise in bank mergers and acquisitions, thrift mutual to stock conversions, valuations, capital restructurings, strategic planning and asset purchases and divestitures. He has been involved in numerous mergers and acquisitions with transaction values ranging from $10 million to $600 million.

Mr. Palmer also instructed financial institution classes for other KPMG professionals, and spoke at national and regional banking industry conferences. Mr. Palmer has previously been designated as an “audit committee financial expert” due to his prior experience and understanding of generally accepted accounting principles and financial statements; the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; experience preparing, auditing, analyzing and evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised in financial statements of publicly traded banks such as HF Financial; an understanding of internal control over financial reporting; and an understanding of audit committee functions. Mr. Palmer acquired these attributes through his education and experience as a CPA and board member at other banks. Mr. Palmer previously served on the audit committee of a public company (Franklin Bancorp, Inc.) where he was designated as an “audit committee financial expert.”

Mr. Palmer currently serves on the board of CFS Bancorp, Inc. which is the parent holding company of Citizens Financial Bank, a $1.2 billion asset federal savings bank which operates 22 offices throughout adjoining markets in Chicago and Northwest Indiana where he also serves on the audit committee. Mr. Palmer is the former Chairman of the Board of Directors of Security Financial Bancorp, Inc., a publicly-traded $200 million in assets thrift located in St. John, Indiana which was sold in 2003. Mr. Palmer also previously served as a director of Franklin Bancorp and its wholly owned subsidiary Franklin Bank, NA, a $700 million in assets commercial bank located in Southfield, Michigan, where he also served on the audit, compensation, and loan committees of the board. Mr. Palmer also served as Chairman of the strategic planning committee of Franklin Bancorp. He formerly served on the Board of Directors of Clever Ideas, Inc., a privately-held specialty finance company located in Chicago, Illinois from 1998 to 2006.

Mr. Palmer obtained his Bachelor of Accounting Degree from Walsh College in 1983. He formerly practiced as a Certified Public Accountant in Michigan and Illinois and is currently a member of the American Institute of Certified Public Accountants and the Illinois CPA Society. Mr. Palmer, age 51, resides in Naperville, Illinois.

Mr. Palmer is the beneficial owner of 567,852 shares. He has consented to being named in this proxy and to serve, if elected.

We note that there can be no assurances given that Mr. Palmer, if elected, will be successful in persuading other members of the board to adopt any of his suggestions, because Mr. Palmer would only constitute one member out of six, a minority position.

We expect that our nominee will be able to stand for election but in the event that he is unable to serve or for good cause will not serve, the shares represented by the enclosed WHITE proxy card will be voted for a substitute nominee, to the extent this is not prohibited under the Company’s charter documents and applicable law. In addition, we reserve the right to solicit proxies for the election of such substitute nominee if the Company makes or announces any changes to its charter documents or takes or announces any other action that has, or if consummated would have, the effect of disqualifying our nominee, to the extent this is not prohibited under the Company’s charter documents and applicable law. In any such case, shares represented by the enclosed WHITE proxy card will be voted for such substitute nominee. We reserve the right to nominate additional persons, to the extent this is not prohibited under the Company’s charter documents and applicable law, if the Company increases the size of its board above its existing size or increases the number of directors whose terms expire at the Annual Meeting.

WHO CAN VOTE AT THE ANNUAL MEETING

The record date for determining shareholders entitled to notice of and to vote at the Annual Meeting is October 17, 2011 (the “Record Date”). Shareholders of the Company as of the Record Date are entitled to one vote at the Annual Meeting for each share of Common Stock held on the Record Date. It is anticipated that the proxy statement that will be filed by the Company will state the number of shares issued and outstanding on the Record Date.

HOW TO VOTE BY PROXY

To elect the PL Capital Group’s nominee to the board, if you are a record holder (namely, you own your HF Financial stock in certificate form), you can vote by marking your vote on the WHITE proxy card we have enclosed, signing and dating it, and mailing it in the postage-paid envelope we have provided. If your shares are held in “street name” by a broker, nominee, fiduciary or other custodian, follow the directions given by the broker, nominee, fiduciary or other custodian regarding how to instruct them to vote your shares. Your broker, nominee, fiduciary or other custodian may permit you to vote by the Internet or by telephone. Whether you plan to attend the Annual Meeting or not, we urge you to vote your shares now. Please contact our proxy solicitor D.F. King & Co., Inc. at (800) 859-8509 if you require assistance in voting your shares. This proxy statement and the accompanying form of WHITE proxy card are available at www.dfking.com/hffc.

Properly executed proxies will be voted in accordance with the directions indicated thereon. If you sign the WHITE proxy card but do not make any specific choices, your proxy will vote your shares as follows:

“FOR” the election of our nominee to the board of directors, Mr. John W. Palmer, and “FOR” the person who has been nominated by the Company to serve as Director, other than Christine E. Hamilton.

“FOR” the ratification of the appointment of Eide Bailly, LLP as the independent registered public accounting firm for the Company for the fiscal year ending June 30, 2012.

For purposes of any adjournment, proxies will be voted at the discretion of the persons named as proxies in the attached proxy card.

You should refer to the Company’s proxy statement and form of proxy distributed by the Company for the names, backgrounds, qualifications and other information concerning the Company’s nominees. The PL Capital Group is NOT seeking authority to vote for and will NOT exercise any authority for Christine E.

Hamilton, one of the Company’s two nominees. There is no assurance that the Company’s other nominee, Thomas L. Van Wyhe, will serve if elected with the PL Capital Group’s nominee.

Rule 14a-4(c)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), governs our use of our discretionary proxy voting authority with respect to a matter that is not known by us a reasonable time before our solicitation of proxies. It provides that if we do not know, a reasonable time before making our solicitation, that a matter is to be presented at the meeting, then we are allowed to use our discretionary voting authority when the proposal is raised at the meeting, without any discussion of the matter in this proxy statement. If any other matters are presented at the Annual Meeting for which we may exercise discretionary voting, your proxy will be voted in accordance with the best judgment of the persons named as proxies on the attached proxy card. At the time this Proxy Statement was mailed, we knew of no matters which needed to be acted on at the Annual Meeting, other than those discussed in this Proxy Statement.

If any of your shares are held in the name of a brokerage firm, bank, bank nominee or other institution on the record date, only that entity can vote your shares and only upon its receipt of your specific instructions. Accordingly, please contact the person responsible for your account at such entity and instruct that person to execute and return the WHITE proxy card on your behalf. You should also sign, date and mail the voting instruction from your broker or banker sends you when you receive it (or, if applicable, vote by following the instructions supplied to you by your bank or brokerage firm, including voting by telephone or via the internet). Please do this for each account you maintain to ensure that all of your shares are voted.

A large number of banks and brokerage firms are participating in a program that allows eligible shareholders to vote by telephone or via the Internet. If your bank or brokerage firm is participating in the telephone voting program or Internet voting program, then such bank or brokerage firm will provide you with instructions for voting by telephone or the Internet on the voting form. Telephone and Internet voting procedures, if available through your bank or brokerage firm, are designed to authenticate your identity to allow you to give your voting instructions and to confirm that your instructions have been properly recorded. Shareholders voting via the Internet should understand that there might be costs that they must bear associated with electronic access, such as usage charges from Internet access providers and telephone companies. If your bank or brokerage firm does not provide you with a voting form, but instead you receive our WHITE proxy card, then you should mark our proxy card, date it and sign it, and return it in the enclosed postage-paid envelope.

VOTING AND PROXY PROCEDURES

The board of directors of HF Financial is divided into three classes of directors having staggered terms of three years. If elected, Mr. Palmer would serve for a three-year term expiring in 2014. Shareholders of HF Financial are not permitted to cumulate their votes for the election of directors.

The presence, in person or by proxy, of a majority of the shares of Common Stock outstanding entitled to vote at the Annual Meeting will constitute a quorum. Proxies relating to “street name” shares that are voted by brokers on some but not all of the matters before shareholders at the Annual Meeting will be treated as shares present for purposes of determining the presence of a quorum on all matters, but will not be entitled to vote at the Annual Meeting on those matters as to which authority to vote is not given to the broker (“broker non-votes”). Accordingly, broker non-votes will not affect the outcome of the election of directors, and are not counted in determining whether a matter requiring approval of a majority of the shares present and entitled to vote has been approved.

At this meeting, proxies relating to “street name” shares will not be voted for the election of directors unless the shareholder gives instructions on how to vote the shareholder’s shares.

Since the PL Capital Group is only proposing one nominee for the board of directors, if the PL Capital Group nominee is elected, the Company’s nominee with the highest number of shares voted in such

nominee’s favor will also be elected. If Mr. Palmer is elected, he would obtain minority representation on the Company’s board of directors (namely, only one of six seats).

The election of Mr. Palmer requires the affirmative vote of a plurality of the votes present in person or represented by proxy at the Annual Meeting. Assuming the presence of a quorum at the Annual Meeting, all other proposals to be voted on at the Annual Meeting will require the affirmative vote of a majority of the Common Stock present in person or represented by proxy at the Annual Meeting.

THE PL CAPITAL GROUP URGES YOU TO VOTE FOR THE ELECTION OF MR. PALMER AS A DIRECTOR OF HF FINANCIAL AS SOON AS POSSIBLE. PROXIES SOLICITED BY THIS PROXY STATEMENT MAY BE EXERCISED ONLY AT THE ANNUAL MEETING (AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF) IN ACCORDANCE WITH YOUR INSTRUCTIONS AND WILL NOT BE USED FOR ANY OTHER MEETING.

A proxy given pursuant to this solicitation may be revoked at any time before it is voted. If you are a record holder, you may revoke your proxy and change your vote by: (1) the timely delivery of a duly executed proxy bearing a later date, (2) providing timely written notice of revocation to the Company’s Corporate Secretary at the Company’s principal executive offices at 225 South Main Avenue, Sioux Falls, South Dakota 57104, or (3) attending the Annual Meeting and giving oral notice of your intention to vote in person. If you are the beneficial owner of shares held in street name, you may revoke your proxy and change your vote: (1) by submitting new voting instructions to your broker, bank or other nominee in accordance with their voting instructions, or (2) if you have obtained a legal proxy from your bank, broker or other nominee giving you the right to vote your shares in person, by attending the Annual Meeting, presenting the completed legal proxy to the Company and voting in person. You should be aware that simply attending the Annual Meeting will not in and of itself constitute a revocation of your proxy.

Only holders of record as of the close of business on the Record Date will be entitled to vote at the Annual Meeting. If you were a shareholder of record on the Record Date, you will retain your voting rights for the Annual Meeting even if you sell your shares after the Record Date. Accordingly, it is important that you vote the shares held by you on the Record Date, or grant a proxy to vote such shares, even if you sell such shares after the Record Date.

IMPORTANT: If you wish to support Mr. Palmer, please sign, date and return only the PL Capital Group’s WHITE proxy card. If you later vote on management’s BLUE proxy (even if it is to withhold authority to vote for management’s nominees), you will revoke your previous vote for Mr. Palmer. Please discard the Company’s BLUE proxy card.

ALTHOUGH YOU MAY VOTE MORE THAN ONCE, ONLY ONE PROXY WILL BE COUNTED AT THE ANNUAL MEETING, AND THAT WILL BE YOUR LATEST-DATED, VALIDLY EXECUTED PROXY.

If you have already sent a BLUE proxy to management of the Company, you can revoke that proxy by signing, dating and mailing the WHITE proxy card or by voting in person at the Annual Meeting.

IF YOU SIGN THE WHITE PROXY CARD AND NO MARKING IS MADE, YOU WILL BE DEEMED TO HAVE GIVEN A DIRECTION TO VOTE THE HF FINANCIAL COMMON STOCK REPRESENTED BY THE WHITE PROXY CARD FOR THE ELECTION OF MR. PALMER AND FOR THE PERSON WHO HAS BEEN NOMINATED BY THE COMPANY TO SERVE AS A DIRECTOR, OTHER THAN CHRISTINE E. HAMILTON, AND FOR THE RATIFICATION OF EIDE BAILLY, LLP AS THE COMPANY’S INDEPENDENT AUDITORS.

SOLICITATION OF PROXIES; EXPENSES

The entire expense of preparing and mailing this Proxy Statement and any other soliciting material and the total expenditures relating to the solicitation of proxies (including, without limitation, costs, if any, related to advertising, printing, fees of attorneys, financial advisors, solicitors, accountants, public relations, transportation and litigation) will be borne by the PL Capital Group. In addition to the use of the mails, proxies may be solicited by the PL Capital Group, other Participants (as defined below) and/or their employees by telephone, telegram, and personal solicitation, for which no additional compensation will be paid to those persons engaged in such solicitation. Banks, brokerage houses, and other custodians, nominees, and fiduciaries will be requested to forward solicitation material to the beneficial owners of the Common Stock that such institutions hold, and PL Capital Group will reimburse such institutions for their reasonable out-of-pocket expenses.

The PL Capital Group has retained D.F. King & Co., Inc., a proxy solicitation firm, to assist in the solicitation of proxies at a fee estimated not to exceed $75,000, plus reimbursement of reasonable out-of-pocket expenses. Approximately ten persons will be utilized by that firm in its solicitation efforts.

The PL Capital Group estimates that its total expenditures relating to the solicitation of proxies will be approximately $325,000 (including, without limitation, costs, if any, related to advertising, printing, fees of attorneys, financial advisors, solicitors, accountants, public relations, transportation, and litigation). Total cash expenditures to date relating to this solicitation have been approximately $140,000.

The PL Capital Group intends to seek reimbursement from the Company for its actual expenses in connection with this solicitation. If elected, the PL Capital Group and its nominee will submit the matter to a vote of the Company’s board of directors. The Company’s board of directors may vote to submit the matter to a vote of the Company’s shareholders. If elected to the Company’s board of directors, Mr. Palmer intends to vote in favor of reimbursing the PL Capital Group and submitting the matter to a vote of the Company’s shareholders. If the matter is submitted to a vote of the Company’s shareholders, the PL Capital Group will vote its shares in favor of such reimbursement and will accept the results of such shareholder vote.

CERTAIN INFORMATION REGARDING THE PARTICIPANTS

The PL Capital Group consists of Financial Edge Fund, L.P. (“Financial Edge Fund”); PL Capital, LLC (“PL Capital”); Goodbody/PL Capital, LLC (“Goodbody/PL LLC”); Financial Edge-Strategic Fund, L.P. (“Financial Edge Strategic”; PL Capital/Focused Fund, L.P. (“Focused Fund”); Goodbody/PL Capital, L.P. (“Goodbody/PL LP”); PL Capital Advisors, LLC (“PL Capital Advisors”); Richard J. Lashley; John W. Palmer; Beth R. Lashley; PL Capital Defined Benefit Pension Plan (“PL Capital Pension Plan”); and Dr. Robin Lashley.

PL Capital is a Delaware limited liability company. Messrs. Lashley and Palmer are the managing members and owners of PL Capital. The principal business of PL Capital is serving as general partner of (1) Financial Edge Fund, a Delaware limited partnership (2) Financial Edge Strategic, a Delaware limited partnership, and (3) Focused Fund, a Delaware limited partnership.

PL Capital Advisors is a Delaware limited liability company. Messrs. Palmer and Lashley are the managing members and owners of PL Capital Advisors. PL Capital Advisors is the investment advisor to Financial Edge Fund, Financial Edge Strategic, Goodbody/PL LP and Focused Fund.

Goodbody/PL LLC is a Delaware limited liability company. Messrs. Lashley and Palmer are the managing members and owners of Goodbody/PL LLC. The principal business of Goodbody/PL LLC is serving as general partner of Goodbody/PL LP.

The business address of Financial Edge Fund, Financial Edge Strategic, Focused Fund, PL Capital, Goodbody/PL LP, Goodbody/PL LLC, PL Capital Advisors, PL Capital Pension Plan, Mr. Palmer and Mr. Lashley is: c/o PL Capital, LLC, 20 East Jefferson Avenue, Suite 22, Naperville, Illinois 60540.

Each of the limited partnerships and companies managed by PL Capital, PL Capital Advisors and Goodbody/PL LLC invest primarily in equity and debt securities issued by publicly traded banks. The principal employment of Messrs. Palmer and Lashley is investment management through PL Capital, PL Capital Advisors and Goodbody/PL LLC. Mr. Lashley resides at 2 Trinity Place, Warren, NJ 07059. Mr. Palmer resides at 4216 Richwood Court, Naperville, IL 60540.

Beth Lashley is the spouse of Richard Lashley. Her business address is c/o PL Capital LLC, 20 East Jefferson Avenue, Suite 22, Naperville, Illinois 60540.

Dr. Robin Lashley is a college professor at a campus of Kent State University in Ohio, and the sister of Richard Lashley. Her business address is c/o PL Capital LLC, 20 East Jefferson Avenue, Suite 22, Naperville, Illinois 60540.

Each of the members of the PL Capital Group identified in this proxy statement is a participant in the solicitation conducted with this Proxy Statement. Each of them is referred to in this Proxy Statement as a “Participant” and collectively they are the “Participants.”

Appendix A lists certain information regarding ownership of the Common Stock by the Participants and transactions in the Common Stock made by the Participants during the past two years. Collectively, the PL Capital Group beneficially owns 572,352 shares of Common Stock, or approximately 8.2% of the outstanding shares of Common Stock. The PL Capital Group may change or alter its investment strategy at any time to increase or decrease its holdings in HF Financial.

No Participant has during the last ten years been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

Except as set forth herein, no Participant is now, or within the past year has been, a party to any contract, arrangement or understanding with any person with respect to any securities of the Company (including, but not limited to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies). With respect to Financial Edge Fund, Financial Edge Strategic and Focused Fund, PL Capital is entitled to an allocation of a portion of profits, if any. With respect to Financial Edge Fund, Financial Edge Strategic, Focused Fund, and Goodbody/PL LP, PL Capital Advisors is entitled to a management fee based upon a percentage of total capital. With respect to Goodbody/PL LP, Goodbody/PL LLC is entitled to an allocation of a portion of profits, if any.

There are no material proceedings to which any Participant or any associate of any Participant is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. Except as described herein, no Participant and no associate of any Participant has any interest in the matters to be voted upon at the Annual Meeting, other than an interest, if any, as a shareholder of the Company.

Except as described herein or in Appendix A, neither any Participant nor any associate of any Participant (1) has engaged in or has a direct or indirect interest in any transaction or series of transactions since the beginning of the Company’s last fiscal year, or in any currently proposed transaction, to which the Company or any of its subsidiaries is a party where the amount involved was in excess of $120,000; (2) has been indebted to the Company or any of its subsidiaries; (3) has borrowed any funds for the purpose of acquiring or holding any securities of the Company, or is presently, or has been within the past year, a party to any contract, arrangement or understanding with any person with respect to either any securities of the Company, any future employment by the Company or its affiliates, or any future transaction to which

the Company or any of its affiliates will or may be a party; or (4) is the beneficial or record owner of any securities of the Company or any parent or subsidiary thereof.

The PL Capital Group has not paid any compensation to Mr. Palmer in connection with this proxy solicitation. The partnerships managed by PL Capital will generally reimburse or indemnify Mr. Palmer for any expenses, and/or liabilities, he may incur in connection with the Annual Meeting. There are no other arrangements or understandings with Mr. Palmer other than as set forth herein.

OTHER MATTERS

The PL Capital Group anticipates that the Company’s proxy statement will contain information regarding (1) the security ownership of management and beneficial owners of more than 5% of the Common Stock; (2) the committees of the Company’s board of directors, including the nominating, compensation and audit committees (and information about audit committee financial experts); (3) the meetings of the Company’s board of directors and all committees thereof; (4) the background and qualifications of the nominees of the Company’s board of directors; (5) the Company’s leadership structure and the board’s oversight of risk management; (6) the compensation and remuneration paid and payable to the Company’s directors and management, and other compensation related information; (7) the attendance of members of the Company’s board of directors at the annual meeting; (8) the Company’s policies and procedures for the review, approval or ratification of transactions with related persons; (9) the Company’s director nomination process; (10) the independence of the Company’s directors; (11) shareholder communication with the Company’s board of directors; (12) the deadline for submitting shareholder proposals for inclusion in the Company’s proxy statement for the 2012 annual meeting of shareholders under Rule 14a-8 of the Exchange Act; (13) the date after which a notice of shareholder proposal submitted outside the process of Rule 14a-8 is considered untimely; and (14) the Company’s independent registered public accounting firm and the fees paid to such firm. The PL Capital Group has no knowledge of, or responsibility for, the accuracy of the Company’s disclosures in its proxy materials.

ADDITIONAL INFORMATION

The information concerning HF Financial contained in this proxy statement has been taken from, or is based upon, publicly available information. Although we do not have any information that would indicate that any information contained in this proxy statement concerning HF Financial is inaccurate or incomplete, we do not take responsibility for the accuracy or completeness of such information.

HF Financial files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information that the Company files with the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. These SEC filings are also available to the public from commercial document retrieval services and at the Internet website maintained by the SEC at www.sec.gov.

The Participants have filed a Schedule 13D, as amended, with the SEC, the exhibits of which include some of the PL Capital Group’s correspondence with HF Financial concerning the matters described herein. These materials may be accessed from the SEC’s website free of charge.

YOUR VOTE IS IMPORTANT

NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN WE ARE SEEKING YOUR SUPPORT. PLEASE VOTE FOR MR. PALMER. ONLY YOUR LATEST DATED PROXY COUNTS. EVEN IF YOU HAVE ALREADY RETURNED A BLUE PROXY TO THE COMPANY’S BOARD OF DIRECTORS, YOU HAVE EVERY LEGAL RIGHT TO REVOKE IT BY RETURNING A WHITE PROXY TO US AS PROVIDED BELOW.

IF YOU ARE A RECORD HOLDER, PLEASE VOTE BY SIGNING, DATING, AND MAILING IN THE ENCLOSED POSTAGE-PAID ENVELOPE THE ENCLOSED WHITE PROXY CARD AS SOON AS POSSIBLE. IF YOUR SHARES ARE HELD IN “STREET NAME” BY A BROKER, NOMINEE, FIDUCIARY OR OTHER CUSTODIAN, FOLLOW THE DIRECTIONS GIVEN BY THE BROKER, NOMINEE, FIDUCIARY OR OTHER CUSTODIAN REGARDING HOW TO INSTRUCT THEM TO VOTE YOUR SHARES. YOUR BROKER, NOMINEE, FIDUCIARY OR OTHER CUSTODIAN MAY PERMIT YOU TO VOTE BY THE INTERNET OR BY TELEPHONE.

This proxy statement and the accompanying form of WHITE proxy card are available at www.dfking.com/hffc. If you have any questions or require any assistance, please contact D.F. King & Co., Inc., proxy solicitors for the PL Capital Group, at the following address and telephone number:

D.F. KING & CO., INC.

48 Wall Street

New York, NY 10005

Toll Free: 1-800-859-8509

Please feel free to call or email the PL Capital Group at the following:

Mr. Richard J. Lashley, Principal	Mr. John W. Palmer, Principal
PL Capital, LLC	PL Capital, LLC
466 Southern Blvd.	20 East Jefferson Avenue
Chatham, NJ 07928	Suite 22
(973) 360-1666	Naperville, IL 60540
(973) 360-1720 (fax)	(630) 848-1340
RLashley@PLCapitalllc.com	(630) 848-1342 (fax)
	JPalmer@PLCapitalllc.com

Sincerely,


Richard J. Lashley		John W. Palmer
The PL Capital Group		The PL Capital Group

November 15, 2011

Appendix A

Name and Address	Shares Held Beneficially	Percent of Class	Shares Held By Non-Participant Associates
Richard J. Lashley 2 Trinity Place Warren, NJ 07059	572,252 (1) (3)	8.2%	0
John W. Palmer 4216 Richwood Court Naperville, IL 60540	567,852 (2) (3)	8.1%	0
Beth R. Lashley 2 Trinity Place Warren, NJ 07059	2,000	<0.1%	0
PL Capital, LLC 20 East Jefferson Avenue, Suite 22 Naperville, Illinois 60540	529,905 (3)	7.6%	0
PL Capital Advisors, LLC 20 East Jefferson Avenue, Suite 22 Naperville, Illinois 60540	556,095 (3)	8.0%	0
Financial Edge Fund, L.P. 20 East Jefferson Avenue, Suite 22 Naperville, Illinois 60540	255,316	3.7%	0
Financial Edge-Strategic Fund, L.P. 20 East Jefferson Avenue, Suite 22 Naperville, Illinois 60540	93,588	1.3%	0
PL Capital/Focused Fund, L.P. 20 East Jefferson Avenue, Suite 22 Naperville, Illinois 60540	169,344	2.4%	0
Goodbody/PL Capital, LLC 20 East Jefferson Avenue, Suite 22 Naperville, Illinois 60540	37,847 (3)	0.5%	0
Goodbody/PL Capital, L.P. 20 East Jefferson Avenue, Suite 22 Naperville, Illinois 60540	37,847	0.5%	0
PL Capital Defined Benefit Pension Plan 20 East Jefferson Avenue, Suite 22 Naperville, Illinois 60540	11,657	0.2%	0
Robin Lashley 20 East Jefferson Avenue, Suite 22 Naperville, Illinois 60540	2,000	<0.1%	0

(1)	Includes 500 shares held by Mr. Lashley of record and 2,000 shares held jointly with his spouse Beth Lashley in street name.

(2)	Includes 100 shares held by Mr. Palmer in street name.

(3)	Includes shares that the person may be deemed to beneficially own pursuant to the attribution provisions of Rule 13d-3 of the Exchange Act.

A-1

In aggregate, the Participants own 572,352 shares of Common Stock of the Company acquired at a cost of $5,748,038. The amount of funds expended by each entity or person is as follows:

Entity:	Shares Held:	Total Cost($):
Financial Edge Fund	255,316	$2,611,818
Financial Edge Strategic	93,588	954,782
Goodbody/PL LP	37,847	359,030
Focused Fund	169,344	1,681,125
Richard Lashley	500	6,259
Richard and Beth Lashley	2,000	17,009
John Palmer	100	919
Dr. Robin Lashley	2,000	19,425
PL Capital Defined Benefit Pension Plan	11,657	97,671
TOTAL	572,352	$5,748,038

The funds used by Financial Edge Fund, Financial Edge Strategic, Goodbody/PL LP and Focused Fund came from their available capital and from time to time by margin provided by BNP Paribas Prime Brokerage, Inc. (“BNP Paribas”) on such firms’ usual terms and conditions. The amount of funds expended by Mr. Palmer to acquire the shares held in his name came from his available personal capital. The amount of funds expended by Mr. and Mrs. Lashley to acquire the shares held in their names came from their available personal capital. The amount of funds expended by Dr. Robin Lashley came from her available personal capital. The amount of funds expended by the PL Capital Pension Plan came from its available capital.

All or part of the shares of Common Stock owned by Participants may from time to time be pledged with one or more banking institutions or brokerage firms as collateral for loans made by such entities to Participants. Such loans, if any, generally bear interest at a rate based upon the federal funds rate plus a margin. Such indebtedness, if any, may be refinanced with other banks or broker-dealers. As of the date of this filing, no Participant has margin or other loans outstanding secured by Common Stock except Financial Edge Fund, Financial Edge Strategic, Focused Fund and Goodbody/PL LP.

No Participant is required to file reports under Section 16 of the Exchange Act, with respect to the Common Stock.

Transactions In Stock of the Company

During the past two years, the following Common Stock transactions were made by the Participants.

A-2

Financial Edge Fund, L.P.

Transaction Date	Number of Shares (Sold) Purchased
11/20/2009	56,000
12/17/2009	(100)
12/30/2009	200
12/31/2009	200
8/31/2010	200
3/3/2011	9,699
3/7/2011	100
3/10/2011	794
3/11/2011	121
3/14/2011	1,945
3/21/2011	19
3/28/2011	200
4/15/2011	8
4/18/2011	2,500
4/21/2011	103
4/26/2011	5,397
4/27/2011	9
4/28/2011	9,000
5/2/2011	1,590
5/3/2011	1,500
5/4/2011	20
5/6/2011	500
5/11/2011	3,900
5/13/2011	300
5/17/2011	3,000
5/18/2011	11,280
5/19/2011	3,000
5/20/2011	4,618
5/26/2011	2,000
5/27/2011	1,500
6/1/2011	5,890
6/8/2011	924
6/9/2011	100
6/10/2011	100
6/14/2011	1,500
7/8/2011	479
7/25/2011	1,552
7/28/2011	300
7/29/2011	2,100
8/1/2011	508
8/3/2011	3,310

A-3

Goodbody/PL Capital, L.P.		John W. Palmer
Transaction Date	Number of Shares (Sold) Purchased	Transaction Date	Number of Shares (Sold) Purchased
11/20/2009	22,000	8/16/2011	100
12/30/2009	100
12/31/2009	100
3/1/2010	(200)	Richard & Beth Lashley
3/2/2010	(34,800)	Transaction Date	Number of Shares (Sold) Purchased
4/28/2011	1,250	Transaction Date	Number of Shares (Sold) Purchased
5/2/2011	1,100	11/20/2009	2,000
5/3/2011	300
5/6/2011	225

Financial Edge Strategic Fund, L.P.		Richard J. Lashley
Transaction Date	Number of Shares (Sold) Purchased	Transaction Date	Number of Shares (Sold) Purchased
11/20/2009	22,000	n/a	n/a
12/30/2009	100
12/31/2009	100
3/3/2011	5,000	Robin Lashley
4/18/2011	1,000	Transaction Date	Number of Shares (Sold) Purchased
4/28/2011	3,500	Transaction Date	Number of Shares (Sold) Purchased
5/2/2011	1,250	10/2/2009	993
5/3/2011	1,000	10/5/2009	7
5/5/2011	233	11/20/2009	1,000
5/6/2011	200
5/17/2011	1,500
5/19/2011	1,521	PL Capital Defined Benefit Pension Plan
5/26/2011	1,065	Transaction Date	Number of Shares (Sold) Purchased
5/27/2011	1,646	Transaction Date	Number of Shares (Sold) Purchased
5/31/2011	31	12/1/2009	10,000
6/13/2011	388
6/14/2011	1,300
6/15/2011	2,104
7/19/2011	2,000

PL Capital/Focused Fund, L.P.

Transaction Date	Number of Shares (Sold) Purchased
11/20/2009	50,000
12/30/2009	100
12/31/2009	200
4/18/2011	1,000
4/28/2011	2,343
5/2/2011	1,250
5/3/2011	500
5/10/2011	767
5/17/2011	1,684
5/26/2011	1,000

A-4

▼ DETACH PROXY CARD HERE ▼

The PL Capital Group recommends that you vote “FOR” the election of the PL Capital Group’s Nominee John W. Palmer as a Director and the Company Nominee as noted below, and “FOR” the ratification of the appointment of Eide Bailly, LLP as the Company’s independent auditor.

1.	ELECTION OF DIRECTORS – To elect Mr. John W. Palmer

o FOR

o WITHHOLD

The PL Capital Group intends to use this proxy to vote for the persons who have been nominated by the Company to serve as Director, other than the Company nominee noted below. There is no assurance that any of the candidates who have been nominated by the Company will serve as a Director if the PL Capital Group’s nominee is elected. You should refer to the Company’s proxy statement and form of proxy distributed by the Company for the names, backgrounds, qualifications and other information concerning the Company’s nominees. The PL Capital Group is NOT seeking authority to vote for and will NOT exercise any authority for Christine E. Hamilton, one of the Company’s two nominees.

Note: If you do not wish for your shares to be voted “FOR” the persons who have been nominated by the Company to serve as Director, other than Christine E. Hamilton, write the name of the Company nominee in the following space:_______________________________________________________________________

2.	RATIFICATION OF THE APPOINTMENT OF EIDE BAILLY, LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR HF FINANCIAL CORP. FOR THE YEAR ENDING JUNE 30, 2012.

o FOR

o AGAINST

o ABSTAIN

In his discretion, each Proxy is authorized to vote upon such other business that may properly come before the Annual Meeting and any and all adjournments or postponements thereof, as provided in the proxy statement provided herewith.

Please sign exactly as your name(s) appear on the proxy card(s) previously sent to you. When shares are held by joint tenants, both should sign. When signing as an attorney, executor, administrator, trustee, or guardian, please give full title as such. If a corporation, please sign in full corporation name by the President or other duly authorized officer. If a partnership, please sign in partnership name by authorized person. This proxy card votes all shares held in all capacities.

PLEASE SIGN, DATE, AND MAIL THIS PROXY CARD TODAY


Dated		Signature


Signature (if held jointly)		Title

▼ DETACH PROXY CARD HERE ▼

PROXY

THIS PROXY IS SOLICITED BY THE PL CAPITAL GROUP IN OPPOSITION TO

THE BOARD OF DIRECTORS OF HF FINANCIAL CORP.

THIS SOLICITATION IS NOT BEING MADE BY THE BOARD OF DIRECTORS OF HF FINANCIAL CORP.

2011 ANNUAL MEETING OF SHAREHOLDERS

The undersigned hereby appoints Mr. Phillip M. Goldberg, Mr. Peter D. Fetzer and Mr. Richard H. Grubaugh, and each of them, attorneys and agents with full power of substitution, as Proxy for the undersigned, to vote all shares of common stock, par value $0.01 per share, of HF Financial Corp. (“HF Financial” or the “Company”) which the undersigned is entitled to vote at the Annual Meeting of Shareholders to be held at the Best Western Ramkota Inn, located at 3200 West Maple Street, Sioux Falls, South Dakota 57107, on December 13, 2011 at 2:00 p.m., Central Standard Time, or any adjournments or postponements thereof and at any meeting called in lieu thereof (the “Annual Meeting”).

This proxy, when properly executed will be voted in the manner directed herein by the undersigned shareholder. Unless otherwise specified, this proxy will be voted “FOR” the election of the PL Capital Group’s Nominee as Director and the Company Nominee as noted on the reverse, and “FOR” the ratification of the appointment of Eide Bailly, LLP as the Company’s independent auditor. This proxy revokes all prior proxies given by the undersigned.

IMPORTANT: PLEASE SIGN AND DATE ON THE REVERSE SIDE.

PL Capital DEFC14AProxy in contested solicitation