[graphic of open winged eagle] HMN FINANCIAL, INC. 101 North Broadway, P.O. Box 231, Spring Valley, MN 55975-0231 Phone (507) 346-7345, FAX (507) 346-1111 NEWS RELEASE For Immediate Release October 3, 1996 For Additional Information Contact: James B. Gardner, Executive Vice President HMN Financial, Inc. (507) 346-7345 HMN FINANCIAL, INC. ANNOUNCES STOCK REPURCHASE PROGRAM - ------------------------------------------------------ SPRING VALLEY, MINNESOTA, October 3, 1996 ... HMN Financial, Inc., (HMN) (NASDAQ:HMNF) announced its intention today to repurchase up to 10%, or 467,334 shares, of its outstanding shares in the open market over the next 12 month period. The shares will be purchased at prevailing market prices from time to time, depending upon market conditions. Roger P. Weise, Chairman and Chief Executive Officer of HMN, indicated that the Board of Directors approved the repurchase program in view of the current price level of HMN's common stock. Mr. Weise stated that "we believe that the repurchase of our shares continues to represent an attractive investment opportunity which will benefit HMN and our stockholders. The repurchased shares will become treasury shares and will be used for general corporate purposes, including the issuance of shares in connection with the exercise of stock options". The repurchase program will be executed through previously selected and approved brokers. Over the past three months, the shares traded in a range between $15.125 and $16.50. At August 31, 1996, HMN had $552.1 million in assets and stockholders' equity of $85.3 million. On October 3, 1996 HMN had 4,673,690 common stock shares outstanding. ***END***