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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
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     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.    
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