HMN Financial, Inc. Computation of Earnings Per Common Share (Unaudited) Computation of Earnings Per Common Share for Statements of Operations: Three Months Ended Nine Months Ended September 30, September 30, 1997 1996 1997 1996 - -------------------------------------------------------------------- Net income (loss) $1,524,111 (144,527) 4,330,810 2,975,248 Weighted average number of common share and common share equivalents: Weighted average common shares outstanding 3,740,468 4,185,867 3,742,802 4,474,903 Dilutive effect of stock option plans after application of treasury stock method 232,026 195,652 35,039 3,972,494 4,185,867 3,938,454 4,509,942 Earnings (loss) per common share and common share equivalents $ 0.38 (0.03) 1.10 0.66 Computation of Fully Diluted Earnings Per Common Share and Common Share Equivalent(1) - ------------------------------ Net income (loss) $ 1,524,111 (144,527) 4,330,810 2,975,248 Weighted average number of common share and common share equivalents: Weighted average common shares outstanding 3,740,468 4,185,867 3,742,802 4,474,903 Dilutive effect of stock option plans after application of treasury stock method 235,330 235,160 41,596 3,975,798 4,185,867 3,977,962 4,516,499 Earnings (loss) per common share and common share equivalents $ 0.38 (0.03) 1.09 0.66