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