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HMN Financial, Inc.
101 North Broadway
Spring Valley, Minnesota 55975
Phone 507-346-1100
Fax 507-346-1151



                          NEWS RELEASE



For Immediate Release         Contact:  James B. Gardner
                                        Executive Vice President
                                        HMN Financial, Inc.
                                        (507) 346-1100


HMN FINANCIAL, INC. ANNOUNCES INTENT TO INSTITUTE A 3-FOR-2 STOCK 
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    SPLIT SUBJECT TO STOCKHOLDER APPROVAL OF INCREASE IN    
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    AUTHORIZED SHARES
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    SPRING VALLEY, MINNESOTA, February 23, 1998... HMN Financial,
Inc. ("HMN")(NASDAQ:HMNF) announced that its Board of Directors voted to
request stockholder approval at the annual meeting of stockholders to be
held on April 28, 1998 of an increase in HMN's authorized common stock from 7.0
million shares  to 11.0 million shares.  Subject to stockholder approval of
the increase, the Board has authorized a three-for-two stock split of
its common stock, to be effected in the form of a fifty percent stock
dividend.  The record date and distribution date for such dividend are 
expected to be set by the Board immediately following the annual 
stockholders' meeting.

    HMN Financial, Inc. and Home Federal Savings Bank are
headquartered in Spring Valley, MN.  The Bank operates seven offices in southern
Minnesota and three in Iowa. HMN Mortgage Services, Inc., a subsidiary of HMN
Financial, Inc. operates mortgage banking facilities in Eden Prairie and 
Brooklyn Park, MN.

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