HMN Financial, Inc. Computation of Earnings Per Common Share (Unaudited) Three Months Nine Months Computation of Earnings Ended Sept 30, Ended Sept 30, Per Common Share: 1998 1997 1998 1997 ----------------------- ---------------------- Weighted average number of common shares outstanding used in basic earnings per common share calculation 4,625,803 5,533,211 5,038,496 5,532,155 Net dilutive effect of: Options 0 348,039 358,514 293,476 Restricted stock awards 0 74,009 54,344 79,007 --------- --------- --------- --------- Weighted average number of shares outstanding adjusted for effect of dilutive securities 4,625,803 5,955,259 5,451,354 5,904,637 ========= ========= ========= ========= Income available to common shareholders $(434,240) 1,524,111 2,013,145 4,330,812 Basic earnings per common share $ (0.09) 0.28 0.40 0.78 Diluted earnings per common share $ (0.09) 0.26 0.37 0.73 The earnings per share calculations reflected above are presented as if the split had been completed at the beginning of each period presented for the weighted average number of shares outstanding for each period.