HMN Financial, Inc. Declares Dividend, Announces Annual Meeting

HMN Financial, Inc., (HMN) (Nasdaq:HMNF) today announced
that the Company will pay a regular quarterly dividend of 24 cents per
share payable on March 7, 2006 to stockholders of record on February
17, 2006.
   HMN also announced that its annual meeting will be held at the
Rochester Golf and Country Club, located at 3100 West Country Club
Road, Rochester, Minnesota on Tuesday, April 25, 2006, at 10:00 a.m.
local time.

   General Information

   HMN Financial, Inc. and Home Federal Savings Bank are
headquartered in Rochester, Minnesota. The Bank operates nine full
service offices in southern Minnesota located in Albert Lea, Austin,
LaCrescent, Rochester, Spring Valley and Winona, Minnesota and two
full service offices in Iowa located in Marshalltown and Toledo, Iowa.
Home Federal Savings Bank also operates loan origination offices
located in St. Cloud, Rochester and Dodge Center, Minnesota. Eagle
Crest Capital Bank, a division of Home Federal Savings Bank, operates
branches in Edina and Rochester, Minnesota.