Item 2.02 Results of Operations and Financial Condition.

The information in this section is being furnished to, but not filed with, the Securities and Exchange Commission.

On October 20, 2008, HMN Financial, Inc. (HMN) issued a press release that included financial information for its quarter and nine months ended September 30, 2008. A copy of the press release is attached as Exhibit 99 to this Form 8-K and incorporated by reference into this Item 2.02.

Item 2.06 Material Impairments.

On October 16, 2008, HMN management determined that a loan with an outstanding balance of approximately $12.0 million had become impaired and should be fully reserved. The impairment related indirectly to the charges of fraud against businessman Tom Petters and the bankruptcy of Petters Company, Inc. (PCI). The Bank issued a commercial loan in April 2003 to a company that in turn loaned money to PCI. The Bank took a security interest in receivables from PCI as collateral for its commercial loan. It now appears that fraudulent misrepresentations were made about the collateral. The loan in question was current prior to the discovery of the apparent fraud, which remains under investigation. The financial capability of the borrower to repay the loan is uncertain due to the pervasive impact that the apparent fraud has had on the borrower's financial position which raises substantial doubt regarding future collections on the loan.

HMN does not expect the impairment to result in any future cash expenditures.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits (the following exhibit is furnished to the SEC)

Exhibit Number Description

99 Press release dated October 20, 2008

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