-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ISaY2z8CJvZ33WdpD1cCwBjyOuJhaFW6F2qSZQqsjBFPDUHQcmgvGdubjq2J7cqX kfVLX9QdkotB3TRq1AKegg== 0000897069-98-000020.txt : 19980202 0000897069-98-000020.hdr.sgml : 19980202 ACCESSION NUMBER: 0000897069-98-000020 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19980130 SROS: NASD GROUP MEMBERS: FLORENCE NELSON GROUP MEMBERS: LASALLE FINANCIAL PARTNRES LIMITED PARTNERSHIP GROUP MEMBERS: PETER T. KROSS GROUP MEMBERS: RICHARD J. NELSON SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HMN FINANCIAL INC CENTRAL INDEX KEY: 0000921183 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 411777397 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-46195 FILM NUMBER: 98517997 BUSINESS ADDRESS: STREET 1: 101 N BROADWAY CITY: SPRING VALLEY STATE: MN ZIP: 55975-1223 BUSINESS PHONE: 5073467345 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LASALLE FINANCIAL PARTNERS LP CENTRAL INDEX KEY: 0001020426 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 350 E MICHIGAN STREET 2: SUITE 500 CITY: KALAMAZOO STATE: MI ZIP: 49007 BUSINESS PHONE: 6163444993 MAIL ADDRESS: STREET 1: 350 E MICHIGAN STREET 2: SUITE 500 CITY: KALAMAZOO STATE: MI ZIP: 49007 FORMER COMPANY: FORMER CONFORMED NAME: LASALLE FINANCIAL PARTNRES LIMITED PARTNERSHIP DATE OF NAME CHANGE: 19970623 FORMER COMPANY: FORMER CONFORMED NAME: LASALLE/KROSS PARTNERS LP DATE OF NAME CHANGE: 19960805 SC 13D/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 4) HMN FINANCIAL, INC. (Name of Issuer) Common Stock, $.01 par value (Title of Class of Securities) 40424G108 (CUSIP Number) Charles R. Haywood Foley & Lardner One IBM Plaza 330 North Wabash Avenue Suite 3300 Chicago, Illinois 60611 (312) 755-1900 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 27, 1998 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. CUSIP No. 40424G108 1 Name of Reporting Person S.S. or I.R.S. Identification Number of Above Person (optional) LaSalle Financial Partners, Limited Partnership 2 Check The Appropriate Box If a Member of a Group (a)[X] (b)[ ] 3 SEC Use Only 4 Source of Funds: WC, OO 5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [X] 6 Citizenship or Place of Organization Delaware 7 Sole Voting Power 0 shares Number of Shares 8 Shared Voting Power Beneficially 403,600 shares Owned By Each Reporting 9 Sole Dispositive Power Person With 0 shares 10 Shared Dispositive Power 403,600 shares 11 Aggregate Amount Beneficially Owned by Each Reporting Person 403,600 shares 12 Check Box If The Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13 Percent of Class Represented By Amount in Row (11) 9.7% 14 Type of Reporting Person PN CUSIP No. 40424G108 1 Name of Reporting Person S.S. or I.R.S. Identification Number of Above Person (optional) Richard J. Nelson 2 Check The Appropriate Box If a Member of a Group (a)[X] (b)[ ] 3 SEC Use Only 4 Source of Funds: Not Applicable 5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [X] 6 Citizenship or Place of Organization United States 7 Sole Voting Power 0 shares Number of Shares 8 Shared Voting Power Beneficially 403,600 shares Owned By Each Reporting 9 Sole Dispositive Power Person With 0 shares 10 Shared Dispositive Power 403,600 shares 11 Aggregate Amount Beneficially Owned by Each Reporting Person 403,600 shares 12 Check Box If The Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13 Percent of Class Represented By Amount in Row (11) 9.7% 14 Type of Reporting Person IN CUSIP No. 40424G108 1 Name of Reporting Person S.S. or I.R.S. Identification Number of Above Person (optional) Peter T. Kross 2 Check The Appropriate Box If a Member of a Group (a)[X] (b)[ ] 3 SEC Use Only 4 Source of Funds: Not Applicable 5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [X] 6 Citizenship or Place of Organization United States 7 Sole Voting Power 0 shares Number of Shares 8 Shared Voting Power Beneficially 403,600 shares Owned By Each Reporting 9 Sole Dispositive Power Person With 0 shares 10 Shared Dispositive Power 403,600 shares 11 Aggregate Amount Beneficially Owned by Each Reporting Person 403,600 shares 12 Check Box If The Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13 Percent of Class Represented By Amount in Row (11) 9.7% 14 Type of Reporting Person IN CUSIP No. 40424G108 1 Name of Reporting Person S.S. or I.R.S. Identification Number of Above Person (optional) Florence Nelson 2 Check The Appropriate Box If a Member of a Group (a)[X] (b)[ ] 3 SEC Use Only 4 Source of Funds: Not Applicable 5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] 6 Citizenship or Place of Organization United States 7 Sole Voting Power 0 shares Number of Shares 8 Shared Voting Power Beneficially 0 shares Owned By Each Reporting 9 Sole Dispositive Power Person With 0 shares 10 Shared Dispositive Power 0 shares 11 Aggregate Amount Beneficially Owned by Each Reporting Person 0 shares 12 Check Box If The Aggregate Amount in Row (11) Excludes Certain Shares [X] 13 Percent of Class Represented By Amount in Row (11) 0% 14 Type of Reporting Person IN This is Amendment No. 4 to the Schedule 13D filed jointly by LaSalle Financial Partners, Limited Partnership (the "Partnership"), Richard J. Nelson and Peter T. Kross (including Florence Nelson as of this Amendment No. 3, the "Group") on July 11, 1997 (as amended, the "Original 13D"), and relates to the common stock, $.01 par value (the "Common Stock"), of HMN Financial, Inc. (the "Issuer"). The following items in the Original 13D are amended to read in their entirety as follows: Item 3. Source and Amount of Funds or Other Consideration The amount of funds expended to date by the Partnership to acquire its shares as reported herein is $9,206,925. Such funds were provided in part from the Partnership's available capital and in part by loans from subsidiaries of The Bear Stearns Companies, Inc. ("Bear Stearns"). The Partnership has a margin account with Bear Stearns and has used the proceeds from loans made to it by Bear Stearns to purchase a portion of the shares of the Common Stock that it presently owns. All of the marginable securities owned by the Partnership and held in its brokerage account at Bear Stearns are pledged as collateral for the repayment of margin loans made to the Partnership by Bear Stearns. A copy of the Partnership's margin agreement with Bear Stearns is attached hereto as Exhibit 2 and incorporated herein by reference. Item 4. Purpose of Transaction The Group's goal is to profit from appreciation in the market price of the Common Stock. The Group expects to actively assert shareholder rights, in the manner described below, with the purpose to influence the policies of the Issuer. The Partnership's stated purpose is to emphasize investments in the stocks of selected thrifts, banks and savings banks which the General Partners believe to be undervalued or that they believe to represent "special situation" investment opportunities. The Partnership has further described its purpose, in its private placement memorandum, as follows: Considering the current opportunity to purchase shares of selected thrifts and savings banks at substantial discounts to intrinsic value as determined by the General Partners, with significant appreciation potential available due to merger and acquisition activity in the banking industry, the Partnership currently intends to concentrate its investments in thrifts, banks and savings banks which, in the opinion of the General Partners, possess certain buyout characteristics. Concentrated investments may be made in companies to allow the Partnership to influence or to effect control over management's decisions in order to achieve Partnership objectives. The Partnership believes that its acquisition of the Common Stock is in accordance with these stated purposes. The Group intends to work with the Issuer to attempt to influence the Board of Directors to consider all possible strategic alternatives available to the Issuer in order to increase the market price of the Common Stock. One way of achieving this goal is to seek out another financial institution and attempt to implement a business combination. The Group is interested in influencing the Issuer's Board of Directors to explore seriously, in consultation with independent financial advisors, this and other possible means of improving the market price of the Common Stock, to the extent such options may not have already been fully explored. To the extent such influence may be deemed to constitute a "control purpose" with respect to the Securities Exchange Act of 1934, as amended, and the regulations thereunder, the Group has such a purpose. On October 21, 1997, Messrs. Nelson and Kross met with management of the Issuer. Topics of discussion included the past performance of the Issuer and methods to maximize shareholder value in the future. At that meeting, Messrs. Nelson and Kross, on behalf of the Group, requested that the Board of Directors of the Issuer nominate Mr. Nelson for election to the Board at the 1998 Meeting of Stockholders and noted that if the Board of Directors does not nominate Mr. Nelson for election as a Board nominee, the Group most likely would nominate Mr. Nelson and directly solicit shareholder votes for Mr. Nelson's election to the Board. In addition, Messrs. Nelson and Kross informed management of the Issuer that the Group was generally reviewing its options with respect to the Issuer, and that the Group may submit for shareholder vote at the 1998 Meeting of Stockholders a proposal regarding corporate governance, maximizing shareholder value or other matters. Messrs. Nelson and Kross also informed the Issuer that the Partnership would shortly submit a request for a shareholder list and associated materials. On November 20, 1997, the Partnership sent to the Issuer a request for a shareholder list and associated materials. A copy of that letter is attached as Exhibit 3. After discussion and additional correspondence, the Issuer is making available to the Partnership stockholder list materials. By a letter dated January 27, 1998, the Partnership submitted to the Issuer a notice of intent to nominate Thomas A. Burton and Howard T. Stewart for election to the Board of Directors of the Issuer at the 1998 Annual Meeting of Stockholders of the Issuer, to be held April 28, 1998. A copy of that letter is attached as Exhibit 4. On that same day, Messrs. Nelson and Kross discussed their notice of intent to nominate with management of the Issuer. The above-stated purpose to control is unrelated to the Office of Thrift Supervision ("OTS") regulations. Specifically, the Group is aware that regulations promulgated by the OTS contain separate standards with regard to acquisition of "control" of a federally chartered savings institution, such as the Issuer's subsidiary bank. Those regulations require OTS approval for acquisition of control under certain conditions. Some of the provisions are based in part on numerical criteria. One of the provisions creates a rebuttable presumption of control where a person acquires more than 10 percent of the voting stock of a savings association and other conditions are met. Another provision creates a rebuttable presumption of control where a person acquires proxies to elect one-third or more of the savings association's board of directors and other conditions are met. The Group intends to comply with all OTS regulations. To the extent the Group's actions constitute control of the Issuer's subsidiary bank for the purposes of OTS regulation, and to the extent possible, the Group will evaluate its options and may take one or more of several actions, including attempting to rebut a rebuttable presumption of control, submitting an application for OTS approval of the acquisition of control, or taking action to avoid making OTS regulations applicable to the Group. The Group's actions taken in response to OTS regulations may have implications with respect to the Group's above-discussed intentions with regard to the Issuer. The Group intends to continue to evaluate the Issuer and its business prospects and intends to consult with management of the Issuer, other shareholders of the Common Stock or other persons to further its objectives. The Group may make further purchases of shares of the Common Stock or may dispose of any or all of its shares of the Common Stock at any time. At present, and except as disclosed herein, the Group has no specific plans or proposals that relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive, of Item 4 of Schedule 13D. The Group intends to continue to explore the options available to it. The Group may, at any time or from time to time, review or reconsider its position with respect to the Issuer and may formulate plans with respect to matters referred to in Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer a. By virtue of their separate ownership and control over the General Partners, Mr. Nelson and Mr. Kross are each deemed to own beneficially all of the 403,600 shares of the Common Stock that the Partnership owns, constituting approximately 9.7% of the issued and outstanding shares of the Common Stock, based on the number of outstanding shares reported on the Issuer's Quarterly Report on Form 10-Q for the period ended September 30, 1997. None of Mr. Nelson, Mrs. Nelson, Mr. Kross or the General Partners beneficially owns any shares of the Common Stock personally or otherwise, except for the shares owned by the Partnership itself. b. With respect to the shares described in (a) above, all decisions regarding voting and disposition of the Partnership's 403,600 shares are made jointly by the chief executive officers of the General Partners (i.e., Messrs. Nelson and Kross). As such, they share voting and investment power with respect to those shares. c. The following transactions are the only purchases of the Common Stock made by the Partnership in the past 60 days, all of which were made in open market purchases on the Nasdaq National Market System: Date Number of Shares Cost Per Share 1/22/98 15,000 $26.75 Item 7. Material to be Filed as Exhibits No. Description 1 Joint Filing Agreement* 2 Professional Account Agreement, dated March 6, 1996, between the Partnership and each of the subsidiaries of The Bear Stearns Companies Inc.* 3 Letter from Richard J. Nelson to the Issuer, dated November 20, 1997.* 4 Letter from Peter T. Kross to the Issuer, dated January 27, 1998. *Filed previously with the Securities and Exchange Commission as part of the Original 13D. SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: January 30, 1998 LaSALLE FINANCIAL PARTNERS, LIMITED PARTNERSHIP By: LaSALLE CAPITAL MANAGEMENT, INC. a General Partner By: /s/ Richard J. Nelson Richard J. Nelson, President /s/ Richard J. Nelson Richard J. Nelson /s/ Peter T. Kross Peter T. Kross /s/ Florence Nelson Florence Nelson EX-99.4 2 EXHIBIT 4 LASALLE FINANCIAL PARTNERS, L.P. Suite 500 350 E. Michigan Avenue Kalamazoo, Michigan 49007 ______________________ Telephone (616) 344-4993 Facsimile (616) 382-2382 January 27, 1998 Mr. James B. Gardner Executive Vice President HMN Financial, Inc. 101 North Broadway Spring Valley, Minnesota 55975 Re: Notice of Intent to Nominate Two Directors Dear Mr. Gardner: This letter constitutes a notice of intent by LaSalle Financial Partners, L.P. (the "Partnership"), to nominate two persons for election as directors of HMN Financial, Inc. (the "Corporation") at the 1998 Annual Meeting of Stockholders of the Corporation. We understand that such Annual Meeting is scheduled to be held on April 28, 1998. This notice is being provided to you pursuant to Article I, Section 6(c) of the Corporation's By-Laws. The Partnership owns of record 10,000 shares of the Corporation's common stock, par value $.01 per share (the "Common Stock"). The Partnership also beneficially owns an additional 393,600 shares of the Common Stock, which shares are held in a brokerage account at Bear, Stearns & Co. The Partnership hereby notifies the Corporation pursuant to Article I, Section 6(c) of the Corporation's By-Laws that the Partnership intends to nominate Thomas A. Burton and Howard T. Stewart for election to the Board of Directors of the Corporation at the 1998 Annual Meeting of Stockholders of the Corporation. As required by Article I, Section 6(c), also enclosed is the written consent of each proposed nominee to be named in the Partnership's proxy statement and to serve as a director of the Corporation if elected. Set forth below is certain information, including that required by Article I, Section 6(c), of the Corporation's By-Laws. The information set forth below responds fully to all of the requirements of Article I, Section 6(c). In certain instances in which a disclosure item is not applicable or no disclosure is required to be made pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, no response has been provided below. (i) As to each proposed nominee: A. Name, Age, Business Address and Residence Address Name Age Business Address Residence Address Thomas A. Burton 62 822 Sierra Lane, N.E. 822 Sierra Lane, N.E. Rochester, MN 55906 Rochester, MN 55906 Howard T. Stewart 67 1426 Stoppel Lane, S.W. 1426 Stoppel Lane, S.W. Rochester, MN 55902 Rochester, MN 55902 B. Principal Occupation or Employment Thomas Burton: President of Management Services Company, which provides management consultant services to medical and computer industries. Howard Stewart: President of Rochester Technical Services, Inc., which provides technical support for computer hard drives. President of Triple S, Inc., which provides computer consulting services. C. Shares Owned Either Beneficially or Of Record Name of Nominee Class Amount Thomas Burton Common None Howard Stewart Common None D. Interest of Certain Persons in Matters to be Acted Upon Except as otherwise set forth herein, neither Mr. Burton nor Mr. Stewart is or was, within the past year, a party to any contract, arrangement or understanding with any person with respect to any securities of the Corporation, including, but not limited to joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies. Except as otherwise set forth herein, neither Mr. Burton nor Mr. Stewart, nor any of their associates, has any arrangement or understanding with any person with respect to any future employment with the Corporation or its affiliates or with respect to any future transactions to which the Corporation or any of its affiliates will or may be a party. E. Other information relating to such person that is required to be disclosed in a solicitation of proxies for the election of directors, or is otherwise required, pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended. Directorships of Other Publicly Owned Companies Neither Mr. Burton nor Mr. Stewart is presently serving as a director of any corporation, partnership or other entity that has a class of equity securities registered under the Securities Exchange Act of 1934, as amended, or subject to the requirements of 15(d) of the such Act or any company registered as an investment company under the Investment Company Act of 1940. Mr. Burton and Mr. Stewart each served as a director of Rochester Savings and Loan, its successor Reliance Savings and Loan, and its successor United Savings and Loan. Mr. Stewart has also served as a director of Kahler Hotel Corp. in Rochester, Minnesota. Mr. Burton also served as president, chief executive officer, and a director of Waters Instruments, Inc. of Rochester, Minnesota and served two terms as a public utilities commissioner for the state of Minnesota, appointed by the governor of the state. Material Proceedings Adverse to the Corporation To the Partnership's best knowledge, and based on information provided by each nominee, there are no material proceedings to which either Mr. Burton or Mr. Stewart, or any associate of either of them, is a party adverse to the Corporation or any of its subsidiaries, and neither of them nor any associate of either of them has a material interest adverse to the Corporation or any of its subsidiaries. Positions or Offices with the Corporation Thomas Burton . . . . . None Howard Stewart . . . . . None Arrangements or Understandings with Other Persons: Mr. Burton and Mr. Stewart have an understanding with the Partnership pursuant to which the Partnership has requested them to serve as its representatives on the Board of Directors of the Corporation, and they have agreed to do so, without compensation from the Partnership of any sort whatsoever. The Partnership has agreed to reimburse them for any out-of-pocket expenses that either one of them incurs in connection with the Partnership's intended solicitation of proxies for use at the 1998 Annual Meeting of Stockholders of the Corporation, but has no other arrangements or understandings with either such proposed nominee. To the Partnership's knowledge, neither Mr. Burton nor Mr. Stewart has any arrangement or understanding with any other person pursuant to which he was or is to be selected as a director or nominee for election as a director of the Corporation. Absence of any Family Relationships Neither Mr. Burton nor Mr. Stewart has any family relationship with any director or officer of the Corporation. There is no family relationship between Mr. Burton and Mr. Stewart or between Mr. Burton or Mr. Stewart and any partner of the Partnership or any person who controls any partner of the Partnership. Absence of Involvement in Certain Legal Proceedings To the best knowledge of the Partnership, and based on information provided by each nominee: d. Since January 1, 1993, no petition under the Federal bankruptcy laws or any state insolvency law has been filed by or against Mr. Burton or Mr. Stewart, and no receiver, fiscal agent or similar officer has been appointed by a court for business or property of Mr. Burton or Mr. Stewart. In addition, since January 1, 1993 no petition under the Federal bankruptcy laws or any state insolvency law has been filed by or against, and no receiver, fiscal agent or similar officer has been appointed by a court for business or property of, any partnership in which either of them is or was a general partner, or any corporation or business association of either of them is or was an executive officer. e. Neither Mr. Burton nor Mr. Stewart has been convicted in a criminal proceeding nor has either of them been named as the subject of any pending criminal proceeding (excluding traffic violations or similar misdemeanors). f. Since January 1, 1993, neither Mr. Burton nor Mr. Stewart has been the subject of any court order, judgment or decree, not suspended, reversed or vacated, permanently or temporarily enjoining (or otherwise limiting) either of them from (A) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission ("CFTC") or any associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity, (B) engaging in any type of business practice, or (C) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws. g. Since January 1, 1993, neither Mr. Burton nor Mr. Stewart has been the subject of any order, judgment or decree not subsequently reversed, suspended or vacated, of a federal or state authority barring, suspending or otherwise limiting for more than 60 days their right to be engaged in any activity described in clause (iii) above, or to be associated with persons engaged in any such activity. h. Since January 1, 1993, neither Mr. Burton nor Mr. Stewart has been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission ("SEC") to have violated any federal or state securities law, or by a court of competent jurisdiction in a civil action or by the CFTC to have violated any federal commodities law, wherein the judgment in such civil action or finding by the SEC or the CFTC has not been subsequently reversed, suspended or vacated. Absence of Certain Transactions To the best knowledge of the Partnership, and based on information provided by each nominee: i. Since January 1, 1997, neither Mr. Burton nor Mr. Stewart nor any member of the immediate family of either has had any material interest in any transaction or any series of similar transactions to which the Corporation or any of its subsidiaries was a party, and neither Mr. Burton nor Mr. Stewart nor any member of the immediate family of either has any material interest in any currently proposed transaction, or series of similar transactions to which the Corporation or any of its subsidiaries is a party. j. Since January 1, 1997, neither Mr. Burton nor Mr. Stewart has had any relationship of the nature described in Item 404(b) of Regulation S-K, promulgated by the SEC under the Securities Exchange Act of 1934, as amended. Specifically, since January 1, 1997, neither Mr. Burton nor Mr. Stewart has been an officer, director, partner or employee of, or has either one of them owned (directly or indirectly) more than 10% of the equity interest in, any of the following types of organizations: i. Any organization that has made or proposes to make payments to the Corporation or any of its subsidiaries for property or services; ii. Any organization to which the Corporation or any of its subsidiaries was indebted; iii. Any organization to which the Corporation or any of its subsidiaries has made or proposes to make payments for property or services; or iv. Any organization that provided legal services or investment banking services to the Corporation or any of its subsidiaries. k. Since January 1, 1997, neither Mr. Burton nor Mr. Stewart, nor any member of their respective immediate families or any firm, corporation or organization of which either of them is an executive officer or director or the beneficial owner of 10% or more of any class of equity securities, nor any trust or other estate in which either of them has a substantial beneficial interest or as to which either of them serves as a trustee or in a similar capacity, was indebted to the Corporation or any of its subsidiaries in excess of $60,000 at any time. Section 16 Compliance Neither Mr. Burton nor Mr. Stewart is required to file reports under Section 16 of the Securities Exchange Act of 1934, as amended, with respect to the Common Stock of the Corporation. (ii) As to the Partnership: A. Name and Record Address LaSalle Financial Partners, Limited Partnership 350 East Michigan, Suite 500 Kalamazoo, Michigan 49007 No other stockholder is known to the Partnership to be supporting Mr. Burton or Mr. Stewart as a nominee. B. Beneficial Ownership The Partnership is the beneficial owner of 403,600 shares of Common Stock, par value $0.01 per share, of the Corporation. Very truly yours, LASALLE FINANCIAL PARTNERS, L.P. By: Talman Financial, Inc. By: /s/ Peter T. Kross Peter T. Kross, President CONSENT OF PROPOSED NOMINEE I, Thomas A. Burton, hereby consent to be named in the proxy statement of LaSalle Financial Partners, L.P., to be used in connection with its solicitation of proxies from the shareholders of HMN Financial, Inc., for use in voting at the 1998 Annual Meeting of Stockholders of HMN Financial, Inc., and I hereby consent and agree to serve a director of HMN Financial, Inc., if elected at such Annual Meeting. /s/ Thomas A. Burton Thomas A. Burton Dated: January 26, 1998 CONSENT OF PROPOSED NOMINEE I, Howard T. Stewart, hereby consent to be named in the proxy statement of LaSalle Financial Partners, L.P., to be used in connection with its solicitation of proxies from the shareholders of HMN Financial, Inc., for use in voting at the 1998 Annual Meeting of Stockholders of HMN Financial, Inc., and I hereby consent and agree to serve a director of HMN Financial, Inc., if elected at such Annual Meeting. /s/ Howard T. Stewart Howard T. Stewart Dated: January 26, 1998 -----END PRIVACY-ENHANCED MESSAGE-----