HMN Financial, Inc. Announces Definitive Agreement Relating to the Toledo, Iowa Branch of Home Federal Savings Bank

ROCHESTER, Minn.--(BUSINESS WIRE)--HMN Financial, Inc. (HMN or the Company) (NASDAQ:HMNF), the $818 million holding company for Home Federal Savings Bank (Home Federal or Bank), today announced that the Bank has entered into a definitive purchase and assumption agreement (Agreement) with Pinnacle Bank of Marshalltown, Iowa (Pinnacle) which provides for the sale to Pinnacle of substantially all of the assets associated with the Toledo, Iowa branch (the Branch) of Home Federal and the assumption by Pinnacle of all deposit liabilities of the Branch. Home Federal will continue to own and operate its other Iowa and Minnesota branches. The transaction is subject to regulatory approval and scheduling of the required Branch data processing conversion. Subject to the foregoing and other customary terms and conditions, the transaction is anticipated to be consummated in the first quarter of 2012. Home Federal anticipates that the transaction will be funded with available assets and that the sale will result in a one time gain in the first quarter of 2012 and a decrease in the Bank’s overall assets of approximately $43 million.