Profile: HMN Financial Inc (HMNF.OQ)
11 Dec 2013
HMN Financial, Inc. (HMN), incorporated in 1994, is a stock savings bank holding company that owns 100% of Home Federal Savings Bank (the Bank). The Bank operates retail banking and loan production facilities in Minnesota and Iowa. The Bank has one wholly owned subsidiary, Osterud Insurance Agency, Inc. (OIA) which offers financial planning products and services. The Company’s business involves attracting deposits from the general public and businesses and using such deposits to originate or purchase one- to four-family residential, commercial real estate, and multi-family mortgage loans as well as consumer, construction, and commercial business loans. The Company also invests in mortgage-backed and related securities, the United States Government agency obligations and other permissible investments. The Company serves the Fillmore, Freeborn, Houston, Mower, Olmsted and Winona and portions of Steele, Dodge, Goodhue and Wabasha through its corporate office located in Rochester, Minnesota and its 10 branch offices located in Albert Lea, Austin, La Crescent, Rochester, Spring Valley and Winona, Minnesota. In March 2012, the Company announced the Bank’s sale of its assets associated with the Toledo, Iowa branch to Pinnacle Bank of Marshalltown, Iowa (Pinnacle).
At December 31, 2011, the Company’s one-to-four family real estate loans, consisting of both fixed rate and adjustable rate loans, totaled $119.1 million. The Company originates permanent commercial real estate and multi-family loans secured by properties located primarily in its market area. The commercial real estate and multi-family loan portfolio includes loans secured by motels, hotels, apartment buildings, churches, ethanol plants, manufacturing plants, office buildings, business facilities, shopping malls, nursing homes, golf courses, restaurants, warehouses and other non-residential building properties primarily located in the upper Midwestern portion of the United States.
The Company makes construction loans to individuals for the construction of their residences and to builders for the construction of one- to four-family residences. Construction loans also include commercial real estate loans. At December 31, 2011, construction loans totaled $10.9 million, of which one-to-four family residential totaled $4.9 million, multi-family residential totaled $1.2 million and commercial real estate totaled $4.8 million.
The Company originates a variety of consumer loans, including home equity loans (open-end and closed-end), automobile, mobile home, lot loans, loans secured by deposit accounts and other loans for household and personal purposes. The Company maintains a portfolio of commercial business loans to borrowers associated with the real estate industry, as well as to retail, manufacturing operations and professional firms.
The Bank invests a portion of its liquid assets in interest-earning overnight deposits of the Federal Home Loan Bank of Des Moines (FHLB). Other investments include high grade medium-term (up to four years) federal agency notes, and a variety of other types of mutual funds that invest in adjustable rate mortgage-backed securities, asset-backed securities, repurchase agreements and the United States Treasury and agency obligations. The Company invests in mortgage-backed and related securities. All of the mortgage-backed and related securities owned by the Company are issued, insured or guaranteed either directly or indirectly by the United States Government Agency. The Company had $20.6 million of mortgage-backed and related securities classified as available for sale at December 31, 2011,
Sources of Funds
The Bank’s primary sources of funds are retail, Internet and brokered deposits, payments of loan principal, interest earned on loans and securities, repayments and maturities of securities, borrowings, sales of preferred shares and other funds provided from operations. The Bank offers a variety of deposit accounts to retail and commercial customers having a range of interest rates and terms. The Bank’s deposits consist of passbook, negotiable order of withdrawal (NOW), money market, non-interest bearing checking and certificate accounts (including individual retirement accounts). The Bank’s other available sources of funds include advances from the Federal Home Loan Bank (FHLB) and other borrowings from the Federal Reserve Bank (FRB). At December 31, 2011, the Bank had $70.0 million of FHLB advances and no FRB borrowings outstanding.
HMN Financial Inc
1016 Civic Center Drive Northwes
ROCHESTER MN 55901