UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
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)
October 21, 1997
(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 [ ].
<PAGE>
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 388,600 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
388,600 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
388,600 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.2%
14 Type of Reporting Person
PN
<PAGE>
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 388,600 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
388,600 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
388,600 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.2%
14 Type of Reporting Person
IN
<PAGE>
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 388,600 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
388,600 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
388,600 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.2%
14 Type of Reporting Person
IN
<PAGE>
This is Amendment No. 2 to the Schedule 13D filed jointly by LaSalle
Financial Partners, Limited Partnership (the "Partnership"), Richard J.
Nelson and Peter T. Kross (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 2. Identity and Background
(d)-(e) During the past five years, none of the Partnership, the
General Partners, Mr. Nelson, Mrs. Nelson or Mr. Kross has been convicted
in a criminal proceeding (excluding traffic violations).
On December 9, 1996, Standard Financial, Inc. filed a civil lawsuit
(case No. 96-C-8037) in the United States District Court for the Northern
District of Illinois (the "Court") naming as defendants the Partnership,
the General Partners, Mr. Kross and Mr. Nelson. The lawsuit requested
injunctive and other relief relating to a Schedule 13D filing with respect
to beneficial ownership of Standard Financial, Inc.'s common stock. While
the Court entered certain preliminary orders in February and March, 1997,
those orders were subsequently vacated on October 9, 1997.
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 will shortly submit a request for
a shareholder list and associated materials.
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 has no present plans to cross these
numerical thresholds.
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 seek representation on the Issuer's Board of
Directors. 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.
<PAGE>
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: October 27, 1997
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
