Note 13 - Stockholders' Equity

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

(

1

3

)

Stockholders’ Equity

The Company's certificate of incorporation authorizes the issuance of up to

500,000

shares of preferred stock, and on

December 23, 2008,

the Company completed the sale of

26,000

shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the Preferred Stock) to the U.S. Department of the Treasury (Treasury). The Preferred Stock had a liquidation value of

$1,000

per share and a related warrant was also issued to purchase

833,333

shares of HMN common stock at an exercise price of

$4.68

per share (the Warrant). The transaction was part of the Treasury’s Capital Purchase Program under the Emergency Economic Stabilization Act of

2008.

On

February 17, 2015,

the Company redeemed the final

10,000

shares of outstanding Preferred Stock. On

May 21, 2015,

the Treasury sold the Warrant at an exercise price of

$4.68

per share to

three

unaffiliated

third

party investors for an aggregate purchase price of

$5.7

million. Two of the investors received a warrant to purchase

277,777.67

shares and

one

investor received a warrant to purchase

277,777.66

shares. All of the warrants were still outstanding as of

March 31, 2018

and

may

be exercised at any time prior to their expiration date of

December 23, 2018.

The Company received

no

proceeds from this transaction and it had

no

effect on the Company’s capital, financial condition or results of operations.