<PAGE>
                                                                      Exhibit 14

                               HMN FINANCIAL, INC.

                       CODE OF BUSINESS CONDUCT AND ETHICS
                  ORIGINAL VERSION ADOPTED ON FEBRUARY 24, 2004
                   CURRENT VERSION ADOPTED ON AUGUST 23, 2005

INTRODUCTION

     This Code of Business Conduct and Ethics (this "Code") covers a wide range
of business practices and procedures. It does not cover every issue that may
arise, but it sets out basic principles to guide all directors and employees of
the Company. All of our directors and employees must conduct themselves
accordingly and seek to avoid even the appearance of improper behavior. This
Code should also be provided to and followed by the Company's agents and
representatives, including consultants.

     If a law conflicts with a policy in this Code, you must comply with the
law. If you have any questions about these conflicts, you should contact the
appropriate person listed on Schedule A to this Code.

     Those who violate the standards in this Code will be subject to
disciplinary action, up to and including termination of employment. If you are
in a situation which you believe may violate or lead to a violation of this
Code, follow the guidelines described in Section 15 of this Code.

1.   COMPLIANCE WITH LAWS, RULES AND REGULATIONS

     It is the Company's policy to comply with all applicable laws, rules and
regulations. It is the personal responsibility of each director, employee and
representative of the Company to adhere to the standards and restrictions
imposed by those laws, rules and regulations. It would be impossible to
summarize here all the laws, rules and regulations with which the Company, our
directors, our employees and our representatives must comply; this Code refers
to only a few of them.

2.   PUBLIC DISCLOSURE

     It is the Company's policy that the information in our public
communications, including SEC filings, be full, fair, accurate, timely and
understandable. All directors, employees and representatives of the Company who
are involved in our disclosure process (including our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions) are responsible for acting
in furtherance of this policy. In particular, these individuals are required to
maintain familiarity with the disclosure requirements applicable to the Company
and are prohibited from knowingly misrepresenting, omitting or causing others to
misrepresent or omit material facts

<PAGE>

about the Company to others, whether within or outside the Company, including
the Company's independent auditors. In addition, any director, employee or
representative of the Company who has a supervisory role in the Company's
disclosure process has an obligation to discharge his or her responsibilities
diligently.

3.   CONFLICTS OF INTEREST

     A "conflict of interest" occurs when an individual's private interest
interferes in any way, or even appears to interfere, with the interests of the
Company as a whole. A conflict situation can arise when a director, employee or
representative of the Company takes actions or has interests that may make it
difficult to perform his or her work for the Company objectively and
effectively.

     Personal conflicts of interest are prohibited as a matter of Company
policy, unless they have been waived in writing by the Company. In particular,
no director, employee or representative of the Company may use or attempt to use
his or her position at the Company to obtain any improper personal benefit for
himself or herself, for his or her family members, or for any other person,
including loans or guarantees of obligations, from any person or entity. Service
to the Company should never be subordinated to personal gain and advantage.
Conflicts of interest should, to the extent possible, be avoided. The term
"family member" means a person's spouse, parents, children and siblings, whether
by blood, marriage or adoption, or anyone residing in such person's home.

     Any director, employee or representative of the Company who is aware of a
material transaction or relationship that could reasonably be expected to give
rise to a conflict of interest should discuss the matter promptly with an
appropriate contact person listed in Schedule A to this Code.

4.   INSIDER TRADING

     The Company has a long-standing commitment to comply with all securities
laws and regulations. U.S. securities laws prohibit persons from trading in the
securities of a company on the basis of material non-public information.
Material non-public information is any information concerning a company's
business, prospects, securities or market that an investor might consider
important in deciding whether to buy or sell the securities of the company or
that could affect the market price of the securities. Examples of material
information include: possible mergers; acquisitions or divestitures; actual or
estimated financial results or changes in dividends; purchases and sales of
investments in companies; obtaining or losing significant contracts; threatened
major litigation or developments in such matters; and major changes in business
strategies. If you have access to material information, whether it pertains to
the Company or another company, do not buy or sell Company securities or those
of the other company until at least two business days after the information has
been disclosed to the public by press release or similar announcement.


                                       -2-

<PAGE>

     Two simple rules can help protect you in this area: (1) do not use material
non-public information for personal gain, and (2) do not pass along such
information to someone else who does not have a reason to know.

5.   CORPORATE OPPORTUNITIES

     Directors, employees and representatives of the Company owe a duty to the
Company to advance the Company's legitimate business interests when the
opportunity to do so arises. Directors, employees and representatives of the
Company are prohibited from taking for themselves, or directing to a third
party, a business opportunity that is discovered through the use of corporate
property, information or position, unless the Company has already been offered
the opportunity and turned it down. More generally, directors, employees and
representatives of the Company are prohibited from using Company property,
information or position for personal gain or competing, directly or indirectly,
with the Company.

6.   COMPETITION AND FAIR DEALING

     The Company has a history of succeeding through honest business
competition. We do not seek competitive advantages through illegal or unethical
business practices. Each director, employee and representative of the Company
should endeavor to deal fairly with the Company's customers, service providers,
suppliers, competitors and employees. No director, employee or representative of
the Company should take unfair advantage of anyone through manipulation,
concealment, abuse of privileged information, misrepresentation of material
facts or any unfair dealing practice.

     The purpose of business entertainment and gifts in a commercial setting is
to create good will and sound working relationships, not to gain unfair
advantage with customers. No gift or entertainment should ever be offered,
given, provided or accepted by any director, employee and representative of the
Company unless it: (1) is not a cash gift, (2) is consistent with customary
business practices, (3) is not excessive in value, (4) cannot be construed as a
bribe or payoff and (5) does not violate any laws or regulations. Please discuss
with an appropriate contact person listed in Schedule A to this Code any gifts
or proposed gifts which you are not certain are appropriate.

7.   DISCRIMINATION AND HARASSMENT

     The diversity of the Company's employees is a tremendous asset. We are
firmly committed to providing equal opportunity in all aspects of employment and
will not tolerate any illegal discrimination or harassment of any kind. Examples
include derogatory comments based on racial or ethnic characteristics and
unwelcome sexual advances.

8.   HEALTH AND SAFETY

     The Company strives to provide a safe and healthy work environment. Each
employee has responsibility for maintaining a safe and healthy workplace for all
employees


                                       -3-

<PAGE>

by following safety and health rules and practices and reporting accidents,
injuries and unsafe equipment, practices or conditions.

     Violence and threatening behavior are not permitted. Employees should
report to work in condition to perform their duties, free from the influence of
illegal drugs or alcohol. The use of illegal drugs or alcohol in the workplace
will not be tolerated.

9.   RECORD-KEEPING

     The Company requires honest and accurate recording and reporting of
information in order to make responsible business decisions. For example, only
the true and actual number of hours worked should be reported.

     Many employees regularly use business expense accounts, which must be
documented and recorded accurately. If you are not sure whether a certain
expense is legitimate, contact the appropriate person listed on Schedule A to
this Code.

     All of the Company's books, records, accounts and financial statements must
be maintained in reasonable detail, must appropriately reflect the Company's
transactions and must conform both to applicable legal requirements and to the
Company's system of internal controls. Unrecorded or "off the books" funds or
assets should not be maintained unless permitted by applicable law or
regulation.

     Business records and communications often become public, and we should
avoid exaggeration, derogatory remarks, guesswork or inappropriate
characterizations of people and companies that can be misunderstood. This
applies equally to e-mail, internal memos and formal reports. Records should
always be retained or destroyed according to the Company's record retention
policies.

10.  CONFIDENTIALITY

     In carrying out the Company's business, directors, employees and
representatives of the Company often learn confidential or proprietary
information about the Company, our customers, prospective customers or other
third parties. Directors, employees and representatives of the Company must
maintain the confidentiality of all information so entrusted to them, except
when disclosure is authorized or legally mandated. Confidential or proprietary
information includes, among other things, any non-public information concerning
the Company, including all non-public information that might be of use to
competitors or harmful to the Company or our customers if disclosed. The
obligation to preserve confidential information continues even after a director,
employee or representative ceases to perform services for the Company.

11.  PROTECTION AND PROPER USE OF COMPANY ASSETS

     All directors, employees and representatives of the Company should protect
the Company's assets and ensure their efficient use. Theft, carelessness and
waste have a direct


                                       -4-

<PAGE>

impact on our profitability. Any suspected incident of fraud or theft should be
immediately reported for investigation. The Company's assets should not be used
for non-company business, though incidental personal use may be permitted. Any
act that involves theft, fraud, embezzlement or misappropriation of any property
is prohibited.

     The obligation of directors, employees and representatives of the Company
to protect our assets includes our proprietary information. Information
pertaining to acquisition and divestiture plans, competitive position,
directional strategy, customers, salaries, etc. must be protected from misuse.

     All software use must be in compliance with applicable laws and contractual
obligations assumed by the Company, including copyright laws and necessary
licensing. No employee or representative of the Company may use unlicensed
software or create or use unauthorized copies of software.

12.  PAYMENTS TO GOVERNMENT PERSONNEL

     The U.S. Foreign Corrupt Practices Act prohibits giving anything of value,
directly or indirectly, to officials of foreign governments or foreign political
candidates in order to obtain or retain business. It is strictly prohibited to
make illegal payments to government officials of any country.

     In addition, the U.S. government has a number of laws and regulations
regarding business gratuities which may be accepted by U.S. government
personnel. The promise, offer or delivery to an official or employee of the U.S.
government of a gift, favor or other gratuity in violation of these rules would
not only violate Company policy but could also be a criminal offense. State and
local governments, as well as foreign governments, may have similar rules.

13.  WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS

     This Code may be amended or modified by the Company's Board. Any waivers of
the provisions in this Code for the Company's directors, principal executive
officer, principal financial officer, principal accounting officer, controller
and other employees performing similar functions and other executive officers
may be granted only by the Company's Board. Any amendment to, or waiver from, a
provision of this Code that applies to a director, principal executive officer,
principal financial officer, principal accounting officer, controller and other
employee performing similar functions and other executive officers will be
publicly disclosed as required by applicable law, regulation or Nasdaq rules.

14.  REPORTING VIOLATION AND ENFORCEMENT

     All directors, employees and representatives of the Company must understand
and comply with this Code. Violation of this Code will not be tolerated and will
result in discipline for employees and other appropriate consequences for
non-employees.


                                       -5-

<PAGE>

     Any person who knows or believes that any director, employee or
representative of the Company has engaged or is engaging in company-related
conduct that violates this Code should report such information to an appropriate
contact person listed in Schedule A to this Code.

     You may report such conduct openly or anonymously without fear of
retaliation. The Company will not discipline, discriminate against or retaliate
against any person who reports such conduct in good faith, whether or not such
information is ultimately proven to be correct, or who cooperates in any
investigation or inquiry regarding such conduct. Confidentiality regarding those
who make compliance reports and those potentially involved is maintained to the
extent possible during a compliance investigation.

     In order to facilitate a complete investigation of a suspected violation, a
reporting person should be prepared to provide as many details as possible,
including a description of the questionable practice or behavior, the names of
any persons involved, the names of possible witnesses, dates, times, places and
any other available details.

     Based on its investigation, the Company will take prompt and appropriate
corrective action in response to the concern, if necessary, to ensure compliance
with legal and ethical requirements.

     Violation of this Code may result in disciplinary action, up to and
including termination of employment, removal from the board or other appropriate
consequences for non-employees. Any supervisor who directs or approves of any
conduct in violation of this Code, or who has knowledge of such conduct and does
not immediately report it, also will be subject to disciplinary action, up to
and including termination of employment.

     Legal proceedings may also be commenced, if necessary, to recover the
amount of any improper expenditures, any profits realized by the offending
director, employee or representative of the Company and any financial detriment
sustained by the Company. In appropriate circumstances, violations of this Code
will be reported to the applicable authority.

15.  COMPLIANCE PROCEDURES

     We must all work to ensure prompt and consistent action against violations
of this Code. However, in some situations it is difficult to know if a violation
has occurred. Since we cannot anticipate every situation that will arise, it is
important that we have a way to approach a new question or problem. These are
the steps to keep in mind:

-    Make sure you have all the facts. In order to reach the right solutions, we
     must be as fully informed as possible.

-    Ask Yourself Questions. If you are in doubt about a business conduct
     situation, ask yourself the following questions:


                                       -6-

<PAGE>

-    Is it legal?

-    Does it violate this Code?

-    Is it consistent with the Company's values?

-    Is it fair and just?

-    How does it make me feel about myself?

-    What would my family think about it?

-    How would it look in a newspaper article?

-    Will I sleep soundly tonight?

-    What would I tell my child to do?

-    Does it have the appearance of impropriety?

-    Clarify your responsibility and role. In most situations, there is shared
     responsibility. Are your colleagues informed? It may help to get others
     involved and discuss the problem.

-    Discuss the problem with your supervisor. This is the basic guidance for
     all situations. In many cases, your supervisor will be more knowledgeable
     about the question and will appreciate being brought into the
     decision-making process. Remember that it is your supervisor's
     responsibility to help solve problems.

-    Seek help from Company resources. If you feel that it may not be
     appropriate to discuss an issue with your supervisor, or where you do not
     feel comfortable approaching your supervisor with your question, discuss it
     with the appropriate person listed on Schedule A to this Code.

-    Always ask first, act later: If you are unsure of what to do in any
     situation, seek guidance before you act.


                                       -7-

<PAGE>

                                   SCHEDULE A

                                  CONTACT LIST

HOTLINE #: CHIEF FINANCIAL OFFICER   507-535-1210
           CORPORATE SECRETARY       507-535-1205

DIRECTORS AND EXECUTIVE OFFICERS

CONTACT:

     -    Chairman of the Board

     -    Chair of the Audit Committee

     -    Corporate Secretary

     -    Chief Financial Officer

OTHER EMPLOYEES

CONTACT:

     -    The employee's immediate supervisor

     -    Human Resource representative

     -    Corporate Secretary

     -    Chief Financial Officer

     -    Chair of the Audit Committee

COMPANY REPRESENTATIVES

CONTACT:

     -    Human Resource representative

     -    Corporate Secretary

     -    Chief Financial Officer

This contact list is subject to change from time to time. Any change to this
contact list shall not be deemed an amendment to this Code.

<PAGE>

                           RECEIPT AND ACKNOWLEDGMENT

I acknowledge that I have received and will comply with the Code of Business
Conduct and Ethics. I understand and agree that the Code of Business Conduct and
Ethics is NOT an employment contract between HMN Financial Inc. and me.

I understand that if I have questions related to the standards of conduct
outlined in the Code of Business Conduct and Ethics, I am to discuss them
promptly with an appropriate contact person listed in Schedule A attached to the
Code of Business Conduct and Ethics.


Signature                                               Date:
          -------------------------------------------         ------------------

Print Name
           ---------------------------------------------------------------------

Employee Number                                    Mail Station
                -------------------------------                 ----------------

Return this card to:
                      ------------------

                      ------------------

                      ------------------