NSBK

Northern Star Financial, Inc. (OTCBB: NSBK) the parent company of Northern Star Bank announced today that Northern Star Bank has entered into an agreement and consented to the issuance of an order by the Federal Deposit Insurance Corporation ("FDIC") to take affirmative actions in order to improve and strengthen the bank's operations.

The order cites weaknesses in bank operations and condition, including inadequate management, capital and earnings, excessive loan losses and an excessive level of adversely classified loans. The order alleges that the bank is operating with an inadequate allowance for loan losses, hazardous lending and lax collection practices and an inadequate funds management policy and loan review system. The order requires, among other things, that the bank improve earnings and capital levels, develop a management plan, increase board participation, improve funds management practices, reduce concentrations of credit, improve lending and collection practices and policies, increase its allowance for anticipated loan and lease losses and adhere to regulatory restrictions on inter-company payments. The bank entered into the agreement without admitting or denying any charges of unsafe or unsound banking practices and violations of laws or regulations.

Northern Star Bank President and Chief Executive Officer, Tom Stienessen said: "The deterioration in the commercial real estate markets has resulted in an unprecedented decline in the value of real estate contributing to the challenges the bank otherwise faces in recessionary times. While there is a lot of second guessing and finger pointing by congress and regulators, banks and bankers are required to deal with the here and now. We are diligently working with the FDIC to address the requirements and concerns included in the agreement and the order. This process is designed to improve stability and the operation of the bank and help us in this challenging time."

Stienessen reported that the bank is considered "Well Capitalized" by regulatory standards and the bank is participating in the FDIC's transaction account guarantee program in which all funds in non-interest bearing transaction deposit accounts will be protected in full. This insurance coverage on non-interest-bearing transaction accounts is over and above the $250,000 coverage already provided to customers by the FDIC. The coverage will last through December 31, 2013.

The Company commenced operations on January 25, 1999 as a bank holding company whose subsidiary provides financial services. Northern Star Bank's business is that of a financial intermediary and consists primarily of attracting deposits from the general public and using such deposits, together with borrowings and other funds, to make secured and unsecured loans to business and professional concerns and mortgage loans secured by residential real estate and other consumer loans. The Bank operates two full-service offices that are located in Mankato and St. Cloud, Minnesota.

THIS PRESS RELEASE CONTAINS FORWARD-LOOKING INFORMATION AND ACTUAL RESULTS MAY DIFFER.

Statements that Northern Star Financial may publish, including those in this announcement that are not strictly historical, are "forward-looking" statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are inherently unreliable and actual results may vary. Factors which could cause actual results to differ from these forward-looking statements include changes in the competitive marketplace, changes in the interest rate environment, economic conditions, outcome of pending litigation, risks associated with credit quality and other factors discussed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact: Thomas Stienessen Chief Executive Officer (507) 387-2265