NSBK

Northern Star Financial, Inc. (OTCBB: NSBK) today announced results for the Company and its wholly-owned subsidiary Northern Star Bank for the second quarter of the fiscal year ending June 30, 2010.

Northern Star Financial, Inc., the parent company of Northern Star Bank, reported a net loss of $209,455 (a basic loss of $0.17 per share) in the second quarter ended December 31, 2009 compared with a net loss of $166,929 (a basic loss of $0.18 per share) during the same period of the prior fiscal year. The Company reported a basic loss per share of $0.20 for the six month period ended December 31, 2009 compared with a basic loss per share of $0.31 during the same six month period of the prior fiscal year.

The Company's total assets decreased $1.77 million to $45.22 million at the end of the second quarter from $46.98 million at fiscal year ending June 30, 2009. Total deposits for the second quarter ended December 31, 2009 decreased $0.96 million to $34.46 million from $35.42 million at fiscal year ending June 30, 2009. Loan receivables net of an allowance for loan losses decreased by $4.43 million over the prior fiscal year end.

When comparing the Company's operating results for the first six months of fiscal year 2010, Stienessen reported that management was actively continuing to reduce the level of debt at the Company and nonperforming loans held on its subsidiary books. Northern Star Bank reported $1.31 million in loans on non-accrual status and another $1.39 million in other real estate owned status at December 31, 2009 from which no interest income was being recognized. Interest forgone or reversed on non-accrual and other real estate owned loans during the first six months of the fiscal year totaled approximately $155 thousand. Stienessen said that at quarter end Northern Star Bank had reduced its exposure in commercial real estate loans to $6.38 million or 17% of gross loans and 171% of capital. Stienessen noted that exclusive of $500 thousand in an unplanned provision made to the Bank's Allowance for Loan and Lease Losses and a $40 thousand increase in FDIC insurance; operating results were substantially on track with expectations.

Stienessen made public the election of long time Mankato area businessmen Randall Westman and Daniel Robinson to the Company and Bank board of directors and the appointment of former Security State Bank of Mankato President David Knopick to the position of Northern Star Bank President and Senior Lender.

The Company announced plans to issue five year warrants to shareholders of record as of December 31, 2009 to purchase additional shares of the Company's common stock at a price of $1.00 per share.

The Company operates 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.

               Northern Star Financial, Inc. and Subsidiary
              Consolidated Statements of Financial Condition



                                                December 31,    June 30,
                                                ------------  ------------
ASSETS                                              2009          2009
                                                ------------  ------------

Cash and due from banks                         $  1,917,726  $  2,258,371
Federal funds sold                                         -             -
                                                ------------  ------------
  Cash and cash equivalents                        1,917,726     2,258,371
Securities available for sale, at fair value       3,204,542     3,164,288
Federal Home Loan Bank stock, at cost                363,600       505,600
Loans held for sale                                5,374,521     3,256,515
Loans receivable, net of allowance for loan and
 lease losses of $763,042 and $317,403            31,280,746    35,713,075
Property and equipment, net of depreciation          201,170       223,870
Cash surrender value of life insurance             1,215,508       259,698
Accrued interest receivable                          209,288     1,194,023
Other real estate owned                            1,368,684       242,943
Other assets                                          80,479       163,958
                                                ------------  ------------
    Total Assets                                $ 45,216,264    46,982,341
                                                ============  ============


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits                                 $  2,561,365  $  2,444,713
NOW and money market                               8,131,039     7,016,803
Savings                                            4,701,077     4,830,489
Time deposits                                     19,062,357    21,128,344
                                                ------------  ------------
  Total deposits                                  34,455,838    35,420,349
Federal funds purchased                            3,704,670     1,154,600
Notes payable and other borrowings                 3,990,029     7,268,144
Convertible subordinated notes payable             2,355,000     2,355,000
Accrued interest payable                             241,338       250,829
Other liabilities                                     89,866       141,274
                                                ------------  ------------
    Total Liabilities                             44,836,741    46,590,196

Stockholders' Equity
Common stock, $0.01 par value, 15,000,000
 shares authorized; 1,215,358 and 1,030,647
 shares issued outstanding respectively               12,153        10,306
Undesignated stock, par value $0.01 per share
 5,000,000 shares authorized, no shares issued
Paid in Capital                                    6,565,990     6,383,126
Accumulated deficit                               (6,155,046)   (5,917,297)
Accumulated comprehensive income (loss)              (43,574)      (83,990)
                                                ------------  ------------
    Total Stockholders' Equity                       379,523       392,145
                                                ------------  ------------
    Total Liabilities and Stockholders' Equity    45,216,264    46,982,341
                                                ============  ============





               Northern Star Financial, Inc. and Subsidiary
              Unaudited Consolidated Statements of Operation



                          For the Three Months       For the Six Months
                           Ended December 31,        Ended December 31,
                        ------------------------  ------------------------
                            2009         2008         2009         2008
                        -----------  -----------  -----------  -----------

Interest Income:
Loans receivable        $   509,254  $   668,358  $ 1,094,577  $ 1,361,341
Securities available
 for sale                    32,223       56,361       66,957      113,856
Due from banks                8,678        6,130       20,232        6,130
Federal funds sold              455        2,199        1,163       12,482
                        -----------  -----------  -----------  -----------
    Total interest
     income                 550,610      733,048    1,182,929    1,493,809
                        -----------  -----------  -----------  -----------

Interest Expense:
Deposits                    172,141      300,397      371,832      641,435
Borrowed funds              119,408      151,893      261,580      310,073
                        -----------  -----------  -----------  -----------
    Total interest
     expense                291,549      452,290      633,412      951,508
                        -----------  -----------  -----------  -----------

Net interest income         259,061      280,758      549,517      542,301
Provision for loan and
 lease losses                19,900       22,759       24,400       12,259
                        -----------  -----------  -----------  -----------

    Net interest income
     after provision
     for loan and
     lease losses           239,161      257,999      525,117      530,042
                        -----------  -----------  -----------  -----------

Non-interest income:
Other fees and service
 charges                     54,273       54,189      108,024      138,682
Sale of investments               -            -       46,801            -
Gain on sale of loans        22,841       23,567       45,762       73,005
                        -----------  -----------  -----------  -----------
    Total non-interest
     income                  77,114       77,756      200,587      211,687
                        -----------  -----------  -----------  -----------

Non-interest expense:
Compensation and
 employee benefits          223,390      217,661      414,957      451,689
Board fees                    5,200        5,450       10,800        9,950
Occupancy                    73,990       62,888      140,122      131,147
Printing and Supplies         6,507        6,755       10,216       16,186
Furniture, fixtures &
 equipment depreciation       8,632       11,085       17,385       19,520
Data Processing              56,435       71,796      107,204      127,611
Professional fees            68,614       50,505       96,737       81,223
Other                        82,962       76,544      166,032      182,255
                        -----------  -----------  -----------  -----------
    Total non-interest
     expense                525,730      502,684      963,453    1,019,581
                        -----------  -----------  -----------  -----------

Loss before income tax
 benefit                   (209,455)    (166,929)    (237,749)    (277,852)
Income tax benefit                -            -            -            -
                        -----------  -----------  -----------  -----------

Net loss                $  (209,455) $  (166,929) $  (237,749) $  (277,852)
                        ===========  ===========  ===========  ===========

Net (loss) per common
 share
Basic and diluted
 (loss) per share
 of common stock        $     (0.17) $     (0.18) $     (0.20) $     (0.31)
                        ===========  ===========  ===========  ===========

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