NSBK

Northern Star Financial, Inc. (the Company) (OTCBB:NSBK) today announced that it has signed a letter of intent with an undisclosed investor that if consummated provides for the sale of up to a 49% interest in the Company for $2.9 million. Consummation of the transaction is subject to a number of conditions, including the negotiation and execution of a definitive agreement, approval by the Company's board of directors, and receipt of all necessary and required regulatory approvals. Accordingly, there can be no assurance that the two parties will enter into a definitive agreement or that the sale and purchase will be consummated. "The investment would strengthen our corporate structure and balance sheet and position us to continue the growth and business development which was interrupted by the litigation the Company successfully endured during the past three years," stated Tom Stienessen, Chief Executive Officer of Northern Star Financial, Inc. "We have established an excellent core base of business in two of the strongest markets in Minnesota and we are very pleased to have negotiated the financial terms of what we believe will be a very synergistic opportunity for additional growth and development," Stienessen remarked. 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.