Northern Star Financial, Inc. Announces Merger Agreement with River City Mortgage and RHS Title

  
    
  
  
    
      Northern Star Financial, Inc. (OTCBB: NSBK) today announced merger plans 
      for NSBK and River City Mortgage and RHS Title, wholly-owned 
      subsidiaries of River City Group of Eagan, Minnesota. The Agreement is 
      subject to regulatory approval. Terms of the deal were not disclosed.
    
    
      River City Mortgage is a mortgage banker involved in the origination of 
      residential real estate mortgage loans for various lenders. RHS Title is 
      a title insurance agency providing title insurance, escrow and closing 
      services in connection with residential and commercial real estate 
      properties. The Company was founded in 1984 as an originator of high 
      quality conventional and government guaranteed loans. River City 
      Mortgage and RHS Title will continue to operate under their current name 
      as an operating division and a subsidiary of Northern Star Bank. 
      Northern Star Bank is a wholly owned subsidiary of Northern Star 
      Financial.
    
    
      "We are very pleased to have reached this agreement providing for a 
      merger of equals," said Thomas Stienessen, Chief Executive Officer of 
      Northern Star Financial. "This is a major undertaking for our 
      organization that will be made easier by the long-term relationship we 
      have enjoyed and the commonality of interest. I have known and admired 
      the company and its principals for years, and we are excited about our 
      future potential together. We believe the resulting organization will 
      benefit from an expanded footprint in the market place and from the 
      managerial resources, clients, products, services and capital the merger 
      of our two companies brings”.
    
    
      "We are very excited about the opportunity to merge with Northern Star," 
      said Louis Olsen, the founder of River City. "We look forward to 
      becoming part of Northern Star Financial. Our long-term relationship and 
      trust lead us to this opportunity to grow together while benefiting our 
      customers, communities and shareholders. This is a natural fit for both 
      companies and will help us contribute to the banks growth and earnings. 
      We expect that we will double our mortgage originations and 
      significantly raise our visibility in the mortgage industry with an 
      expanded menu of loan products and services while positioning the 
      organization for continued growth and expansion”.
    
    
      The Northern Star organization will be joined by 65 additional River 
      City employees at seven title insurance offices and six prime production 
      offices in the Minneapolis – St Paul metro 
      area in addition to an office in Grand Forks, North Dakota and 
      Melbourne, Florida.
    
    
      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.