SOURCE: Northern Star Financial, Inc.

March 20, 2008 12:00 ET

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

MANKATO, MN--(Marketwire - March 20, 2008) - 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 bank's 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.

Contact Information

  • Contact:
    Thomas Stienessen
    Chief Executive Officer
    Northern Star Financial, Inc
    (507) 387-2265

    Louis Olsen
    Chief Executive Officer
    River City Group
    (651) 406-5000