July 14, 2008

FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION

Bethlehem, Pa. Contact Joseph T. Svetik, President

610-691-2233

First Star Bancorp, Inc. reported net income for the year ended June 30, 2008 of $602,000, a decrease of 2,642,000, or 81%, as compared to net income of $3,244,000 for the year ended June 30, 2007. The decrease is primarily attributable to the recognition of a loss of $2,730,000 for a redemption in kind transaction that was initiated to liquidate a position in the AMF Ultra-Short Mortgage Fund. The fund’s net asset value has declined significantly. Lack of liquidity of certain CMO securities in the fund contributed to the decline. The underlying securities of $35.0 million were delivered to the bank and are now part of the bank’s investment portfolio. Net interest income for the year ended June 30, 2008 was $9,334,000, representing an increase of $7,000, or 1%, compared to net interest income of $9,327,000 for the year ended June 30, 2007.

First Star Bancorp, Inc. also reported a net loss for the quarter ended June 30, 2008 of $1,566,000, representing a decrease of $2,180,000, or 355%, as compared to net income of $614,000 for the three months ended June 30, 2007. The loss resulted from the redemption in kind transaction. Net interest income for the three months ended June 30, 2008 was $2,394,000 an increase of $136,000, or 6%, as compared to net interest income of $2,258,000 for the three months ended June 30, 2007. First Star Bancorp, Inc. had assets of $669.6 million at June 30, 2008.

The company also reported that it contributed approximately $600,000 to its employee stock ownership plan trust during the fiscal year ending June 30, 2008. The employee stock ownership plan trust purchased a corresponding amount of the stock of the company in open market transactions during the fiscal year and utilized such company contributions and/or borrowed funds to effect such stock purchases.

First Star Bancorp, Inc. is the holding company for First Star Savings Bank which serves the Lehigh Valley through its main office in Bethlehem and branch offices in Alburtis, Allentown, Bath, Nazareth, Palmer Township, Wind Gap and New Tripoli. Deposits at First Star are insured up to the legal maximum (generally, $250,000 per depositor) by the Federal Deposit Insurance Corporation (FDIC).

Forward Looking Statements/Safe Harbor Provision

This release contains “forward-looking statements” that are based on assumptions and may describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by the use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, changes in market interest rates, regional and national economic conditions, legislative and regulatory changes, monetary and fiscal policies of the United States government, including policies of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, changes in the real estate market values in the Company’s market area, ability to operate new branch offices profitably and changes in relevant accounting principles and guidelines. These risks and uncertainties should be considered in evaluating any forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence

FIRST STAR BANCORP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share data)

Selected Financial Data:

	At June 30, 2008	At June 30, 2007
Total assets..................................................	$669,572	$555,348
Cash and cash equivalents.............................	13,661	3,576
Investment securities.....................................	113,439	145,444
Mortgage-backed securities ..........................	304,925	162,257
Loans receivable, net....................................	209,235	227,248
Deposits.......................................................	339,034	354,515
Borrowings...................................................	288,267	155,600
Stockholder’s equity......................................	35,669	38,625
Non-performing loans....................................	1,826	3,626
Non-performing assets..................................	$ 2,359	$ -

Selected Operations Data:

	Three Months Ended June 30,			Year Ended June 30,
	2008	2007		2008	2007
Interest and dividend income.....	$8,468		$7,996	$32,708		$32,746
Interest expense ..........................	6,074		5,738	23,374		23,419
Net interest income.................	2,394		2,258	9,334		9,327
Provision for loan losses............	90		150	255		371
Net interest income after provision for loan losses.........	2,304		2,108	9,079		8,956
Other income.................................	(2,339)		244	(1,458)		1,773
Other expense...............................	1,738		1,482	6,435		6,070
Income before taxes.....................	(1,773)		870	1,186		4,659
Provision for income taxes..........	(204)		256	587		1,415
Net Income...............................	(1,569)		614	599		3,244
Earnings per share basic	$(1.70)		$0.44	$0.56		$3.19
Earnings per share diluted	$(0.90)		$0.27	$0.45		$1.90