October 9, 2008

FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION

Bethlehem, Pa. Contact Joseph T. Svetik, President

610-691-2233

First Star Bancorp, Inc. reported a net loss for the three months ended September 30, 2008 of $90,000, a decrease of $899,000, or 111.12%, as compared to net income of $809,000 for the three months ended September 30, 2007. The loss is primarily due to a write-down to market value of FNMA and FHLMC Preferred Stocks held by the company. The write-down amount was $998,000, net of taxes. Excluding the write-down net income for the three months ended September 30, 2008 would have been $908,000. Net interest income for the three months ended September 30, 2008 was $2,514,000, representing an increase of $128,000, or 5.36%, as compared to net interest income of $2,386,000 for the three months ended September 30, 2007. First Star Bancorp, Inc. had assets of $685.37 million at September 30, 2008 as compared to $670.30 million at June 30, 2008.

The company also reported that it expects to contribute approximately $350,000 to its employee stock ownership plan trust during the fiscal year ending June 30, 2009. The employee stock ownership plan trust will purchase a corresponding amount of the stock of the company in open market transactions from time to time during the fiscal year and utilize 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 and Wind Gap. 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 Sept 30, 2008	At June 30, 2008
Total assets..................................................	$684,853	$670,298
Cash and cash equivalents.............................	3,765	13,661
Investment securities.....................................	120,360	113,578
Mortgage-backed securities ..........................	323,301	304,925
Loans receivable, net....................................	206,542	209,235
Deposits.......................................................	344,046	339,034
Borrowings...................................................	301,624	288,267
Stockholder’s equity......................................	33,802	35,244
Non-performing loans....................................	1,886	1,826
Non-performing assets..................................	$ 2,243	$ 2,359

Selected Operations Data:

	Three Months Ended Sept 30,
	2008	2007
Interest and dividend income.....	$8,470		$8,201
Interest expense ..........................	5,956		5,815
Net interest income.................	2,514		2,386
Provision for loan losses............	-		-
Net interest income after provision for loan losses.........	2,514		2,386
Other income.................................	(1,097)		236
Other expense...............................	1,739		1,464
Income (loss) before taxes..........	(322)		1,158
Provision (benefit) for income taxes.. ……………..	232)		349
Net Income (loss)....................	(90)		809
Earnings (loss) per share basic	$(0.09)		$0.71
Earnings (loss) per share diluted	$(0.02)		$0.40