December 3, 2008

FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION

Bethlehem, Pa. Contact Joseph T. Svetik, President

610-691-2233

FIRST STAR BANCORP ANNOUNCES DIVIDEND DECLARATION

Bethlehem, PA, December 3, 2008. First Star Bancorp, Inc. (the “Company”) announced today that on November 25, 2008, the Company’s board of directors has declared a cash dividend of $.03 per share on the Company’s outstanding common stock. The cash dividend will be payable on January 7, 2009 to stockholders of record on December 19, 2008.

The Company reported a net loss for the three months ended September 30, 2008 of $90,000, or $0.02 per diluted share, compared to net income of $809,000, or $0.40 per diluted share, for the three months ended September 30, 2007. The decrease is primarily attributable to a write-down to market value of FNMA and FHLMC Preferred Stocks held by the company. The write-down was $998,000, net of taxes.

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 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, New Tripoli and Wind Gap. Deposits at First Star Savings Bank are insured up to the legal maximum (generally, $250,000 per depositor) by the Federal Deposit Insurance Corporation (FDIC).

This news release may contain forward-looking statements, which can be identified by the use of words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions. Such forward-looking statements and all other statements that are not historic facts are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. These factors include, but are not limited to, general economic conditions, changes in the interest rate environment, legislative or regulatory changes that may adversely affect our business, changes in accounting policies and practices, changes in competition and demand for financial services, adverse changes in the securities markets, changes in deposit flows and changes in the quality or composition of the Company’s loan or investment portfolios. Should one or more of these risks materialize, actual results may vary from those anticipated, estimated or projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as may be required by applicable law or regulation, the Company assumes no obligation to update any forward-looking statements.

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.......................................................	334,046	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 (loss)......................	(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

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