First State Offers To Redeem Trust Preferred Securities

First State Bancorporation (the “Company”)(NASDAQ:FSNM) today announced that the Company has commenced cash offers to purchase, and consent solicitations relating to, any and all of its outstanding trust preferred securities (“TruPS”) as part of its plan to recapitalize its balance sheet in order to be able to continue to operate through 2010 and beyond, and to comply with a written agreement entered into with its principal regulators.

TRUST PREFERRED SECURITIES

The terms and conditions of the purchase offer for each series of TruPS in the table below (each, an “Offer,” and collectively the “Offers”) are described in the Offers to Purchase for Cash and Consent Solicitations Statement dated June 7, 2010 (the “Offers to Purchase Statement”) and the related Letter of Transmittal and Consent, which are being sent to holders of the TruPS (the “Holders”).

Title of Security				Liquidation Amount Outstanding				Offer to Purchase Price per $1,000 of Liquidation Amount				Aggregate Purchase Price
First State NM Statutory Trust III				$5,000,000				$150				$750,000
First State NM Statutory Trust IV				10,000,000				$150				1,500,000
First State NM Statutory Trust V				7,500,000				$150				1,125,000
First State NM Statutory Trust VI				20,000,000				$150				3,000,000
First State NM Statutory Trust VII				21,000,000				$150				3,150,000
First State NM Statutory Trust VIII				22,500,000				$150				3,375,000
Front Range Capital Trust II				9,200,000				$150				1,380,000
Total				$95,200,000								$14,280,000

The Offer for each series of TruPS will expire at 5:00 p.m., Eastern Time, on July 7, 2010, unless extended or earlier terminated by the Company (the “Expiration Time”). TruPS purchased in the Offers will be paid for on the settlement date for the applicable Offer, which, assuming the applicable Offer is not extended, will occur promptly after the applicable Expiration Time or any extension thereof.