CFHI Coast Finl Hldgs (MM)

BRADENTON, Fla., Aug. 12 /PRNewswire-FirstCall/ -- Coast Financial Holdings, Inc. (NASDAQ:CFHI), parent company of Coast Bank of Florida, today reported that strong loan and deposit growth in the second quarter contributed to a 33% increase in net interest income for the second quarter ended June 30, 2005, compared to the second quarter a year ago. Assets grew 40% to $468.3 million, deposits increased 44% to $394.7 million and loans grew 40% to $359.6 million from year ago levels. Following a $1.3 million provision for loan losses in the second quarter of 2005, Coast Financial reported a loss of $958,000, or $0.25 per basic share during the second quarter, compared to earnings of $235,000, or $0.06 per basic share, in the second quarter last year. For the first six months of 2005, the Company reported a loss of $881,000, or $0.23 per basic share, compared to earnings of $244,000, or $0.07 per basic share, in the first half of 2004. The decrease in net income was primarily due to a $1.3 million provision for loan losses and the settlement of a legal proceeding with a past employee of a former subsidiary of Coast Bank. The $1.3 million provision for loan losses was primarily due to certain loans that originated before February 2004, including those which resulted in charge offs of $1.1 million. The costs associated with the settlement of the legal proceeding were approximately $185,000, including the payment of the settlement itself. The Company estimates that legal fees and lost interest from the charged-off loans was approximately $304,000. More financial information can be found in the Company's second quarter 10-Q previously filed with the Securities and Exchange Commission. Coast Bank also joined forces with a major ATM network, which will allow customers, with no surcharge, access to 32,000 ATM machines throughout the country. "We are very pleased with our growth, branch expansion and expanded ATM delivery channels to better serve our new and existing customers. The staff has worked tirelessly to continue to make Coast a true success story. While unfortunate, the provision and related write-off of several credits and the settlement of the employee lawsuit are related to activities of prior management and are not representative of how Coast now conducts business. We are pleased to get these issues behind us so that we can focus on continuing to improve shareholder value through profitable growth. Excluding these items, we believe we are on track with our business plan and are very pleased with the progress of the Coast team. We now have a 12-branch network in Pinellas and Manatee counties, 36 Coast branded ATMs located in Kash n' Karry/Sweetbay Markets and 32,000 ATMs available to our clients free of any service charges," said Brian Peters, president and CEO. About the Company As of June 30, 2005, Coast Financial Holdings, Inc. had $468.3 million in total assets and through its banking subsidiary, Coast Bank of Florida ( http://www.coastfl.com/ ), operates 12 full-service banking locations in Manatee and Pinellas County, Florida. Coast Bank of Florida is a commercial bank that provides full-service banking operations to its customers from its headquarters location and from branch offices in Bradenton, Palmetto, Longboat Key, Seminole, Kenneth City and St. Petersburg. This press release and other statements to be made by the Company contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, including but not limited to statements relating to projections and estimates of earnings, revenues, cost-savings, expenses, or other financial items; statements of management's plans, strategies, and objectives for future operations, and management's expectations as to future performance and operations and the time by which objectives will be achieved; statements concerning proposed new products and services; and statements regarding future economic, industry, or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as "believe," expect," anticipate," project," and conditional verbs such as "may," "could," and "would," and other similar expressions or verbs. Such forward-looking statements reflect management's current expectations, beliefs, estimates, and projections regarding the Company, its industry and future events, and are based upon certain assumptions made by management. These forward-looking statements are not guarantees of future performance and necessarily are subject to risks, uncertainties, and other factors (many of which are outside the control of the Company) that could cause actual results to differ materially from those anticipated. These risks, uncertainties, and other factors include, among others: changes in general economic or business conditions, either nationally or in the State of Florida, changes in the interest rate environment, the Company's ability to successfully open and operate new branches and collect on delinquent loans, changes in the regulatory environment, and other risks described in the Company's Form 10-KSB for the fiscal year ended December 31, 2004 and as described from time to time by the Company in other reports filed by it with the Securities and Exchange Commission. Any forward-looking statement speaks only to the date on which the statement is made, and the Company disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. If the Company does update any forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to that statement or any other forward-looking statements. Contacts: Brian P. Peters, President and CEO 877-COASTFL Brian F. Grimes, EVP and CFO 877-COASTFL DATASOURCE: Coast Financial Holdings, Inc. CONTACT: Brian P. Peters, President and CEO, , or Brian F. Grimes, EVP and CFO, , both of Coast Financial Holdings, +1-877-COASTFL Web site: http://www.coastbankflorida.com/

Copyright