CFHI Coast Finl Hldgs (MM)

Coast Financial Implements Cost Savings Strategies, Reduces Risk, Continues Growth Plan BRADENTON, Fla., June 24 /PRNewswire-FirstCall/ -- Coast Financial Holdings, Inc. (NASDAQ:CFHI), parent company of Coast Bank of Florida, announced today that it has completed the sale of a $112 million portfolio of residential servicing for approximately book value. Coast Financial made the strategic decision to sell the residential servicing portfolio in the first quarter of 2004. At that time it began selling residential loans servicing released, reducing the potential interest rate risk associated with retained servicing. "With this transaction completed and others in the works, we are in a position to execute on our plan to improve the growth and profitability of our community bank franchise without distraction," said Brian Peters, president and CEO. "Our focus will be to continue profitable growth through branching and strong loan demand and implementing efficiencies throughout the company. This strategy, we believe, is the cornerstone for building shareholder value going forward." Coast Financial has also entered into a definitive agreement for the sale of its proprietary merchant services portfolio and credit card portfolio. While both sales will result in a gain on sale, the exact amount will not be known until closing. "Merchant and credit card operations are clearly business lines that have risks that are unlike those of traditional commercial banking," said Peters. "While we will continue to offer these services to our customers through a third party relationship, it simply didn't make sense from a financial or risk perspective to manage these products in-house." Each of these transactions is set to close in the third quarter. In addition, the company will begin outsourcing data processing later this month and item processing next quarter. "We believe it is important for us to focus on our core business of originating deposits and generating loan growth and use the talents of a vendor for data and item processing activities. We will gain efficiencies from this change and have the flexibility for significant growth without the concern for new equipment, staffing and additional office space," said Peters. "Further, we are pleased to announce that, prior to any overhead allocations, six of our seven retail branch locations are profitable on a stand-alone basis. The seventh retail branch, which opened May 18 in Downtown Bradenton, is expected to be profitable within 12 months. We are progressing with the new downtown corporate office location and expect to relocate our administrative functions to that location later this year and sell the existing operations center. Finally, we have two additional branch sites, one owned and the other under contract, which are in the planning stages of development, and we are evaluating other potential sites within our market area," concluded Peters. Coast Financial Holdings, Inc. through its banking subsidiary, Coast Bank of Florida (http://www.coastbankflorida.com/), operates seven full-service banking locations in Manatee County, Florida. Coast Bank of Florida is a general commercial bank that provides full-service banking operations to its customers from branch offices in Bradenton, Palmetto and Longboat Key. Through an arrangement with Raymond James Financial Services, Inc., Coast makes asset and investment management services and insurance products available to its customers. 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. 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: the Company's ability to execute planned transactions and efficiently outsource its data and item processing, changes in general economic or business conditions, either nationally or in the State of Florida, changes in the regulatory environment, and other risks described in the Company's initial public offering prospectus 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 Brian F. Grimes, EVP and CFO 941-752-5900 941-752-5900 DATASOURCE: Coast Financial Holdings, Inc. CONTACT: Brian P. Peters, President and CEO, , or Brian F. Grimes, EVP and CFO, , both of Coast Financial Holdings, +1-941-752-5900 Web site: http://www.coastbankflorida.com/

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