CFHI Coast Finl Hldgs (MM)

Coast Financial Holdings, Inc. Earns $269,000 or $.07 Per Share in Third Quarter BRADENTON, Fla., Oct. 19 /PRNewswire-FirstCall/ -- Coast Financial Holdings, Inc. (NASDAQ:CFHI), parent company of Coast Bank of Florida, today reported earnings for the quarter ended September 30, 2004. Net income was $269,000, or $0.07 per diluted share, compared to a net loss of $150,000, or $0.11 per diluted share, in the third quarter of 2003. For the nine months ended September 30, 2004, net income was $513,000, or $0.14 per diluted share, compared to a net loss of $100,000, or $0.07 per diluted share before dividends paid on preferred stock, for the same period a year earlier. "The Board and I are very pleased with the commitment to excellence and dedication of the staff in implementing the business strategy initiated at the beginning of 2004. We continue to experience strong loan demand which has been funded by deposit growth at branches opened during the last 12 months. We have added a Consumer Lending Manager to our management team and have modified our organizational structure such that each of the lending managers reports directly to me. This will allow each of the lending managers (residential, commercial/commercial real estate, consumer) to focus on their respective product offerings and clients and continue to improve profitability while ensuring excellent credit quality. While we continue to expand our branch franchise in Manatee County, we are actively evaluating our strategy to include adjacent markets to ensure that we take advantage of market opportunities as they become available," said Brian P. Peters, President and CEO of Coast Financial Holdings, Inc. About the Company 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 its headquarters location and 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, 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, 2003 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. (tables follow) RESULTS OF OPERATIONS Quarter Ended (In thousands except shares and per share data) Sep 30, Jun 30, Sep 30, 2004 2004 2003 (unaudited) Interest income: Loans receivable $4,122 $3,861 $2,896 Securities 307 245 192 Other interest-earning assets 4 25 4 Total interest income 4,433 4,131 3,092 Interest expense: Deposits 1,822 1,705 1,301 Borrowings 111 73 95 Total interest expense 1,933 1,778 1,396 Net interest income before provision for loan losses 2,500 2,353 1,696 Provision for loan losses: 319 491 198 Net interest income after provision for loan losses 2,181 1,862 1,498 Non-interest income: Service charges on deposit accounts 118 106 80 Gain on sale of loans held for sale 371 379 370 Gain on sale of securities available for sale 4 -- -- Gain on sale of mortgage loan servicing rights -- 118 -- Gain on sale of merchant services -- 212 -- Gain on sale of credit card portfolio 173 -- -- Net loan servicing (costs) fees -- (101) (89) Asset management fees -- -- 92 Other service charges and fees 87 220 140 Other 13 15 (22) Non-interest expense: Salary and employee benefits 1,339 1,281 1,297 Occupancy and equipment 406 300 300 Data processing 187 258 210 Professional fees 102 141 89 Telephone, postage, and supplies 168 168 142 Advertising 90 59 98 Settlement on impaired security -- -- -- Other 222 223 173 Total non-interest expense 2,514 2,430 2,309 Income before provision for income taxes 433 381 (240) Income tax expense (benefit): 164 146 (90) Net income (loss) 269 235 (150) Dividends on preferred stock -- -- -- Net income (loss) applicable to common stockholders $269 $235 $(150) Earnings (loss) per share, basic $0.07 $0.06 $(0.11) Earnings (loss) per share, diluted $0.07 $0.06 $(0.11) Weighted average shares outstanding, basic 3,753,065 3,748,110 1,350,450 Weighted average shares outstanding, diluted 3,786,223 3,770,561 1,350,450 RESULTS OF OPERATIONS Nine Months Ended (In thousands except shares and per Sep 30, Sep 30, share data) 2004 2003 (unaudited) Interest income: Loans receivable $11,587 $7,952 Securities 790 743 Other interest-earning assets 41 47 Total interest income 12,418 8,742 Interest expense: Deposits 4,998 3,906 Borrowings 269 281 Total interest expense 5,267 4,187 Net interest income before provision for loan losses 7,151 4,555 Provision for loan losses: 1,139 510 Net interest income after provision for loan losses 6,012 4,045 Non-interest income: Service charges on deposit accounts 320 211 Gain on sale of loans held for sale 1,033 1,053 Gain on sale of securities available for sale 4 98 Gain on sale of mortgage loan servicing rights 118 -- Gain on sale of merchant services 212 -- Gain on sale of credit card portfolio 173 -- Net loan servicing (costs) fees (159) (99) Asset management fees 69 332 Other service charges and fees 498 457 Other 35 (14) Non-interest expense: Salary and employee benefits 3,950 3,668 Occupancy and equipment 1,041 785 Data processing 694 640 Professional fees 419 292 Telephone, postage, and supplies 504 401 Advertising 246 242 Settlement on impaired security -- (400) Other 632 614 Total non-interest expense 7,486 6,242 Income before provision for income taxes 829 (159) Income tax expense (benefit): 316 (59) Net income (loss) 513 (100) Dividends on preferred stock -- (105) Net income (loss) applicable to common stockholders $513 $(205) Earnings (loss) per share, basic $0.14 $(0.07) Earnings (loss) per share, diluted $0.14 $(0.07) Weighted average shares outstanding, basic 3,747,091 1,350,450 Weighted average shares outstanding, diluted 3,773,069 1,350,450 FINANCIAL CONDITION (In thousands except shares and per Sep 30, Dec 31, Sep 30, share data) 2004 2003 2003 (unaudited) ASSETS Cash and due from banks $9,657 $4,667 $7,856 Federal funds sold 185 3,000 564 Cash and cash equivalents 9,842 7,667 8,420 Securities available for sale 46,695 26,972 26,321 Loans, net of allowance for loan losses of $2,839, $3,163, and $1,632, at 9/30/04, 12/31/03, and 9/30/03 respectively 278,986 214,240 176,277 Foreclosed real estate -- -- 73 Federal Home Loan Bank stock, at cost 854 592 592 Premesis and equipment, net 16,751 8,614 8,256 Accrued interest receivable 1,497 1,187 1,015 Deferred income taxes 2,077 2,525 1,629 Loan servicing rights -- 1,134 1,085 Other assets 1,085 952 1,080 $357,787 $263,883 $224,748 LIABILITIES Deposits: Non-interest bearing demand deposits $21,967 $20,293 $19,977 Savings, NOW and money-market deposits 91,759 46,934 39,975 Time deposits 184,926 140,513 127,667 Total deposits 298,652 207,740 187,619 Federal Home Loan Bank advances 6,000 7,500 3,100 Other borrowings 16,069 12,097 15,752 Other liabilities 2,468 2,881 2,472 323,189 230,218 208,943 STOCKHOLDERS' EQUITY Preferred stock, $.01 par value; $11 liquidation value; 5,000,000 shares authorized -- -- 5,995 Common stock, $5 par value; 20,000,000 shares authorized 18,780 18,677 6,752 Additional paid-in capital 19,447 19,351 5,897 Accumulated deficit (3,541) (4,055) (2,530) Accumulated other comprehensive income (88) (308) (309) 34,598 33,665 15,805 Total liabilities and stockholders' equity $357,787 $263,883 $224,748 Preferred shares issued and outstanding at end of period -- -- 545,000 Common shares issued and outstanding at end of period 3,756,050 3,735,450 1,350,450 Book value per common share at end of period $9.21 $9.01 $7.26 Contacts: Brian P. Peters, President and CEO 941-752-5900 Brian F. Grimes, EVP and CFO 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, Inc., +1-941-752-5900 Web site: http://www.coastbankflorida.com/

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