##### Table of Contents

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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark One)

|x | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------



For the quarterly period ended June 30, 2005



| ̈ | Transition report under Section 13 or 15(d) of the Exchange Act
|- | ---------------------------------------------------------------



For the transition period from  to



Commission file number 000-50433



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COAST FINANCIAL HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 14-1858265                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)



1301  6thAvenue West, Suite 300

Bradenton, Florida 34205

(Address of Principal Executive Offices)



(941) 752-5900

(Registrants Telephone Number, Including Area Code)



2412 Cortez Road West

Bradenton,
Florida 34207

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)



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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1394 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act.    YES ̈NO  x



Indicate the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date;



|                                        |  |                             
|--------------------------------------- |  | ----------------------------
|Common stock, par value $5.00 per share |  | 3,757,650 shares            
|(class)                                 |  | Outstanding at July 31, 2005



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##### Table of Contents

COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



INDEX



|                                                                                                                         |  |      
|------------------------------------------------------------------------------------------------------------------------ |  | -----
|                                                                                                                         |  | Page 
|PART I.
FINANCIAL INFORMATION                                                                                            |  |      
|                                                                                                                         | 
|Item 1.
Financial Statements                                                                                             |  |      
|                                                                                                                         | 
|Condensed Consolidated Balance Sheets - At June 30, 2005 (unaudited) and At December 31, 2004                            |  | 2    
|                                                                                                                         | 
|Condensed Consolidated Statements of Operations - Three and Six Months ended June 30, 2005 and 2004 (unaudited)          |  | 3    
|                                                                                                                         | 
|Condensed Consolidated Statements of Changes in Stockholders Equity Six Months Ended June 30, 2005 and 2004 (unaudited) |  | 4    
|                                                                                                                         | 
|Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2005 and 2004 (unaudited)                    |  | 5-6  
|                                                                                                                         | 
|Notes to Condensed Consolidated Financial Statements (unaudited)                                                         |  | 7-11 
|                                                                                                                         | 
|Review by Independent Registered Public Accounting Firm                                                                  |  | 12   
|                                                                                                                         | 
|Report of Independent Registered Public Accounting Firm                                                                  |  | 13   
|                                                                                                                         | 
|Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations                            |  | 14-27
|                                                                                                                         | 
|Item 3.
Quantitative and Qualitative Disclosures About Market Risk                                                       |  | 28   
|                                                                                                                         | 
|Item 4.
Controls and Procedures                                                                                          |  | 28   
|                                                                                                                         | 
|PART II.
OTHER INFORMATION                                                                                               |  |      
|                                                                                                                         | 
|Item 1.
Legal Proceedings                                                                                                |  | 29   
|                                                                                                                         | 
|Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds                                                      |  | 29   
|                                                                                                                         | 
|Item 3.
Defaults Upon Senior Securities                                                                                  |  | 29   
|                                                                                                                         | 
|Item 4.
Submission of Matters to a Vote of Security Holders                                                              |  | 30   
|                                                                                                                         | 
|Item 5.
Other Information                                                                                                |  | 30   
|                                                                                                                         | 
|Item 6.
Exhibits                                                                                                         |  | 31   



1



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##### Table of Contents

COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



PART I. FINANCIAL INFORMATION



Item 1. Financial Statements



Condensed Consolidated Balance Sheets

($ In thousands, except per share amounts)



|                                                                                                                                 |  |               |         |   |                  |         |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | ------- | -
|                                                                                                                                 |  | June 30, 2005 |         |   | December 31,2004 |        
|                                                                                                                                 |  | (Unaudited)   |         |   |                  |        
|Assets                                                                                                                           |  |               |         |   |                  |         |  
|                                                                                                                                 |  |              
|Cash and due from banks                                                                                                          |  | $             | 12,050  |   |                  | 7,122   |  
|Federal funds sold                                                                                                               |  |               | 7,420   |   |                  |        |  
|                                                                                                                                 |  |               |         |   |                  |         |  
|Cash and cash equivalents                                                                                                        |  |               | 19,470  |   |                  | 7,122   |  
|                                                                                                                                 |  |              
|Securities available for sale                                                                                                    |  |               | 58,935  |   |                  | 55,490  |  
|Loans, net of allowance for loan losses of $3,187 and $2,901                                                                     |  |               | 359,645 |   |                  | 297,725 |  
|Federal Home Loan Bank stock, at cost                                                                                            |  |               | 1,289   |   |                  | 573     |  
|Premises and equipment, net                                                                                                      |  |               | 23,466  |   |                  | 18,358  |  
|Accrued interest receivable                                                                                                      |  |               | 1,782   |   |                  | 1,478   |  
|Deferred income taxes                                                                                                            |  |               | 2,352   |   |                  | 1,846   |  
|Other assets                                                                                                                     |  |               | 1,361   |   |                  | 2,031   |  
|                                                                                                                                 |  |               |         |   |                  |         |  
|Total assets                                                                                                                     |  | $             | 468,300 |   |                  | 384,623 |  
|                                                                                                                                 |  |               |         |   |                  |         |  
|Liabilities and Stockholders Equity                                                                                             |  |               |         |   |                  |         |  
|                                                                                                                                 |  |              
|Liabilities:                                                                                                                     |  |               |         |   |                  |         |  
|Noninterest-bearing demand deposits                                                                                              |  | $             | 37,507  |   |                  | 25,485  |  
|Savings, NOW and money-market deposits                                                                                           |  |               | 90,227  |   |                  | 99,394  |  
|Time deposits                                                                                                                    |  |               | 267,010 |   |                  | 201,410 |  
|                                                                                                                                 |  |               |         |   |                  |         |  
|Total deposits                                                                                                                   |  |               | 394,744 |   |                  | 326,289 |  
|                                                                                                                                 |  |              
|Federal Home Loan Bank advances                                                                                                  |  |               | 11,000  |   |                  | 1,000   |  
|Federal funds purchased                                                                                                          |  |               |        |   |                  | 3,790   |  
|Repurchase agreement                                                                                                             |  |               | 4,731   |   |                  |        |  
|Other borrowings                                                                                                                 |  |               | 20,423  |   |                  | 15,867  |  
|Other liabilities                                                                                                                |  |               | 3,300   |   |                  | 2,729   |  
|                                                                                                                                 |  |               |         |   |                  |         |  
|Total liabilities                                                                                                                |  |               | 434,198 |   |                  | 349,675 |  
|                                                                                                                                 |  |               |         |   |                  |         |  
|Stockholders equity:                                                                                                            |  |               |         |   |                  |         |  
|Preferred stock, $0.01 par value; 5,000,000 shares authorized, no shares issued and outstanding                                  |  |               |        |   |                  |        |  
|Common stock, $5 par value; 20,000,000 shares authorized, 3,757,650 and 3,756,050 shares issued and outstanding in 2005 and
2004 |  |               | 18,788  |   |                  | 18,780  |  
|Additional paid-in capital                                                                                                       |  |               | 19,456  |   |                  | 19,448  |  
|Accumulated deficit                                                                                                              |  |               | (4,105  | ) |                  | (3,224  | )
|Accumulated other comprehensive income (loss)                                                                                    |  |               | (37     | ) |                  | (56     | )
|                                                                                                                                 |  |               |         |   |                  |         |  
|Total stockholders equity                                                                                                       |  |               | 34,102  |   |                  | 34,948  |  
|                                                                                                                                 |  |               |         |   |                  |         |  
|Total liabilities and stockholders equity                                                                                       |  | $             | 468,300 |   |                  | 384,623 |  
|                                                                                                                                 |  |               |         |   |                  |         |  



See Accompanying Notes to Condensed
Consolidated Financial Statements.



2



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##### Table of Contents

COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Condensed Consolidated Statements of Operations (Unaudited)

($ In thousands, except per share
amounts)



|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|------------------------------------------------------------- |  | --------------------------- | --------- | - | ------------------------- | - | --------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                              |  | Three Months Ended June 30, |           |   | Six Months Ended June 30, |  
|                                                              |  | 2005                        |           |   | 2004                      |   |           | 2005 |  |   | 2004      |  
|Interest income:                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Loans                                                         |  | $                           | 5,476     |   |                           | $ | 3,861     |      |  | $ | 10,317    |   |  | $ | 7,465     |  
|Securities                                                    |  |                             | 522       |   |                           |   | 245       |      |  |   | 974       |   |  |   | 483       |  
|Other interest-earning assets                                 |  |                             | 8         |   |                           |   | 25        |      |  |   | 15        |   |  |   | 37        |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Total interest income                                         |  |                             | 6,006     |   |                           |   | 4,131     |      |  |   | 11,306    |   |  |   | 7,985     |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Interest expense:                                             |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Deposits                                                      |  |                             | 2,630     |   |                           |   | 1,705     |      |  |   | 4,785     |   |  |   | 3,176     |  
|Borrowings                                                    |  |                             | 237       |   |                           |   | 73        |      |  |   | 411       |   |  |   | 158       |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Total interest expense                                        |  |                             | 2,867     |   |                           |   | 1,778     |      |  |   | 5,196     |   |  |   | 3,334     |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Net interest income                                           |  |                             | 3,139     |   |                           |   | 2,353     |      |  |   | 6,110     |   |  |   | 4,651     |  
|                                                              |  |                             |           |  
|Provision for loan losses                                     |  |                             | 1,522     |   |                           |   | 491       |      |  |   | 1,882     |   |  |   | 820       |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Net interest income after provision for loan losses           |  |                             | 1,617     |   |                           |   | 1,862     |      |  |   | 4,228     |   |  |   | 3,831     |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Noninterest income:                                           |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Service charges on deposit accounts                           |  |                             | 125       |   |                           |   | 106       |      |  |   | 247       |   |  |   | 202       |  
|Gain on sale of loans held for sale                           |  |                             | 486       |   |                           |   | 379       |      |  |   | 927       |   |  |   | 662       |  
|Gain on sale of mortgage loan servicing rights                |  |                             |          |   |                           |   | 118       |      |  |   |          |   |  |   | 118       |  
|Gain on sale of merchant services                             |  |                             |          |   |                           |   | 212       |      |  |   |          |   |  |   | 212       |  
|Net loan servicing costs                                      |  |                             |          |   |                           |   | (101      | )    |  |   |          |   |  |   | (159      | )
|Asset management fees                                         |  |                             |          |   |                           |   |          |      |  |   |          |   |  |   | 71        |  
|Other service charges and fees                                |  |                             | 13        |   |                           |   | 220       |      |  |   | 26        |   |  |   | 409       |  
|Other                                                         |  |                             | 4         |   |                           |   | 15        |      |  |   | 4         |   |  |   | 22        |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Total noninterest income                                      |  |                             | 628       |   |                           |   | 949       |      |  |   | 1,204     |   |  |   | 1,537     |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Noninterest expenses:                                         |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Employee compensation and benefits                            |  |                             | 1,746     |   |                           |   | 1,281     |      |  |   | 3,346     |   |  |   | 2,611     |  
|Occupancy and equipment                                       |  |                             | 546       |   |                           |   | 300       |      |  |   | 953       |   |  |   | 635       |  
|Data processing                                               |  |                             | 220       |   |                           |   | 258       |      |  |   | 431       |   |  |   | 506       |  
|Professional fees                                             |  |                             | 347       |   |                           |   | 141       |      |  |   | 444       |   |  |   | 317       |  
|Telephone, postage and supplies                               |  |                             | 261       |   |                           |   | 168       |      |  |   | 495       |   |  |   | 336       |  
|Advertising                                                   |  |                             | 354       |   |                           |   | 59        |      |  |   | 511       |   |  |   | 156       |  
|Other                                                         |  |                             | 300       |   |                           |   | 223       |      |  |   | 649       |   |  |   | 411       |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Total noninterest expenses                                    |  |                             | 3,774     |   |                           |   | 2,430     |      |  |   | 6,829     |   |  |   | 4,972     |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|(Loss) earnings before income tax (benefit) provision         |  |                             | (1,529    | ) |                           |   | 381       |      |  |   | (1,397    | ) |  |   | 396       |  
|                                                              |  |                             |           |  
|Income tax (benefit) provision                                |  |                             | (571      | ) |                           |   | 146       |      |  |   | (516      | ) |  |   | 152       |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Net (loss) earnings                                           |  | $                           | (958      | ) |                           | $ | 235       |      |  | $ | (881      | ) |  | $ | 244       |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|(Loss) earnings per share, basic                              |  | $                           | (0.25     | ) |                           | $ | 0.06      |      |  | $ | (0.23     | ) |  | $ | 0.07      |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|(Loss) earnings per share, diluted                            |  | $                           | (0.25     | ) |                           | $ | 0.06      |      |  | $ | (0.23     | ) |  | $ | 0.06      |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Weighted-average number of common shares outstanding, basic   |  |                             | 3,757,650 |   |                           |   | 3,748,110 |      |  |   | 3,757,623 |   |  |   | 3,744,071 |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Weighted-average number of common shares outstanding, diluted |  |                             | 3,757,650 |   |                           |   | 3,770,561 |      |  |   | 3,757,623 |   |  |   | 3,764,926 |  
|                                                              |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  



See Accompanying Notes to Condensed
Consolidated Financial Statements.



3



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##### Table of Contents

COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Condensed Consolidated Statements of Changes in Stockholders Equity (Unaudited)



Six Months Ended June 30, 2005 and 2004

($ in thousands)



|                                                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|---------------------------------------------------------------------------------------- |  | ----------- | ------ | ------------------------ | ------ | - | ------------------ | ------ | - | ------------------------------------------ | ---- | - | ------------------------ | ------ | -
|                                                                                         |  | CommonStock |        | AdditionalPaid-InCapital |        |   | AccumulatedDeficit |        |   | AccumulatedOtherComprehensiveIncome (loss) |      |   | TotalStockholdersEquity |       
|Balance at December 31, 2003                                                             |  | $           | 18,677 |                          | 19,351 |   |                    | (4,055 | ) |                                            | (308 | ) |                          | 33,665 |  
|                                                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|Comprehensive income:                                                                    |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|Net earnings (unaudited)                                                                 |  |             |       |                          |       |   |                    | 244    |   |                                            |     |   |                          | 244    |  
|Net change in unrealized loss on securities available for sale, net of taxes (unaudited) |  |             |       |                          |       |   |                    |       |   |                                            | (135 | ) |                          | (135   | )
|                                                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|Comprehensive income (unaudited)                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          | 109    |  
|                                                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|Offering costs relating to 2003 common stock offering paid in 2004 (unaudited)           |  |             |       |                          | (7     | ) |                    |       |   |                                            |     |   |                          | (7     | )
|Proceeds from exercise of common stock options (15,900 shares) (unaudited)               |  |             | 80     |                          | 79     |   |                    |       |   |                                            |     |   |                          | 159    |  
|                                                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|Balance at June 30, 2004 (unaudited)                                                     |  | $           | 18,757 |                          | 19,423 |   |                    | (3,811 | ) |                                            | (443 | ) |                          | 33,926 |  
|                                                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|Balance at December 31, 2004                                                             |  | $           | 18,780 |                          | 19,448 |   |                    | (3,224 | ) |                                            | (56  | ) |                          | 34,948 |  
|                                                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|Comprehensive income (loss):                                                             |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|Net loss (unaudited)                                                                     |  |             |       |                          |       |   |                    | (881   | ) |                                            |     |   |                          | (881   | )
|Net change in unrealized loss on securities available for sale, net of taxes (unaudited) |  |             |       |                          |       |   |                    |       |   |                                            | 19   |   |                          | 19     |  
|                                                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|Comprehensive income (loss) (unaudited)                                                  |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          | (862   | )
|                                                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|Proceeds from exercise of common stock options (1,600 shares) (unaudited)                |  |             | 8      |                          | 8      |   |                    |       |   |                                            |     |   |                          | 16     |  
|                                                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  
|Balance at June 30, 2005 (unaudited)                                                     |  | $           | 18,788 |                          | 19,456 |   |                    | (4,105 | ) |                                            | (37  | ) |                          | 34,102 |  
|                                                                                         |  |             |        |                          |        |   |                    |        |   |                                            |      |   |                          |        |  



See Accompanying Notes to Condensed
Consolidated Financial Statements.



4



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##### Table of Contents

COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)



|                                                                                           |  |                           |         |   |      |         |  
|------------------------------------------------------------------------------------------ |  | ------------------------- | ------- | - | ---- | ------- | -
|                                                                                           |  | Six Months Ended June 30, |        
|                                                                                           |  | 2005                      |         |   | 2004 |        
|Cash flows from operating activities:                                                      |  |                           |         |   |      |         |  
|Net (loss) earnings                                                                        |  | $                         | (881    | ) |      | 244     |  
|Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: |  |                           |         |   |      |         |  
|Depreciation and amortization                                                              |  |                           | 589     |   |      | 407     |  
|Provision for loan losses                                                                  |  |                           | 1,882   |   |      | 820     |  
|Deferred income tax (benefit) provision                                                    |  |                           | (516    | ) |      | 152     |  
|Amortization and accretion of discounts and premiums on securities                         |  |                           | 155     |   |      | 193     |  
|Amortization of loan servicing rights                                                      |  |                           |        |   |      | 274     |  
|Gain on sale of loans held for sale                                                        |  |                           | (927    | ) |      | (662    | )
|Gain on sale of loan servicing rights                                                      |  |                           |        |   |      | (118    | )
|Gain on sale of merchant services                                                          |  |                           |        |   |      | (212    | )
|Originations of loans held for sale                                                        |  |                           | (46,998 | ) |      | (39,741 | )
|Proceeds from sale of loans held for sale                                                  |  |                           | 47,925  |   |      | 40,315  |  
|Increase in accrued interest receivable                                                    |  |                           | (304    | ) |      | (233    | )
|Decrease (increase) in other assets                                                        |  |                           | 826     |   |      | (469    | )
|Increase in other liabilities                                                              |  |                           | 571     |   |      | 99      |  
|                                                                                           |  |                           |         |   |      |         |  
|Net cash provided by operating activities                                                  |  |                           | 2,322   |   |      | 1,069   |  
|                                                                                           |  |                           |         |   |      |         |  
|Cash flows from investing activities:                                                      |  |                           |         |   |      |         |  
|Purchase of securities available for sale                                                  |  |                           | (11,400 | ) |      | (26,313 | )
|Proceeds from maturities, calls and repayments of securities available for sale            |  |                           | 7,829   |   |      | 5,394   |  
|Net increase in loans                                                                      |  |                           | (63,958 | ) |      | (43,549 | )
|Purchase of premises and equipment                                                         |  |                           | (5,697  | ) |      | (8,295  | )
|Purchase of Federal Home Loan Bank stock                                                   |  |                           | (716    | ) |      | (262    | )
|Proceeds from sale of loan servicing rights                                                |  |                           |        |   |      | 969     |  
|Proceeds from sale of merchant services                                                    |  |                           |        |   |      | 212     |  
|                                                                                           |  |                           |         |   |      |         |  
|Net cash used in investing activities                                                      |  |                           | (73,942 | ) |      | (71,844 | )
|                                                                                           |  |                           |         |   |      |         |  
|Cash flows from financing activities:                                                      |  |                           |         |   |      |         |  
|Net increase in deposits                                                                   |  |                           | 68,455  |   |      | 67,284  |  
|Proceeds from Federal Home Loan Bank advances                                              |  |                           | 61,000  |   |      |        |  
|Repayments of Federal Home Loan Bank advances                                              |  |                           | (51,000 | ) |      | (5,000  | )
|Net increase in other borrowings                                                           |  |                           | 4,556   |   |      | 4,154   |  
|Net (decrease) increase in federal funds purchased                                         |  |                           | (3,790  | ) |      | 4,000   |  
|Net increase in repurchase agreement                                                       |  |                           | 4,731   |   |      |        |  
|Payment of offering costs relating to 2003 common stock offering                           |  |                           |        |   |      | (7      | )
|Proceeds from exercise of common stock options                                             |  |                           | 16      |   |      | 159     |  
|                                                                                           |  |                           |         |   |      |         |  
|Net cash provided by financing activities                                                  |  |                           | 83,968  |   |      | 70,590  |  
|                                                                                           |  |                           |         |   |      |         |  
|Net increase (decrease) in cash and cash equivalents                                       |  |                           | 12,348  |   |      | (185    | )
|                                                                                           |  |                          
|Cash and cash equivalents at beginning of period                                           |  |                           | 7,122   |   |      | 7,667   |  
|                                                                                           |  |                           |         |   |      |         |  
|Cash and cash equivalents at end of period                                                 |  | $                         | 19,470  |   |      | 7,482   |  
|                                                                                           |  |                           |         |   |      |         |  



(continued)



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Condensed Consolidated Statements of Cash Flows, Continued

(In thousands)



|                                                                                                                            |  |                           |       |      |       |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----- | ---- | ----- | -
|                                                                                                                            |  | Six Months Ended June 30, |      
|                                                                                                                            |  | 2005                      |       | 2004 |      
|Supplemental disclosure of cash flow information:                                                                           |  |                           |       |      |       |  
|Cash paid during the period for:                                                                                            |  |                           |       |      |       |  
|Interest                                                                                                                    |  | $                         | 5,075 |      | 3,333 |  
|                                                                                                                            |  |                           |       |      |       |  
|Income taxes                                                                                                                |  | $                         |      |      |      |  
|                                                                                                                            |  |                           |       |      |       |  
|Noncash transactions:                                                                                                       |  |                           |       |      |       |  
|Accumulated other comprehensive income (loss), net change in unrealized loss on securities available for sale, net of taxes |  | $                         | 19    |      | (135  | )
|                                                                                                                            |  |                           |       |      |       |  
|Originated mortgage loan servicing rights capitalized                                                                       |  | $                         |      |      | 88    |  
|                                                                                                                            |  |                           |       |      |       |  
|Transfer of loans servicing rights to other assets                                                                          |  | $                         |      |      | 97    |  
|                                                                                                                            |  |                           |       |      |       |  
|Transfer of loans to other assets                                                                                           |  | $                         | 156   |      |      |  
|                                                                                                                            |  |                           |       |      |       |  



See Accompanying Notes to Condensed
Consolidated Financial Statements.



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (Unaudited)



|1. | General. Coast Financial Holdings, Inc. (the Holding Company) owns 100% of the outstanding common stock of Coast Bank of Florida (the Bank)
(collectively, the Company).
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Holding Companys primary activity is the operation of the Bank. The Bank is a state (Florida)-chartered commercial bank. The deposit accounts of the Bank are insured by the Federal Deposit Insurance Corporation. The Bank offers a variety of
community banking services to individual and corporate customers through its ten banking offices located in Manatee and Pinellas Counties, Florida. Coast Financial Partners, Inc. (CFP), a wholly owned subsidiary of the Bank, provided
investment advisory services to customers of the Bank. During the three-months ended March 31, 2004, CFP ceased operations and the Bank now provides these services through an unrelated entity.



In the opinion of the management of the Company, the accompanying condensed
consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary to present fairly the financial position at June 30, 2005, the results of operations for the three- and six-month periods ended
June 30, 2005 and 2004 and cash flows for the six-month periods ended June 30, 2005 and 2004. The results of operations and other data for the three- and six-month periods ended June 30, 2005 are not necessarily indicative of results that may be
expected for the year ending December 31, 2005.



|2. | Loan Impairment and Loan Losses.We have developed a strategy for the exit or restructuring of certain under performing, under collateralized, or high risk loans that
were originated prior to February 2004. As a result of our review of the entire loan portfolio, we identified lending relationships totaling approximately $28.4 million that we deemed to possess an unsatisfactory level of risk. We refer to these
loans as Legacy Loans. At December 31, 2004, the composition of the Legacy Loans was approximately $20.0 million of indirect automobile loans and $8.4 million of commercial loans. For each of the Legacy Loans, we have sought additional
or alternative collateral, a complete exit of the borrower from the Bank, or a restructuring of the credit to accelerate the loan pay-off. The activity in the allowance for loan losses is as follows (in thousands):
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                |  |                            |        |   |                          |       |   |      |        |   |      |        |  
|------------------------------- |  | -------------------------- | ------ | - | ------------------------ | ----- | - | ---- | ------ | - | ---- | ------ | -
|                                |  | Three Months EndedJune 30, |        |   | Six Months EndedJune 30, |      
|                                |  | 2005                       |        |   | 2004                     |       |   | 2005 |        |   | 2004 |       
|Balance at beginning of period  |  | $                          | 3,040  |   |                          | 3,212 |   |      | 2,901  |   |      | 3,163  |  
|Provision for loan losses       |  |                            | 1,522  |   |                          | 491   |   |      | 1,882  |   |      | 820    |  
|Net, charge-offs and recoveries |  |                            | (1,375 | ) |                          | (895  | ) |      | (1,596 | ) |      | (1,175 | )
|                                |  |                            |        |   |                          |       |   |      |        |   |      |        |  
|Balance at end of period        |  | $                          | 3,187  |   |                          | 2,808 |   |      | 3,187  |   |      | 2,808  |  
|                                |  |                            |        |   |                          |       |   |      |        |   |      |        |  



(continued)



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (Unaudited), Continued



|2. | Loan Impairment and Loan Losses, Continued.Impaired collateral dependent loans were as follows (in thousands):
|-- | --------------------------------------------------------------------------------------------------------------



|                                             |  |                             |       |                          |     |      |   |       |  |    
|-------------------------------------------- |  | --------------------------- | ----- | ------------------------ | --- | ---- | - | ----- |  | ---
|                                             |  | Three Months Ended June 30, |       | Six Months EndedJune 30,
|                                             |  | 2005                        |       | 2004                     |     | 2005 |   | 2004 
|Balance at end of period                     |  | $                           | 475   |                          | 243 |      | $ | 475   |  | 243
|                                             |  |                             |       |                          |     |      |   |       |  |    
|Total related allowance for losses           |  | $                           | 39    |                          | 40  |      | $ | 39    |  | 40 
|                                             |  |                             |       |                          |     |      |   |       |  |    
|Average investment in impaired loans         |  | $                           | 1,760 |                          | 340 |      | $ | 1,117 |  | 339
|                                             |  |                             |       |                          |     |      |   |       |  |    
|Interest income recognized on impaired loans |  | $                           |      |                          |    |      | $ |      |  |   
|                                             |  |                             |       |                          |     |      |   |       |  |    
|Interest income received on impaired loans   |  | $                           |      |                          |    |      | $ |      |  |   
|                                             |  |                             |       |                          |     |      |   |       |  |    



Nonaccrual and past
due loans were as follows (in thousands):



|                                             |  |             |       |      |      
|-------------------------------------------- |  | ----------- | ----- | ---- | -----
|                                             |  | At June 30,
|                                             |  | 2005        |       | 2004
|Nonaccrual loans                             |  | $           | 1,072 |      | 1,770
|Past due ninety days or more, still accruing |  |             |      |      |     
|                                             |  |             |       |      |      
|                                             |  | $           | 1,072 |      | 1,770
|                                             |  |             |       |      |      



|3. | Stock Option Plans.The Company has adopted stock option plans for certain key employees and directors of the Company. A total of 563,000 shares of common stock have
been reserved under these plans. 160,100 shares remain available for grant at June 30, 2005. The exercise price of the stock options granted under these plans must at least equal the fair market value of the common stock at the date of grant. The
options granted to employees generally have ten year terms and vest over periods of up to three years. The options issued to directors generally are fully vested on the date of grant and have ten year terms. A summary of stock option transactions
follows ($in thousands, except per share amounts):
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                 |  |                 |   |  |                                 |             |                                 |   |                      |  |   |       |  
|-------------------------------- |  | --------------- | - |  | ------------------------------- | ----------- | ------------------------------- | - | -------------------- |  | - | ----- | -
|                                 |  | Number ofShares |   |  | Range of Per Share Option Price |             | Weighted -AveragePer SharePrice |   | AggregateOptionPrice | 
|Outstanding at December 31, 2004 |  | 372,300         |   |  | $                               | 10.00-14.50 |                                 | $ | 13.11                |  | $ | 4,881 |  
|Granted                          |  | 10,000          |   |  |                                 | 17.35-17.95 |                                 |   | 17.65                |  |   | 177   |  
|Exercised                        |  | (1,600          | ) |  |                                 | 10.00       |                                 |   | 10.00                |  |   | (16   | )
|                                 |  |                 |   |  |                                 |             |                                 |   |                      |  |   |       |  
|Outstanding at June 30, 2005     |  | 380,700         |   |  | $                               | 10.00-17.95 |                                 | $ | 13.24                |  | $ | 5,042 |  
|                                 |  |                 |   |  |                                 |             |                                 |   |                      |  |   |       |  



(continued)



8



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (Unaudited), Continued



|3. | Stock Option Plans, Continued.The Company accounts for their stock option plans under the recognition and measurement principles of Accounting Principles Board
Opinion No. 25. No stock-based employee compensation cost is reflected in net (loss) earnings, as all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The
following table illustrates the effect on net (loss) earnings if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123, accounting for stock-based compensation,
as amended by SFAS No. 148, accounting for stock-based compensation transition and disclosure, to stock-based employee compensation ($ in thousands, except per share amounts).
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                                                                       |  |                            |       |   |                          |      |   |      |       |   |      |      |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ----- | - | ------------------------ | ---- | - | ---- | ----- | - | ---- | ---- | -
|                                                                                                                                       |  | Three Months EndedJune 30, |       |   | Six Months EndedJune 30, |     
|                                                                                                                                       |  | 2005                       |       |   | 2004                     |      |   | 2005 |       |   | 2004 |     
|Net (loss) earnings                                                                                                                    |  | $                          | (958  | ) |                          | 235  |   |      | (881  | ) |      | 244  |  
|Deduct: Total stock-based employee compensation determined under the fair value based method for all awards, net of related tax
effect |  |                            | (31   | ) |                          | (49  | ) |      | (48   | ) |      | (127 | )
|                                                                                                                                       |  |                            |       |   |                          |      |   |      |       |   |      |      |  
|Proforma net (loss) earnings                                                                                                           |  | $                          | (989  | ) |                          | 186  |   |      | (929  | ) |      | 117  |  
|                                                                                                                                       |  |                            |       |   |                          |      |   |      |       |   |      |      |  
|(Loss) earnings per share:                                                                                                             |  |                            |       |   |                          |      |   |      |       |   |      |      |  
|Basic, as reported                                                                                                                     |  | $                          | (0.25 | ) |                          | 0.06 |   |      | (0.23 | ) |      | 0.07 |  
|                                                                                                                                       |  |                            |       |   |                          |      |   |      |       |   |      |      |  
|Diluted, as reported                                                                                                                   |  | $                          | (0.25 | ) |                          | 0.06 |   |      | (0.23 | ) |      | 0.06 |  
|                                                                                                                                       |  |                            |       |   |                          |      |   |      |       |   |      |      |  
|Basic, proforma                                                                                                                        |  | $                          | (0.26 | ) |                          | 0.05 |   |      | (0.25 | ) |      | 0.03 |  
|                                                                                                                                       |  |                            |       |   |                          |      |   |      |       |   |      |      |  
|Diluted, proforma                                                                                                                      |  | $                          | (0.26 | ) |                          | 0.05 |   |      | (0.25 | ) |      | 0.03 |  
|                                                                                                                                       |  |                            |       |   |                          |      |   |      |       |   |      |      |  



The fair value of each
option granted is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions:



|                                              |  |                             |      |   |                           |   |     |      |  |   |      |   |  |   |      |  
|--------------------------------------------- |  | --------------------------- | ---- | - | ------------------------- | - | --- | ---- |  | - | ---- | - |  | - | ---- | -
|                                              |  | Three Months Ended June 30, |      |   | Six Months Ended June 30, |  
|                                              |  | 2005                        |      |   | 2004                      |   |     | 2005 |  |   | 2004 |  
|Risk-free interest rate                       |  |                             | 4.34 | % |                           |   |    | %    |  |   | 4.34 | % |  |   | 4.32 | %
|Dividend yield                                |  |                             |     | % |                           |   |    | %    |  |   |     | % |  |   |     | %
|Expected volatility                           |  |                             | 4.52 | % |                           |   |    | %    |  |   | 4.52 | % |  |   | 3.37 | %
|Expected life in years                        |  |                             | 5.75 |   |                           |   | N/A |      |  |   | 5.75 |   |  |   | 6.18 |  
|                                              |  |                             |      |  
|Per share fair value of options at grant date |  | $                           | 6.01 |   |                           | $ |    |      |  | $ | 6.01 |   |  | $ | 4.97 |  
|                                              |  |                             |      |   |                           |   |     |      |  |   |      |   |  |   |      |  



(continued)



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (Unaudited), Continued



|4. | Regulatory Capital. The Company and the Bank are required to maintain certain minimum regulatory capital requirements. The following is a summary at June 30, 2005 of
the regulatory capital requirements and the Companys and the Banks actual capital on a percentage basis:
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                 |  |        |   |  |                       |  
|------------------------------------------------ |  | ------ | - |  | --------------------- | -
|                                                 |  | Actual |   |  | RegulatoryRequirement |  
|Total capital to risk-weighted assets:           |  |        |   |  |                       |  
|Company                                          |  | 11.06  | % |  | 8.00                  | %
|Bank                                             |  | 10.98  | % |  | 8.00                  | %
|Tier I capital to risk-weighted assets:          |  |        |   |  |                       |  
|Company                                          |  | 10.05  | % |  | 4.00                  | %
|Bank                                             |  | 9.97   | % |  | 4.00                  | %
|Tier I capital to total assets - leverage ratio: |  |        |   |  |                       |  
|Company                                          |  | 7.23   | % |  | 4.00                  | %
|Bank                                             |  | 7.17   | % |  | 4.00                  | %



|5. | (Loss) Earnings Per Share. (Loss) earnings per share (EPS) of common stock has been computed on the basis of the weighted-average number of shares of
common stock outstanding. Outstanding stock options are not considered dilutive securities in 2005 for purposes of calculating diluted EPS due to the net losses incurred by the Company. Outstanding stock options are considered dilutive securities in
2004, for purposes of calculating diluted EPS, which is computed using the treasury stock method. The following table presents the calculations of the weighted-average number of shares for diluted EPS in 2004.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                      |  |                            
|----------------------------------------------------- |  | ---------------------------
|                                                      |  | Weighted-AverageShares 2004
|                                                     
|Three Months Ended June 30:                           |  |                            
|For Basic EPS                                         |  | 3,748,110                  
|Effect of dilutive securities-                        |  |                            
|Incremental shares from assumed conversion of options |  | 22,451                     
|                                                      |  |                            
|For Diluted EPS                                       |  | 3,770,561                  
|                                                      |  |                            
|Six Months Ended June 30:                             |  |                            
|For Basic EPS                                         |  | 3,744,071                  
|Effect of dilutive securities-                        |  |                            
|Incremental shares from assumed conversion of options |  | 20,855                     
|                                                      |  |                            
|For Diluted EPS                                       |  | 3,764,926                  
|                                                      |  |                            



(continued)



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (Unaudited), Continued



|5. | (Loss) Earnings Per Share, Continued. Shares not included in the computations of diluted earnings per share in 2004 because the options exercise price was not less
than the market value for the six-months ended June 30, 2004 are as follows:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|        |  |                 |  |               |       |            |      |              |     
|------- |  | --------------- |  | ------------- | ----- | ---------- | ---- | ------------ | ----
|        |  | Numberof Shares |  | ExercisePrice |       | YearIssued |      | YearExpiring
|Options |  | 190,000         |  | $             | 14.50 |            | 2003 |              | 2013



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Review by Independent Registered Public Accounting Firm



Hacker, Johnson & Smith PA, the Companys independent registered public accounting firm, have made a limited review of the financial data as of June 30, 2005, and for the three and six-month periods ended
June 30, 2005 and 2004 presented in this document, in accordance with standards established by the Public Company Accounting Oversight Board.



Their report furnished pursuant to Article 10 of Regulation S-X is included herein.



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##### Table of Contents

Report of Independent Registered Public Accounting Firm



Coast Financial Holdings, Inc.

Bradenton, Florida:



We have reviewed the accompanying interim condensed consolidated balance sheet of Coast Financial Holdings, Inc. and subsidiary (the Company)
as of June 30, 2005, and the related interim condensed consolidated statements of operations for the three and six month periods ended June 30, 2005 and 2004 and the related interim condensed consolidated statements of changes in stockholders
equity and cash flows for the six-month periods ended June 30, 2005 and 2004. These interim financial statements are the responsibility of the Companys management.



We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States).
A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in
accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.



Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying interim condensed consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles.



We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the
consolidated balance sheet of the Company as of December 31, 2004, and the related consolidated statements of operations, changes in stockholders equity and cash flows for the year then ended (not presented herein); and in our report dated
March 28, 2005, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2004, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it has been derived.



|                              
|------------------------------
|/s/ Hacker, Johnson & Smith PA
|                              
|HACKER, JOHNSON & SMITH PA    
|Tampa, Florida                
|July 25, 2005                 



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Item 2. Managements Discussion and Analysis

of Financial Condition and Results of Operations



A Note About Forward Looking Statements



This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, such as statements relating to our financial condition, prospective results of operations, future performance or expectations, plans, objectives,
simulation of changes in interest rates, capital spending and financing sources, and revenue sources. These statements relate to expectations concerning matters that are not historical fact. Accordingly, statements that are based on
managements projections, estimates, assumptions and judgments are forward-looking statements. These forward-looking statements are typically identified by words or phrases such as believe, expect,
anticipate, plan, estimate, approximately, intend, and other similar words and expressions, or future or conditional verbs such as will, should, would,
could, and may. In addition, the Company may from time to time make such written or oral forward-looking statements in future filings with the Securities and Exchange Commission (including exhibits thereto), in its reports to
stockholders, and in other communications made by or with the approval of the Company.



These forward-looking statements are based largely on information currently available to our management, and upon current views, expectations, assumptions, plans, estimates, judgments and projections about our
business and our industry, and they involve inherent risks and uncertainties. Although we believe that these forward-looking statements are based upon reasonable estimates, judgments and assumptions, they are not guarantees of future performance and
are subject to known and unknown risks, contingencies, and other factors. Accordingly, we cannot give you any assurance that our expectations will in fact occur or that our estimates, judgments or assumptions will be correct. We caution you that
actual results may differ materially and adversely from those expressed or implied by such forward-looking statements due to a variety of factors, including, but not limited to, those related to the general and local economic environment,
competition and competitive products and pricing, fiscal and monetary policies of the U.S. government, inflation, changes in interest rates, the Companys ability to successfully open and operate new branches and collect on delinquent loans,
the Companys ability to identify, consummate, and manage additional branch expansion or acquisition opportunities, changes in the value of collateral securing loans we have made, changes in government regulations affecting financial
institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset/liability management, changes in technology, changes in
the securities markets, and the availability of and the costs associated with sources of liquidity. Accordingly, investors and all others are cautioned not to place undue reliance on such forward-looking statements.



Many of these factors are beyond our control, and you should read carefully
the factors described in Risk Factors in the Companys filings (including its Form 10-KSB and registration statements) with the Securities and Exchange Commission for a description of some, but not all, risks, uncertainties and
contingencies. These forward-looking statements speak only as of the date of this document. We do not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of
this document or to reflect the occurrence of unanticipated events.



14



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



General



Coast Financial Holdings, Inc. (the Holding Company) owns 100% of the outstanding common stock of Coast Bank of
Florida (the Bank or Coast Bank) (collectively, the Company).



The Holding Companys primary activity is the operation of the Bank. The Bank is a state (Florida)-chartered commercial bank. The deposit accounts of
the Bank are insured by the Federal Deposit Insurance Corporation. The Bank offers a variety of community banking services to individual and corporate customers through its ten banking offices located in Manatee and Pinellas Counties, Florida. Coast
Financial Partners, Inc. (CFP), a wholly owned subsidiary of the Bank, provided investment advisory services to customers of the Bank. During the three-months ended March 31, 2004, CFP ceased operations and the Bank now provides these
services through an unrelated entity.



Results of Operations



Comparison of the Three-Month Periods Ended June 30, 2005 and 2004



General. The decrease in net income in the
three months ended June 30, 2005 compared to the same period in 2004 was attributable primarily to an increase in the provision for loan losses, an increase in noninterest expenses, and a decrease in noninterest income. The increase in the loan loss
provision was due primarily to, including those Legacy Loans which resulted in a $1.1 million charge-off in the second quarter of 2005, and the increase in noninterest expense was primarily due to branch expansion costs and the settlement of a legal
proceeding with a former employee of a former subsidiary of Coast Bank. The Company estimates that legal fees and lost interest from the charged-off loans was approximately $304,000. See Comparison of the Three-Month Periods Ending June 30,
2005 and 2004  Provision for Loan Losses and  Noninterest Expenses.



Net Interest Income and Net Interest Margin. Net interest income, which constitutes the principal source of income for Coast Bank, is the
difference between interest earned on its interest-earning assets and the interest paid on interest-bearing liabilities. Our principal interest-earning assets are loans, investment securities, and short-term investments. Interest-bearing liabilities
primarily consist of customer deposits (such as interest paying checking accounts or NOW accounts, retail savings deposits, money market accounts, and time deposits), repurchase agreements, and Federal Home Loan Bank (FHLB) advances.
Funds attracted by these interest-bearing liabilities are invested by the Bank in interest-earning assets. Accordingly, net interest income depends on the volume of average interest-earning assets and average interest-bearing liabilities and the
interest rates earned or paid on them.



Interest income
increased to $6.0 million during the three months ended June 30, 2005, from $4.1 million for the same period in 2004. Interest on loans for the three months ended June 30, 2005 was $5.5 million, resulting from an average yield of 6.34% compared to
$3.9 million resulting from an average yield of 6.31% for the three months ended June 30, 2004. The increase in interest on loans was primarily due to an increase in the average loan balance to $346.5 million during the three months ended June 30,
2005 compared to $246.2



15



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Comparison of the Three-Month Periods Ended June 30, 2005 and 2004,
Continued



million, for the three months ended June 30,
2004. Interest on securities increased to $522,000 during the three months ended June 30, 2005, from $245,000 for the same period in 2004. The increase in interest income on securities was primarily due to the increase in the average securities
balance to $59.5 million during the three months ended June 30, 2005 from $38.0 million for the three months ended June 30, 2004. Interest on other interest earning assets decreased to $8,000 during the three months ended June 30, 2005, from $25,000
during the three months ended June 30, 2004.



Interest expense
on interest bearing liabilities increased to $2.9 million during the three months ended June 30, 2005, from $1.8 million during the three months ended June 30, 2004. The increase was due to an increase in the average balance of interest bearing
liabilities to $371.8 million in 2005 from $262.6 million in 2004, which was augmented by an increase in the average cost of interest bearing liabilities to 3.09% in 2005 from 2.72% in 2004. The increase in the average rate paid was the result of
the continued increase in overall interest rates. Management is intent on building core deposits for the long-term, which enhance customer retention, and anticipate the mix of deposits to shift throughout the remainder of 2005.



Our net interest margin of 3.09% for the three months ended June 30, 2005
was lower than our margin for the same period in the previous year of 3.21% due to an increase in market rates for deposit accounts.



Average Balances and Average Interest Rates. The following table sets forth, for the three months ended June 30, 2005 and 2004, information
regarding (i) the total dollar amount of interest and dividend income of the Company from interest-earning assets and the resultant average yields, (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant
average cost, (iii) net interest income, (iv) interest rate spread, and (v) net interest margin.



|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|-------------------------------------------------------------------------------- |  | ---------------------- | ------- | ------------------------ | ------------- | ------------- | ---- | - | ------------------ | - | ------------------------ |  | ------------- |  | ---- | -
|                                                                                 |  | Three Months Ended     |        
|                                                                                 |  | June 30, 2005          |         |                          | June 30, 2004 |              
|                                                                                 |  | Average Balance(1)     |         | Interest/ Income Expense |               | Yield/Rate(2) |      |   | Average Balance(1) |   | Interest Income/ Expense |  | Yield/Rate(2) | 
|                                                                                 |  | (dollars in thousands) |        
|Interest-earning assets:                                                         |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Investment securities (3)                                                        |  | $                      | 59,503  |                          | 522           |               | 3.52 | % |                    | $ | 37,995                   |  | 245           |  | 2.59 | %
|Loans (4)                                                                        |  |                        | 346,547 |                          | 5,476         |               | 6.34 |   |                    |   | 246,154                  |  | 3,861         |  | 6.31 |  
|Other interest-earning assets (5)                                                |  |                        | 1,239   |                          | 8             |               | 2.59 |   |                    |   | 10,625                   |  | 25            |  | 0.95 |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total interest-earning assets/interest income/average rates earned               |  |                        | 407,289 |                          | 6,006         |               | 5.91 |   |                    |   | 294,774                  |  | 4,131         |  | 5.64 |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total noninterest earning assets                                                 |  |                        | 34,798  |                          |               |               |      |   |                    |   | 28,726                   |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total assets                                                                     |  | $                      | 442,087 |                          |               |               |      |   |                    | $ | 323,500                  |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Interest-bearing liabilities:                                                    |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|NOW                                                                              |  | $                      | 17,286  |                          | 14            |               | 0.32 | % |                    | $ | 11,777                   |  | 10            |  | 0.34 | %
|Money market                                                                     |  |                        | 69,021  |                          | 409           |               | 2.38 |   |                    |   | 62,805                   |  | 304           |  | 1.95 |  
|Savings                                                                          |  |                        | 4,031   |                          | 5             |               | 0.50 |   |                    |   | 3,237                    |  | 4             |  | 0.50 |  
|Time                                                                             |  |                        | 244,535 |                          | 2,202         |               | 3.61 |   |                    |   | 165,991                  |  | 1,387         |  | 3.36 |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total interest-bearing deposits                                                  |  |                        | 334,873 |                          | 2,630         |               | 3.15 |   |                    |   | 243,810                  |  | 1,705         |  | 2.81 |  
|Other borrowings                                                                 |  |                        | 36,940  |                          | 237           |               | 2.57 |   |                    |   | 18,754                   |  | 73            |  | 1.57 |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total interest-bearing liabilities/ interest expense/average rate paid           |  |                        | 371,813 |                          | 2,867         |               | 3.09 |   |                    |   | 262,564                  |  | 1,778         |  | 2.72 |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total noninterest bearing liabilities                                            |  |                        | 35,704  |                          |               |               |      |   |                    |   | 27,011                   |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total liabilities                                                                |  |                        | 407,517 |                          |               |               |      |   |                    |   | 289,575                  |  |               |  |      |  
|Shareholders equity                                                             |  |                        | 34,570  |                          |               |               |      |   |                    |   | 33,925                   |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total liabilities and shareholders equity                                       |  | $                      | 442,087 |                          |               |               |      |   |                    | $ | 323,500                  |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Net interest income                                                              |  |                        |         |                          | 3,139         |               |      |   |                    |   |                          |  | 2,353         |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Interest rate spread (6)                                                         |  |                        |         |                          |               |               | 2.82 | % |                    |   |                          |  |               |  | 2.92 | %
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Net interest margin (7)                                                          |  |                        |         |                          |               |               | 3.09 | % |                    |   |                          |  |               |  | 3.21 | %
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                        | 1.10    |                          |               |               |      |   |                    |   | 1.12                     |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  

---

|(1) | Average balance represents the average daily balance year to date.
|--- | ------------------------------------------------------------------



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##### Table of Contents

|(2) | Annualized for comparability with full year data.
|--- | -------------------------------------------------

|(3) | Principally taxable. The yield information does not give effect to changes in fair value that are reflected as a component of shareholders equity.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Non-accruing loans are included in computation of average balance.
|--- | ------------------------------------------------------------------

|(5) | Includes federal funds sold and interest-bearing deposits.
|--- | ----------------------------------------------------------

|(6) | Interest rate spread represents the difference between average yield on interest-bearing assets and the average rate of interest-bearing liabilities.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Net interest margin is the net interest income divided by average interest earning assets.
|--- | ------------------------------------------------------------------------------------------



Rate/Volume Interest Analysis. The effect on interest income, interest expense, and net interest income for
the three month periods ended June 30, 2005 and 2004, of changes in average balance and rate, is shown below. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i)
changes in rate (change in rate multiplied by prior volume), (ii) changes in volume (change in volume multiplied by prior rate), and (iii) changes in rate/volume (change in rate multiplied by change in volume).



|                              |  |                                                                             |     |   |        |   |       |             |  |   |             |   |  |   |       |  
|----------------------------- |  | --------------------------------------------------------------------------- | --- | - | ------ | - | ----- | ----------- |  | - | ----------- | - |  | - | ----- | -
|                              |  | Three-Months Ended June 30 2005 Compared to 2004 Increase (Decrease) Due to |    
|                              |  | Rate                                                                        |     |   | Volume |   |       | Rate/Volume |  |   | TotalChange |  
|                              |  | (in thousands)                                                              |    
|Interest-earning assets       |  |                                                                             |     |   |        |   |       |             |  |   |             |   |  |   |       |  
|Loans                         |  | $                                                                           | 29  |   |        | $ | 1,578 |             |  | $ | 8           |   |  | $ | 1,615 |  
|Investment securities         |  |                                                                             | 89  |   |        |   | 138   |             |  |   | 50          |   |  |   | 277   |  
|Other interest-earning assets |  |                                                                             | 44  |   |        |   | (23   | )           |  |   | (38         | ) |  |   | (17   | )
|                              |  |                                                                             |     |   |        |   |       |             |  |   |             |   |  |   |       |  
|Total interest income         |  | $                                                                           | 162 |   |        | $ | 1,693 |             |  | $ | 20          |   |  | $ | 1,875 |  
|                              |  |                                                                             |     |   |        |   |       |             |  |   |             |   |  |   |       |  
|Interest-bearing liabilities  |  |                                                                             |     |   |        |   |       |             |  |   |             |   |  |   |       |  
|NOW                           |  | $                                                                           | (1  | ) |        | $ | 5     |             |  | $ |            |   |  | $ | 4     |  
|Money-market                  |  |                                                                             | 68  |   |        |   | 30    |             |  |   | 7           |   |  |   | 105   |  
|Savings                       |  |                                                                             |    |   |        |   | 1     |             |  |   |            |   |  |   | 1     |  
|Time                          |  |                                                                             | 107 |   |        |   | 659   |             |  |   | 49          |   |  |   | 815   |  
|                              |  |                                                                             |     |   |        |   |       |             |  |   |             |   |  |   |       |  
|Total interest on deposits    |  |                                                                             | 174 |   |        |   | 695   |             |  |   | 56          |   |  |   | 925   |  
|Other borrowings              |  |                                                                             | 47  |   |        |   | 72    |             |  |   | 45          |   |  |   | 164   |  
|                              |  |                                                                             |     |   |        |   |       |             |  |   |             |   |  |   |       |  
|Total interest expense        |  | $                                                                           | 221 |   |        | $ | 767   |             |  | $ | 101         |   |  | $ | 1,089 |  
|                              |  |                                                                             |     |   |        |   |       |             |  |   |             |   |  |   |       |  
|Change in net interest income |  | $                                                                           | (59 | ) |        | $ | 926   |             |  | $ | (81         | ) |  | $ | 786   |  
|                              |  |                                                                             |     |   |        |   |       |             |  |   |             |   |  |   |       |  



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Comparison of the Three-Month Periods Ended June 30, 2005 and 2004,
Continued



Provision for Loan Losses. Our
provision for loan losses was $1,522,000 for the three months ended June 30, 2005 compared to $491,000 for the three months ended June 30, 2004.



The provision was increased $1.3 million primarily due to the Legacy Loans, including those Legacy Loans with three different borrowers which resulted in
charge-offs of $1.1 million. The first borrower, a yacht brokerage firm, was issued a $1.0 million commercial line of credit in 2001, secured by yachts under construction. The Bank failed to secure its lien position on the collateral at the
inception of the loan. When the yacht builder (in Canada) went bankrupt, the Banks collateral was liquidated without any principal reduction. The borrower had one completed yacht, which was sold with proceeds used to pay down the line of
credit by $336,000. The borrower then offered the Bank a 28-acre parcel of land on the Braden River as collateral, which had a first lien with another bank of $166,000. In order to protect the Banks position the Bank purchased the first lien
at par. After a lengthy process of obtaining an environmental and engineering study on the parcel to ascertain its potential use and value, it was determined in the second quarter of 2005 that only 1.4 acres could potentially be developed. An
appraisal has been ordered and although it has not been received, verbal offers have been in the range of $125,000 to $200,000. As a result, the Bank charged off the second lien of $664,000 and expects to liquidate the collateral for a value
sufficient to satisfy the first lien of $166,000.



The second
borrower, a formal wear rental business, was issued a $1.4 million commercial line of credit in 2002, secured by business assets. Current Bank management, through a number of concerted efforts, was able to secure principal reductions of
approximately $1.0 million. During the second quarter of 2005 the borrower filed bankruptcy on the business and then fled the country. The remaining balance of the loan totaling approximately $400,000 was consequently charged-off, of which
approximately $200,000 had been previously included in our provision for loan loss. Management expects a minimal recovery if any from the liquidation of the business assets.



The last borrower, a glass installation and repair business, was issued a $276,000 commercial line of credit in 2000,
secured by business assets. During the second quarter of 2005 the primary guarantor had closed the business and liquidated all business assets (without Bank consent). Consequently, the loan was charged-off; we are proceeding with judgments and will
pursue all legal options in an effort to recover any portion due on the loan.



Commercial real estate loans grew 74% and now comprise 35% of the Banks net loan portfolio at June 30, 2005, compared to 28% at June 30, 2004. Residential loans grew 57% and now account for 51% of net loans,
compared to 46% at June 30, 2004.



Noninterest Income. Noninterest income decreased to $628,000 for the three months ended June 30, 2005 compared to $949,000 for the three months ended June 30, 2004. This decrease was primarily due to the one-time
gains experienced in 2004 in connection with the sale of our merchant services and our mortgage loan servicing rights. The gains on these



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Comparison of the Three-Month Periods Ended June 30, 2005 and 2004,
Continued



assets were part of the restructuring of our
operations as a result of the change in our executive management. Based upon the current growth and expansion of building in Florida, absent any unforeseen events, we anticipate that we will continue to achieve the same results or, possibly
increase, our gains on the sales of loans.



Noninterest
Expenses.Noninterest expense increased to $3.8 million for the three months ended June 30, 2005 compared to $2.4 million for the three months ended June 30, 2004. The increase was primarily due to an increase in employee compensation and
benefits and occupancy and equipment expense associated with the addition of three new branches in 2005 and an increase in advertising expenditures of $295,000.



On June 28, 2005, the Bank and Coast Financial Partners, Inc. (CFP), a now inactive, wholly-owned and
consolidated subsidiary of Coast Bank, entered into a Settlement Agreement and General Release (the Settlement Agreement) with Gillian Busard, a former employee of CFP. Under the terms of the Settlement Agreement, among other things, the
Bank and CFP agreed to pay $75,000 to Ms. Busard and her attorneys, Ms. Busard agreed to dismiss her claims for employment discrimination, breach of contract, and unfair and deceptive trade practices relating to her prior employment and termination
by CFP, and Ms. Busard agreed to release the Bank, CFP and their affiliates from any and all claims she may have against them. Neither the Bank nor CFP admitted any liability or wrongdoing. The Bank and CFP had denied all liability and we were
prepared to defend the action vigorously. However, while continuing to believe that the suit was without merit, we determined that it was more cost effective to settle the dispute than to proceed to arbitration. An expense of approximately $185,000,
reflecting the settlement amount of $75,000 and related legal fees and expenses of approximately $110,000, were accrued in our second quarter in connection with the settlement.



Income Taxes. The income tax benefit for the three months ended June 30, 2005 was $(571,000), which equates to
an effective rate of 37.3% compared to a tax provision of $146,000 for the three months ended June 30, 2004, which equates to an effective rate of 38.3%.



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Comparison of the Six-Month Periods Ended June 30, 2005 and 2004



General. The decrease in net income in the
six months ended June 30, 2005 compared to the same period in 2004 was attributable primarily to an increase in the provision for loan losses, an increase in noninterest expenses, and a decrease in noninterest income. The increase in the loan loss
provision was due primarily to Legacy Loans, including those Legacy Loans which resulted in a $1.1 million charge-off in the second quarter of 2005, and the increase in noninterest expense was primarily due to branch expansion costs and the
settlement of a legal proceeding with a former employee of a former subsidiary of Coast Bank. The Company estimates that legal fees and lost interest from the charged-off loans was approximately $304,000. See Comparison of the Six-Month
Periods Ending June 30, 2005 and 2004  Provision for Loan Losses and  Noninterest Expenses.



Net Interest Income and Net Interest Margin.



Interest income increased to $11.3 million during the six months ended June 30, 2005, from $8.0 million for the same period in 2004. Interest on loans for
the six months ended June 30, 2005 was $10.3 million, resulting from an average yield of 6.30% compared to $7.5 million resulting from an average yield of 6.39% for the six months ended June 30, 2004. The increase in interest on loans was primarily
due to an increase in the average loan balance to $330.5 million during the six months ended June 30, 2005 compared to $235.1 million, for the six months ended June 30, 2004. Interest on securities increased to $974,000 during the six months ended
June 30, 2005, from $483,000 for the same period in 2004. The increase in interest income on securities was primarily due to the increase in the average securities balance to $58.3 million during the six months ended June 30, 2005 from $32.7 million
for the six months ended June 30, 2004. Interest on other interest earning assets decreased to $15,000 during the six months ended June 30, 2005, from $37,000 during the six months ended June 30, 2004.



Interest expense on interest bearing liabilities increased to $5.2 million
during the six months ended June 30, 2005, from $3.3 million during the six months ended June 30, 2004. The increase was due to an increase in the average balance of interest bearing liabilities to $353.7 million in 2005 from $241.6 million in 2004.
Management is intent on building core deposits for the long-term, which enhance customer retention, and anticipate the mix of deposits to shift throughout the remainder of 2005.



20



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Comparison of the Six-Month Periods Ended June 30, 2005 and 2004, Continued



Our net interest margin of 3.16% for the six months ended
June 30, 2005 was lower than our margin for the same period in the previous year of 3.39% due to an increase in market rates for deposit accounts.



Average Balances and Average Interest Rates. The following table sets forth, for the six months ended June 30, 2005 and 2004, information
regarding (i) the total dollar amount of interest and dividend income of the Company from interest-earning assets and the resultant average yields, (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant
average cost, (iii) net interest income, (iv) interest rate spread, and (v) net interest margin.



|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|-------------------------------------------------------------------------------- |  | ---------------------- | ------- | ------------------------ | ------------- | ------------- | ---- | - | ------------------ | - | ------------------------ |  | ------------- |  | ---- | -
|                                                                                 |  | Six Months Ended       |        
|                                                                                 |  | June 30, 2005          |         |                          | June 30, 2004 |              
|                                                                                 |  | Average Balance(1)     |         | Interest/ Income Expense |               | Yield/Rate(2) |      |   | Average Balance(1) |   | Interest Income/ Expense |  | Yield/Rate(2) | 
|                                                                                 |  | (dollars in thousands) |        
|Interest-earning assets:                                                         |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Investment securities (3)                                                        |  | $                      | 58,347  |                          | 974           |               | 3.37 | % |                    | $ | 32,699                   |  | 483           |  | 2.97 | %
|Loans (4)                                                                        |  |                        | 330,476 |                          | 10,317        |               | 6.30 |   |                    |   | 235,052                  |  | 7,465         |  | 6.39 |  
|Other interest-earning assets (5)                                                |  |                        | 1,211   |                          | 15            |               | 2.50 |   |                    |   | 8,032                    |  | 37            |  | 0.93 |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total interest-earning assets/interest income/average rates earned               |  |                        | 390,034 |                          | 11,306        |               | 5.85 |   |                    |   | 275,783                  |  | 7,985         |  | 5.82 |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total noninterest earning assets                                                 |  |                        | 32,169  |                          |               |               |      |   |                    |   | 25,143                   |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total assets                                                                     |  | $                      | 422,203 |                          |               |               |      |   |                    | $ | 300,926                  |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Interest-bearing liabilities:                                                    |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|NOW                                                                              |  | $                      | 16,484  |                          | 26            |               | 0.32 | % |                    | $ | 10,954                   |  | 18            |  | 0.33 | %
|Money market                                                                     |  |                        | 72,202  |                          | 809           |               | 2.26 |   |                    |   | 49,963                   |  | 453           |  | 1.82 |  
|Savings                                                                          |  |                        | 3,968   |                          | 10            |               | 0.51 |   |                    |   | 3,111                    |  | 8             |  | 0.52 |  
|Time                                                                             |  |                        | 226,475 |                          | 3,940         |               | 3.51 |   |                    |   | 157,926                  |  | 2,697         |  | 3.43 |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total interest-bearing deposits                                                  |  |                        | 319,129 |                          | 4,785         |               | 3.02 |   |                    |   | 221,954                  |  | 3,176         |  | 2.88 |  
|Other borrowings                                                                 |  |                        | 34,578  |                          | 411           |               | 2.40 |   |                    |   | 19,692                   |  | 158           |  | 1.61 |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total interest-bearing liabilities/ interest expense/average rate paid           |  |                        | 353,707 |                          | 5,196         |               | 2.96 |   |                    |   | 241,646                  |  | 3,334         |  | 2.77 |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total noninterest bearing liabilities                                            |  |                        | 33,751  |                          |               |               |      |   |                    |   | 25,490                   |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total liabilities                                                                |  |                        | 387,458 |                          |               |               |      |   |                    |   | 267,136                  |  |               |  |      |  
|Shareholders equity                                                             |  |                        | 34,745  |                          |               |               |      |   |                    |   | 33,790                   |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Total liabilities and shareholders equity                                       |  | $                      | 422,203 |                          |               |               |      |   |                    | $ | 300,926                  |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Net interest income                                                              |  |                        |         |                          | 6,110         |               |      |   |                    |   |                          |  | 4,651         |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Interest rate spread (6)                                                         |  |                        |         |                          |               |               | 2.89 | % |                    |   |                          |  |               |  | 3.05 | %
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Net interest margin (7)                                                          |  |                        |         |                          |               |               | 3.16 | % |                    |   |                          |  |               |  | 3.39 | %
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                        | 1.10    |                          |               |               |      |   |                    |   | 1.14                     |  |               |  |      |  
|                                                                                 |  |                        |         |                          |               |               |      |   |                    |   |                          |  |               |  |      |  

---

|(1) | Average balance represents the average daily balance year to date.
|--- | ------------------------------------------------------------------

|(2) | Annualized for comparability with full year data.
|--- | -------------------------------------------------

|(3) | Principally taxable. The yield information does not give effect to changes in fair value that are reflected as a component of shareholders equity.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Non-accruing loans are included in computation of average balance.
|--- | ------------------------------------------------------------------

|(5) | Includes federal funds sold and interest-bearing deposits.
|--- | ----------------------------------------------------------

|(6) | Interest rate spread represents the difference between average yield on interest-bearing assets and the average rate of interest-bearing liabilities.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Net interest margin is the net interest income divided by average interest earning assets.
|--- | ------------------------------------------------------------------------------------------



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Comparison of the Six-Month Periods Ended June 30, 2005 and 2004, Continued



Rate/Volume Interest Analysis. The effect on
interest income, interest expense, and net interest income for the six month periods ended June 30, 2005 and 2004, of changes in average balance and rate, is shown below. For each category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to (i) changes in rate (change in rate multiplied by prior volume), (ii) changes in volume (change in volume multiplied by prior rate), and (iii) changes in rate/volume (change in rate multiplied by
change in volume).



|                              |  |                                                                           |      |   |        |   |       |             |  |   |             |   |  |   |       |  
|----------------------------- |  | ------------------------------------------------------------------------- | ---- | - | ------ | - | ----- | ----------- |  | - | ----------- | - |  | - | ----- | -
|                              |  | Six-Months Ended June 30 2005 Compared to 2004 Increase (Decrease) Due to |     
|                              |  | Rate                                                                      |      |   | Volume |   |       | Rate/Volume |  |   | TotalChange |  
|                              |  | (in thousands)                                                            |     
|Interest-earning assets       |  |                                                                           |      |   |        |   |       |             |  |   |             |   |  |   |       |  
|Loans                         |  | $                                                                         | (126 | ) |        | $ | 3,021 |             |  | $ | (43         | ) |  | $ | 2,852 |  
|Investment securities         |  |                                                                           | 64   |   |        |   | 376   |             |  |   | 51          |   |  |   | 491   |  
|Other interest-earning assets |  |                                                                           | 62   |   |        |   | (31   | )           |  |   | (53         | ) |  |   | (22   | )
|                              |  |                                                                           |      |   |        |   |       |             |  |   |             |   |  |   |       |  
|Total interest income         |  | $                                                                         |     |   |        | $ | 3,366 |             |  | $ | (45         | ) |  | $ | 3,321 |  
|                              |  |                                                                           |      |   |        |   |       |             |  |   |             |   |  |   |       |  
|Interest-bearing liabilities  |  |                                                                           |      |   |        |   |       |             |  |   |             |   |  |   |       |  
|NOW                           |  | $                                                                         | (1   | ) |        | $ | 9     |             |  | $ |            |   |  | $ | 8     |  
|Money-market                  |  |                                                                           | 108  |   |        |   | 199   |             |  |   | 49          |   |  |   | 356   |  
|Savings                       |  |                                                                           |     |   |        |   | 2     |             |  |   |            |   |  |   | 2     |  
|Time                          |  |                                                                           | 55   |   |        |   | 1,161 |             |  |   | 27          |   |  |   | 1,243 |  
|                              |  |                                                                           |      |   |        |   |       |             |  |   |             |   |  |   |       |  
|Total interest on deposits    |  |                                                                           | 162  |   |        |   | 1,371 |             |  |   | 76          |   |  |   | 1,609 |  
|Other borrowings              |  |                                                                           | 77   |   |        |   | 118   |             |  |   | 58          |   |  |   | 253   |  
|                              |  |                                                                           |      |   |        |   |       |             |  |   |             |   |  |   |       |  
|Total interest expense        |  | $                                                                         | 239  |   |        | $ | 1,489 |             |  | $ | 134         |   |  | $ | 1,862 |  
|                              |  |                                                                           |      |   |        |   |       |             |  |   |             |   |  |   |       |  
|Change in net interest income |  | $                                                                         | (239 | ) |        | $ | 1,877 |             |  | $ | (179        | ) |  | $ | 1,459 |  
|                              |  |                                                                           |      |   |        |   |       |             |  |   |             |   |  |   |       |  



Provision for
Loan Losses. Our provision for loan losses was $1,882,000 for the six months ended June 30, 2005 compared to $820,000 for the six months ended June 30, 2004.



The provision was increased $1.3 million primarily due to the Legacy Loans, including those Legacy Loans with three
different borrowers which resulted in charge-offs of $1.1 million. The first borrower, a yacht brokerage firm, was issued a $1.0 million commercial line of credit in 2001, secured by yachts under construction. The Bank failed to secure its lien
position on the collateral at the inception of the loan. When the yacht builder (in Canada) went bankrupt, the Banks collateral was liquidated without any principal reduction. The borrower had one completed yacht, which was sold with proceeds
used to pay down the line of credit by $336,000. The borrower then offered the Bank a 28-acre parcel of land on the Braden River as collateral, which had a first lien with another bank of $166,000. In order to protect the Banks position the
Bank purchased the first lien at par. After a lengthy process of obtaining an environmental and engineering study on the parcel to ascertain its potential use and value, it was determined in the second quarter of 2005 that only 1.4 acres could
potentially be developed. An appraisal has been ordered and although it has not been received, verbal offers have been in the range of $125,000 to $200,000. As a result, the Bank charged off the second lien of $664,000 and expects to liquidate the
collateral for a value sufficient to satisfy the first lien of $166,000.



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Comparison of the Six-Month Periods Ended June 30, 2005 and 2004, Continued



The second borrower, a formal wear rental business, was
issued a $1.4 million commercial line of credit in 2002, secured by business assets. Current Bank management, through a number of concerted efforts, was able to secure principal reductions of approximately $1.0 million. During the second quarter of
2005 the borrower filed bankruptcy on the business and then fled the country. The remaining balance of the loan totaling approximately $400,000 was consequently charged-off, of which approximately $200,000 had been previously included in our
provision for loan loss. Management expects a minimal recovery if any from the liquidation of the business assets.



The last borrower, a glass installation and repair business, was issued a $276,000 commercial line of credit in 2000, secured by business assets. During
the second quarter of 2005 the primary guarantor had closed the business and liquidated all business assets (without Bank consent). Consequently, the loan was charged-off; we are proceeding with judgments and will pursue all legal options in an
effort to recover any portion due on the loan.



Commercial
real estate loans grew 74% and now comprise 35% of the Banks net loan portfolio at June 30, 2005, compared to 28% at June 30, 2004. Residential loans grew 57% and now account for 51% of net loans, compared to 46% at June 30, 2004.



Noninterest Income. Noninterest income decreased to $1.2
million for the six months ended June 30, 2005 compared to $1.5 million for the six months ended June 30, 2004. This decrease was primarily due to the one-time gains experienced in 2004 in connection with the sale of our merchant services, the sale
of asset management services, and our mortgage loan servicing rights partially offset with an increase from gains on the sale of loans held for sale, due to an increase in loans sold. The gains on these assets were part of the restructuring of our
operations as a result of the change in our executive management. Based upon the current growth and expansion of building in Florida, absent any unforeseen events, we anticipate that we will continue to achieve the same results or, possibly
increase, our gains on the sales of loans.



Noninterest
Expenses.Noninterest expense increased to $6.8 million for the six months ended June 30, 2005 compared to $5.0 million for the six months ended June 30, 2004. The increase was primarily due to an increase in employee compensation and
benefits and occupancy and equipment expense associated with the addition of three new branches in 2005 and an increase in advertising expenditures of $355,000.



On June 28, 2005, the Bank and Coast Financial Partners, Inc. (CFP), a now inactive, wholly-owned and
consolidated subsidiary of Coast Bank, entered into a Settlement Agreement and General Release (the Settlement Agreement) with Gillian Busard, a former employee of CFP. Under the terms of the Settlement Agreement, among other things, the
Bank and CFP agreed to pay $75,000 to Ms. Busard and her attorneys, Ms. Busard agreed to dismiss her claims for employment discrimination, breach of contract, and unfair and deceptive trade practices relating to her prior employment and termination
by CFP, and Ms. Busard agreed to release the Bank, CFP and their affiliates from any and all claims she may have against them. Neither the Bank nor CFP admitted any liability or wrongdoing. The Bank and CFP had denied all liability and we were
prepared to defend the action vigorously.



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Comparison of the Six-Month Periods Ended June 30, 2005 and 2004, Continued



However, while continuing to believe that the suit was
without merit, we determined that it was more cost effective to settle the dispute than to proceed to arbitration. An expense of approximately $185,000, reflecting the settlement amount of $75,000 and related legal fees and expenses of approximately
$110,000, were accrued in our second quarter in connection with the settlement.



Income Taxes. The income tax benefit for the six months ended June 30, 2005 was $(516,000), which equates to an effective rate of 36.9% compared to a tax provision of $152,000 for the six months ended
June 30, 2004, which equates to an effective rate of 38.4%.



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Liquidity and Capital Resources



The Companys primary source of cash during the six months ended June
30, 2005, was from net deposit inflows of approximately $68.5 million, net proceeds from Federal Home Loan Bank advances of approximately $10.0 million, principle repayments and calls of securities available for sale of approximately $7.8 million,
proceeds from a repurchase agreement of $4.7 million and an increase in other borrowings of approximately $4.6 million. Cash was used primarily to originate net loans of approximately $64.0 million, to purchase securities of approximately $11.4
million, to purchase premises and equipment of approximately $5.7 million and to repay federal funds purchased of approximately $3.8 million. Management will continue to attempt to acquire short-term deposits and low cost transaction accounts. At
June 30, 2005, the Bank exceeded its regulatory liquidity requirements.



As part of our expansion plans, as of July 31, 2005, we have opened five new branches during 2005, four in Pinellas County and one in Manatee County. The two newest branches were opened in July. In addition, we will
continue to seek and evaluate additional expansion and growth alternatives available to us, including any branch expansion or acquisition opportunities which may be identified by us. Although we generally have expanded through the opening of a
limited number of branches each year, we would consider more rapid expansion if economically sound and suitable acquisitions or branching opportunities should present themselves or otherwise be available to us. However, we cannot assure you that any
suitable opportunities will be identified or, if identified, that we will be able to take advantage of them.



Furthermore, if we continue to achieve our anticipated growth levels and/or significant opportunities to expand our business operations present
themselves, the Company is likely to require additional funds in order to finance such growth and expansion activities. Accordingly, the Company is considering and evaluating a variety of additional sources of funds and capital to meet its cash
requirements, including the sale of equity securities, debt financings and borrowings, trust preferred offerings, and other financing alternatives. Although the sale of equity securities is the most likely source of such funds, there is no assurance
that the Company will not seek other financing alternatives, that the Company will be able to obtain additional financing, if needed, or, if available, that it can be obtained on terms favorable to the Company.



Off-Balance Sheet Arrangements



The Company is a party to financial instruments with off-balance-sheet risk
in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, unfunded construction loans, unused lines of credit and standby letters of credit. These instruments
involve, to varying degrees, elements of credit and interest-rate risk in excess of the amounts recognized in the condensed consolidated balance sheet. The contract or notional amounts of these instruments reflect the extent of the Companys
involvement in particular classes of financial instruments.



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



The Companys exposure to credit loss in the event of nonperformance by
the other party to the financial instrument for commitments to extend credit, unfunded construction loans, unused lines of credit and standby letters of credit is represented by the contractual amount of those instruments. To control the credit risk
associated with entering into commitments and issuing letters of credit, the Company uses the same credit quality, collateral policies, and monitoring controls in making commitments and letters of credit as it does with its lending activities.



Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to
expire without being drawn upon, the total committed amounts do not necessarily represent future cash requirements. The Company evaluates each customers credit worthiness on a case-by-case basis. The amount of collateral obtained, if it is
deemed necessary by the Company upon extension of credit, is based on managements credit evaluation of the counter party.



Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party and to support
public and private borrowing arrangements. Essentially all letters of credit issued have expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to
customers. The Company generally holds collateral supporting those commitments.



Unused lines of credit and commitments to extend credit typically result in loans with a market interest rate.



A summary of the amounts of the Companys financial instruments, with off-balance sheet risk at June 30, 2005, follows (in thousands):



|                             |  |                |        
|---------------------------- |  | -------------- | -------
|                             |  | ContractAmount
|Commitments to extend credit |  | $              | 4,423  
|                             |  |                |        
|Unfunded construction loans  |  | $              | 149,050
|                             |  |                |        
|Unused lines of credit       |  | $              | 22,540 
|                             |  |                |        
|Standby letters of credit    |  | $              | 1,610  
|                             |  |                |        



Management believes
that the Company has adequate resources to fund all of its commitments and that substantially all its existing commitments will be funded within the next twelve months.



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Impact of Inflation



The condensed consolidated financial statements and related notes herein have been presented in terms of historic dollars
without considering changes in the relative purchasing power of money over time due to inflation. Unlike industrial companies, substantially all of the assets and virtually all of the liabilities of the Company are monetary in nature. As a result,
interest rates have a more significant impact on the Companys performance than the general level of inflation. Over short periods of time, interest rates may not necessarily move in the same direction or in the same magnitude as inflation.



Selected Ratios



The following are presented for the dates and periods indicated:



|                                                 |  |                             |    |  |                            |   |  |                             |  
|------------------------------------------------ |  | --------------------------- | -- |  | -------------------------- | - |  | --------------------------- | -
|                                                 |  | Six MonthsEndedJune 30,2005 |    |  | Year EndedDecember 31,2004 |   |  | Six MonthsEndedJune 30,2004 |  
|Average equity as a percentage of average assets |  | 8.23                        | %  |  | 10.31                      | % |  | 11.23                       | %
|Equity to total assets at end of period          |  | 7.28                        | %  |  | 9.09                       | % |  | 10.14                       | %
|Return on average assets(1)                      |  | (0.42                       | )% |  | 0.25                       | % |  | 0.16                        | %
|Return on average equity(1)                      |  | (5.11                       | )% |  | 2.44                       | % |  | 1.44                        | %
|Dividend payout ratio(2)                         |  | N/A                         |    |  | N/A                        |   |  | N/A                         |  

---

|(1) | Annualized for the six months ended June 30.
|--- | --------------------------------------------

|(2) | The Company has not paid dividends on common stock since inception.
|--- | -------------------------------------------------------------------



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



Item 3. Quantitative and Qualitative Disclosures About Market Risk



Not applicable.



Item 4. Controls and Procedures



The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 (the Exchange Act) is
recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to the Companys management, including
our Chief Executive Officer and Chief Financial Officer (the Companys Principal Executive Officer and Principal Financial Officer, respectively), as appropriate to allow for timely decisions regarding timely disclosure. In designing and
evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is
required to apply its judgment in evaluating the cost/benefit relationship of possible controls and procedures.



Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure
controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this Form 10-Q.



Based on this evaluation of our disclosure controls and procedures, our Chief Executive Officer and our Chief Financial Officer have concluded that the
Companys disclosure controls and procedures, subject to the limitations disclosed above, were effective as of June 30, 2005.



There were no significant changes in our internal controls over financial reporting (as defined in Rule 13a-15(4) of the Exchange Act) that occurred
during the second quarter of our 2005 fiscal year that has materially affected, or in other factors that could or is reasonably likely to materially affect, these controls subsequent to the date of the evaluation of those controls by the Chief
Executive and Chief Financial officers.



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



PART II. OTHER INFORMATION



Item 1. Legal Proceedings



The Company and its
wholly owned subsidiary, Coast Bank of Florida, are periodically parties to or otherwise involved in legal proceedings arising in the ordinary course of business. Except for those proceedings described below, management does not believe that there
is any proceeding threatened or pending against the Company or Coast Bank of Florida which, if determined adversely, would have a material affect on the business, results of operations, cash flows or financial position of the Company or Coast Bank
of Florida.



As reported by the Company in its Form 8-K filed on July 1, 2005,
the Company announced that on June 28, 2005, Coast Bank of Florida (Coast Bank), a wholly owned and consolidated subsidiary of the Company, and Coast Financial Partners, Inc. (CFP), a now inactive, wholly-owned and
consolidated subsidiary of the Company, entered into a Settlement Agreement and General Release (the Settlement Agreement) with Gillian Busard, a former employee of CFP. Under the terms of the Settlement Agreement, among other things:



| |  |  | Coast Bank and CFP agreed to promptly cause to be paid to Ms. Busard and her attorneys $75,000;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | Ms. Busard agreed to dismiss her claims for employment discrimination, breach of contract, and unfair and deceptive trade practices relating to her prior employment and termination
by CFP;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Neither Coast Bank nor CFP admitted any liability or wrongdoing; and
| | - |  | --------------------------------------------------------------------



| |  |  | Ms. Busard agreed to release Coast Bank, CFP and their affiliates from any and all claims she may have against them.
| | - |  | --------------------------------------------------------------------------------------------------------------------



Coast Bank and CFP had denied all liability and the Registrant was prepared to defend the
action vigorously. However, shortly before the arbitration of her claims, Ms. Busard made an offer of settlement that was substantially below the amounts she previously asserted she was seeking. Accordingly, while continuing to believe that the suit
was without merit, the Registrant determined that it was more cost effective to settle the dispute for $75,000 than to proceed to arbitration and risk an adverse judgment.



An expense of approximately $185,000, reflecting the settlement amount of $75,000 and related legal fees and expenses of approximately
$110,000, were accrued in the Companys fiscal quarter ending June 30, 2005.



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds



None.



Item 3. Defaults Upon Senior Securities



None.



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



PART II. OTHER INFORMATION, CONTINUED



Item 4. Submission of Matters to a Vote of Security Holders



At the Annual Meeting of Shareholders (the Annual Meeting) of the Company, held on May 20, 2005, shareholders were asked to consider and vote on (a) the election of nine directors and (b) the approval and
adoption of the Coast Financial Holdings, Inc. 2005 Stock Incentive Plan (the 2005 Stock Plan). At the Annual Meeting, the shareholders elected each of the nine nominees to serve as directors of the Company and approved the approval and
adoption of the 2005 Stock Plan.



At the Annual Meeting, 2,916,269 shares were
present in person or by proxy. Listed below are the voting results for each of the matters considered and voted on by the Companys shareholders at the Annual Meeting:



Election of Directors



|                    |  |           |  |      |  |          |  |    
|------------------- |  | --------- |  | ---- |  | -------- |  | ---
|Director            |  | For       |  | %    |  | Withheld |  | %  
|James K. Toomey     |  | 2,911,469 |  | 99.8 |  | 4,800    |  | 0.2
|Joseph Gigliotti    |  | 2,911,469 |  | 99.8 |  | 4,800    |  | 0.2
|Kennedy Legler, III |  | 2,911,469 |  | 99.8 |  | 4,800    |  | 0.2
|Paul G. Nobbs       |  | 2,913,469 |  | 99.9 |  | 2,800    |  | 0.1
|Thomas M. OBrien   |  | 2,913,469 |  | 99.9 |  | 2,800    |  | 0.1
|Brian P. Peters     |  | 2,913,269 |  | 99.9 |  | 3,000    |  | 0.1
|John R. Reinemeyer  |  | 2,898,469 |  | 99.4 |  | 17,800   |  | 0.6
|Michael T. Ruffino  |  | 2,907,469 |  | 99.7 |  | 8,800    |  | 0.3
|M. Alex White       |  | 2,911,469 |  | 99.8 |  | 4,800    |  | 0.2



Approval and Adoption of the 2005 Stock Plan



|                                        |  |           |  |      |  |         |  |     |  |         |  |     |  |                 |  |     
|--------------------------------------- |  | --------- |  | ---- |  | ------- |  | --- |  | ------- |  | --- |  | --------------- |  | ----
|                                        |  | For       |  | %    |  | Against |  | %   |  | Abstain |  | %   |  | Broker Non-Vote |  | %   
|Approval and Adoption Stock Option Plan |  | 2,047,069 |  | 70.9 |  | 213,184 |  | 7.4 |  | 9,125   |  | 0.3 |  | 619,891         |  | 21.5



Furthermore, because the votes for
approval and adoption of the 2005 Stock Plan exceeded a majority of the votes cast on the proposal at the Annual Meeting, the approval of the 2005 Stock Plan also satisfied applicable Nasdaq rules relating to the approval of stock option plans.



Item 5. Other Information



None.



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



PART II. OTHER INFORMATION, CONTINUED



Item 6. Exhibits



The following exhibits
are hereby filed with the Securities and Exchange Commission.



|            |  |                                                                                                                                                                                                                                                                             
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                                                                                                                                                                      
|10.1        |  | Settlement Agreement and General Release, dated June 28, 2005, by and among Coast Bank of Florida, Coast Financial Partners, Inc. and Gillian Busard, incorporated herein by reference to
Exhibit 10.1 to the Companys Form 8-K, filed with the Commission on July 1, 2005.
|            | 
|10.2        |  | Coast Financial Holdings, Inc. 2005 Stock Incentive Plan, dated May 20, 2005, and Forms of Nonqualified Stock Option Agreement and Incentive Stock Option Agreement                                                                                                         
|            | 
|31.1        |  | Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act                                                                                                                                                                        
|            | 
|31.2        |  | Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act                                                                                                                                                                        
|            | 
|32.1        |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002                                                                                                                               
|            | 
|32.2        |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002                                                                                                                               



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COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY



SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                     |  |                                |  |                                              
|-------------------- |  | ------------------------------ |  | ---------------------------------------------
|                     |  | COAST FINANCIAL HOLDINGS, INC.
|                     |  | (Registrant)                  
|                     |  |                               
|Date: August 8, 2005 |  | By:                            |  | /s/ Brian P. Peters                          
|                     |  |                                |  | Brian P. Peters, President and Chief         
|                     |  |                                |  | Executive Officer                            
|                     |  |                               
|Date: August 8, 2005 |  | By:                            |  | /s/ Brian F. Grimes                          
|                     |  |                                |  | Brian F. Grimes, Executive Vice President and
|                     |  |                                |  | Chief Financial Officer