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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-QSB

(Mark One)

[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2003

[  ] Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from _________to

Commission file number 000-1262276

COAST FINANCIAL HOLDINGS, INC.




(Exact Name of Small Business Issuer as Specified in Its Charter)


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

2412 Cortez Road West
Bradenton, Florida 34207

(Address of Principal Executive Offices)


(941) 752-5900

(Issuers Telephone Number, Including Area Code)


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

Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 [  ] NO [X]

State 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 |  | 3,735,450 shares                
|                                        |  |                                 
|(class)                                 |  | Outstanding at December 30, 2003

Transitional Small Business Format (Check One): YES [  ] NO [X]



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TABLE OF CONTENTS



|                                      |                                                                   |                                                                      |  |  |  |  |  | 
|------------------------------------- | ----------------------------------------------------------------- | -------------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION        
|                                      | Item 1. Financial Statements                                     
|                                      |                                                                   | Condensed Consolidated Balance Sheets                               
|                                      |                                                                   | Condensed Consolidated Statements of Operations                     
|                                      |                                                                   | Condensed Consolidated Statements of Changes in Stockholders Equity
|                                      |                                                                   | Condensed Consolidated Statements of Cash Flows                     
|                                      |                                                                   | Notes to Condensed Consolidated Financial Statements                
|                                      |                                                                   | Review by Independent Accountants                                   
|                                      |                                                                   | Independent Accountants Report                                     
|                                      | Item 2. Managements Discussion and Analysis or Plan of Operation
|                                      | Item 3. Controls and Procedures                                  
|PART II. OTHER INFORMATION           
|                                      | Item 1. Legal Proceedings                                        
|                                      | Item 6. Exhibits and Reports on Form 8-K                         
|SIGNATURES                           
|Ex-31.1 Section 302 CEO Certification
|Ex-31.2 Section 302 CFO Certification
|Ex-32.1 Section 906 CEO Certification
|Ex-32.2 Section 906 CFO Certification



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##### Table of Contents



COAST FINANCIAL HOLDINGS, INC.

INDEX

|                              |                                                                   |                                                                                                                                |    |       |      | 
|----------------------------- | ----------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------ | -- | ----- | ---- | 
|                              |                                                                   |                                                                                                                                |    | Page 
|                              |                                                                   |                                                                                                                                |    |      
|PART I. FINANCIAL INFORMATION |                                                                   |                                                                                                                                |    |      
|                              | Item 1. Financial Statements                                      |                                                                                                                                |    |       |     
|                              |                                                                   | Condensed Consolidated Balance Sheets -
At September 30, 2003 (unaudited) and At December 31, 2002                             |    |       | 2    | 
|                              |                                                                   | Condensed Consolidated Statements of Operations -
Three and Nine Months ended September 30, 2003 and 2002 (unaudited)          |    |       | 3    | 
|                              |                                                                   | Condensed Consolidated Statements of Changes in Stockholders Equity
Nine Months Ended September 30, 2003 and 2002 (unaudited) |    |       | 4    | 
|                              |                                                                   | Condensed Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 2003 and 2002 (unaudited)                    |    |       | 5-6  | 
|                              |                                                                   | Notes to Condensed Consolidated Financial Statements (unaudited)                                                               |    |       | 7-10 | 
|                              |                                                                   | Review by Independent Accountants                                                                                              |    |       | 11   | 
|                              |                                                                   | Independent Accountants Report                                                                                                |    |       | 12   | 
|                              | Item 2. Managements Discussion and Analysis or Plan of Operation |                                                                                                                                |    | 13-18 |     
|                              | Item 3. Controls and Procedures                                   |                                                                                                                                |    | 19    |     
|PART II. OTHER INFORMATION    |                                                                   |                                                                                                                                |    |      
|                              | Item 1. Legal Proceedings                                         |                                                                                                                                |    | 19    |     
|                              | Item 6. Exhibits and Reports on Form 8-K                          |                                                                                                                                |    | 20    |     
|SIGNATURES                    |                                                                   |                                                                                                                                | 21 |      

1



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##### Table of Contents












COAST FINANCIAL HOLDINGS, INC.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)

|                                                                             |                                                                                                                            |                            |         |               |         |              |         |        |         | 
|---------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ------------- | ------- | ------------ | ------- | ------ | ------- | 
|                                                                             |                                                                                                                            |                            |         | September 30, |         | December 31,
|                                                                             |                                                                                                                            |                            |         | 2003          |         | 2002        
|                                                                             |                                                                                                                            |                            |         |               |         |             
|                                                                             |                                                                                                                            |                            |         | (Unaudited)   |         |              |         |       
|                                                                             | Assets                                                                                                                     |                            |         |               |         |              |         |        |        
|Cash and due from banks                                                      |                                                                                                                            | $                          | 7,825   |               |         |              | 4,330   |       
|Federal funds sold                                                           |                                                                                                                            |                            | 595     |               |         |              | 4,640   |       
|                                                                             |                                                                                                                            |                            |         |               |         |              |         |       
|                                                                             |                                                                                                                            | Cash and cash equivalents  |         |               | 8,420   |              |         |        | 8,970   | 
|Securities available for sale                                                |                                                                                                                            |                            | 26,321  |               |         |              | 29,290  |       
|Loans, net of allowance for loan losses of $1,632 in 2003 and
$1,350 in 2002 |                                                                                                                            |                            | 164,628 |               |         |              | 116,203 |       
|Loans held for sale                                                          |                                                                                                                            |                            | 11,649  |               |         |              | 10,888  |       
|Foreclosed real estate                                                       |                                                                                                                            |                            | 73      |               |         |              | 110     |       
|Federal Home Loan Bank stock, at cost                                        |                                                                                                                            |                            | 592     |               |         |              | 299     |       
|Premises and equipment, net                                                  |                                                                                                                            |                            | 8,256   |               |         |              | 6,454   |       
|Accrued interest receivable                                                  |                                                                                                                            |                            | 1,015   |               |         |              | 808     |       
|Deferred income taxes                                                        |                                                                                                                            |                            | 1,629   |               |         |              | 1,418   |       
|Loan servicing rights                                                        |                                                                                                                            |                            | 1,085   |               |         |              | 775     |       
|Other assets                                                                 |                                                                                                                            |                            | 1,080   |               |         |              | 651     |       
|                                                                             |                                                                                                                            |                            |         |               |         |              |         |       
|                                                                             |                                                                                                                            | $                          | 224,748 |               |         |              | 175,866 |       
|                                                                             |                                                                                                                            |                            |         |               |         |              |         |       
|                                                                             | Liabilities and Stockholders Equity                                                                                       |                            |         |               |         |              |         |        |        
|Liabilities:                                                                 |                                                                                                                            |                            |         |               |         |              |         |       
|                                                                             | Noninterest-bearing demand deposits                                                                                        |                            |         | 16,759        |         |              |         | 11,382 |        
|                                                                             | Savings, NOW and money-market deposits                                                                                     |                            |         | 39,974        |         |              |         | 36,517 |        
|                                                                             | Time deposits                                                                                                              |                            |         | 127,641       |         |              |         | 98,238 |        
|                                                                             |                                                                                                                            |                            |         |               |         |              |         |       
|                                                                             |                                                                                                                            | Total deposits             |         |               | 184,374 |              |         |        | 146,137 | 
|                                                                             | Federal Home Loan Bank advances                                                                                            |                            |         | 3,100         |         |              |         | 2,500  |        
|                                                                             | Line of credit                                                                                                             |                            |         | 303           |         |              |         |       |        
|                                                                             | Official checks                                                                                                            |                            |         | 5,208         |         |              |         | 1,928  |        
|                                                                             | Other borrowings                                                                                                           |                            |         | 15,449        |         |              |         | 8,141  |        
|                                                                             | Other liabilities                                                                                                          |                            |         | 509           |         |              |         | 899    |        
|                                                                             |                                                                                                                            |                            |         |               |         |              |         |       
|                                                                             |                                                                                                                            | Total liabilities          |         |               | 208,943 |              |         |        | 159,605 | 
|                                                                             |                                                                                                                            |                            |         |               |         |              |         |       
|Stockholders equity:                                                        |                                                                                                                            |                            |         |               |         |              |         |       
|                                                                             | Preferred stock, $.01 par value; $11 liquidation value; 5,000,000
shares authorized, 545,000 shares issued and outstanding |                            |         | 5,995         |         |              |         | 5,995  |        
|                                                                             | Common stock, $5 par value; 20,000,000 shares authorized,
1,350,450 shares issued and outstanding in 2003 and 2002         |                            |         | 6,752         |         |              |         | 6,752  |        
|                                                                             | Additional paid-in capital                                                                                                 |                            |         | 5,897         |         |              |         | 5,897  |        
|                                                                             | Accumulated deficit                                                                                                        |                            |         | (2,530        | )       |              |         | (2,325 | )      
|                                                                             | Accumulated other comprehensive income (loss)                                                                              |                            |         | (309          | )       |              |         | (58    | )      
|                                                                             |                                                                                                                            |                            |         |               |         |              |         |       
|                                                                             |                                                                                                                            | Total stockholders equity |         |               | 15,805  |              |         |        | 16,261  | 
|                                                                             |                                                                                                                            |                            |         |               |         |              |         |       
|                                                                             |                                                                                                                            | $                          | 224,748 |               |         |              | 175,866 |       
|                                                                             |                                                                                                                            |                            |         |               |         |              |         |       

See Accompanying Notes to Condensed Consolidated Financial Statements.

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COAST FINANCIAL HOLDINGS, INC.

Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)

|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |       |       |  | 
|----------------------------------------------------------------------- | --------------------------------------------- | ----------------------------------------------------- | --------- | ----- | ------------------ | - | ----------------- | ----- | ----- |  | --------- | ----- | ----- | - | ------- | ----- | ----- |  | 
|                                                                        |                                               |                                                       |           |       | Three Months Ended |   | Nine Months Ended
|                                                                        |                                               |                                                       |           |       | September 30,      |   | September 30,    
|                                                                        |                                               |                                                       |           |       |                    |   |                  
|                                                                        |                                               |                                                       |           |       | 2003               |   | 2002              |       | 2003  |  | 2002     
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |          
|Interest income:                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        | Loans                                         |                                                       | $         | 2,865 |                    |   |                   | 2,040 |       |  |           | 7,864 |       |   |         | 5,559 |      
|                                                                        | Securities                                    |                                                       |           | 188   |                    |   |                   | 233   |       |  |           | 729   |       |   |         | 584   |      
|                                                                        | Other interest-earning assets                 |                                                       |           | 6     |                    |   |                   | 26    |       |  |           | 60    |       |   |         | 76    |      
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        |                                               | Total interest income                                 |           |       | 3,059              |   |                   |       | 2,299 |  |           |       | 8,653 |   |         |       | 6,219 | 
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|Interest expense:                                                       |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        | Deposits                                      |                                                       |           | 1,301 |                    |   |                   | 1,123 |       |  |           | 3,906 |       |   |         | 3,104 |      
|                                                                        | Borrowings                                    |                                                       |           | 95    |                    |   |                   | 60    |       |  |           | 281   |       |   |         | 164   |      
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        |                                               | Total interest expense                                |           |       | 1,396              |   |                   |       | 1,183 |  |           |       | 4,187 |   |         |       | 3,268 | 
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        |                                               | Net interest income                                   |           |       | 1,663              |   |                   |       | 1,116 |  |           |       | 4,466 |   |         |       | 2,951 | 
|Provision for loan losses                                               |                                               |                                                       | 198       |       |                    |   | 191               |       |       |  | 510       |       |       |   | 538     |      
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        |                                               | Net interest income after provision for
loan losses   |           |       | 1,465              |   |                   |       | 925   |  |           |       | 3,956 |   |         |       | 2,413 | 
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|Noninterest income:                                                     |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        | Service charges on deposit accounts           |                                                       |           | 97    |                    |   |                   | 107   |       |  |           | 258   |       |   |         | 222   |      
|                                                                        | Gain on sale of loans held for sale           |                                                       |           | 370   |                    |   |                   | 212   |       |  |           | 1,053 |       |   |         | 665   |      
|                                                                        | Gain on sale of securities available for sale |                                                       |           |      |                    |   |                   | 138   |       |  |           | 98    |       |   |         | 145   |      
|                                                                        | Net loan servicing (cost) fees                |                                                       |           | (117  | )                  |   |                   | 38    |       |  |           | (168  | )     |   |         | 44    |      
|                                                                        | Asset management fees                         |                                                       |           | 92    |                    |   |                   | 67    |       |  |           | 332   |       |   |         | 132   |      
|                                                                        | Other service charges and fees                |                                                       |           | 69    |                    |   |                   | 103   |       |  |           | 243   |       |   |         | 295   |      
|                                                                        | Other                                         |                                                       |           | 11    |                    |   |                   | 66    |       |  |           | 13    |       |   |         | 91    |      
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        |                                               | Total noninterest income                              |           |       | 522                |   |                   |       | 731   |  |           |       | 1,829 |   |         |       | 1,594 | 
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|Noninterest expenses:                                                   |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        | Employee compensation and benefits            |                                                       |           | 1,297 |                    |   |                   | 754   |       |  |           | 3,668 |       |   |         | 2,103 |      
|                                                                        | Occupancy and equipment                       |                                                       |           | 300   |                    |   |                   | 202   |       |  |           | 785   |       |   |         | 487   |      
|                                                                        | Professional fees                             |                                                       |           | 89    |                    |   |                   | 80    |       |  |           | 292   |       |   |         | 187   |      
|                                                                        | Telephone, postage and supplies               |                                                       |           | 142   |                    |   |                   | 75    |       |  |           | 401   |       |   |         | 192   |      
|                                                                        | Advertising                                   |                                                       |           | 98    |                    |   |                   | 53    |       |  |           | 242   |       |   |         | 151   |      
|                                                                        | Organizational cost                           |                                                       |           |      |                    |   |                   |      |       |  |           | 143   |       |   |         |      |      
|                                                                        | Settlement on impaired security               |                                                       |           |      |                    |   |                   |      |       |  |           | (400  | )     |   |         |      |      
|                                                                        | Other                                         |                                                       |           | 301   |                    |   |                   | 263   |       |  |           | 813   |       |   |         | 703   |      
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        |                                               | Total noninterest expenses                            |           |       | 2,227              |   |                   |       | 1,427 |  |           |       | 5,944 |   |         |       | 3,823 | 
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        |                                               | (Loss) earnings before income taxes                   |           |       | (240               | ) |                   |       | 229   |  |           |       | (159  | ) |         |       | 184   | 
|Income tax (benefit) provision                                          |                                               |                                                       | (90       | )     |                    |   | 84                |       |       |  | (59       | )     |       |   | 69      |      
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        |                                               | Net (loss) earnings                                   |           | $     | (150               | ) |                   |       | 145   |  |           |       | (100  | ) |         |       | 115   | 
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|Dividends on preferred stock                                            |                                               |                                                       |          |       |                    |   |                  |       |       |  | (105      | )     |       |   |        |      
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|                                                                        |                                               | Net (loss) earnings applicable to common
stockholders |           | $     | (150               | ) |                   |       | 145   |  |           |       | (205  | ) |         |       | 115   | 
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|(Loss) earnings per share, basic and diluted                            |                                               | $                                                     | (0.11     | )     |                    |   | 0.11              |       |       |  | (0.07     | )     |       |   | 0.12    |      
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      
|Weighted-average number of common shares
outstanding, basic and diluted |                                               |                                                       | 1,350,450 |       |                    |   | 1,350,450         |       |       |  | 1,350,450 |       |       |   | 958,333 |      
|                                                                        |                                               |                                                       |           |       |                    |   |                   |       |       |  |           |       |       |   |         |      

See Accompanying Notes to Condensed Consolidated Financial Statements.

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##### Table of Contents






COAST FINANCIAL HOLDINGS, INC.

Condensed Consolidated Statements of Changes in Stockholders Equity

Nine Months Ended September 30, 2003 and 2002
(Dollars in thousands)

|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |   |      |  
|------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------- | ----- | --------- | - | ------ | ----- | ------- | - | ----------- | ----- | ---------- | - | ------------- | ------ | - | ---- | ------- | ---- | ----------- | ---- | - | ------ | - | ---- | -
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      | Accumulated |      |   |        |  
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      | Other       |      |   |        |  
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      | Compre-     |      |   |        |  
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       | Additional |   |               |        |   |      | hensive |      | Total      
|                                                                                                  |  |                                                                                          |       | Preferred |   | Common |       | Paid-in |   | Accumulated |       | Income     |   | Stockholders
|                                                                                                  |  |                                                                                          |       | Stock     |   | Stock  |       | Capital |   | Deficit     |       | (Loss)     |   | Equity       
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |              
|Balance at December 31, 2001                                                                      |  | $                                                                                        | 5,995 |           |   |        | 3,155 |         |   |             | 2,582 |            |   |               | (1,634 | ) |      |         | (84  | )           |      |   | 10,014 |  
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |  
|Comprehensive income (loss):                                                                      |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |  
|                                                                                                  |  | Net earnings (unaudited)                                                                 |       |           |  |        |       |         |  |             |       |            |  |               |        |   | 115  |         |      |             |     |   |        |   | 115  |  
|                                                                                                  |  | Net change in unrealized loss on
securities available for sale,
net of taxes (unaudited) |       |           |  |        |       |         |  |             |       |            |  |               |        |   |     |         |      |             | (175 | ) |        |   | (175 | )
|Comprehensive income (loss) (unaudited)                                                           |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   | (60    | )
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |  
|Proceeds from issuance of common
stock, net of offering cost of $483
(719,425) (unaudited) shares |  |                                                                                          |      |           |   |        | 3,597 |         |   |             | 3,315 |            |   |               |       |   |      |         |     |             |      |   | 6,912  |  
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |  
|Balance at September 30, 2002
(unaudited)                                                         |  | $                                                                                        | 5,995 |           |   |        | 6,752 |         |   |             | 5,897 |            |   |               | (1,519 | ) |      |         | (259 | )           |      |   | 16,866 |  
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |  
|Balance at December 31, 2002                                                                      |  | $                                                                                        | 5,995 |           |   |        | 6,752 |         |   |             | 5,897 |            |   |               | (2,325 | ) |      |         | (58  | )           |      |   | 16,261 |  
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |  
|Comprehensive income (loss):                                                                      |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |  
|                                                                                                  |  | Net loss (unaudited)                                                                     |       |           |  |        |       |         |  |             |       |            |  |               |        |   | (100 | )       |      |             |     |   |        |   | (100 | )
|                                                                                                  |  | Net change in unrealized loss on
securities available for sale,
net of taxes (unaudited) |       |           |  |        |       |         |  |             |       |            |  |               |        |   |     |         |      |             | (251 | ) |        |   | (251 | )
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |  
|Comprehensive income (loss)
(unaudited)                                                           |  |                                                                                          |      |           |   |        |      |         |   |             |      |            |   |               |       |   |      |         |     |             |      |   | (351   | )
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |  
|Dividends on preferred stock
(unaudited)                                                          |  |                                                                                          |      |           |   |        |      |         |   |             |      |            |   |               | (105   | ) |      |         |     |             |      |   | (105   | )
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |  
|Balance at September 30, 2003
(unaudited)                                                         |  | $                                                                                        | 5,995 |           |   |        | 6,752 |         |   |             | 5,897 |            |   |               | (2,530 | ) |      |         | (309 | )           |      |   | 15,805 |  
|                                                                                                  |  |                                                                                          |       |           |   |        |       |         |   |             |       |            |   |               |        |   |      |         |      |             |      |   |        |  

See Accompanying Notes to Condensed Consolidated Financial Statements.

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COAST FINANCIAL HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)

|                                                     |                                                                                                      |                                                                    |                                           |         |                   |         |        |         |             |         |  
|---------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | ----------------------------------------- | ------- | ----------------- | ------- | ------ | ------- | ----------- | ------- | -
|                                                     |                                                                                                      |                                                                    |                                           |         | Nine Months Ended
|                                                     |                                                                                                      |                                                                    |                                           |         | September 30,    
|                                                     |                                                                                                      |                                                                    |                                           |         |                  
|                                                     |                                                                                                      |                                                                    |                                           |         | 2003              |         | 2002  
|                                                     |                                                                                                      |                                                                    |                                           |         |                   |         |       
|                                                     |                                                                                                      |                                                                    |                                           |         |                   |         |        |         | (Unaudited)
|Cash flows from operating activities:                |                                                                                                      |                                                                    |                                           |         |                   |         |        |        
|                                                     | Net (loss) earnings                                                                                  |                                                                    | $                                         | (100    | )                 |         |        | 115     |            
|                                                     | Adjustments to reconcile net (loss) earnings to net
cash (used in) provided by operating activities: |                                                                    |                                           |         |                   |         |        |         |            
|                                                     |                                                                                                      | Depreciation and amortization                                      |                                           |         | 334               |         |        |         | 280         |        
|                                                     |                                                                                                      | Provision for loan losses                                          |                                           |         | 510               |         |        |         | 538         |        
|                                                     |                                                                                                      | (Credit) provision for deferred income taxes                       |                                           |         | (59               | )       |        |         | 69          |        
|                                                     |                                                                                                      | Amortization and accretion of discounts
and premiums on securities |                                           |         | 274               |         |        |         | 217         |        
|                                                     |                                                                                                      | Amortization of loan servicing rights                              |                                           |         | 99                |         |        |         | 63          |        
|                                                     |                                                                                                      | Gain on sale of securities available for sale                      |                                           |         | (98               | )       |        |         | (145        | )      
|                                                     |                                                                                                      | Settlement on impaired security                                    |                                           |         | (400              | )       |        |         |            |        
|                                                     |                                                                                                      | Provision of foreclosed real estate losses                         |                                           |         | 37                |         |        |         |            |        
|                                                     |                                                                                                      | Gain on sale of loans held for sale                                |                                           |         | (1,053            | )       |        |         | (665        | )      
|                                                     |                                                                                                      | Originations of loans held for sale                                |                                           |         | (70,327           | )       |        |         | (35,666     | )      
|                                                     |                                                                                                      | Proceeds from sale of loans held for sale                          |                                           |         | 70,210            |         |        |         | 36,436      |        
|                                                     |                                                                                                      | Increase in accrued interest receivable                            |                                           |         | (207              | )       |        |         | (67         | )      
|                                                     |                                                                                                      | Increase in other assets                                           |                                           |         | (429              | )       |        |         | (221        | )      
|                                                     |                                                                                                      | Increase in official checks and other liabilities                  |                                           |         | 2,890             |         |        |         | 2,344       |        
|                                                     |                                                                                                      |                                                                    |                                           |         |                   |         |        |        
|                                                     |                                                                                                      |                                                                    | Net cash provided by operating activities |         |                   | 1,681   |        |         |             | 3,298   |  
|                                                     |                                                                                                      |                                                                    |                                           |         |                   |         |        |        
|Cash flows from investing activities:                |                                                                                                      |                                                                    |                                           |         |                   |         |        |        
|                                                     | Purchase of securities available for sale                                                            |                                                                    |                                           | (16,516 | )                 |         |        | (28,078 | )          
|                                                     | Proceeds from maturities, calls, repayments and
sales of securities available for sale               |                                                                    |                                           | 19,306  |                   |         |        | 25,605  |            
|                                                     | Net increase in loans                                                                                |                                                                    |                                           | (48,935 | )                 |         |        | (32,661 | )          
|                                                     | Purchase of premises and equipment                                                                   |                                                                    |                                           | (2,136  | )                 |         |        | (2,541  | )          
|                                                     | Purchase of Federal Home Loan Bank stock                                                             |                                                                    |                                           | (293    | )                 |         |        | (149    | )          
|                                                     | Redemption of certificates of deposit                                                                |                                                                    |                                           |        |                   |         |        | 99      |            
|                                                     |                                                                                                      |                                                                    |                                           |         |                   |         |        |        
|                                                     |                                                                                                      |                                                                    | Net cash used in investing activities     |         |                   | (48,574 | )      |         |             | (37,725 | )
|                                                     |                                                                                                      |                                                                    |                                           |         |                   |         |        |        
|Cash flows from financing activities:                |                                                                                                      |                                                                    |                                           |         |                   |         |        |        
|                                                     | Net increase in deposits                                                                             |                                                                    |                                           | 38,237  |                   |         |        | 33,030  |            
|                                                     | Proceeds from Federal Home Loan Bank advances                                                        |                                                                    |                                           | 600     |                   |         |        | 1,500   |            
|                                                     | Repayments of Federal Home Loan Bank advances                                                        |                                                                    |                                           |        |                   |         |        | (1,000  | )          
|                                                     | Net increase in repurchase agreements                                                                |                                                                    |                                           | 7,308   |                   |         |        | 798     |            
|                                                     | Net increase in line of credit                                                                       |                                                                    |                                           | 303     |                   |         |        |        |            
|                                                     | Proceeds from issuance of common stock, net of offering costs                                        |                                                                    |                                           |        |                   |         |        | 6,912   |            
|                                                     | Dividends paid on preferred stock                                                                    |                                                                    |                                           | (105    | )                 |         |        |        |            
|                                                     |                                                                                                      |                                                                    |                                           |         |                   |         |        |        
|                                                     |                                                                                                      |                                                                    | Net cash provided by financing activities |         |                   | 46,343  |        |         |             | 41,240  |  
|                                                     |                                                                                                      |                                                                    |                                           |         |                   |         |        |        
|Net (decrease) increase in cash and cash equivalents |                                                                                                      |                                                                    | (550                                      | )       |                   |         | 6,813  |        
|Cash and cash equivalents at beginning of period     |                                                                                                      |                                                                    | 8,970                                     |         |                   |         | 9,678  |        
|                                                     |                                                                                                      |                                                                    |                                           |         |                   |         |        |        
|Cash and cash equivalents at end of period           |                                                                                                      | $                                                                  | 8,420                                     |         |                   |         | 16,491 |        
|                                                     |                                                                                                      |                                                                    |                                           |         |                   |         |        |        

(continued)

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COAST FINANCIAL HOLDINGS, INC.

Consolidated Statements of Cash Flows, Continued
(in thousands)

|                                                  |                                  |                                                                                                                         |  |   |                   |   |      |  |             |   | 
|------------------------------------------------- | -------------------------------- | ----------------------------------------------------------------------------------------------------------------------- |  | - | ----------------- | - | ---- |  | ----------- | - | 
|                                                  |                                  |                                                                                                                         |  |   | Nine Months Ended
|                                                  |                                  |                                                                                                                         |  |   | September 30,    
|                                                  |                                  |                                                                                                                         |  |   |                  
|                                                  |                                  |                                                                                                                         |  |   | 2003              |   | 2002
|                                                  |                                  |                                                                                                                         |  |   |                   |   |     
|                                                  |                                  |                                                                                                                         |  |   |                   |   |      |  | (Unaudited)
|Supplemental disclosure of cash flow information: |                                  |                                                                                                                         |  |   |                   |   |      | 
|                                                  | Cash paid during the period for: |                                                                                                                         |  |   |                   |   |      |  |            
|                                                  |                                  | Interest                                                                                                                |  | $ | 4,196             |   |      |  | 3,244       |  
|                                                  |                                  |                                                                                                                         |  |   |                   |   |      | 
|                                                  |                                  | Income taxes                                                                                                            |  | $ |                  |   |      |  |            |  
|                                                  |                                  |                                                                                                                         |  |   |                   |   |      | 
|                                                  | Noncash transactions:            |                                                                                                                         |  |   |                   |   |      |  |            
|                                                  |                                  | Accumulated other comprehensive income (loss), change in unrealized loss
on securities available for sale, net of taxes |  | $ | (251              | ) |      |  | (175        | )
|                                                  |                                  |                                                                                                                         |  |   |                   |   |      | 
|                                                  |                                  | Originated mortgage loan servicing rights capitalized                                                                   |  | $ | 409               |   |      |  | 411         |  
|                                                  |                                  |                                                                                                                         |  |   |                   |   |      | 

See Accompanying Notes to Condensed Consolidated Financial Statements.

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COAST FINANCIAL HOLDINGS, INC.

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)
which owns 100% of Coast Financial Partners, Inc. (CFP) (collectively
the Company). On April 15, 2003, the Banks stockholders approved a
Plan of Merger and Merger Agreement under which the Bank would become a
wholly-owned subsidiary of the Holding Company. The Banks stockholders
exchanged their common stock and preferred stock for shares of the Holding
Company. As a result, all (1,350,450 shares) of the previously issued $5
par value common stock of the Bank were exchanged for 1,350,450 shares of
the $5 par value common stock of the Holding Company and all (545,000
shares) of the previously issued $.01 par value preferred stock of the
Bank were exchanged for 545,000 shares of the $.01 par value preferred
stock of the Holding Company. The Holding Companys merger with the Bank
was accounted as a reorganization of entities under common control at
historical cost and, the financial data for periods presented include the
results of the Bank and CFP.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Holding Companys primary activity is the operation of the Bank and
CFP. 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 three banking
offices located in Manatee County, Florida. CFP provides investment
advisory services to customers of the Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   |  | 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 September 30, 2003, the results
of operations for the three- and nine-month periods ended September 30,
2003 and 2002 and cash flows for the nine-month periods ended September
30, 2003 and 2002. The results of operations and other data for the
three- and nine-month periods ended September 30, 2003 are not
necessarily indicative of results that may be expected for the year
ending December 31, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|2. |  | Loan Impairment and Loan Losses.The activity in the allowance for loan losses is as follows (in
thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

|                                |                                |  |                    |       |                   |  |      |       |      |  |      |       |  |  |     |       | 
|------------------------------- | ------------------------------ |  | ------------------ | ----- | ----------------- |  | ---- | ----- | ---- |  | ---- | ----- |  |  | --- | ----- | 
|                                |                                |  | Three Months Ended |       | Nine Months Ended
|                                |                                |  | September 30,      |       | September 30,    
|                                |                                |  |                    |       |                  
|                                |                                |  | 2003               |       | 2002              |  | 2003 |       | 2002
|                                |                                |  |                    |       |                   |  |      |       |     
|                                | Balance at beginning of period |  | $                  | 1,587 |                   |  |      | 953   |      |  |      | 1,350 |  |  |     | 644   | 
|Provision for loan losses       |                                |  | 198                |       |                   |  | 191  |       |      |  | 510  |       |  |  | 538 |      
|Net, charge-offs and recoveries |                                |  | (153               | )     |                   |  | (9   | )     |      |  | (228 | )     |  |  | (47 | )    
|                                |                                |  |                    |       |                   |  |      |       |      |  |      |       |  |  |     |       | 
|                                | Balance at end of period       |  | $                  | 1,632 |                   |  |      | 1,135 |      |  |      | 1,632 |  |  |     | 1,135 | 
|                                |                                |  |                    |       |                   |  |      |       |      |  |      |       |  |  |     |       | 

(continued)

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COAST FINANCIAL HOLDINGS, INC.

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 |     | Nine Months Ended
|                                             |  | September 30,      |     | September 30,    
|                                             |  |                    |     |                  
|                                             |  | 2003               |     | 2002              |  | 2003 |   | 2002
|                                             |  |                    |     |                   |  |      |   |     
|Balance at end of period                     |  | $                  | 259 |                   |  |      |  |      |  |  | 259 |  |  |  |  | 
|                                             |  |                    |     |                   |  |      |   |      |  |  |     |  |  |  |   | 
|Total related allowance for losses           |  | $                  | 130 |                   |  |      |  |      |  |  | 130 |  |  |  |  | 
|                                             |  |                    |     |                   |  |      |   |      |  |  |     |  |  |  |   | 
|Average investment in impaired loans         |  | $                  | 305 |                   |  |      |  |      |  |  | 266 |  |  |  |  | 
|                                             |  |                    |     |                   |  |      |   |      |  |  |     |  |  |  |   | 
|Interest income recognized on impaired loans |  | $                  | 8   |                   |  |      |  |      |  |  | 24  |  |  |  |  | 
|                                             |  |                    |     |                   |  |      |   |      |  |  |     |  |  |  |   | 
|Interest income received on impaired loans   |  | $                  | 8   |                   |  |      |  |      |  |  | 10  |  |  |  |  | 
|                                             |  |                    |     |                   |  |      |   |      |  |  |     |  |  |  |   | 

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

|                                             |  |                  |     |      |  |  |    | 
|-------------------------------------------- |  | ---------------- | --- | ---- |  |  | -- | 
|                                             |  | At September 30,
|                                             |  |                 
|                                             |  | 2003             |     | 2002
|                                             |  |                  |     |     
|Nonaccrual loans                             |  | $                | 211 |      |  |  | 50 | 
|Past due ninety days or more, still accruing |  |                  | 5   |      |  |  |   | 
|                                             |  |                  |     |      |  |  |    | 
|                                             |  | $                | 216 |      |  |  | 50 | 
|                                             |  |                  |     |      |  |  |    | 

(continued)

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COAST FINANCIAL HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued



|3. |  | Stock OptionPlans.The Company accounts for their stock option plan under
the recognition and measurement principles of APB No. 25. No stock-based
employee compensation cost is reflected in net earnings (loss), as all
options granted under this plan 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 earnings (loss) if the Company had
applied the fair value recognition provisions of SFAS No. 123 to
stock-based employee compensation. ($ in thousands, except per share
amounts).
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                   |                                                                                                                                        |                      |      |                    |       |                   |     |      |      |      |      |      |      |   |     |     |      | 
|------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ---- | ------------------ | ----- | ----------------- | --- | ---- | ---- | ---- | ---- | ---- | ---- | - | --- | --- | ---- | 
|                                                                   |                                                                                                                                        |                      |      | Three Months Ended |       | Nine Months Ended
|                                                                   |                                                                                                                                        |                      |      | September 30,      |       | September 30,    
|                                                                   |                                                                                                                                        |                      |      |                    |       |                  
|                                                                   |                                                                                                                                        |                      |      | 2003               |       | 2002              |     | 2003 |      | 2002
|                                                                   |                                                                                                                                        |                      |      |                    |       |                   |     |      |      |     
|Net (loss) earnings applicable to
common stockholders, as reported |                                                                                                                                        | $                    | (150 | )                  |       |                   | 145 |      |      |      | (100 | )    |      |   | 115 |    
|                                                                   | Deduct: Total stock-based employee compensation
determined under the fair value based method
for all awards, net of related tax effect |                      |      | (3                 | )     |                   |     | (20  | )    |      |      | (8   | )    |   |     | (60 | )   
|                                                                   |                                                                                                                                        |                      |      |                    |       |                   |     |      |      |      |      |      |      |   |     |    
|                                                                   | Proforma net (loss) earnings appliable
to common stockholders                                                                          |                      | $    | (153               | )     |                   |     | 125  |      |      |      | (108 | )    |   |     | 55  |     
|                                                                   |                                                                                                                                        |                      |      |                    |       |                   |     |      |      |      |      |      |      |   |     |    
|                                                                   | (Loss) earnings per share:                                                                                                             |                      |      |                    |       |                   |     |      |      |      |      |      |      |   |     |     |     
|                                                                   |                                                                                                                                        | Basic, as reported   |      | $                  | (0.11 | )                 |     |      | 0.11 |      |      |      | (0.7 | ) |     |     | 0.12 | 
|                                                                   |                                                                                                                                        |                      |      |                    |       |                   |     |      |      |      |      |      |      |   |     |    
|                                                                   |                                                                                                                                        | Basic, proforma      |      | $                  | (0.11 | )                 |     |      | 0.09 |      |      |      | (0.8 | ) |     |     | 0.06 | 
|                                                                   |                                                                                                                                        |                      |      |                    |       |                   |     |      |      |      |      |      |      |   |     |    
|                                                                   |                                                                                                                                        | Diluted, as reported |      | $                  | (0.11 | )                 |     |      | 0.11 |      |      |      | (0.7 | ) |     |     | 0.12 | 
|                                                                   |                                                                                                                                        |                      |      |                    |       |                   |     |      |      |      |      |      |      |   |     |    
|                                                                   |                                                                                                                                        | Diluted, proforma    |      | $                  | (0.11 | )                 |     |      | 0.09 |      |      |      | (0.8 | ) |     |     | 0.06 | 
|                                                                   |                                                                                                                                        |                      |      |                    |       |                   |     |      |      |      |      |      |      |   |     |    



| |  | The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model with the following
assumptions, there were no options granted during the three and nine
months ended September 30, 2003. ($ in thousands):
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                          |                         |   |                    |      |                   |  |    |      |  
|--------------------------------------------------------- | ----------------------- | - | ------------------ | ---- | ----------------- |  | -- | ---- | -
|                                                          |                         |   | Three Months Ended |      | Nine Months Ended
|                                                          |                         |   | September 30,      |      | September 30,    
|                                                          |                         |   | 2002               |      | 2002             
|                                                          |                         |   |                    |      |                  
|                                                          | Risk-free interest rate |   |                    | 4.19 | %                 |  |    | 4.19 | %
|                                                          | Dividend yield          |   |                    |     |                   |  |    |     |  
|Expected volatility                                       |                         |   |                   |      |                   |  |   |     
|                                                          | Expected life in years  |   |                    | 10   |                   |  |    | 10   |  
|Grant-date fair value of options
issued during the period |                         | $ | 58                 |      |                   |  | 58 |     
|                                                          |                         |   |                    |      |                   |  |    |     



|4. |  | Regulatory Capital.The Bank is required to maintain certain minimum
regulatory capital requirements. Management believes that the Bank has
met all capital adequacy requirements to which they are subject.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(continued)

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COAST FINANCIAL HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued



|5. |  | (Loss) Earnings Per Share.Basis and diluted (loss) earnings per share
is computed on the basis of the weighted average number of common shares
outstanding. Outstanding stock options are not considered dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|6. |  | Subsequent Event.The Company will record a provision for loan losses of
approximately $2.3 million for the fourth quarter of 2003, due to the
recent defaults with two different borrowers totaling approximately
$780,000 and tighter loan quality standards. In addition, it has
discontinued all indirect consumer auto loans, all floor plan lending to
auto dealers, and has completed a review of all commercial loans greater
than $100,000 that are not secured by real estate.                                                                                                                                                    
|  
|   |  | The first borrower, a used car dealership, defaulted on a $560,000
commercial business loan and a floor plan loan with a remaining balance of
approximately $100,000. This loan relationship was on the watch list but
was paid current through October 31, 2003. The second borrower, with
total borrowing of approximately $120,000, had never been on the watch
list and was not delinquent at the time of default. No recovery is
expected with the first relationship and only minimal recovery on the
second relationship.                                                                                                           
|  
|   |  | As a result of the loan portfolio review, a number of loans were kept on
the watch list and the reserve allocation was increased based on recent
factors affecting the applicable credits. In addition, some loans not on
the watch list were downgraded and their respective reserve allocation
increased by an applicable amount.                                                                                                                                                                                                                                                                                                        
|  
|7. |  | Initial
Public Offering.On November 10, 2003, the Company completed an
initial public offering (IPO). The IPO raised approximately $20,154,000
of capital net of offering cost of approximately $1,926,000. The Company
paid off its line of credit of approximately $418,000, paid approximately
$770,000 to holders of our Series A Preferred Stock under the terms of a
Securities Conversion Agreement whereby our Series a Preferred
Stockholders was converted into common shares (at a one for one basis) and
the remaining proceeds will be used for provided capital to support the
Bank's growth and additional branch locations.

10



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COAST FINANCIAL HOLDINGS, INC.

Review by Independent Accountants



| |  | Hacker, Johnson & Smith PA, independent accountants, have made a limited review
of the financial data as of September 30, 2003, and for the three- and nine-
month periods ended September 30, 2003 presented in this document, in
accordance with standards established by the American Institute of Certified
Public Accountants.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Their report furnished pursuant to Article 10 of Regulation S-X is included
herein.                                                                                                                                                                                                                                                

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Independent Accountants Report

The Board of Directors
Coast Financial Holdings, Inc.
Bradenton, Florida:

We have reviewed the accompanying condensed consolidated balance sheet of
Coast Financial Holdings, Inc. and Subsidiaries (the Company) as of September
30, 2003, the related condensed consolidated statements of operations for the
three- and nine- month periods ended September 30, 2003 and the related
condensed consolidated statements of changes in stockholders equity and cash
flows for the nine-month period ended September 30, 2003. These financial
statements are the responsibility of the Companys management.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with auditing standards generally accepted in the United States
of America, 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 review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with accounting principles generally
accepted in the United States of America.

We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the consolidated balance
sheet of the Company as of December 31, 2002, and the related consolidated
statements of earnings, changes in stockholders equity and cash flows for the
year then ended (not presented herein); and in our report dated January 24,
2003, except for Notes 1 and 15 as to which the date is October 20, 2003, 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, 2002, 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
December 31, 2003

12



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##### Table of Contents






COAST FINANCIAL HOLDINGS, INC.

Item 2. Managements Discussion and Analysis
or Plan of Operation

Forward Looking Statements



| |  | This document contains forward-looking statements as defined by Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements involve
substantial risks and uncertainties. When used in this document, or in
the documents incorporated by reference, the words anticipate,
believe, estimate, may, intend and expect and similar
expressions are some of the forward-looking statements used in these
documents. Actual results, performance, or achievements could differ
materially from those contemplated, expressed or implied by the
forward-looking statements. Factors which may cause results to change
materially include competition, inflation, general economic conditions,
changes in interest rates, and changes in the value of collateral
securing loans Coast Financial Holdings, Inc. has made, among other
things.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

General



| |  | Coast Financial Holdings, Inc. (the Holding Company) owns 100% of the
outstanding common stock of Coast Bank of Florida (the Bank) which
owns 100% of Coast Financial Partners, Inc. (CFP) (collectively the
Company). On April 15, 2003, the Banks stockholders approved a Plan
of Merger and Merger Agreement under which the Bank would become a
wholly-owned subsidiary of the Holding Company. The Banks stockholders
exchanged their common stock and preferred stock for shares of the
Holding Company. As a result, all (1,350,450 shares) of the previously
issued $5 par value common stock of the Bank were exchanged for
1,350,450 shares of the $5 par value common stock of the Holding Company
and all (545,000 shares) of the previously issued $.01 par value
preferred stock of the Bank were exchanged for 545,000 shares of the
$.01 par value preferred stock of the Holding Company. The Holding
Companys merger with the Bank was accounted as a reorganization of
entities under common control at historical cost and, the financial data
for periods presented include the results of the Bank and CFP.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Liquidity and Capital Resources



| |  | The Companys primary source of cash during the nine months ended September
30, 2003, was from net deposit inflows of approximately $38.2 million,
principle repayments and calls of securities available for sale of
approximately $19.3 million, advances of $600,000 from the Federal Home Loan
Bank, net increase in repurchase agreement of approximately $7.3 million and
cash flows generated from operations of approximately $1.7 million. Cash was
used primarily to originate net loans of approximately $48.9 million and to
purchase securities of approximately $16.5 million. At September 30, 2003,
the Bank exceeded its regulatory liquidity requirements.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations



| |  | 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,
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.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13



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##### Table of Contents



COAST FINANCIAL HOLDINGS, INC.



| |  | 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,
unused lines of credit and standby letters of credit is represented by the
contractual amount of those instruments. The Company uses the same credit
policies in making commitments as it does for on-balance-sheet instruments.                                                                                                                                                                                                                                                                                                     
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | 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 many 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. The credit risk
involved in issuing letters of credit is essentially the same as that
involved in extending loans to customers.                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | 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 September 30, 2003, follows (in thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

|                                                    |  |          |        | 
|--------------------------------------------------- |  | -------- | ------ | 
|                                                    |  | Contract
|                                                    |  | Amount  
|                                                    |  |         
|Commitments to extend credit                        |  | $        | 9,224  | 
|                                                    |  |          |        | 
|Unused lines of credit loans and
construction loans |  | $        | 74,705 | 
|                                                    |  |          |        | 
|Standby letters of credit                           |  | $        | 2,664  | 
|                                                    |  |          |        | 



| |  | 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.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14



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##### Table of Contents



COAST FINANCIAL HOLDINGS, INC.

Comparison of the Three-Month Periods Ended September 30, 2003 and 2002

Results of Operations



| |  | General.Our net loss for the three months ended September 30, 2003,
was $(150,000) or $(0.11) loss per basis share and $(0.11) loss per diluted
share compared to net earnings of $145,000 or $0.11 earnings per basis share
and $0.11 earnings per diluted share of the three months ended September 30,
2002. Net earnings decreased due to an increase in noninterest expense for
branch and related support expansion, which was partially offset by an
increase in noninterest income and net interest income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Net Interest Income.Interest income increased to $3.1 million during
the three months ended September 30, 2003, from $2.3 million in 2002, a
24.8% increase. The yield on average earnings assets for the three months
ended September 30, 2003 was 6.07%, compared to 6.94% in 2002. Interest on
loans for the three months ended September 30, 2003 was $2.9 million,
resulting from an average yield of 6.65% compared to $2.0 million resulting
from an average yield of 7.59% for 2002. The increase in interest on loans
was primarily due to an increase in the average balance in commercial real
estate and commercial loans to $39.1 million and $28.7 million,
respectively, during the three months ended September 30, 2003 when compared
to $17.4 million and $22.3 million, respectively, during the three months
ended September 30, 2002. This was primarily due to the hiring of two new
commercial loan officers and the opening of one new banking office during
the year ended December 31, 2002. Interest on securities decreased to
$188,000 during the three months ended September 30, 2003, based on an
average yield of 2.67%, from $233,000 in 2002 resulting from an average
yield of 4.16%. The decrease in interest income on securities was primarily
due to the decreased in average portfolio yield during the three months
ended September 30, 2003 partially offset by an increase in the average
portfolio balance. Interest on other interest earning assets decreased to
$6,000 during the three months ended September 30, 2003, from $26,000 during
the three months ended September 30, 2002.
|
| |  | Interest expense on interest bearing liabilities increased to $1.4
million during the three months ended September 30, 2003, compared to $1.2
million during the three months ended September 30, 2002. The increase was
due to an increase in the average balance of interest bearing liabilities,
which was partially offset by a decrease in the average cost of interest
bearing liabilities to 3.03% in 2003 from 4.03% in 2002. The decline in the
average rate paid was the result of managements efforts to increase low
cost deposit accounts and the continued decline in overall interest rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Provision for Loan Losses.Calculating the allowance for loan losses
is divided into two primary allocation groups: (1) specific allocation loans
and (2) all other passing grade loans. For specific allocation loans, we
have determined an allowance amount to set aside which it believes is
sufficient to cover any potential collateral shortfall. Problem loans are
identified by the loan officer, loan review, loan committee or by the
examiners. Those loans identified as problem loans are assigned a risk
grade. Loans graded special mention are multiplied by an inherent loss
factor of 5% to determine the amount to be included in the allowance. Loans
graded substandard are generally multiplied by a loss factor of 15%, loans
graded doubtful are generally multiplied by a loss factor of 50% and loans
graded loss are multiplied by a loss factor of 100%. In addition to the 5%
and 50% on substandard and doubtful loans, respectively, the loans are
individually reviewed for any additional reserve that may by necessary. All
other loans, graded pass are multiplied by an historical experience factor
to determine the appropriate level of the allowance for loan losses. In addition to historical
experience factors, the Company also provides for losses due to economic
factors, concentration of credit and portfolio composition changes.                                                                                                                                                                                                                                                   

15



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##### Table of Contents



COAST FINANCIAL HOLDINGS, INC.

Comparison of the Three-Month Periods Ended September 30, 2003 and 2002



| |  | Provision for Loan Losses, Continued.The provision for loan losses
was $198,000 for the three months ended September 30, 2003 compared to
$191,000 for the three months ended September 30, 2002. The provision
remained relatively the same due to the similar growth in commercial real
estate and commercial loan portfolios.                                
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The allowance for loan losses was $1,632,000 at September 30, 2003.
While management believes that its allowance for loan losses is adequate as
of September 30, 2003, future adjustments to the Companys allowance for
loan losses may be necessary if economic conditions differ substantially
from the assumptions used in making the initial determination.
|
| |  | Nontinterest Income.The following table shows the components of
noninterest income for the three months ended September 30, 2003 compared to
the three months ended September 30, 2002:                                                                                                                                                                         
|
| |  | A summary of the major components of noninterest income for the periods
indicated are set forth below:                                                                                                                                                                                                                                                          

|                                              |       |   |                    |     |                    |  |     |     | 
|--------------------------------------------- | ----- | - | ------------------ | --- | ------------------ |  | --- | --- | 
|                                              |       |   | Three Months Ended |     | Three Months Ended
|                                              |       |   | September 30,      |     | September 30,     
|                                              |       |   | 2003               |     | 2002              
|                                              |       |   |                    |     |                   
|                                              |       |   | (In thousands)    
|Service charges on deposit accounts           |       | $ | 97                 |     |                    |  | 107 |    
|Gain on sale of loans held for sale           |       |   | 370                |     |                    |  | 212 |    
|Gain on sale of securities available for sale |       |   |                   |     |                    |  | 138 |    
|Net loan servicing (costs) fees               |       |   | (117               | )   |                    |  | 38  |    
|Asset management fees                         |       |   | 92                 |     |                    |  | 67  |    
|Other service charges and fees                |       |   | 69                 |     |                    |  | 103 |    
|Other                                         |       |   | 11                 |     |                    |  | 66  |    
|                                              |       |   |                    |     |                    |  |     |    
|                                              | Total |   | $                  | 522 |                    |  |     | 731 | 
|                                              |       |   |                    |     |                    |  |     |    



| |  | Noninterest Expense.The following table shows the components of noninterest expenses for the three months ended September 30,
2003 compared to the three months ended September 30, 2002:
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                |       |   |                    |       |                    |  |     |       | 
|------------------------------- | ----- | - | ------------------ | ----- | ------------------ |  | --- | ----- | 
|                                |       |   | Three Months Ended |       | Three Months Ended
|                                |       |   | September 30,      |       | September 30,     
|                                |       |   | 2003               |       | 2002              
|                                |       |   |                    |       |                   
|                                |       |   | (In thousands)    
|Salaries and employee benefits  |       | $ | 1,297              |       |                    |  | 754 |      
|Occupancy and equipment         |       |   | 300                |       |                    |  | 202 |      
|Professional fees               |       |   | 89                 |       |                    |  | 80  |      
|Telephone, postage and supplies |       |   | 142                |       |                    |  | 75  |      
|Advertising                     |       |   | 98                 |       |                    |  | 53  |      
|Other expenses                  |       |   | 301                |       |                    |  | 263 |      
|                                |       |   |                    |       |                    |  |     |      
|                                | Total |   | $                  | 2,227 |                    |  |     | 1,427 | 
|                                |       |   |                    |       |                    |  |     |      

Income Taxes.The income tax benefit for the three months ended September
30, 2003 was (90,000) (an effective rate of 37.5%) compared to an income tax
expense of $84,000 for the three months ended September 30, 2002 ( an effective
rate of 36.7%).

16



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##### Table of Contents



COAST FINANCIAL HOLDINGS, INC.

Comparison of the Nine-Month Periods Ended September 30, 2003 and 2002



| |  | General.Our net loss for the nine months ended September 30, 2003,
was $(100,000) or $(0.07) loss per basis share and $(0.07) loss per diluted
share compared to net earnings of $115,000 or $0.12 earnings per basis share
and $0.12 earnings per diluted share of the nine months ended September 30,
2002. Net earnings decreased due to an increase in noninterest expense for
branch and related support expansion, which was partially offset by an
increase in noninterest income and net interest income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Net Interest Income.Interest income increased to $8.7 million during
the nine months ended September 30, 2003, from $6.2 million in 2002, a 39%
increase. The yield on average earnings assets for the nine months ended
September 30, 2003 was 6.17%, compared to 6.76% in 2002. Interest on loans
for the nine months ended September 30, 2003 was $7.9 million, resulting
from an average yield of 6.86% compared to $5.6 million resulting from an
average yield of 7.52% for 2002. The increase in interest on loans was
primarily due to an increase in the average balance in commercial real
estate and commercial loans to $41.1 million and $28.8 million,
respectively, during the nine months ended September 30, 2003 when compared
to $14.6 million and $19.8 million, respectively, during the nine months
ended September 30, 2002. This was primarily due to the hiring of two new
commercial loan officers and the opening of one new banking office during
the year ended December 31, 2002. Interest on securities increased to
$729,000 during the nine months ended September 30, 2003, based on an
average yield of 3.02%, from $584,000 in 2002 resulting from an average
yield of 3.76%. The increase in interest income on securities was primarily
due to the increased average portfolio balance, partially offset by a
reduction in portfolio yield during the nine months ended September 30,
2003. Interest on other interest earning assets decreased to $60,000 during
the nine months ended September 30, 2003, from $76,000 during the nine
months ended September 30, 2002.
|
| |  | Interest expense on interest bearing liabilities increased to $4.2
million during the nine months ended September 30, 2003, compared to $3.3
million during the nine months ended September 30, 2002. The increase was
due to an increase in the average balance of interest bearing liabilities,
which was partially offset by a decrease in the average cost of interest
bearing liabilities to 3.42% in 2003 from 4.22% in 2002. The decline in the
average rate paid was the result of managements efforts to increase low
cost deposit accounts and the continued decline in overall interest rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Provision for Loan Losses.Calculating the allowance for loan losses
is divided into two primary allocation groups: (1) specific allocation loans
and (2) all other passing grade loans. For specific allocation loans, we
have determined an allowance amount to set aside which it believes is
sufficient to cover any potential collateral shortfall. Problem loans are
identified by the loan officer, loan review, loan committee or by the
examiners. Those loans identified as problem loans are assigned a risk
grade. Loans graded special mention are multiplied by an inherent loss
factor of 5% to determine the amount to be included in the allowance. Loans
graded substandard are generally multiplied by a loss factor of 15%, loans
graded doubtful are generally multiplied by a loss factor of 50% and loans
graded loss are multiplied by a loss factor of 100%. In addition to the 5%
and 50% on substandard and doubtful loans, respectively, the loans are
individually reviewed for any additional reserve that may by necessary. All
other loans, graded pass are multiplied by an historical experience factor
to determine the appropriate level of the allowance for loan losses. In
addition to historical experience factors, the Company also provides for
losses due to economic factors, concentration of credit and portfolio
composition changes.                                                                                                                                                                                                                           
|
| |  | The provision for loan losses was $510,000 for the nine months ended
September 30, 2003 compared to $538,000 for the nine months ended September
30, 2002. The provision remained
relatively the same due to the similar growth in commercial real estate and
commercial loan portfolios.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

17



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##### Table of Contents



COAST FINANCIAL HOLDINGS, INC.

Comparison of the Nine-Month Periods Ended September 30, 2003 and 2002

Results of Operations, Continued



| |  | The allowance for loan losses was $1,632, 000 at September 30, 2003.
While management believes that its allowance for loan losses is adequate as
of September 30, 2003, future adjustments to the Companys allowance for
loan losses may be necessary if economic conditions differ substantially
from the assumptions used in making the initial determination.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Nontinterest Income.The following table shows the components of
noninterest income for the nine months ended September 30, 2003 to the nine
months ended September 30, 2002:                                                                                                                                                                                     
|
| |  | A summary of the major components of noninterest income for the periods
indicated are set forth below:                                                                                                                                                                                                                                                           

|                                              |       |   |                   |       |                   |  |     |       | 
|--------------------------------------------- | ----- | - | ----------------- | ----- | ----------------- |  | --- | ----- | 
|                                              |       |   | Nine Months Ended |       | Nine Months Ended
|                                              |       |   | September 30,     |       | September 30,    
|                                              |       |   | 2003              |       | 2002             
|                                              |       |   |                   |       |                  
|                                              |       |   | (In thousands)   
|Service charges on deposit accounts           |       | $ | 258               |       |                   |  | 222 |      
|Gain on sale of loans held for sale           |       |   | 1,053             |       |                   |  | 665 |      
|Gain on sale of securities available for sale |       |   | 98                |       |                   |  | 145 |      
|Net loan servicing (costs) fees               |       |   | (168              | )     |                   |  | 44  |      
|Asset management fees                         |       |   | 332               |       |                   |  | 132 |      
|Other service charges and fees                |       |   | 243               |       |                   |  | 295 |      
|Other                                         |       |   | 13                |       |                   |  | 91  |      
|                                              |       |   |                   |       |                   |  |     |      
|                                              | Total |   | $                 | 1,829 |                   |  |     | 1,594 | 
|                                              |       |   |                   |       |                   |  |     |      



| |  | Noninterest Expense.The following table shows the components of noninterest expense for the nine months ended September 30,
2003 to the nine months ended Septmeber 30, 2002:
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                |       |   |                   |       |                   |  |       |       | 
|------------------------------- | ----- | - | ----------------- | ----- | ----------------- |  | ----- | ----- | 
|                                |       |   | Nine Months Ended |       | Nine Months Ended
|                                |       |   | September 30,     |       | September 30,    
|                                |       |   | 2003              |       | 2002             
|                                |       |   |                   |       |                  
|                                |       |   | (In thousands)   
|Salaries and employee benefits  |       | $ | 3,668             |       |                   |  | 2,103 |      
|Occupancy and equipment         |       |   | 785               |       |                   |  | 487   |      
|Professional fees               |       |   | 292               |       |                   |  | 187   |      
|Telephone, postage and supplies |       |   | 401               |       |                   |  | 192   |      
|Advertising                     |       |   | 242               |       |                   |  | 151   |      
|Organizational costs            |       |   | 143               |       |                   |  |      |      
|Settlement on impaired security |       |   | (400              | )     |                   |  |      |      
|Other                           |       |   | 813               |       |                   |  | 703   |      
|                                |       |   |                   |       |                   |  |       |      
|                                | Total |   | $                 | 5,944 |                   |  |       | 3,823 | 
|                                |       |   |                   |       |                   |  |       |      

Income Taxes.The income tax benefit for the nine months ended September
30, 2003 was ($59,000) (an effective rate of 37.1%) compared to income tax expense of
$69,000 for the nine months ended September 30, 2002 ( an effective rate of
37.5%).

18



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##### Table of Contents






COAST FINANCIAL HOLDINGS, INC.

Item 3. Controls and Procedures

Under the supervision and with the participation of the Companys President and
Chief Executive Officer, and Chief Financial Officer (its principal executive
officer and principal financial officer), management has evaluated the
effectiveness of the design and operation of the Companys disclosure controls
and procedures within 90 days of the filing date of this quarterly report.
Based on that evaluation, the President and Chief Executive Officer, and Chief
Financial Officer have concluded that these disclosure controls and procedures
(as such term is defined in Rule 13a-14(c) promulgated under the Securities and
Exchange Act of 1934) are effective to ensure the disclosure of material
information relating to the Company files and submits under the Securities and
Exchange Act of 1934. There were no significant changes in our internal
controls or in other factors known to us that could significantly affect these
internal controls subsequent to the date of the evaluation.







PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceeding to which Coast Financial
Holdings, Inc., is a party or to which any of their property is subject.

19



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##### Table of Contents






COAST FINANCIAL HOLDINGS, INC.

PART II. OTHER INFORMATION, CONTINUED

Item 6. Exhibits and Reports on Form 8-K



|(a) |  | Exhibits.The following exhibits are filed with the Securities and
Exchange Commission and are incorporated by reference into this
Registration Statement.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|            |  |                                                                                                                                                                                        
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                                                                                 
|            |  |                                                                                                                                                                                        
|*1.1        |  | Form of Underwriting Agreement                                                                                                                                                         
|            |  |                                                                                                                                                                                        
|*3.1        |  | Articles of Incorporation                                                                                                                                                              
|            |  |                                                                                                                                                                                        
|*3.2        |  | Bylaws                                                                                                                                                                                 
|            |  |                                                                                                                                                                                        
|*4.1        |  | See Exhibits 3.1 and 3.2 for provisions of the Articles of
Incorporation and Bylaws of the Company defining the rights of
holders of the Companys common shares                       
|            |  |                                                                                                                                                                                        
|*4.2        |  | Specimen common share certificate                                                                                                                                                      
|            |  |                                                                                                                                                                                        
|*4.3        |  | Securities Conversion Agreement, dated October 20, 2003, by
and among the Company and all of the holders of its Series A
Preferred Stock                                               
|            |  |                                                                                                                                                                                        
|*5.1        |  | Form of legal opinion of Carlton Fields, P.A., Re: validity of
securities                                                                                                              
|            |  |                                                                                                                                                                                        
|*10.1       |  | Employment Agreement, dated March 29, 2003, and Modification
of Employment Agreement, dated September 3, 2003, by and
between Cost Bank and Gerald L. Anthony                          
|            |  |                                                                                                                                                                                        
|*10.2       |  | Cost Financial Holdings, Inc. Amended and Restated 2003 Stock
Option Plan, dated August 19, 2003, and Forms of Nonqualified
Stock Option Agreement and Incentive Stock Option Agreement
|            |  |                                                                                                                                                                                        
|*10.3       |  | Business Loan Agreement, dated as of April 15, 2003, by and
between the Company and Independent Bankers Bank of Florida,
together with Promissory Note and Commercial Pledge Agreement
|            |  |                                                                                                                                                                                        
|*10.4       |  | Stock Purchase Agreement, dated June 3, 2003 by and between
the Company and the Companys directors                                                                                    
|            |  |                                                                                                                                                                                        
|*21.1       |  | List of Subsidiaries of the Company                                                                                                                                                    
|            |  |                                                                                                                                                                                        
|*23.1       |  | Consent of Hacker Johnson & Smith PA                                                                                                                                                   
|            |  |                                                                                                                                                                                        
|*23.2       |  | Consent of Carlton Fields, P.A. (included in Exhibit 5.1)                                                                                                                              
|            |  |                                                                                                                                                                                        
|*24.1       |  | Power of Attorney (contained in Signature section of the
Registration Statement)                                                                                                       
|            |  |                                                                                                                                                                                        
|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                                          



|* |  | Exhibits marked with an asterisk were filled with the Companys
registration statement Form SB-2 that was effective November 5, 2003.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------



|(b) |  | Reports on Form 8-K.Registrant filed no Form 8-Ks during the
three-month period ended September 30, 2003.
|--- |  | ----------------------------------------------------------------------------------------------------------

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##### Table of Contents






COAST FINANCIAL HOLDINGS, INC.

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: |  | December 31, 2003 |  | By: |  | /s/ Gerald L. Anthony                                                    |  | 
|      |  |                   |  |     |  |                                                                          |  | 
|      |  |                   |  |     |  | Gerald L. Anthony, President and Chief
   Executive Officer              |  | 
|      |  |                   |  |     |  |                                                                          |  | 
|Date: |  | December 31, 2003 |  | By: |  | /s/ Brain P. Peters                                                      |  | 
|      |  |                   |  |     |  |                                                                          |  | 
|      |  |                   |  |     |  | Brian P. Peters, Executive Vice President and
   Chief Financial Officer |  | 

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