CFHI Coast Finl Hldgs (MM)

Lerach Coughlin Stoia Geller Rudman & Robbins LLP (�Lerach Coughlin�) (http://www.lerachlaw.com/cases/coastfinancial/) today announced that a class action lawsuit has been commenced in the United States District Court for the Middle District of Florida on behalf of purchasers of Coast Financial Holdings, Inc. (�Coast Financial� or the �Company�) (NASDAQ: CFHI) who purchased the publicly traded securities of Coast Financial between October 5, 2005 to January 25, 2007, inclusive (the �Class Period�), seeking to pursue remedies under the Securities Exchange Act of 1934 (the �Exchange Act�). If you wish to serve as lead plaintiff, you must move the Court no later than May 21, 2007. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff�s counsel, Samuel H. Rudman or David A. Rosenfeld of Lerach Coughlin at 800/449-4900 or 619/231-1058 or via e-mail at wsl@lerachlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.lerachlaw.com/cases/coastfinancial/. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. The complaint charges Coast Financial and certain of its officers and directors with violations of the Exchange Act. The Company operates as the holding company for Coast Bank of Florida (�Coast Bank�) that provides various consumer and commercial banking services to individuals and small to medium sized businesses in Manatee, Pinellas and Sarasota counties in Florida. According to the complaint, in order to take advantage of the housing boom and in particular the fast-growing real estate market in Southwest Florida, Coast Financial partnered with Construction Compliance Inc. (�CCI�) to lend money to borrowers who would use the money to construct homes in that area. The plan was simple: borrowers would put little money down and take out construction loans in their name that CCI would then use to construct the properties. CCI would then use the credit line to construct the properties and pay the interest on the loans. Once the construction was completed, borrowers would then sell the property or �flip� it for a quick profit. Unbeknownst to shareholders, however, by the start of the Class Period, Coast Financial had materially increased its exposure to CCI and its investors and had extended tens of millions of dollars of credit for the construction of homes in Florida. Given the then-deteriorating condition of the Florida real estate market, the Company should have increased its loan loss reserves for this segment of the business but did not. Throughout the Class Period, defendants never disclosed all material facts about its relationship with CCI, the status of CCI�s construction projects or the Company�s increasing exposure to CCI. Furthermore, the Company should have fully disclosed the true risks associated with this line of business � there were little, if any, controls placed on the CCI and its ability to withdraw money from Coast Financial. Ultimately, CCI withdrew tens of millions of dollars and never completed construction on many homes. Plaintiff seeks to recover damages on behalf of all those who purchased the publicly traded securities of Coast Financial between October 5, 2005 to January 25, 2007. The plaintiff is represented by Lerach Coughlin, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. Lerach Coughlin, a 180-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston, Philadelphia and Seattle, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Lerach Coughlin lawyers have been responsible for more than $20 billion in aggregate recoveries. The Lerach Coughlin Web site (http://www.lerachlaw.com) has more information about the firm.