CFHI Coast Finl Hldgs (MM)

PROXY STATEMENT

SPECIAL MEETING OF SHAREHOLDERS

To Be Held November 26, 2007

The board of directors of Coast Financial Holdings, Inc. is providing this proxy statement to solicit your vote on the adoption of the merger proposal. Pursuant to the Merger Agreement as described in this proxy statement, the boards of directors of Coast Financial and First Banks have agreed to engage in a transaction whereby First Banks will acquire Coast Financial in a merger transaction.

If the merger is completed, each outstanding common share of Coast Financial will be converted into the right to receive a cash payment in an amount equal to (a) the aggregate cash consideration of $22,130,793.80, subject to a downward adjustment under certain circumstances described below, divided by (b) the number of common shares outstanding prior to the consummation of the merger, or approximately $3.40 in cash, subject to any downward adjustment. Under the terms of the Merger Agreement, the price paid for each of our common shares shall be reduced if:

If each of the above conditions exists, then the aggregate cash consideration to be paid by First Banks will be reduced to the nearest $500,000 increment, rounded upward or downward, to the full amount of the Deficiency and the price per common share will be reduced accordingly. If the Deficiency exceeds $10 million, then Coast Financial or First Banks, respectively, will have the right to terminate the Merger Agreement. Based on this formula and depending on the amount of the Deficiency, the price paid per share could be reduced to $1.86 prior to triggering such termination rights. As of September 30, 2007, the Deficiency was approximately $1,286,000 which would result in a payment of approximately $3.17 per share. In view of our current and anticipated performance, it is likely that the Deficiency will continue to increase in size and the amount that you will receive will be further reduced. On August 3, 2007, the last full trading day before the public announcement of the merger, the closing price of Coast Financial common shares was $2.28 per share.

The merger cannot be completed unless the holders of a majority of the outstanding common shares of Coast Financial approve and adopt the Merger Agreement, which will be considered and voted upon at a special meeting of shareholders to be held by Coast Financial at the Manatee Civic Center located at One Haben Boulevard, Palmetto, Florida 34221, Florida, on November 26, 2007 at 4:00 p.m., local time.

This proxy statement provides you with detailed information about the merger proposal. For a more complete description of the terms of the Merger Agreement, see “The Merger” beginning on page 9 of this proxy statement. Please also see “Where You Can Find More Information” beginning on page 45 for additional information about Coast Financial on file with the Securities and Exchange Commission. We urge you to read and carefully consider this proxy statement and the Merger Agreement in their entirety.

The board of directors of Coast Financial unanimously recommends that its shareholders vote “ FOR ” approval and adoption of the Merger Agreement. Regardless of whether you plan to attend the special meeting, please take the time to vote by signing, dating, and mailing the enclosed proxy card to us. YOUR VOTE IS VERY IMPORTANT.

This proxy statement and the enclosed form of proxy are first being sent to shareholders, together with the notice of the special meeting, beginning on or about October 26, 2007.

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QUESTIONS AND ANSWERS ABOUT THE MERGER

The following questions and answers are intended to address briefly some commonly asked questions regarding the special meeting of shareholders to be held for the purpose of considering and voting on the merger proposal. These questions and answers do not address all questions that may be important to you as a Coast Financial shareholder. Please refer to the more detailed information contained elsewhere in this proxy statement, the Annexes to this proxy statement, and the documents referred to in this proxy statement before voting on the merger proposal.

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Your latest dated proxy or vote will be counted. If you have instructed a broker to vote your shares, you must follow the instructions received from your broker to change your vote.

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THE COMPANIES

Coast Financial and Coast Bank

Coast Financial Holdings, Inc. (“us”, “our”, “we”, “Coast Financial”), headquartered in Bradenton, Florida, is a bank holding company registered under the Bank Holding Company Act of 1956 that owns Coast Bank of Florida (“Coast Bank”). Coast Financial was incorporated in November 2002 under the laws of the State of Florida and became the holding company for Coast Bank in April 2003. Our primary asset is Coast Bank and we conduct our operations through Coast Bank. As of September 30, 2007, we had, on a consolidated basis, total assets of $664,452,000, total deposits of $632,303,000, and total shareholder equity of $22,251,000. Our Common Shares are traded on the Nasdaq Global Market under the symbol “CFHI.” The principal executive offices of both Coast Financial and Coast Bank are located at 1301 – 6 ^th Avenue West, Suite 300, Bradenton, Florida 34205. The telephone number for both of these offices is (941) 752-5900.

Coast Bank, which commenced operation in April 2000, is a Florida state-chartered bank which engages in a full service general commercial banking business from its 20 branches located in and around Manatee, Pinellas, Hillsborough and Pasco counties, Florida. We also operate 67 ATM kiosks located in Manatee, Pinellas, Hillsborough, Pasco, and Sarasota counties branded with the Coast Bank logo. We offer a broad range of deposit services, including checking accounts, savings accounts, and time deposits of various types, as well as residential loans and a full range of short- to intermediate- term personal and commercial loans. Commercial loans include term loans, lines of credit, and equipment receivables financing which are made available to businesses for working capital (including inventory and receivables), business expansion (including acquisitions of real estate and improvements), and the purchase of equipment and machinery, as well as commercial mortgages to finance land and buildings. Coast Bank also makes personal consumer loans directly to its customers for various purposes, including purchases of automobiles, recreational vehicles, boats, home improvements, education and personal investments. Our consumer loan portfolio consists primarily of home equity lines loans with both fixed and variable rate lines of credit. Coast Bank also makes residential mortgage loans and, until recently, a large portion of our lending activities consisted of the origination of residential construction-to-permanent loans throughout the State of Florida, which were used to finance the construction of single-family dwellings. These loans were made for the construction of primary residences and second homes, as well as a significant amount for investment purposes. Construction loans also have been made to contractors to erect single-family dwellings for resale. Because of the loss that we recorded in 2006 due to the failure of a local builder that had been contracted to construct the homes of a substantial number of our borrowers, Coast Bank’s capital position was adversely affected and we decided to discontinue making residential construction loans originated through broker correspondence. The majority of our residential construction-to-permanent loan portfolio was originated through broker correspondence. Coast Bank however, does continue to offer single family residential mortgage loans to its customers primarily in its local market area.

Our revenues are primarily derived from interest on, and fees received in connection with, its lending activities, from the sales of loans, and from interest and dividends from investment securities and short-term investments. The principal sources of funds for our lending activities are deposits, prepayment of loans, sales of loans, and the sale of investment securities. Our principal expenses consist of the interest paid on deposits and operating, general and administrative expenses. Coast Bank does not presently provide trust or appraisal services.

First Banks

First Banks is a bank holding company organized as a Missouri corporation headquartered in St. Louis, Missouri. First Banks is a privately owned corporation. The primary asset of First Banks is the capital stock of The San Francisco Company, a bank holding company headquartered in St. Louis, Missouri, which owns all of the capital stock of First Bank, a Missouri state-chartered bank and member of the Federal Reserve System. First Bank currently operates 196 retail banking facilities in California, Illinois, Missouri and Texas. Deposits in First Bank are insured up to the applicable limits by the FDIC. First Banks and its subsidiaries are subject to extensive regulation, supervision, and examination by federal and state banking authorities as well as other regulatory

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authorities. As of September 30, 2007, on a consolidated basis First Banks had total assets of approximately $10.3 billion, deposits of approximately $8.6 billion and stockholders’ equity of approximately $856.8 million. The executive offices of First Banks are currently located at 600 James S. McDonnell Boulevard, Hazelwood, Missouri 63042, and its telephone number is: (314) 592-5000.

THE SPECIAL MEETING

This proxy statement is furnished to you in connection with the solicitation of proxies by our board of directors for use at the special meeting of our shareholders, which we refer to in this proxy statement as the special meeting. This proxy statement, the enclosed Notice of Special Meeting, and the proxy card are being first sent to you on or about October 26, 2007.

Date, Time and Place of the Special Meeting

The special meeting is scheduled to be held as follows:

Date: November 26, 2007

Time: 4:00 p.m.

Place: The Manatee Civic Center, One Haben Boulevard, Palmetto, FL 35221

Purpose of the Special Meeting

The purpose of the special meeting is for you to:

As of the date of this proxy statement, we are not aware of any business that will be presented for consideration at the special meeting other than those matters described in the proxy statement.

Record Date and Voting Rights

Our board of directors has fixed the close of business on October 26, 2007 as the record date for the special meeting. Only holders of record of our Common Shares on that date are entitled to notice of, and to vote at, the special meeting. As of the close of business on October 26, 2007, there were issued and outstanding and entitled to vote 6,509,05 7 Common Shares.

Voting and Revocation of Proxies

Shareholders of record may submit proxies by mail. Shareholders who wish to submit a proxy by mail should mark, date, sign and return the proxy card in the envelope furnished.

All properly signed and dated proxies received at any time before the special meeting, and not revoked or superseded before being voted, will be voted at the special meeting. Where a voting instruction is specified on the proxy, it will be voted in accordance with the instruction. Where no instructions are indicated on a proxy properly signed and dated, such the proxy will be voted “ FOR ” the approval of the merger proposal and “ FOR ” the approval of any proposal to postpone or adjourn the special meeting, if necessary, in order to solicit additional proxies in favor of the merger proposal, except that no proxy voted against the merger proposal will be voted in favor of any adjournment or postponement.

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The proxies also confer discretionary authority on the persons named on the proxy cards to vote your Common Shares with respect to matters incident to the conduct of the meeting. If any other business is properly presented at the special meeting, proxies will be voted in accordance with the discretion of the proxy holders.

Until your proxy is exercised at the special meeting, you can revoke your proxy and change your vote in any of the following ways:

Your latest dated proxy will be counted unless you vote in person at the special meeting.

Quorum; Vote Required for Approval

A majority of the outstanding Common Shares issued and outstanding and entitled to vote on the record date must be represented either in person or by proxy at the meeting for a quorum to be present for the purpose of transacting business at the special meeting. Common Shares represented at the special meeting but not voted, including our Common Shares for which proxies have been received but for which shareholders have abstained and “broker non-votes” (as described below), will be treated as present at the special meeting for purposes of determining the presence or absence of a quorum for the transaction of all business. In the event that a quorum is not present at the special meeting, it is expected that the meeting will be adjourned or postponed to solicit additional proxies.

Under Florida law, approval and adoption of the Merger Agreement requires the affirmative vote of the holders of a majority of our Common Shares outstanding on the record date that are entitled to vote on the merger proposal. Accordingly, the failure to vote your shares in favor of the merger proposal for any reason whatsoever—whether by voting no, failing to vote, abstaining, or allowing a “broker non-vote”—will have the same effect as a vote “ AGAINST ” the merger proposal. Approval of other matters submitted to our shareholders at a meeting where a quorum is present (including a postponement or adjournment of the meeting to solicit additional proxies if there are insufficient votes to approve the merger proposal) requires the votes cast in favor of the action exceed the votes cast opposing the action, unless our articles of incorporation or bylaws, or state laws require a greater number of shares. Because abstentions and broker non-votes are neither a vote cast in favor of nor opposing a proposed action, abstentions and broker non-votes will not be counted as a vote cast on such matters and will not affect the outcome of such vote.

If you hold your shares in an account in “street name” with a broker or bank, you must instruct the broker or bank on how to vote your shares. If an executed proxy card returned by a broker or bank holding shares indicates that the broker or bank does not have authority to vote on the merger proposal, the shares will be considered present at the meeting for purposes of determining the presence of a quorum, but will not be voted on the merger proposal. This is called a “broker non-vote.” Your broker or bank will vote your shares only if you provide instructions on how to vote by following the instructions provided to you by your broker or bank. If you hold shares of our Common Shares in “street name,” you must request a legal proxy from your broker or bank in order to vote in person at the special meeting.

Solicitation of Proxies

We will pay all the costs associated with the solicitation of proxies. Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of our Common Shares held of record by those persons, and we may reimburse them for their reasonable transaction and clerical expenses. Proxies also may be solicited in person, or by telephone, facsimile, email or other means of communication, by our officers and regular employees. These people will receive no

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additional compensation for these services, but will be reimbursed for any transaction expenses incurred by them in connection with these services. The Altman Group has been retained by Coast Financial to assist it in the solicitation of proxies, using the means referred to above, and will receive a fee estimated not to exceed $25,000, plus reimbursement of out-of-pocket expenses.

Do not send in any stock certificates with your proxy cards. As soon as practicable after completion of the merger, the paying agent will mail transmittal forms to you with instructions for the surrender of your Common Share certificates at that time.

Shareholder List

A list of our shareholders entitled to vote at the special meeting will be available for examination by any of our shareholders at the special meeting. For a period of ten days prior to the special meeting of our shareholders, this shareholder list will be available for inspection by shareholders, subject to compliance with applicable provisions of Florida law, during usual business hours at our corporate offices.

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THE MERGER

Background of the Merger

In January 2007, the board of directors of Coast Financial was made aware of circumstances that were likely to have a material adverse impact on Coast Bank’s construction-to-permanent residential loan portfolio. A local builder that had been hired by a significant number of Coast Bank’s borrowers to construct single family homes on their properties, Construction Compliance Incorporated (“CCI”) and its affiliates, indicated that it did not have the financial resources to complete its existing construction projects with our borrowers, many of whom had financed both the purchase of the property and the subsequent construction through loan with Coast Bank. The board of directors took immediate steps to review its loan portfolio and assess the impact of these developments on Coast Bank, its borrowers, and our shareholders. To assist us in evaluating these issues and to consider alternatives for resolving or limiting, to the extent practicable, the adverse consequences of these developments, among other things, we engaged the services of Sandler O’Neill & Partners, L.P. (“Sandler O’Neill”) on January 22, 2007. As our review of the situation continued, we determined that the scope of Sandler O’Neill’s engagement needed to be broadened to include the evaluation and consideration of the strategic alternatives available to Coast Financial for enhancing shareholder value, including a possible sale or business combination transaction. On January 29, 2007, we formally engaged Sandler O’Neill for these purposes.

Between January 27, 2007 and March 23, 2007, Sandler O’Neill contacted over forty parties that it believed may be interested in considering a potential acquisition of Coast Financial, comprised of financial institutions and other strategic buyers, financial buyers, and other investors. Based on these initial contacts, approximately 30 interested parties received confidentiality agreements and those returning executed copies were given access to certain confidential information relating to Coast Financial and Coast Bank. All parties interested in pursing a transaction were instructed to furnish indications of interest to Sandler O’Neill on or before March 27, 2007 which were to include, at a minimum, the price and form of consideration that they would pay for an acquisition of Coast Financial, as well as the proposed form of any transaction.

On March 27, 2007, Sandler O’Neill met with the board of directors to provide an update on the status of the bidding process and to advise the board that several interested parties had requested an extension of the initial bidding process. During this presentation, the board of directors and Sandler O’Neill discussed the process going forward. In order to facilitate the schedules of various of the invited parties, the date for submitting bids was extended to March 30, 2007.

On March 30, 2007, Sandler O’Neill made a presentation to the special committee and the board of directors describing the results of its solicitation of indications of interest and provided an analysis of the values offered. Sandler O’Neill advised the board of directors that five entities had provided indications of interest. The proposals received included four all cash merger transactions and one offer consisting of a cash and stock deal with an escrowed earn-out structure. The values of the initial indications of interest ranged between $32.5 million to $84.6 million in aggregate consideration. In addition to the acquisition proposals, Sandler O’Neill also received informal inquiries about potential asset acquisition transactions and recapitalization plans. After receiving and discussing the information provided by Sandler O’Neill, and analyzing the indications of interest received, as well as the prospects of Coast Financial under its current revised business plan, the board of directors authorized Sandler O’Neill to seek formal bids for the acquisition of Coast Financial.

At the March 30, 2007 meeting, the board of directors determined that it was in the best interests of our shareholders to appoint a special committee of independent directors to analyze and review the various bids received, to consider any other alternatives that should be presented to Coast Financial, and to make a recommendation to the board of directors. The board of directors appointed Alex White, James Toomey, and Michael Ruffino to serve on the special committee. In an effort to establish a going concern value for Coast Financial as an independent company, on March 31, 2007, the special committee and the board of directors engaged the services of The Kafafian Group, Inc. (“Kafafian”) to assist management in establishing a business

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plan on a going forward basis in light of the then–current circumstances. Further, Kafafian also was engaged to render a fairness opinion in the event that Coast Financial should determine that it was interested in accepting a bid received through this bidding process.

Sander O’Neill identified the indications of interest that offered the highest economic values to Coast Financial’s shareholders and, based on the direction given by the special committee, all of these parties were invited to conduct onsite due diligence and submit a bid to Sandler O’Neill on or before May 7, 2007. Because the value offered by First Banks (approximately $32.5 million to $35.8 million) was substantially less than the values of several of the other interested parties (between $60.0 million and $84.6 million), it was mutually agreed that First Banks would not participate in the onsite due diligence or the second round of bidding.

From April 4, 2007 to April 30, 2007, onsite due diligence was conducted by those parties invited to make formal bids. The due diligence review included a detailed examination of the construction-to-permanent residential loan portfolio, including those loans that were affected by the failure of CCI and its affiliates, interviews with senior management, and various legal counsel of Coast Financial. The outstanding balance of residential construction loans at March 31, 2007 was $177.3 million, of which $65.8 million were loans affected by the failure of CCI and its affiliates.

During the due diligence process, Sandler O’Neill advised the special committee that based on the feedback that it was receiving during the due diligence process and concerns that had been raised with respect to various legal developments, lawsuits and regulatory oversight that Coast Financial was experiencing, it anticipated that the final bids may be substantially lower than the original indications of interest.

In mid-April 2007, a third party (“Recap Party”) interested in pursuing a recapitalization plan preliminarily approached Coast Financial about its interest and on May 1, 2007, made a presentation to Coast Financial describing a potential recapitalization scenario, the actual terms of which were dependent upon a due diligence review of the Bank. The recapitalization alternative appeared attractive in light of the feedback received from Sandler O’Neill. Depending on the values of the bids received, the special committee indicated that it would be willing to pursue further discussion of the proposal.

Final bids from the interested parties that had been invited to participate in the second round of the bidding process were received on May 7, 2007. The final bids received by Sandler O’Neill reflected a substantial downward adjustment of the financial terms from those that were contained in the initial indications of interest received in March 2007. One party declined to bid, one dropped out, and the structure of one of the bids was revised to be undertaken as an asset purchase deal. The final remaining bidder offered an all cash merger deal valued at approximately $2.00 per share, subject to several significant conditions. Based on the values received and the structure of the deals proposed, First Banks’ initial indication of interest was competitive with the final bids received. The special committee discussed the recapitalization scenario previously described to them, the possibility of seeking increased offers from the bidding groups, and the addition of First Banks to the bidding process. In order to permit additional time to seek such higher bids and to permit time for First Banks to conduct its due diligence review, the special committee decided to extend the deadline for final bids to May 31, 2007. Further, the special committee authorized Sandler O’Neill to seek a bid from First Banks and agreed to pursue a potential recapitalization option further.

From May 8, 2007 to May 20, 2007, both First Banks and the Recap Party were permitted onsite due diligence review. Several other parties again approached Sandler O’Neill about participating further in the process and also were given the opportunity to conduct due diligence. Final bids were due no later than May 30, 2007. On May 22, 2007, First Banks presented a formal bid to acquire Coast Financial at a price of $3.25 per share. This price was substantially less than its original indication of interest. On May 24, 2007, the FDIC and the OFR entered a Cease and Desist Order against Coast Financial and Coast Bank (“Cease and Desist Order”) and, in connection therewith, Coast Bank executed and entered into a Stipulation with the FDIC and the OFR (the “Stipulation”) and, without admitting or denying the alleged facts, charges of unsafe and unsound banking practices, and violations of law and regulations, Coast Financial and Coast Bank agreed to the issuance of a Cease and Desist Order by the FDIC and the OFR (“Cease and Desist Order”). After completing its due diligence and conducting extensive discussion with the Recap Party, the Recap Party advised the special committee on

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May 30, 2007, that it would be unable to offer a recapitalization proposal to Coast Financial. Sandler O’Neill was requested to seek the final and best price from all interested parties prior to the meeting to be held on May 31, 2007. On May 31, 2007, First Banks submitted its formal bid in which it increased its offer to $3.40 per share.

On May 31, 2007, the special committee received a presentation from Sandler O’Neill describing each of the final bids. Sandler O’Neill advised the special committee that four entities had submitted final bids and two of these entities provided three different alternatives, resulting in a total of eight offers. The offers included an asset only acquisition transaction, a purchase of only Coast Bank, and a recapitalization proposal involving the acquisition of 85% of the Company and the issuance of preferred stock to the remaining shareholders. The remaining offers consisted of all cash mergers transactions ranging in value from $13.02 million to $21.15 million. In its presentation it summarized the terms and conditions of each of the offers and its assessment of the value, the risks, and the reasonableness of the conditions attached to each of the offers. Sandler O’Neill also addressed the stand alone value of Coast Financial and the impact that the Cease and Desist Order would likely have on its ability to continue as an independent corporation. Based on the foregoing, Sandler O’Neill recommended acceptance of the bid submitted by First Banks. After due deliberation, discussion and consideration of the various proposals, the special committee voted to recommend that the First Banks bid be accepted and that Coast Financial move forward in negotiating the final terms of a definitive agreement. The board of directors which convened shortly after the special committee meeting was given a full presentation of the bids received, the processes employed, the matters considered and the special committee’s recommendation. The board of directors unanimously approved the special committee’s recommendation and authorized the special committee to negotiate the definitive agreement.

The parties entered into a letter of intent on June 1, 2007 and on June 11, 2007 First Banks delivered to us its first draft of the definitive merger documents. From June 11, 2007 through July 9, 2007, representatives of the parties and their respective counsel negotiated the terms and conditions of the proposed merger. On July 12, 2007, Coast Financial determined that it had reached an impasse with First Banks as it related to, among other things, certain closing conditions that Coast Financial deemed to be unacceptable, as well as the termination fee being requested. Among the conditions that Coast Financial deemed to be unacceptable were closing conditions relating to credit quality levels and loan loss reserves and a requirement that it seek waivers from liability from its shareholders.

On July 18, 2007, First Banks offered additional changes to the proposed Merger Agreement, including changes to the proposed closing conditions and the elimination of the termination fee in exchange for a stock option agreement. From July 18, 2007 through July 24, 2007, the parties continued to negotiate the terms of the proposed Merger Agreement.

On July 25, 2007, the special committee reviewed the proposed terms of the offer with Sandler O’Neill. Kafafian indicated that it was willing to issue a fairness opinion. The special committee agreed to recommend approval subject to certain revisions being made to the final documentation.

First Banks and Coast Financial continued to negotiate the final terms of the merger documentation in accordance with the direction of the special committee. On August 1, 2007, Coast Financial provided to First Banks its operating results for the second quarter, as well as certain information relating to operations through July 31, 2007. First Banks also was aware Coast Financial’s intention to record a valuation allowance in the second quarter against its deferred tax asset. As a result, First Banks indicated a concern relating to the ability of Coast Financial to achieve the financial covenants established a condition to consummation of the merger.

From August 1, 2007 to August 3, 2007, the parties negotiated a new financial condition provision and provided for a purchase price adjustment rather than a termination of the transaction. A threshold was established prior to triggering a purchase price adjustment and limits were placed on the level of such adjustments. On August 3, 2007, Sandler O’Neill advised the special committee of the revised terms of the transaction and recommended that it be accepted. Kafafian provided its written fairness opinion. The special committee unanimously approved the Merger Agreement and recommended that the board of directors vote to approve it. Based on the foregoing, the board of directors unanimously approved the Merger Agreement and the transactions contemplated thereby.

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On August 3, 2007, we and First Banks executed the Merger Agreement after the close of the market and a press release was issued that evening.

Recommendation of Our Board of Directors and Reasons for the Merger

After careful consideration, our board of directors unanimously determined that the merger proposal is fair to, and in the best interests of Coast Financial and our shareholders, and that First Banks is a sound merger partner. Additionally, our board of directors believes that the merger will have a positive effect on our employees, customers, and the communities that we serve. Accordingly, on August 3, 2007, our board of directors unanimously approved the Merger Agreement and unanimously determined to recommend that our shareholders vote “FOR” the approval and adoption of the Merger Agreement and the merger.

In reaching its decision that the merger proposal is advisable, fair to, and in the best interests of our shareholders, and to recommend that our shareholders approve and adopt the Merger Agreement and the merger, our board of directors relied on its knowledge of our business and the information provided by our officers, considered the recommendation of the special committee and the reasons for its recommendation to the board of directors, consulted with its financial advisor, Sandler O’Neill, and considered the short-term and long-term interests and prospects of Coast Financial and our shareholders. In the course of reaching its determinations, the board of directors consulted with legal counsel with respect to their legal duties and the terms of the Merger Agreement. The board members also consulted with Coast Financial’s financial advisors with respect to the financial aspects of the transaction, and with an independent financial consultant, Kafafian, as to the fairness of the merger consideration from a financial point of view. In reaching their decision to approve and recommend the merger proposal, both the special committee and our board of directors considered a number of factors, including, but not limited to, the following:

Financial Considerations. Our board of directors and its special committee considered, among other things, the following financial factors:

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Business Considerations. Our board of directors and its special committee considered, among other things, the following business factors:

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Other Transaction Considerations. Our board of directors and its special committee also considered certain transaction-related factors:

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Adverse Factors Considered. In their deliberations, the special committee and our board of directors also recognized the following adverse factors associated with the merger:

In its analysis of the merger proposal, our board of directors and the special committee were aware of, and understood that, all but one of the valuation methodologies used by Kafafian suggested that Coast Financial may be valued at a price higher than that to be paid under the merger proposal. The board of directors and the special committee further acknowledged and agreed with Kafafian’s conclusion that the deterioration of Coast Financial’s finances, as well as identified contingent liabilities, is fairly unique and this makes the use of the valuation techniques, other than the capital deterioration analysis difficult. Because of the circumstances

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surrounding the determination that a sale of Coast Financial at this time was essential to the continuation of Coast Financial as a going concern and the most probable way for its shareholders to receive value for their shares, the board of directors and the special committee did not give much weight to any higher valuation models. More important to the decision of the board of directors and the special committee to accept the merger proposal was:

In essence, because it was determined that it was necessary to sell Coast Financial at this particular point in time and that such sale could not be postponed to a future date, the board of directors and the special committee concluded that, based on the active auction process and the inclusion of a fiduciary-out provision, the best valuation of Coast Financial at this time was the amount that the highest bidder would pay for Coast Financial.

During its consideration and deliberation of the merger proposal, our board of directors also was aware that some of our directors and executive officers may have interests in the merger that are different from or in addition to those of our shareholders generally as described under “The Merger—Interests of Directors and Executive Officers in the Merger.”

The discussion of the information and factors considered by our board of directors and the special committee is not intended to be exhaustive, but is believed to address the material information and factors that they considered. In view of the variety of factors and the amount of information considered, neither our board of directors nor the special committee found it practicable to, and did not specifically, make assessments of, quantify or otherwise assign relative weights to the various factors and analyses considered in reaching their determinations. Rather, the determination to approve the merger proposal was made after consideration of all of the factors and analyses as a whole. Individual directors may have given different weight to different factors. After considering all of the foregoing material factors, the special committee and our board of directors each concluded that the positive material factors favoring the approval of the merger proposal outweighed the adverse material factors, and that approval of the merger proposal is in the best interests of our shareholders.

Opinion of The Kafafian Group, Inc.

We engaged Kafafian to render an opinion to the special committee and our board of directors as to the fairness, from a financial point of view, of the merger consideration offered to our shareholders under the terms of the Merger Agreement. Kafafian delivered its written opinion dated August 3, 2007 to the special committee and, later that same day, to our board of directors. Kafafian’s opinion stated that, as of August 3, 2007, it was of the view that the aggregate cash consideration to be paid by First Banks in the amount of $22,130,793.80, less any adjustment amount as set forth in the Merger Agreement, divided by the number of Common Shares outstanding, provides a price per Common Share which was fair, from a financial point of view, to the holders of our Common Shares. Except as discussed herein, no limitations were imposed by the special committee or our board of directors upon Kafafian with respect to investigations made or procedures followed in rendering this opinion.

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As part of its financial advisory business, Kafafian is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions and valuations for corporate and other purposes. In the ordinary course of business Kafafian provides consulting services to financial institutions, including performance measurement, profitability outsourcing, strategic planning and various investment banking advisory services. We decided to engage Kafafian to provide the fairness opinion to us because of Kafafian’s experience as a financial advisor on a wide variety of transactions involving financial institution parties, including mergers and acquisitions, its overall understanding of operational and financial issues affecting financial institutions, its general financial advisory and consulting experience in the financial services industry, and, with respect to the merger proposal, its independence and lack of conflicts of interests with our officers and directors and Sandler O’Neill. Kafafian also previously reviewed Coast Bank and was familiar with its operations.

The full text of Kafafian’s written opinion is attached to this proxy statement as Annex C and is incorporated herein by reference. You are urged to read the opinion in its entirety for a description of the procedures followed, assumptions made, matters considered, and qualifications and limitations of Kafafian’s analyses. The merger consideration was determined by negotiation between First Banks and Coast Financial and was not determined by Kafafian. Kafafian has consented to the inclusion of its opinion in this proxy statement.

KAFAFIAN’S OPINION REGARDING THE FAIRNESS OF THE MERGER CONSIDERATION FROM A FINANCIAL POINT OF VIEW WAS DELIVERED TO THE SPECIAL COMMITTEE AND OUR BOARD OF DIRECTORS. IT IS NOT A RECOMMENDATION ON HOW A SHAREHOLDER SHOULD VOTE AT THE SPECIAL MEETING.

In rendering its opinion, Kafafian, among other things:

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Kafafian met with certain members of senior management and other representatives of Coast Financial and First Banks to discuss the foregoing as well as matters Kafafian deemed relevant. As part of its analyses, Kafafian took into account its assessment of general economic, market and financial conditions, its experience in similar transactions, as well as its experience in and knowledge of the banking industry. Kafafian’s opinion is necessarily based upon conditions as they existed and could be evaluated on the respective dates thereof and the information made available to Kafafian through the respective dates thereof.

Kafafian has assumed and relied upon the accuracy and completeness of all of the financial and other information reviewed and/or discussed for the purposes of its opinion, without independent investigation. Kafafian assumed that financial forecasts provided by Coast Financial were reasonably prepared on bases reflecting the best currently available estimates and judgments of its senior management, and are based on reasonable assumptions, estimates and judgments. Any estimates contained in the analyses performed by Kafafian are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold.

Kafafian did not make any independent evaluation or appraisals of the assets or liabilities of Coast Financial or First Banks nor was it furnished with any such appraisals. Further, Kafafian did not review the loans or loan loss reserves or any individual loan files of Coast Financial or First Banks and it also assumed, without independent verification, that the aggregate allowances for loan losses for Coast Financial and First Banks were adequate. Kafafian also assumed that the conditions to the Merger Agreement would be satisfied and that the merger would be consummated on a timely basis as contemplated by the Merger Agreement.

In order to determine the fairness of the consideration to be received in the merger by Coast Financial shareholders, as outlined in the Merger Agreement, Kafafian considered the viability of Coast Financial as an independent company. Kafafian considered the possibility that if Coast Financial remained independent, regulatory authorities having jurisdiction over Coast Financial and Coast Bank could seek receivership, or other remedy if Coast Bank was unable to satisfy the requirements established by such regulatory authorities with respect to its operations, financial condition, and capital requirements. Kafafian recognized the possibility that shareholder value, as determined by the merger consideration to be received for each Common Share, as outlined in the Merger Agreement, could be impaired if such regulatory authorities were to take any of the aforementioned actions. Kafafian also considered the values and the nature of the consideration of all other offers received by Coast Financial at the time the Merger Agreement was recommended for approval by the special committee and approved by the board of directors of Coast Financial.

Kafafian’s opinion was for the use of the special committee and our board of directors in its consideration of the merger proposal, and Kafafian’s opinion did not address the relative merits of the transactions contemplated by the Merger Agreement as compared to any alternative transactions or opportunity that may be available to Coast Financial.

The Kafafian opinion was one of many factors taken into consideration by the special committee and the board of directors in its review and analysis of the Merger Agreement and should not be considered determinative of the views of either the special committee or the board of directors with respect to the Merger Agreement.

In preparing its opinion, Kafafian performed a variety of financial and comparative analyses. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant quantitative and qualitative methods of financial analysis and the application of those methods to the particular circumstances and, therefore, the opinion is not readily susceptible to summary description. Kafafian believes that its analyses must be considered as a whole and that selecting portions of its analyses and of the factors considered by it, without considering all analyses and factors, could create an incomplete view of the evaluation process underlying the opinion. However, in view of the relatively unique circumstances of Coast Financial, Kafafian did give significant weight to capital deterioration analysis. Taken as a whole, Kafafian believes these analyses support the conclusion that the consideration to be paid to our shareholders under the terms of the Merger Agreement is fair, from a financial point of view.

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The following is a summary of the material financial and comparative analyses performed by Kafafian in connection with the delivery of its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand Kafafian’s financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data described below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Kafafian’s financial analyses.

Valuation Methodologies and Range of Values. The following table summarizes the material valuation methodologies and the range of values of the Common Shares used by Kafafian in arriving at its opinion. The values for peer group and comparable transactions were arrived at by applying Coast Financial data to median peer group trading and comparable transaction acquisition multiples. The valuation methodologies are described below in greater detail. Kafafian noted that the deterioration of Coast Financial’s financial condition is relatively unique and makes comparisons to peer and comparable transactions difficult.

Contribution Analysis. Kafafian reviewed the contribution made by each of Coast Financial and First Banks to various balance sheet items of the combined company based on balance sheet data at June 30, 2007. The analysis showed that:

Capital Deterioration Analysis . Kafafian performed a capital deterioration analysis based on future operating losses of Coast Financial using projected earnings for the remainder of 2007 and 2008 based on management’s forecasts. Using these projections and price-to-tangible book multiples from comparable underperforming institutions between 95% and 100%, Kafafian calculated a range of values of the Common Shares. This analysis assumed Coast Financial was not acquired but remained independent for the projection period. The analysis showed a value per share of Common Shares between $3.29 - $3.46.

Using the aforementioned projections, Kafafian used acquisition multiples from comparable merger transactions of banks with credit problems and under a Cease and Desist order between 140% to 150% of tangible book value. This analysis assumed Coast Financial was to be acquired at similar tangible book multiples as comparable merger transactions. The analysis showed a value per share of the Common Shares between $4.84 and $5.19. Kafafian noted that if Coast Financial’s reserves to non-performing loans ratio was equivalent to that of the comparable transactions, Coast Financial’s tangible book value would be less than zero.

The capital depreciation analysis relies on numerous assumptions, including balance sheet and earnings growth rates and market trading multiples that may ultimately be materially different than those used in the analysis. Therefore, this analysis does not purport to be indicative of the actual values or expected values of the Common Shares.

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Peer Group Analysis: Coast Financial . Kafafian compared selected balance sheet, asset quality, capitalization, profitability, and market trading ratios using financial data at or for the twelve months ended June 30, 2007 and market data on or near the date of the August 3, 2007 fairness opinion for Coast Financial and two groups of similar financial institutions. Group 1 includes 8 publicly traded commercial banks in Florida established between January 1, 1996 and December 31, 2003 (the “Regional Peers”). Group 2 includes 8 poorly performing publicly traded commercial banks with non-performing asset to total asset ratios greater than 1% and established earlier than January 1, 2003 (the “Underperforming Peers”). For purposes of this analysis, non-performing assets include non-accrual loans, restructured loans, other real estate owned, and loans greater than 90 days past due but still accruing. Peer statistics are medians.

Peer Group Analysis: First Banks . Kafafian compared selected balance sheet, asset quality, capitalization, profitability, and market trading ratios using financial data at or for the twelve months ended June 30, 2007 and market data on or near the date of the August 3, 2007 fairness opinion for First Banks and two groups of similar financial institutions. Group 1 includes 10 publicly traded commercial banks in the Midwest region with assets between $5 billion and $15 billion and a return on average assets, or ROAA, greater than 0.80% (the “FB Regional Peers”). Group 2 includes 14 publicly traded commercial banks nationwide with total assets between $5 and $ 15 billion, ROAA greater than 0.80%, and construction loans to total loans greater than 15% (the “FB National Peers”). For purposes of this analysis, non-performing assets include non-accrual loans, restructured loans, other real estate owned, and loans greater than 90 days past due but still accruing. First Banks is not a publicly traded company, and therefore there are no market trading multiples stated for them. Peer statistics are medians.

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Comparable Transaction Analysis . Kafafian reviewed the pricing of two groups of merger and acquisition transactions. Group 1 was composed of transactions where the target was an unprofitable commercial bank with assets between $250 million and $2 billion and where the transaction announcement date was after April 1, 2002. The criteria resulted in a list of 7 merger and acquisition transactions (the “Unprofitable Target Transactions”). Group 2 was composed of 5 transactions announced after January 1, 2005, where the target institution was a commercial bank that was under a regulatory Cease and Desist order and nonperforming assets to total assets was equal to or greater than 1% (the “C&D Transactions”). For purposes of this analysis, premium as a percent of core deposits equates to the amount paid over book value, or premium, divided by the target’s core deposits, or all deposits less time deposits greater than $100,000. Transaction multiples are calculated at the time the transactions were announced.

No company or transaction in the preceding Peer Groups and Comparable Transaction analyses is identical to First Banks, Coast Financial, or the contemplated transaction. Accordingly, an analysis of the results of the foregoing is not mathematically precise; rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading value of the companies to which they are being compared. The ranges of valuation resulting from any particular analysis described above should not be taken to be Kafafian’s view of the actual value of Coast Financial or First Banks.

We engaged Kafafian on March 31, 2007, to render a fairness opinion for the proposed merger transaction. We paid Kafafian a fee of $100,000 upon the rendering of the written fairness opinion. We also have agreed to indemnify Kafafian against certain liabilities. In March 2007, Kafafian was engaged by us to provide Coast Bank with advisory services relating to the development of a strategic plan for Coast Bank in light of the Cease and Desist Order. Kafafian was paid approximately $40,000 for these services.

Company Stock Options and Plans

We have agreed to take all actions necessary to cause, at the effective time of the merger, all of our existing stock options and equity incentive plans to be terminated and for each outstanding option, stock equivalent right or other right to acquire our Common Shares issued thereunder to be cancelled. All of our outstanding options held by our current and former directors and officers are exercisable at prices substantially in excess of the price being paid for our Common Shares pursuant to the Merger Agreement. Accordingly, it is not anticipated that any options will be exercised prior to the merger or that our options will have any impact on the final merger consideration paid to our shareholders. Other than our outstanding stock options, we do not have any other stock incentive awards issued and outstanding under our existing or stock option or equity incentive plans.

Interests of Directors and Executive Officers in the Merger

Members of our board of directors and certain of our executive officers have various interests in the merger described in this section that may be in addition to, or different from, the interests of our shareholders generally. You should keep this in mind when considering the recommendation of our board of directors for the approval of the merger proposal. The members of our board of directors were aware of these interests and considered them at the time they approved the merger proposal. These interests include the following:

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The following table sets forth the cash proceeds that each of our directors and executive officers will receive from the conversion of their Common Shares and their outstanding options to purchase Common Shares at the closing of the merger based on his or her beneficial ownership:

The above chart reflects the beneficial ownership of all equity by all directors and executive officers as defined in Section 16 of the Securities Exchange Act of 1934 and the rules promulgated thereunder.

Financing of the Merger

The merger is not conditioned upon any financing arrangements. The maximum amount of total funds to complete the merger is $22,130,793.80. This amount may be reduced if we are unable to satisfy certain financial

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requirements established in the Merger Agreement which relate to the combined amount of our allowance for loan and lease losses and tangible equity, as compared to the amount of our nonperforming loans and leases and other real estate owned. Please refer to “The Merger—Merger Consideration” for a more complete description of the amount of the merger consideration that will be paid by First Banks in connection with the Merger.

Effects of the Merger

Subject to the terms and conditions of the Merger Agreement and in accordance with Florida law, at the effective time of the merger, a newly formed wholly-owned subsidiary of First Banks will be merged with and into Coast Financial. Coast Financial will survive the merger and become a wholly-owned subsidiary of First Banks and will continue its corporate existence under Florida law. As a result of the merger transaction, First Banks shall commence the business of banking in the State of Florida. Our shareholders will receive the merger consideration payable pursuant to the Merger Agreement and will no longer have any ownership interests in us or rights as holders of the Common Shares.

Regulatory Approvals

The merger is subject to the prior approval by the FRB under the Bank Holding Company Act of 1956 (“BHCA”) and the OFR pursuant to applicable provisions of the Florida Banking Code. It is contemplated that the bank merger will occur after the merger of the wholly owned subsidiary of First Banks with Coast Financial. The approval of the FRB and the MDOF must be obtained prior to the bank merger. In addition, notification of the bank merger must be filed with the OFR. Applications for appropriate regulatory approvals by the FRB and the OFR were filed with such agencies by First Banks on August 20, 2007. First Banks will file its application with the MDOF in the near future in accordance with applicable laws and regulations.

The Bank Merger

Federal Reserve Approval . Pursuant to Section 3 of the BHCA, and the regulations promulgated pursuant thereto, the approval of the FRB must be obtained prior to the merger of the wholly owned subsidiary of First Banks with Coast Financial. The FRB must withhold approval of the merger if it finds that the transaction will result in a monopoly or be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in any part of the United States. In addition, the FRB may not approve the merger if it finds that the effect thereof may be substantially to lessen competition in any section of the country, or tend to create a monopoly, or would in any other manner be in restraint of trade, unless it finds that the anti-competitive effects of the merger are clearly outweighed by the probable effect of the merger in meeting the convenience and needs of the communities to be served. The FRB will also take into consideration the financial condition and managerial resources of First Banks, its subsidiaries, any banks related to First Banks through common ownership or management, and First Bank. Finally, the FRB will consider the compliance records of First Banks’ subsidiaries under the Community Reinvestment Act.

In addition, the FRB is expressly permitted to approve applications under Section 3 of the BHCA for a bank holding company that is adequately capitalized and adequately managed to acquire control of a bank located in a state other than the home state of such bank holding company (an “Interstate Acquisition”), without regard to whether such transaction is prohibited under the law of any state. However, if the law of the state in which the target bank is located requires the target bank to have been in existence for some minimum period of time, the FRB is prohibited from approving an application by a bank holding company to acquire such target bank if such target bank does not satisfy this state law requirement, so long as the state law specifying such minimum period of time does not specify a period of more than five years.

Also, the FRB is prohibited from approving an Interstate Acquisition if the acquiring bank holding company controls, or upon consummation of the acquisition, would control, more than 10% of the total amount of deposits or insured depository institutions in the United States. Finally, subject to certain exceptions, the FRB may not approve an application pertaining to an Interstate Acquisition if, among other things, the bank holding company, upon consummation of the acquisition, would control 30% or more of the total amount of deposits of insured depository institutions in the state where the target bank is located.

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The BHCA provides for the application of notice and public comment on the application and authorizes the FRB to permit interested parties to intervene in the proceedings. If an interested party is permitted to intervene, such intervention could delay the regulatory approvals required for consummation of the merger. Section 11 of the BHCA imposes a waiting period which prohibits the consummation of the merger, in ordinary circumstances, for a period ranging from 15 to 30 days following the FRB’s approval of the merger. During such period, the United States Department of Justice, should it object to the merger for antitrust reasons, may challenge the consummation of the merger.

Pursuant to Section 18(c) of the Federal Deposit Insurance Act (the “Bank Merger Act”), the FRB’s approval also must be obtained prior to the bank merger. The FRB is prohibited from approving the bank merger if it would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of the Untied States. In addition, the FRB is prohibited from approving the bank merger if its effect, in any section of the country, would be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint of trade, unless it finds that the anti-competitive efforts of the bank merger are clearly outweighed in the public interest by the probable effect of the bank merger in meeting the convenience and needs of the community to be served. The FRB is required to take into consideration the financial and managerial resources and future prospects of the existing and proposed institutions, and the convenience and needs of the community to be served.

In that the bank merger constitutes an interstate bank merger, certain additional requirements are applicable to the bank merger. For example, subject to certain exceptions, the FRB is prohibited from approving the bank merger if First Bank materially fails to comply with filing requirements imposed by the OFR for interstate bank merger transactions. In addition, the FRB is prohibited from approving the bank merger if the bank resulting from the bank merger, including all insured depository institutions which are affiliates of such resulting bank, upon consummation of the transaction, would control more than 10% of the total amount of deposits of insured depository institutions in the United States. The FRB is also prohibited from approving the bank merger if either party to the bank merger has a branch in any state in which any other bank involved in the bank merger has a branch, and the resulting bank, upon consummation of the bank merger, would control 30% or more of the total amount of deposits of insured depository institutions in any such state. Finally, the FRB may approve the interstate bank merger only if the FRB determines that the resulting bank will continue to be adequately capitalized and adequately managed upon consummation of the bank merger.

The Bank Merger Act imposes a waiting period which prohibits consummation of the bank merger, in ordinary circumstances, for a period ranging from 15 to 30 days following the FRB’s approval of the bank merger. During such period, the United States Department of Justice, should it object to the bank merger for antitrust reasons, may challenge the consummation of the bank merger.

Florida Department Approval. The OFR must approve the change of control of Coast Bank which would be effected by the merger. Under the Florida Banking Code, the OFR shall issue a Certificate of Approval for a change of control of a Florida state bank only after it has made an investigation and has determined that the proposed new owner of a controlling interest is qualified by reputation, character, experience and financial responsibility to control and operate the bank in a legal and proper manner and that the interest of the other shareholders, if any, and the depositors and creditors of the bank and the interest of the public generally will not be jeopardized by the proposed change in ownership, controlling interest or management.

In addition, pursuant to the Florida Banking Code, the OFR shall not permit the merger unless the bank has been in existence and continuously operating, on the date of its acquisition, for more than three years. Also, the OFR shall not permit the merger if, upon consummation of the transaction, First Banks, including all of its insured depository institutions that would be “affiliates,” as defined in 12 U.S.C. § 1841(k), would control 30% or more of the total amount of deposits held by all insured depository institutions in the State of Florida.

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Missouri Division of Finance Approval. Under Missouri law, the director of the MDOF must approve the merger of a Missouri state chartered bank with another bank upon the filing of an application that includes a copy of the proposed merger agreement and certain other information including verified copies of the proceedings of the banks’ directors and shareholders approving such merger.

The Merger Agreement provides that the obligation of each of First Banks and Coast Financial to consummate the merger is conditioned upon the receipt of all necessary regulatory approvals. There can be no assurance that the applications necessary for First Banks to consummate the merger with Coast Financial will be approved, and, if such approvals are received, that such approvals will not be conditioned upon terms and conditions that would cause the parties to abandon the merger.

Any approval received from bank regulatory agencies reflects only their view that the merger does not contravene applicable competitive standards imposed by law, and that the merger is consistent with regulatory policies relating to safety and soundness. THE APPROVAL OF THE BANK REGULATORY AGENCIES IS NOT AN ENDORSEMENT OR RECOMMENDATION OF THE MERGER.

First Banks is not aware of any governmental approvals or actions that may be required for consummation of the merger except for the FRB, the MDOF and the OFR approvals described above. Should any such approval or action be required, it is presently contemplated that such approval or action would be sought.

Material Federal Income Tax Consequences of the Merger to Shareholders

The following discussion summarizes the material U.S. federal income tax consequences of the merger to our shareholders. This discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, the regulations promulgated under the Code, Internal Revenue Service rulings and judicial and administrative rulings in effect as of the date of this proxy statement, all of which are subject to change, possibly with retroactive effect. Any such changes could affect the accuracy of the statements and conclusions set forth herein. This discussion does not address all aspects of federal income taxation that may be relevant to a holder of our Common Shares in light of the shareholder’s particular circumstances, nor does it discuss the special considerations applicable to those holders of Common Shares subject to special rules, such as shareholders who are not citizens or residents of the United States, shareholders whose functional currency is not the U.S. dollar, shareholders who are financial institutions or broker-dealers, tax-exempt organizations, insurance companies, dealers in securities, foreign corporations or trusts, shareholders who acquired their Common Shares through the exercise of options or similar derivative securities or shareholders who hold their Common Shares as part of a straddle or conversion transaction. This discussion does not address the federal income tax consequences to holders of options to acquire our Common Shares, nor does it address foreign, state or local tax consequences of the merger. This discussion assumes that holders of the Common Shares hold their shares as capital assets within the meaning of the Code.

The receipt of cash for Common Shares pursuant to the merger will be a taxable transaction for United States federal income tax purposes. In general, a shareholder will generally recognize gain or loss equal to the difference, if any, between the amount of cash received and the shareholder’s adjusted tax basis for the shares surrendered for cash pursuant to the merger. Generally, such gain or loss will be capital gain or loss. Gain or loss will be determined separately for each block of shares (i.e., shares acquired at the same cost in a single transaction) that is surrendered for cash pursuant to the merger.

Capital gains recognized by non-corporate taxpayers from the sale of common stock held for more than one year will generally be subject to U.S. federal income tax at a rate not to exceed 20%. Capital gains recognized by non-corporate taxpayers from the sale of common stock held for one year or less will be subject to tax at ordinary income tax rates. Capital gains recognized by a corporate taxpayer will be subject to tax at the tax rates applicable to corporations. In general, capital losses are deductible only against capital gains and are not available to offset ordinary income. However, individual taxpayers are allowed to offset a limited amount of net capital losses against ordinary income, and unused losses may be carried forward to subsequent tax years.

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Certain non-corporate shareholders of our Common Shares will be subject to backup withholding at a rate of 28% on cash payments received pursuant to the merger unless the holder provides certain certifications required by the Internal Revenue Service. Backup withholding will not apply to a shareholder of our Common Shares who furnishes a taxpayer identification number, or TIN, and certifies that he or she is not subject to backup withholding on the substitute Form W-9 included in the transmittal letter or who provides a certificate of foreign status on Form W-8, or who is otherwise exempt from backup withholding.

The information included in this proxy statement regarding U.S. Federal Income Tax consequences of the merger is not binding on the Internal Revenue Service or the Courts. The preceding discussion does not purport to be a complete analysis of all potential tax consequences of the merger that may be relevant to a particular shareholder. You are urged to consult with your own tax advisors regarding the specific tax consequences to you as a result of the merger, including the applicability and effect of foreign, state, local and other tax laws.

Accounting Treatment

The merger will be accounted for as a “purchase transaction” for financial accounting purposes.

Delisting and Deregistration of Our Common Shares

If the merger is completed, our Common Shares will be delisted from the Nasdaq Global Market and will be deregistered under the Exchange Act.

Appraisal Rights

Pursuant to the Florida Business Corporation Act, because our Common Shares are listed on the Nasdaq Global Market and the consideration to be paid in the merger consists solely of cash, our shareholders do not have appraisal rights in connection with the merger, regardless on whether the vote for or against the merger.

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THE MERGER AGREEMENT

This section of the proxy statement describes the material provisions of the Merger Agreement but does not purport to describe all of the terms of the Merger Agreement. The following summary is qualified in its entirety by reference to the complete text of the Merger Agreement, which is attached as Annex A to this proxy statement and incorporated into this proxy statement by reference. We urge you to read the Merger Agreement in its entirety because it is the primary legal document that governs the merger.

Introductory Note

The Merger Agreement has been included to provide information regarding the terms of the merger. Except for its status as the contractual document that establishes and governs the legal relations among us, Coast Bank, and First Banks with respect to the merger, the Merger Agreement is not intended to be a source of factual, business or operational information about us, Coast Bank, First Banks, or their respective subsidiaries or affiliates.

The Merger Agreement contains representations and warranties that Coast Financial and Coast Bank, on the one hand, and First Banks, on the other hand, made to each other as of the date of the Merger Agreement or other specific dates, and such representations and warranties should not be relied upon by any other person. The assertions embodied in those representations and warranties were made solely for purposes of the contract among us, Coast Bank, and First Banks and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Merger Agreement, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Merger Agreement. The confidential disclosures contain information that has been included in Coast Financial’s general prior public disclosures, as well as potential additional non-public information. While Coast Financial does not believe that the confidential disclosures contain information required to be publicly disclosed under the securities laws other than information that has already been so disclosed, the confidential disclosures contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement. Moreover, the representations, warranties and covenants may have been made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, you are not a third party beneficiary under the Merger Agreement and should not rely on the representations and warranties as accurate or complete or characterizations of the actual state of facts as of any specified date since they are modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to shareholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts.

The Merger Transaction

The Merger Agreement provides for the merger of a newly-formed wholly owned subsidiary of First Banks (referred to herein as “Newco”) with and into Coast Financial upon the terms, and subject to the conditions, of the Merger Agreement. Coast Financial will be the surviving corporation in the merger and will continue as a wholly-owned subsidiary of First Banks. The separate corporate existence of Newco will terminate at the effective time of the merger. The merger will be effective upon the acceptance of the articles of merger by the Secretary of the State of Florida. We expect to complete the merger as promptly as practicable after our shareholders approve the Merger Agreement and we receive the required regulatory approvals for the merger.

First Banks or we may terminate the Merger Agreement before completion of the merger in certain circumstances, whether before or after approval of the merger proposal by our shareholders. Additional detail on the termination of the Merger Agreement is described in “—Termination of the Merger Agreement.”

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Merger Consideration

At the effective time of the merger, all issued and outstanding Common Share will be canceled and converted into the right to receive an aggregate payment of $22,130,793.80 (“Initial Aggregate Purchase Price”) less the Adjustment Amount as described below.

On the date that it is determined that all conditions for closing have been satisfied, to the extent that the sum of our allowance for loan and lease losses plus our tangible equity on the effective date of the merger (the “Reserve Plus Equity Amount”) is less than the amount (referred to throughout this proxy statement as the Deficiency) that would be required to be added to the Reserve Plus Equity Amount for such amount to equal at least seventy-five percent (75%) of the sum of our non-performing loans and leases plus other real estate owned as of the effective date of the merger (the “NPL Plus OREO Amount”) and this Deficiency is greater than One Million Dollars ($1,000,000), then the Initial Aggregate Purchase Price will be adjusted downward.

The actual adjustment will be computed determining the amount that would be required to be added to the Reserve Plus Equity Amount to allow the Reserve Plus Equity Amount to equal exactly seventy-five percent (75%) of the NPL Plus OREO Amount. The amount determined in the immediately preceding sentence will then be rounded, upward or downward, to the nearest $500,000 increment, with the rounded number being the actual adjustment to the Initial Aggregate Purchase Price (this rounded amount being referred to as the “Adjustment Amount”). The Initial Aggregate Purchase Price less the Adjustment Amount is referred to as the “Final Aggregate Purchase Price”. For these purposes, the allowance for loan and lease losses, tangible equity, non-performing loans and leases and other real estate owned will be determined in accordance with our past practices, consistently applied.

The amount that will be paid for each Common Share will be determined by dividing the Final Aggregate Purchase Price by the number of Common Shares issued and outstanding immediately prior to the effective time of the merger (the “Per Share Merger Price”).

If the Deficiency exceeds $10 million, then Coast Financial and First Banks each will have the right to terminate the Merger Agreement. Based on the above formula and depending on the amount of the Deficiency, the Per Share Merger Price could be reduced from the initially offered price of $3.40 to as low as $1.86 prior to triggering such termination rights.

Set forth below is a chart which provides the calculation of the Deficiency as if the determination date for determining the Adjustment Amount was on September 30, 2007, June 30, 2007, and December 31, 2006.

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For illustration purposes only, set forth is the calculation of the Adjustment Amount and the resulting Per Share Merger Price based on various Deficiency levels.

The preceding is only an illustration of how the Adjustment Amount and the corresponding Per Share Merger Price is impacted by the existence of differing levels of an existing Deficiency. It is not necessarily indicative of the results of operations of Coast Financial now or in future periods or of any level of any future Deficiency.

As of September 30, 2007, the Deficiency was approximately $1,286,000 which would result in a payment of approximately $3.17 per share. In view of our current and anticipated performance, it is likely that the Deficiency will continue to increase in size and the amount that you will receive will be further reduced. There can be no assurance that the Deficiency will not increase substantially between the date of this proxy statement and the date that the Adjustment Amount and the resulting Per Share Merger Price is determined.

In addition to our trend of increasing delinquencies in our residential construction portfolio, we have one large lending relationship that is currently delinquent, and if it deteriorates further, could have a significant impact on our level of non-performing loans and, consequently, on the resulting Per Share Merger Price. This relationship consists of five loans secured by residential properties, with total outstanding balances of $9.5 million at September 30, 2007. If these loans should become 90 days delinquent, they will be considered non-performing loans. Accordingly, if payment is not received prior to the dates set forth below, these loans would become 90 days delinquent as follows: (a) on November 15, 2007, a loan totaling $1.9 million may become 90 days delinquent, (b) on November 24, 2007, a loan totaling $3.7 million may become 90 days delinquent, (c) on November 30, 2007, a loan totaling $2.6 million may become 90 days delinquent, and (d) on December 30, 2007, the remaining two loans totaling $1.3 million may become 90 days delinquent.

Stock Options and Stock Option Plans

We have agreed to take all actions necessary to cause, at the effective time of the merger, each outstanding option or warrant to acquire our Common Shares granted under our stock option and equity incentive plans to be cancelled. All stock option and equity incentive plans also will be terminated.

Directors and Officers

Upon completion of the merger, the directors and officers of Newco immediately prior to the effective time of the merger shall, from and after the effective time, be the directors and officers of the surviving corporation.

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Payment for Common Shares

At or prior to the completion of the merger, First Banks will designate a paying agent to make payment of the merger consideration as contemplated by the Merger Agreement and will deposit in trust with the paying agent the funds appropriate to pay the merger consideration to our shareholders.

As of the effective time of the merger, the stock transfer ledger with respect to our Common Shares shall be closed and after that time there will be no transfer of our Common Shares on the stock transfer books of the surviving corporation.

Following the effective time of the merger, the paying agent will send you a letter of transmittal and instructions advising you of the procedure to surrender your certificates in exchange for the merger consideration. The paying agent will pay you your merger consideration after you have (1) surrendered your certificates to the paying agent and (2) provided to the paying agent your signed and completed letter of transmittal and any other items specified by the letter of transmittal. Interest will not be paid or accrue in respect of the merger consideration. The paying agent will reduce the amount of any merger consideration paid to you by any applicable withholding taxes. You should not forward your stock certificates to the paying agent without a letter of transmittal, and you should not return your stock certificates with the enclosed proxy.

If the paying agent is to pay some or all of your merger consideration to a person other than you, you must have your certificates properly endorsed or accompanied by appropriate stock powers or otherwise in proper form for transfer, and you must pay any transfer or other taxes payable by reason of the transfer to the paying agent or establish to the paying agent’s satisfaction that the taxes have been paid or are not required to be paid.

The transmittal instructions will tell you what to do if you have lost your certificate, or if it has been stolen or destroyed. You will have to provide an affidavit to that fact and, if required by First Banks or the surviving corporation, post a bond in an amount that First Banks or the surviving corporation, as the case may be, reasonably directs as indemnity against any claim that may be made against them in respect of the certificate.

Represent a tions and Warranties

Our Representations and Warranties to First Banks

We have made various representations and warranties in the Merger Agreement to First Banks relating to, among other matters, the following:

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First Banks’ Representations and Warranties to Us

The Merger Agreement also contains various representations and warranties by First Banks to us, relating to, among other matters:

Please see Sections 2 and 3 of the Merger Agreement for a full statement of the representations and warranties of the parties. The representations and warranties terminate upon the completion of the Merger.

Conduct of Business Pending Merger

We agreed in the Merger Agreement that, until the effective time of the merger, unless expressly contemplated or permitted by the Merger Agreement or is required by the Cease and Desist Order or the Stipulation we will, and will cause our subsidiaries to, operate our business and operations in the ordinary course of business.

Capital Structure and Bank Deposits

In addition, subject to the exceptions identified above, we have specifically agreed that we will not, and will not permit out subsidiaries to:

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Indebtedness or Obligations

Except as required under the Cease and Desist Order, we have agreed that we will not take any of the following actions without the written consent of First Banks, and First Banks has agreed to not unreasonably withhold or delay such consent:

Efforts to Complete the Merger

In the Merger Agreement, we have agreed to a number of additional agreements, including agreements relating to:

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The Merger Agreement also contains a number of mutual agreements by Coast Financial and First Banks, including the following:

Conditions to the Merger

Our obligation to effect the merger is subject to a number of conditions, including the following:

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The obligation of First Banks to effect the merger is subject to a number of conditions, including the following:

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No Solicitation of Other Offers

We have agreed, before the merger becoming effective, to certain limitations on our ability to take action with respect to other acquisition proposals. Notwithstanding these limitations, we may respond to certain acquisition proposals that we reasonably believe will lead to a superior proposal. Under the terms of the Merger Agreement:

We have agreed not to, and to authorize or permit our officers, directors, employees, investment bankers, attorneys, accountants or other agents not to, directly or indirectly:

We have agreed to promptly, and in any event within two business days, notify First Banks if any inquiries or proposals are received by, any information is requested from, or any negotiations or discussions are sought to be initiated or continued with Coast Financial or its representatives, in each case, in connection with an acquisition proposal. Such notice will identify the person indicating such acquisition proposal interest and the material terms and conditions of the acquisition proposal.

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Nothing, however, will prohibit us or our board of directors from taking (and disclosing to our shareholders) any position with respect to a tender or exchange offer by a third party in compliance with Rules 14d-9 or 14e-2 under the Exchange Act or making such other disclosures to our shareholders if, in the good faith judgment of our board of directors, after consultation with outside legal counsel, such disclosure is necessary for our board of directors to comply with its fiduciary duties.

Notwithstanding the restrictions just described, prior to receipt of the approval of our shareholders to the merger proposal, we may furnish, pursuant to a confidentiality agreement with terms no less favorable to us than those contained in the confidentiality agreement with First Banks (subject to applicable law, including without limitation the fiduciary obligations of our board of directors), information concerning our business, properties or assets and such other information as we deem relevant to any person making an acquisition proposal that did not result from a breach of the Merger Agreement and that our board of directors determines in good faith (after consultation with outside counsel and its financial advisors) could be reasonably expected to lead to a superior proposal, and may negotiate and participate in discussions and negotiations with such person concerning the acquisition proposal if in the good faith opinion of our board of directors, after consultation with outside legal counsel to Coast Financial, it is determined that providing such information or access or engaging in such discussions or negotiations is in the best interests of Coast Financial and our shareholders and necessary in order for our board of directors to discharge its fiduciary duties to our shareholders under applicable law. We are required to notify First Banks of such determination relating to a possible superior proposal and shall promptly provide to First Banks any material non-public information regarding Coast Financial provided to any other party, which was not previously provided to First Banks.

Except as described in the next paragraph, neither our board of directors nor any committee thereof shall (i) withdraw or modify the approval or recommendation by the board of directors of the merger proposal, (ii) approve or recommend any acquisition proposal, or (iii) enter into any agreement with respect to any acquisition proposal.

Prior to the earlier of the termination of the Merger Agreement or the completion of the merger, our board of directors may (subject to the terms of this and the following sentence) withhold, withdraw or modify its approval or recommendation of the Merger Agreement and the merger, approve or recommend a superior proposal, or enter into an agreement with respect to a superior proposal, in each case any time after the fifth business day following Coast Financial’s delivery to First Banks of a notice of its determination that an acquisition proposal constitutes a superior proposal; provided, however , that we will not terminate the Merger Agreement and enter into an agreement with respect to a superior proposal unless (i) prior to any such termination we have provided First Banks with notice with respect to such superior proposal, (ii) within five business days following the delivery of the notice, First Banks does not propose to amend the Merger Agreement or enter into an alternative transaction, in either case which our board of directors determines in its good faith judgment in consultation with its legal and financial advisors to be as favorable to our shareholders, from a financial point of view, as such superior proposal, and (iii) at least five full business days after we have provided the notice, we deliver to First Banks a written notice of termination of the Merger Agreement.

Indemnification and Insurance

First Banks has agrees that from and after the effective time it will assume and perform Coast Financial’s obligations with respect to indemnification or exculpation now existing in favor of the directors, officers, employees and agents of Coast Financial, Coast Bank and their subsidiaries as provided in the Florida Business Corporation Act and the articles of incorporation, bylaws, and indemnification agreements of Coast Financial, Coast Bank and their subsidiaries or otherwise in effect as of the date of the Merger Agreement with respect to matters occurring at any time prior to the effective time. First Banks also has agreed that it will permit Coast Bank to purchase an extension of its directors and officers liability insurance policy for all present and former directors and officers of Coast Financial, Coast Bank and their subsidiaries, which extension will extend through April 1, 2012.

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Termination of the Merger Agreement

Either First Banks or we may terminate the Merger Agreement at any time before the effective time of the merger, whether before or after approval of the matters presented to our shareholders in connection with the merger, if any of the following occurs:

First Banks may terminate the Merger Agreement if any of the following occurs:

Upon the authorization of the special committee or our board of directors, we may terminate the Merger Agreement if we enter into a written agreement with respect to a competing transaction that the special committee or our board of directors has determined is a superior proposal; provided that we give five-day advance notice to First Banks identifying the person or entity making the superior proposal and providing First Banks the opportunity to revise its proposal.

Upon termination, the Merger Agreement will become void and there shall be no liability or obligation on the part of any party. However, no party shall be relieved from any liability for any breach of the Merger Agreement.

Fees, Expenses and Other Payments

Each party shall pay its own costs and expenses incurred in connection with the Merger Agreement including but not limited to all fees and expenses or attorneys, accountants, brokers, financial advisors and other professionals.

Amendment to the Merger Agreement

The Merger Agreement may be amended by the parties to the Merger Agreement in writing, at any time before or after the adoption and approval by our shareholders of the merger proposal. However, once our shareholders have adopted and approved the merger proposal, no amendment may be made to any provision relating to the manner or the basis in which Common Shares will be exchanged for the Per Share Merger Price or any other change that, by law, requires the approval of shareholders, without obtaining that approval.

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THE STOCK OPTION AGREEMENT

Concurrently with the execution of the Merger Agreement, we entered into a Stock Option Agreement with First Banks (the “Stock Option Agreement”) pursuant to which we granted First Banks an option to purchase up to 1,295,303 shares of our authorized but unissued Common Shares (representing approximately 19.9% of our currently outstanding Common Shares without giving effect to the exercise of all the currently existing outstanding options to purchase our Common Shares) at a price, subject to certain customary anti-dilution rights and adjustments, equal to the Per Share Merger Price to be paid for our Common Shares under the terms of the Merger Agreement (except that the calculation of any Adjustment Amount to be used to determine Final Aggregate Purchase Price for such purposes shall be calculated as of the date of an Exercise Event (defined below)). The stock option was granted by Coast Financial as an inducement and condition to First Banks’ willingness to enter into the Merger Agreement.

The stock option is exercisable, in whole or in part, only upon the occurrence of both a “Triggering Event” (as defined in the Stock Option Agreement) and an “Exercise Event” (as defined in the Stock Option Agreement) prior to termination of the stock option.

The Stock Option Agreement will expire upon the earlier of any of the following:

A “Triggering Event”, as defined in the Stock Option Agreement, is an event, the occurrence of which serves as a condition precedent to the exercise of the Stock Option, occurs if:

Notwithstanding the occurrence of a Triggering Event, the stock option will become exercisable only if an Exercise Event has occurred prior to the termination of the stock option. An “Exercise Event” generally includes an acquisition by a third party of 50% or more of our outstanding Common Shares or the consummation of an acquisition proposal, except that the percentage referred to above shall be 50%.

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In the event that the stock option becomes exercisable due to the occurrence of an Exercise Event, First Banks has the right to elect during the exercise period of the option to terminate the remaining portion of the option not yet exercised and to require the payment of a termination fee equal to the excess, if any, of:

For purposes of the Stock Option Agreement, the “Applicable Price” means the greater of (i) the highest price per share at which a tender or exchange offer has been made for shares of Common Stock after the date of the Stock Option Agreement and on or before the consummation date of such transaction, or (ii) the price per share to be paid by any third party for Common Shares or the consideration per share to be received by holders of Common Shares, in each case pursuant to an agreement for a merger or other business combination transaction with Coast Financial entered into on or before the consummation date of such transaction. If the consideration to be offered, paid or received shall be other than in cash, the value of such consideration shall be determined in good faith by an investment banking firm selected by both First Banks and Coast Financial.

In addition, the Stock Option Agreement provides the holders of the stock option with certain rights to require us to register the Common Shares acquired by or issuable upon the exercise of the stock option under the Securities Act of 1933, as amended.

The foregoing is a summary description of the Stock Option Agreement and does not purport to be complete and is qualified in its entirety by reference to the complete text of the Stock Option Agreement which is attached hereto as Annex B .

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THE LOAN TRANSACTIONS

On August 17, 2007, Coast Financial and Coast Bank entered into lending arrangements with First Banks and First Bank pursuant to which we were furnished with a $1 million revolving line of credit and Coast Bank was furnished with revolving line of credit of up to $75 million.

Coast Financial Line of Credit

In connection with these lending arrangements, we entered into a revolving credit note with First Banks pursuant to which First Banks has agreed to provide us with a $1 million line of credit (the “Company Note”). All amounts advanced under the Company Note bear interest at an annual rate equal to the LIBOR rate plus 2.5% and such interest is payable monthly in arrears. The Company Note matures on the earlier of February 27, 2008 or the occurrence of an event of default (as defined in the Company Note). Among other things, an event of default shall be deemed to have occurred if (a) we should merge, consolidate or transfer a substantial portion of its properties or assets other than pursuant to the Merger Agreement, (b) we or Coast Bank should be in default under the Merger Agreement, or (c) the merger should not be consummated (collectively the “Merger Events”).

The Company Note is secured by a stock pledge agreement pursuant to which all of the outstanding capital stock of Coast Bank is pledged to First Banks as collateral for our obligations under the Company Note. In the event that Coast Financial should default on its obligations under the Company Note, then First Banks may, at its option:

The proceeds of any sale, or sales, of the collateral, including the Coast Bank stock, shall be applied in the following order: (1) to expenses, including attorneys’ fees and expenses actually incurred, arising from the enforcement of any of the provisions hereof, or of the liabilities due under the Company Note or of any actual or attempted sale; (2) to the payment or the reduction of any of the liabilities due under the Company Note of

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Coast Financial to First Banks with the right of First Banks to distribute or allocate such proceeds in such order and manner as First Banks shall elect; and (3) to the payment of any surplus remaining after payment of the amounts mentioned, to Coast Financial or to whomsoever may be lawfully entitled thereto. If any deficiency arises upon any such sale or sales Coast Financial has agreed to pay the amount of such deficiency promptly upon demand with interest.

Accordingly, if an event of default occurs, First Banks may sell the Coast Bank stock that it holds as collateral to pay the principal and interest due on the Company Note and to pay the fees and expenses incurred in connection therewith (the “Debt Obligations”). In such an event, Coast Financial and, ultimately, its shareholders will retain value in their ownership of the Coast Bank stock only if such sale of the Coast Bank stock yields proceeds in excess of the Debt Obligations. As of the date of this proxy statement, approximately $501,000 has been advanced to us under the Company Note.

Coast Bank Line of Credit

Concurrently with the execution of the documents providing for the Coast Financial line of credit with First Banks, Coast Bank entered into a revolving credit note with First Bank pursuant to which the Coast Bank was provided with a line of credit of up to $75 million (the “Coast Bank Note”). The amount that may be advanced to Coast Bank under the Coast Bank Note may not exceed the lesser of $75 million or the then-current borrowing base (which amount is based on a percentage of the principal balances of the Pledged Loans (defined below) furnished by Coast Bank as collateral for the Coast Bank Note under the terms of a collateral pledge agreement, which Pledged Loans are weighted for borrowing base purposes according to certain characteristics identified in the Coast Bank Note). As of the date of this proxy statement, the amount of credit available to Coast Bank under the Coast Bank Note is estimated to be approximately $53.3 million, none of which has been advance to Coast Bank. All amounts advanced to Coast Bank under the Coast Bank Note bear interest at an annual rate equal to the LIBOR plus 2.25% and such interest is payable monthly in arrears. The Coast Bank Note matures on the earlier of February 27, 2008 or the occurrence of an event of default (as defined in the Coast Bank Note). An event of default includes, among other things, the Merger Events. The Coast Bank Note is secured by a collateral pledge agreement pursuant to which Coast Bank has granted to First Bank a first priority security interest in a loan portfolio held by Coast Bank (the “Pledged Loans”). This security interest encumbers, among other things:

The foregoing summaries of the Company Note, the stock pledge agreement, the Coast Bank Note, and the collateral pledge agreement do not purport to be complete and are qualified in their entirety by reference to the complete text of the Company Note, the stock pledge agreement, the Coast Bank Note, and the collateral pledge agreement, copies of which are filed as Exhibits 10.14, 10.15, 10.16, and 10.17, respectively, to our Current Report on Form 8-K filed with the Securities and Exchange Commission on August 22, 2007.

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