First Bank expands into Florida banking market

BRADENTON, Fla. and ST. LOUIS -- Coast Financial Holdings, Inc. (Nasdaq:CFHI), a bank holding company headquartered in Bradenton, Fla., and First Banks, Inc. ("First Banks"), a bank holding company headquartered in St. Louis, jointly announce the signing of an Agreement and Plan of Merger providing for First Banks to acquire Coast Financial Holdings, Inc., a Florida bank holding company ("CFHI"), and its wholly owned banking subsidiary, Coast Bank of Florida, a Florida state chartered bank (collectively, "Coast").

Coast operates 20 banking offices in Florida's Manatee, Pinellas, Hillsborough and Pasco counties. Coast also has two planned de novo branch offices, one located in the Pinellas County community of Clearwater, and the other located in Sarasota County.

Under the terms of the Agreement and Plan of Merger, each outstanding share of Coast's common stock will be converted into and will represent the right to receive an amount equal to $22,130,793.80 divided by the number of shares of Coast's common stock outstanding, or approximately $3.40 in cash, without interest thereon.

This price is subject to adjustment if, on or about the date that the transaction closes each of the following conditions exist: (a) Coast's allowance for loan and lease losses plus its tangible equity is less than 75 percent of Coast's non-performing loans and leases plus other real estate owned (such difference is referred to as the "Deficiency"), and (b) the Deficiency is greater than $1 million.

If each of the above conditions exists on or about the date that the transaction closes, then the $22,130,793.80 will be reduced to the nearest $500,000 increment, upward or downward, to the full amount of the Deficiency and the per share merger price will be reduced accordingly.

The transaction, which is subject to regulatory and shareholder approvals and certain closing conditions, is expected to be completed during the fourth quarter of 2007. The proposed transaction will be submitted to Coast's stockholders for their consideration at a special meeting, subject to the mailing of a definitive proxy statement. Management of First Banks and Coast expect a smooth transition in this process.

First Banks is one of the largest privately-held bank holding companies in the United States with nearly $10.5 billion in assets at June 30, 2007. First Banks operates 197 offices throughout Missouri, Illinois, Texas and California and employs nearly 2,700 employees.

Terrance M. McCarthy, President and Chief Executive Officer of First Banks, said, "This is a unique opportunity for First Banks to establish an immediate and solid foundation on the central west coast of Florida with a strong customer base and branch presence. With the acquisition of nine banking locations within Manatee County alone, and another 11 in and around the Tampa/Pinellas market area, this transaction will establish a solid framework for further strategic growth opportunities in this vibrant area."

CFHI Chairman James K. Toomey stated, "We have had discussions with First Banks for some time now, and through these discussions we have come to know the organization as one of high integrity, high standards and a commitment to excellence." Mr. Toomey continued, "We believe our proposed alignment with First Banks is a solid decision which serves the best interest of Coast Bank customers, employees, CFHI shareholders and the communities we serve."

Mr. McCarthy added, "We believe Coast Bank customers will benefit not only from the financial strength First Banks brings to the organization, but also through a more extensive line of products and services. Combining the strengths of our product lines and a commitment to provide superior customer service, which mirrors the highly-regarded community bank culture already established at Coast Bank, we are confident customers will benefit greatly from this alignment."

Mr. McCarthy elaborated, "First Banks will continue to focus on the strong retail banking business of Coast while also expanding the commercial segment of the business, providing commercial loans and other financial services to small to mid-sized businesses in the Tampa Bay region and Manatee County."

Anne V. Lee, Coast Acting President and Chief Executive Officer also sees significant benefit for Coast Bank customers. "First Banks has a very diverse and broad product line, offering many products we have not been in a position to offer, including trust, brokerage and investment management." Ms. Lee continued, "Having these products and many other new services available will further enhance the convenience of banking with us."

Coast Bank customers can expect a smooth transition, according to Mr. Toomey. "First Banks is well known in the financial services industry for merger and acquisition expertise, having successfully acquired 26 banks, an insurance brokerage agency, an insurance premium financing company and a loan origination business in the last ten years."

"All of these transactions were completed in a very timely fashion," Mr. Toomey added.

Steven F. Schepman, Executive Vice President and Director of Corporate Development and Business Segments, said, "Expanding into Florida has been a part of First Banks' long-term strategic plan and Coast represents an opportunity for us to establish ourselves in this desirable market. The people at Coast have done an excellent job of building a good deposit franchise and foundation from which First Banks can build in Florida, in much the same way we have done with our entry into Texas in 1994, California in 1995 and then our significant expansion in Chicago in 2004. Throughout the history of First Banks, we have successfully entered new markets in major metropolitan areas as well as smaller communities and demonstrated our ability to grow the franchise while developing long-term partnerships in the communities we serve. It is an exciting moment in our history as our bank enters a fifth state and we expand our footprint which will provide further opportunities for growth and delivery of our full range of financial services."

At June 30, 2007, First Banks reported assets of $10.48 billion, loans, net of unearned discount, of $7.99 billion, deposits of $8.75 billion and stockholders' equity of $832.3 million.

At March 31, 2007, Coast reported assets of $834.1 million, loans, net of unearned discount, of $593.8 million, deposits of $742.4 million and stockholders' equity of $55.0 million. Coast anticipates announcing its second quarter results on August 3, 2007
Coast was advised by Sandler O'Neill & Partners, LP, in the transaction and legal counsel was provided by Carlton Fields, P.A. Thompson Coburn, LLP served as legal counsel to First Banks.