SOURCE: Kahn Gauthier Swick, LLC

April 03, 2007 23:39 ET

KGS Announces That a Shareholder Securities Fraud Class Action Lawsuit Has Been Filed Against Coast Financial Holdings, Inc. -- (NASDAQ: CFHI)

NEW ORLEANS, LA -- (MARKET WIRE) -- April 3, 2007 -- Kahn Gauthier Swick, LLC ("KGS") announces that shareholders of Coast Financial Holdings, Inc. ("Coast Financial") (NASDAQ: CFHI) who purchased the publicly traded securities of Coast Financial between October 5, 2005 and January 25, 2007, inclusive (the "Class Period"), may now move for appointment as Lead Plaintiff in a securities class action lawsuit currently pending in the United States District Court for the Middle District of Florida. No class has yet been certified in this action.

UNTIL A CLASS IS CERTIFIED, YOU ARE NOT PERSONALLY REPRESENTED BY COUNSEL UNLESS YOU RETAIN AN ATTORNEY.

If you purchased shares of Coast Financial between October 5, 2005 and January 25, 2007, you are urged to contact Lewis Kahn, Managing Partner, KGS, toll free 1-866-467-1400, ext. 106, via cell phone at 504-301-7900, or email to lewis.kahn@kgscounsel.com to learn about your legal rights and how this action may benefit you. For further information on KGS, please visit www.kgscounsel.com.

Coast Financial and certain of its officers are charged with making materially false and misleading statements in connection with the purchase and sale of securities in direct violation of the Securities Exchange Act of 1934. Specifically, defendants each failed to reveal that, throughout the Class Period, Coast Financial had materially increased its exposure and had extended tens of millions of dollars of credit for the construction of homes in Florida. Given the then-deteriorating condition of the Florida real estate market, the Company should have increased its loan loss reserves for this segment of the business but did not.

It was only beginning on January 19, 2007, that investors learned the truth about Coast Financial after defendants announced that the Company expected to suffer impairment to its loan portfolio because a major borrower was going out of business and would not complete many of its construction projects. In reaction to this news, the price of the Company's stock collapsed. Coast Financial later disclosed that it would increase its reserves by $14 million to properly account for its impaired loans. On January 24, 2007, after the market closed, Coast Financial issued a press release announcing that it has engaged Sandler O'Neill & Partners, L.P. to advise the Company as it reviews strategic alternatives. On the publication of these disclosures, over the course of several days, shares of the Company fell from above $16.00 to below $8.00 per share, on very heavy trading volume.

If you wish to serve as lead plaintiff in this case, you must move the Court no later than May 21, 2007. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you would like to discuss your legal rights, you may e-mail or call KGS, without obligation or cost to you. You may contact Managing Partner Lewis Kahn of KGS direct, toll free 1-866-467-1400, ext. 106, or by email at lewis.kahn@kgscounsel.com. KGS focuses its practice on securities fraud litigation, and the firm's lawyers have significant experience working on securities fraud cases that have resulted in significant recoveries for shareholders. For more information on KGS, please visit www.kgscounsel.com.

SPECIAL NOTICE: Multiple law firms often file the same class action. However, courts will generally appoint only one of these firms to prosecute a securities fraud action on behalf of the shareholders based upon the amount of losses its "lead plaintiffs" have suffered. Accordingly, while KGS urges you to sign up with the firm, KGS also encourages you to carefully evaluate any other firm that may be competing with KGS to prosecute the Coast Financial class action, should you be considering another firm. Critical components of a law firm's ability to successfully prosecute this action and obtain a strong recovery for you include the resources it will dedicate to prosecution of the case, including the number of lawyers the firm has available for the Coast Financial action, AND especially the quality of the firm's work. Interested shareholders are encouraged to call for consultation and to request more information about KGS.

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