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             COASTAL FINANCIAL CORPORATION ANNOUNCES STOCK DIVIDEND

      Myrtle Beach, S.C., December 15, 2004 -- Coastal Financial Corporation
(Nasdaq: CFCP) today announced that the Corporation's Board of Directors, at a
meeting held today, declared a 10% stock dividend. The stock dividend will be
payable January 20, 2005 to Shareholders of record as of January 6, 2005.

      Michael C. Gerald, President and Chief Executive Officer of Coastal
Financial Corporation stated, "We are very pleased to continue to reward our
Shareholders for their investment with this stock dividend. This action on the
part of our Board is in recognition of the Corporation's continued outstanding
financial performance as indicated by the 32.5% increase in fiscal 2004 net
income and 18.77% return on average Shareholders' equity. These significant
accomplishments pay tribute to our QUEST FOR EXCELLENCE Operating Philosophy,
our superb Leadership Group and Associates and reflect the continuing emergence
of our primary market area as one of the fastest growing in the nation."

      As a result of the common stock dividend, earnings per share will be
retroactively restated for all previous periods. Earnings per share, adjusted
for the stock dividend, for the quarter ended September 30, 2004 were $.22 per
share ($.21 per share diluted), as compared to $.17 per share ($.16 per share
diluted) for the comparable 2003 period. Earnings per share, adjusted for the
stock dividend, for the year ended September 30, 2004 were $.85 per share ($.81
per share diluted), as compared to $.65 per share ($.62 per share diluted) for
the comparable 2003 period. The current cash dividend policy will be adjusted
for the effect of this stock dividend.

      Coastal Financial Corporation, headquartered in Myrtle Beach, South
Carolina, offers a broad range of commercial, consumer and mortgage financial
services through two subsidiaries, Coastal Federal Bank and Coastal Retirement,
Estate and Tax Planners, Inc. Coastal Federal Bank, with assets over $1.3
billion, is a federally chartered and FDIC insured community bank with eighteen
offices serving the communities of Horry and Georgetown Counties, South Carolina
and Brunswick and New Hanover Counties, North Carolina. Coastal Retirement,
Estate and Tax Planners offers professional, objective, fee-based financial
planning services. Additional information about Coastal Federal is available on
its web site at http://www.coastalfederal.com.

STOCK TRADING INFORMATION

      The common stock of Coastal Financial Corporation is traded on the Nasdaq
Stock Market under the symbol "CFCP." For information, contact Raymond James
Financial Services at 1-843-918-7600, Herzog, Heine, Geduld, Inc. at
1-800-523-4936, Knight Securities at 212-336-8690, Spear, Leeds & Kellogg at
1-800-526-3160 or Trident Securities at 1-800-222-2618.



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DIVIDEND REINVESTMENT AND DIRECT STOCK PURCHASE PLAN

      Coastal Financial Corporation offers Shareholders a Dividend Reinvestment
and Direct Stock Purchase Plan which provides existing and new shareholders a
convenient means for making purchases of Coastal Financial shares free of fees
and brokerage commissions and at a discount to market price. Additional cash
contributions, up to $1,000 per quarter, can be made to purchase additional
shares. For more information, contact the Transfer Agent at 1-800-866-1340, Ext.
2514, or Investor Relations.

SHAREHOLDER SERVICES

      Shareholders desiring to enroll in the Coastal Financial Corporation
Dividend Reinvestment Plan, change the name, address, or ownership of their
stock certificates, report lost or stolen certificates, or to consolidate
accounts should contact the Transfer Agent at 1-800-866-1340, Ext. 2514, or
Investor Relations.

FORWARD LOOKING STATEMENTS

      This news release may contain certain "forward-looking statements" within
the meaning of Section 27A of the Securities Exchange Act of 1934, as amended,
that represent Coastal Financial Corporation's (the "Company") expectations or
beliefs concerning future events. Such forward-looking statements are about
matters that are inherently subject to risks and uncertainties. Factors that
could influence the matters discussed in certain forward-looking statements
include the timing and amount of revenues that may be recognized by the Company,
continuation of current revenue and expense trends (including trends affecting
charge-offs), absence of unforeseen changes in the Company's markets, legal and
regulatory changes, and general changes in the economy (particularly in the
markets served by the Company). Because of the risks and uncertainties inherent
in forward looking statements, readers are cautioned not to place undue reliance
on them, whether included in this news release or made elsewhere from time to
time by the Company or on its behalf. The Company disclaims any obligation to
update such forward-looking statements.