- Place a rack in center of oven and preheat to 325 degrees. While oven preheats, place coconut in a small baking pan and toast until brown around the edges, about 10 minutes. Remove and cool. Grease and flour a 9-inch loaf pan and set aside.
- Next, place butter and sugar in a large bowl and cream with electric mixer on medium speed until soft, 1 minute. Set aside.
- Separate the eggs, placing whites in a large bowl and setting aside. Place yolks in a small bowl. Drop yolks, one at a time, into the butter mixture and beat on low until combined.
- Stir together flour, coconut flour, and salt in a medium-size bowl, and add this to the butter mixture along with vanilla and milk. Beat on medium-low until combined and smooth.
- Using clean beaters, beat egg whites on high speed until stiff peaks form, about 3 minutes. Using a rubber spatula, fold whites into batter until completely incorporated. Fold in toasted coconut. Pour batter into pan and place in oven.
- Bake until loaf is deeply golden brown, about 58 to 62 minutes, then let it rest in pan on a rack for 20 minutes. Run a knife around the outside edges of the pan, loosening cake, then invert it onto a rack to completely cool, about 1 hour. Slice and serve.