Gather the ingredients. Preheat the oven to 325 degrees F (165 degrees C).

Grease and flour a 10-inch bundt pan.

Beat butter and sour cream together in a large bowl with an electric mixer until well combined. Add sugar and beat until light. Add in eggs, 1 at a time, beating well after each addition. Stir in coconut extract and vanilla extract.

Mix in flour and baking powder, then fold in coconut flakes and white chocolate chips. Pour batter into the prepared pan

Bake in the preheated oven until a toothpick inserted into the center comes out clean, about 1 hour 30 minutes. Let stand for about 10 minutes, then run a knife along the edges and invert the pan onto a cooling rack. Allow to cool completely.

Beat together cream cheese, butter, and vanilla extract in a large bowl with an electric mixer until creamy. Gradually add confectioners’ sugar until frosting is smooth.

Frost the cake and top with toasted coconut flakes.