UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               -------------------

                                   FORM 10-QSB
                               ------------------

(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

[ ] TRANSITION  REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO _____________.

Commission File Number 000-51155

                      Coastal Bancshares Acquisition Corp.
                        --------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)


               Delaware                                   20-1191778
(State or other Jurisdiction of incorporation)         (I.R.S. Employer
                                                       Identification No.)

                          9821 Katy Freeway, Suite 500
                                 Houston, Texas
                     (Address of Principal Executive Office)

                                 (713) 827-2104
                (Issuer's Telephone Number, Including Area Code)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

As of March 31,  2005,  6,520,000  shares of common  stock,  par value  $.01 per
share, were issued and outstanding.

Transitional Small Business Disclosure Format (check one):
Yes [  ] No [X]

<PAGE>

                                 Index                                  Page No.
                                 -----                                  --------

Part I:  Condensed Financial Information

         Item 1 -Financial Statements                                          3

                  Condensed Balance Sheets                                     3
                  Condensed Statements of Operations                           4
                  Condensed Statements of Cash Flows                           5
                  Notes to Condensed Financial Statements                      6

         Item 2 - Management's Discussion and Analysis or Plan of Operation   10

         Item 3 - Controls and Procedures                                     11

Part II.  Other Information

         Item 2 - Changes in Securities and Small Business Issuer
         Purchases of Equity Securities                                       11

         Item 5 - Other Information                                           12

         Item 6 - Exhibits and Reports on Form 8-K                            12

Signatures                                                                    14
Exhibit Index                                                                 15



<PAGE>

PART I.  CONDENSED FINANCIAL INFORMATION

Item 1.  Condensed Financial Statements

<TABLE>
<CAPTION>

                                          COASTAL BANCSHARES ACQUISITION CORP.
                                        (A Corporation in the Development Stage)
                                                CONDENSED BALANCE SHEETS

                                                                                      March 31, 2005
                                                                                       (Unaudited)          December 31, 2004
                                                                                    ------------------     --------------------
<S>                                                                                 <C>                    <C>
ASSETS
Current assets:
Cash...........................................................................     $        1,085,875     $             21,711
Treasury securities held in trust, at market ..................................             28,561,692                       --
Prepaid expenses................................................................               114,505                       --
                                                                                    ------------------     --------------------
     Total current assets.......................................................            29,762,072                   21,711
Deferred offering costs.........................................................                    --                   63,532
                                                                                    ------------------     --------------------
Total Assets....................................................................    $       29,762,072     $             85,243
                                                                                    ==================     ====================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
     Accounts payable and accrued expenses......................................    $           32,500    $               7,697
     Income taxes payable.......................................................                 3,600                       --
     Note payable, stockholder..................................................                    --                   55,000
                                                                                    ------------------     --------------------
Total Liabilities...............................................................                36,100                   62,697
                                                                                    ------------------     --------------------

Stockholders' Equity:
Preferred stock, $0.01 par value

     Authorized 5,000,000 shares; none issued...................................    $                -     $                  -
Common stock, $0.01 par value
     Authorized 50,000,000 shares
     Issued and outstanding, 6,520,000 and 1,000,000 shares, respectively.......                65,200                   10,000
Additional paid-in capital......................................................            29,653,745                   15,000
Earnings(Deficit) accumulated during the development stage......................                 7,027                   (2,454)
                                                                                    ------------------     --------------------
Total Stockholders' Equity......................................................            29,725,972                   22,546
                                                                                    ------------------     --------------------
Total Liabilities and Stockholders' Equity......................................    $       29,762,072     $             85,243
                                                                                    ==================     ====================

                               See accompanying notes to condensed financial statements.

</TABLE>

                                                           3
<PAGE>

<TABLE>
<CAPTION>
                                          COASTAL BANCSHARES ACQUISITION CORP.
                                        (A Corporation in the Development Stage)
                                           CONDENSED STATEMENTS OF OPERATIONS


                                                       Period from May 19
                                                         (inception) to        Three months ended         Period from May 19
                                                         March 31, 2005           March 31, 2005            (inception) to
                                                          (Unaudited)              (Unaudited)             December 31, 2004
                                                      ----------------------   ----------------------     --------------------
<S>                                                   <C>                      <C>                        <C>
Formation and operating costs................         $           70,389       $               67,935     $              2,454
                                                      ----------------------   ----------------------     --------------------

Operating loss....................................              (70,389)                      (67,935)                  (2,454)
Interest income...................................                81,016                       81,016                       --
                                                      ----------------------   ----------------------     --------------------

Pre-tax income (loss).............................                10,627                       13,081                   (2,454)
  Provision for income taxes......................                 3,600                        3,600                       --
                                                      ----------------------   ----------------------     --------------------

Net income (loss).................................    $            7,027       $                9,481     $             (2,454)
                                                      ======================   ======================     ====================

Weighted Average Shares Outstanding...............             1,483,671                    3,576,000                  650,442
                                                      ======================   ======================     ====================

Net income (loss) Per Share (Basic and Diluted)...    $             0.00       $                 0.00     $               0.00
                                                      ======================   ======================     ====================




                               See accompanying notes to condensed financial statements.
</TABLE>


                                                           4

<PAGE>

<TABLE>
<CAPTION>

                                          COASTAL BANCSHARES ACQUISITION CORP.
                                        (A Corporation in the Development Stage)
                                           CONDENSED STATEMENTS OF CASH FLOWS

                                                          Period from May 19
                                                            (inception) to      Three months ended       Period from May 19
                                                            March 31, 2005         March 31, 2005          (inception) to
                                                             (Unaudited)            (Unaudited)           December 31, 2004
                                                         -------------------    --------------------     --------------------
<S>                                                      <C>                    <C>                      <C>
CASH FLOW FROM OPERATING ACTIVITIES
  Net income (loss)...................................   $            7,027     $             9,481     $             (2,545)
  Accretion of treasury bill..........................              (78,492)                (78,492)                      --
  Increase in prepaid expenses........................             (114,505)               (114,505)                      --
  Increase in accounts payable and accrued expenses...               32,500                  24,803                    7,697
  Increase in income taxes payable....................                3,600                   3,600                       --
                                                         -------------------    --------------------     --------------------
Net cash provided by (used in) operating activities...             (149,870)               (155,113)                   5,243
                                                         -------------------    --------------------     --------------------

CASH FLOW FROM INVESTING ACTIVITIES
  Purchase of treasury bill in trust account..........          (28,483,200)            (28,483,200)                      --
                                                         -------------------    --------------------     --------------------
Net cash used in investing activities.................          (28,483,200)            (28,483,200)                      --
                                                         -------------------    --------------------     --------------------

CASH FLOW FROM FINANCING ACTIVITIES
  Proceeds from sale of common stock..................               25,000                      --                  25,000
  Gross proceeds from public offering.................           33,120,000              33,120,000                      --
  Costs of public offering............................           (3,426,055)             (3,362,523)                     --
  Proceeds from stockholder loan......................               75,000                  20,000                  55,000
  Repayment of  stockholder loan......................              (75,000)                (75,000)                     --
  Deferred costs of the proposed public offering......                   --                      --                  (63,532)
                                                         -------------------    --------------------     --------------------
Net cash provided by financing activities.............           29,718,945              29,702,477                   16,468
                                                         -------------------    --------------------     --------------------

NET INCREASE IN CASH..................................            1,085,875               1,064,164                   21,711

CASH AT BEGINNING OF PERIOD...........................                  ---                  21,711                      ---
                                                         -------------------    --------------------     --------------------
CASH AT END OF PERIOD.................................   $        1,085,875     $         1,085,875      $            21,711
                                                         ===================    ====================     ====================


                               See accompanying notes to condensed financial statements.
</TABLE>

                                                           5
<PAGE>

                      COASTAL BANCSHARES ACQUISITION CORP.
                    (A Corporation in the Development Stage)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS


1.       BASIS OF PRESENTATION

         The financial statements included herein for the quarterly period ended
March 31, 2005 and the periods from  inception (May 19, 2004) ended December 31,
2004 and March 31, 2005,  have been prepared by Coastal  Bancshares  Acquisition
Corp. (the "Company") without audit pursuant to the rules and regulations of the
United States Securities and Exchange  Commission  ("SEC").  Accordingly,  these
statements  reflect  all  adjustments   (consisting  only  of  normal  recurring
entries),  which  are,  in the  opinion  of the  Company,  necessary  for a fair
presentation  of  the  financial  results  for  the  interim  periods.   Certain
information  and notes  normally  included in financial  statements  prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted  pursuant to such rules and  regulations,
although  the Company  believes  that the  disclosures  are adequate to make the
information presented not misleading.  Operating results for the interim periods
presented are not necessarily indicative of the results that may be expected for
the full fiscal year. These financial  statements  should be read in conjunction
with the financial  statements that were included in the Company's Annual Report
on Form 10-KSB for the period ended December 31, 2004.

2.       ORGANIZATION, BUSINESS OPERATIONS

         Coastal  Bancshares  Acquisition Corp. (the "Company") was incorporated
in  Delaware  on May 19, 2004 as a blank check  company  whose  objective  is to
acquire or merge with an operating  commercial bank or bank holding company. The
Company's  initial  stockholders'  purchased  1,000,000  shares of common stock,
$0.01 par value, for $25,000 on August 6, 2004.

         The registration for the Company's initial public offering ("Offering")
of  4,800,000  units was declared  effective  on February 14, 2005.  The Company
consummated the Offering on February 18, 2005. The  underwriters  also exercised
their over-allotment  option to purchase an additional 720,000 units on February
18, 2005. The Company received proceeds,  net of the underwriters'  discount and
offering expenses of approximately $29.7 million.  The Company's  management has
broad discretion with respect to the specific application of the net proceeds of
the Offering, although substantially all of the net proceeds of the Offering are
intended  to  be  generally  applied  toward   consummating  a  merger  with  or
acquisition of an operating  commercial bank or bank holding company  ("Business
Combination").  There  is  no  assurance  that  the  Company  will  be  able  to
successfully affect a Business Combination. The amount of $28,483,200 was placed
in an interest  bearing trust account  ("Trust Fund") upon  consummation  of the
Offering  to be held  until the  earlier  of (i) the  consummation  of its first
Business  Combination or (ii)  liquidation  of the Company.  Under the agreement
governing the Trust Fund, funds may only be invested in United States government
securities  with a maturity of 180 days or less.  The remaining  proceeds may be

                                       6
<PAGE>

used to pay for business,  legal and  accounting  due  diligence on  prospective
mergers or acquisitions and continuing general and administrative expenses.

         The Company,  after signing a definitive  agreement for the merger with
or  acquisition  of  a  target  business,   will  submit  such  transaction  for
stockholder  approval. In the event that stockholders' owning 20% or more of the
outstanding  stock  excluding,   for  this  purpose,   those  persons  who  were
stockholders  immediately  prior to the  Offering,  vote  against  the  Business
Combination,  the  Business  Combination  will  not be  consummated.  All of the
Company's stockholders prior to the Offering,  including all of the officers and
directors  of the Company  ("Initial  Stockholders"),  have agreed to vote their
founding  shares of common stock in accordance  with the vote of the majority in
interest of all other stockholders of the Company ("Public  Stockholders")  with
respect  to a  Business  Combination.  The  business  combination  will  not  be
completed unless more than 50% of the Public  Stockholders  vote in favor of the
transaction.  After  consummation of the Company's  first Business  Combination,
these voting safeguards no longer apply.

         With respect to the first  Business  Combination  which is approved and
consummated,  any Public Stockholder who voted against the Business  Combination
may demand that the Company redeem his or her shares.  The per share  redemption
price  will  equal  the  amount  in the  Trust  Fund as of the  record  date for
determination  of  stockholders  entitled  to vote on the  Business  Combination
divided by the number of shares of common stock held by Public  Stockholders  at
the  consummation  of the Offering.  Accordingly,  Public  Stockholders  holding
19.99% of the aggregate  number of shares owned by all Public  Stockholders  may
seek  redemption  of their shares in the event of a Business  Combination.  Such
Public  Stockholders  are  entitled to receive  their per share  interest in the
Trust Fund computed without regard to the shares held by Initial Stockholders.

         The Company's  Certificate of Incorporation  provides for the mandatory
liquidation of the Company,  without stockholder approval, in the event that the
Company  does not  consummate a Business  Combination  within 18 months from the
date of the consummation of the Offering,  or 24 months from the consummation of
the Offering if certain extension criteria have been satisfied.  In the event of
liquidation,  it is  likely  that the per  share  value of the  residual  assets
remaining available for distribution  (including Trust Fund assets) will be less
than the initial public  offering  price per share in the Offering  (assuming no
value is attributed to the Warrants  contained in the Units to be offered in the
Offering as described in Note 3).

3.       PUBLIC OFFERING

         On February 18, 2005, the Company sold 4,800,000  units  ("Units") in a
public offering,  which included  granting the  underwriters' an  over-allotment
option to purchase up to an additional  720,000 Units. On February 18, 2005, the
underwriters  exercised the entire  amount of the option.  Each Unit consists of
one share of the Company's  common stock,  $0.01 par value,  and two  Redeemable
Common  Stock  Purchase  Warrants  ("Warrants").  Each  Warrant will entitle the
holder to purchase  from the  Company  one share of common  stock at an exercise
price  of  $5.00  commencing  on the  later  of  the  completion  of a  Business

                                       7
<PAGE>

Combination or February 13, 2006,  and expiring  February 13, 2010. The Warrants
will be  redeemable by the Company at a price of $0.01 per Warrant upon 30 days'
notice after the Warrants  become  exercisable,  only in the event that the last
sale  price of the common  stock is at least  $8.50 per share for any 20 trading
days within a 30 trading day period ending on the third day prior to the date on
which notice of the redemption is given.  In connection  with the Offering,  the
Company issued an option for $100 to the underwriters' to purchase 325,000 Units
at an exercise price of $7.50 per Unit. The Units issuable upon exercise of this
option are  identical  to those  included in the Offering  except that  exercise
price of the Warrants included in the units will be $6.65 per share.

4.       TREASURY SECURITIES

         Treasury  securities  are  classified  as  trading  securities  and are
carried at fair value, with gains or losses resulting from changes in fair value
recognized currently in earnings.

5.       COMMITMENT

         The Company presently occupies office space provided by an affiliate of
an Initial Stockholder. Such affiliate has agreed that, until the acquisition of
a target  business by the Company,  it will make such office  space,  as well as
certain office and  secretarial  services,  available to the Company,  as may be
required  by the Company  from time to time.  The Company has agreed to pay such
affiliate $7,500 per month for such services commencing on the effective date of
the Offering.

6.       NOTE PAYABLE

         Coastal  Acquisition,  LLC,  a  stockholder  and  an  affiliate  of our
co-chief  executive  officers,  Mr.  Grossman  and Mr.  Brunson,  entered into a
non-interest  bearing  revolving credit agreement with the Company in the amount
of  $75,000.  The  loan,  which at the time of the  Offering  had a  balance  of
$75,000,  was  repaid  on  February  18,  2005  out of the net  proceeds  of the
Offering.

7. COMMON STOCK

         At March 31,  2005,  50,000,000  shares of $0.01 par value common stock
were authorized and 6,520,000 shares were outstanding.

8. PREFERRED STOCK

         The Company is authorized to issue 5,000,000  shares of preferred stock
with such  designations,  voting  and other  rights  and  preferences  as may be
determined from time to time by the Board of Director.




                                       8
<PAGE>

Item 2.  Management's Discussion and Analysis or Plan of Operation

         The  following  discussion  should  be read  in  conjunction  with  the
financial  statements and footnotes  thereto  incorporated  by reference in this
report.

Forward Looking Statements

Certain  statements  contained  in this interim  report that are not  historical
facts,  including,  but not limited to, statements that can be identified by the
use of  forward-looking  terminology  such  as  "may,"  "expect,"  "anticipate,"
"predict,"  "believe,"  "plan," "estimate" or "continue" or the negative thereof
or other  variations  thereon or  comparable  terminology,  are  forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, and involve a number of risks and uncertainties. The actual results of the
future  events  described  in such  forward-looking  statements  in this interim
report  could  differ  materially  from  those  stated  in such  forward-looking
statements  due to various  factors,  including  but not limited to, our being a
development  stage  company with no operating  history,  our  dependence  on key
personnel  some of whom  may  join us  following  a  business  combination,  our
personnel  allocating  their time to other  businesses  and  potentially  having
conflicts of interest with our business,  our potentially being unable to obtain
additional  financing to complete a business  combination,  the ownership of our
securities  being  concentrated,  risks associated with the banking industry and
those other risks and  uncertainties  detailed in the Company's filings with the
Securities and Exchange Commission, including our Registration Statement on Form
S-1 that was declared effective February 14, 2005 and the definitive  Prospectus
thereunder,  our annual  report on Form  10-KSB  filed with the  Securities  and
Exchange Commission on March 31, 2005, and the uncertainties set forth from time
to time in the Company's filings and other public statements.

Plan of Operation

         We were  formed  on May 19,  2004,  to serve as a  vehicle  to effect a
merger,  capital stock  exchange,  asset  acquisition or other similar  business
combination with an operating commercial bank or bank holding company. We intend
to utilize cash derived from the proceeds of this  offering,  our capital stock,
debt or a combination  of cash,  capital stock and debt, in effecting a business
combination. We consummated the Offering on February 18, 2005. Our activities to
date have been comprised solely of organizational activities,  preparing for and
consummating the Offering,  and efforts associated with identifying a target for
a business combination.

         The net proceeds from the Offering and the capital  contributed  by our
initial  stockholders  amounted to approximately  $29.7 million. As of March 31,
2005, we had cash of  $1,085,875,  and treasury  securities in our trust account
(at  cost)  of  $28,483,200;  a  total  of  approximately  $29.57  million.  The
difference  between the sum of our initial  capital plus the net proceeds of the
Offering  reduced  by our cash and  amount we  placed in trust is  approximately
$150,000.  We used  $126,500  to pay  for our  Directors  &  Officers  liability
insurance policy which was $115,000, and to prepay for one year of certain other
expenses.  The  balance of  approximately  $35,000  was used to pay  general and
administrative   expenses,   including  the  monthly  overhead  fee  to  Coastal
Acquisition, LLC and professional fees.

                                       9
<PAGE>

         For the three months ended March 31, 2005, we earned interest income of
approximately  $2,500 and  recorded  income from the  accretion  in value of our
trust  account of  approximately  $78,500.  We  incurred  operating  expenses of
approximately  $67,900.  Our expenses  consist  primarily of professional  fees,
overhead fees,  insurance,  financial  advisory fees, and certain other expenses
associated with being a public  company.  We recorded an income tax provision of
$3,600, which includes the benefit of our 2004 net operating loss carryforward.

         Over  the  24-month  period  subsequent  to  the  consummation  of  the
Offering,  we  anticipate  spending   approximately  $180,000  for  general  and
administrative  services  which will be paid to  Coastal  Acquisition,  LLC,  an
affiliate of our co-chief  executive  officers,  $350,000 of expenses for legal,
accounting, financial advisory and other expenses attendant to the due diligence
investigations,  structuring and negotiating of a business combination,  $75,000
of  expenses  in  legal  and  accounting  fees  relating  to our  SEC  reporting
obligations  and  $587,400  for general  working  capital  that will be used for
miscellaneous  expenses  and  reserves,  including  approximately  $230,000  for
director and officer  liability  insurance  premiums.  We do not believe we will
need to raise additional  funds in order to meet the  expenditures  required for
operating our business. However, we may need to raise additional funds through a
private  offering  of debt or equity  securities  if such funds are  required to
consummate  a  business  combination  that is  presented  to us.  We would  only
consummate  such  a fund  raising  simultaneously  with  the  consummation  of a
business combination.

         We are  obligated,  commencing  February  14,  2005,  to pay to Coastal
Acquisition,  LLC, an affiliate  of our  directors  and  executive  officers,  a
monthly  fee  of  $7,500  for  general  and  administrative  services.   Coastal
Acquisition,  LLC also  entered into a  non-interest  bearing  revolving  credit
agreement with the Company in the amount of $75,000 in May 2004. The loan, which
at the time of the consummation of our Offering,  had a balance of $75,000,  was
repaid on February 18, 2005 out of the net proceeds of the Offering.

Item 3.  Controls and Procedures

         An  evaluation  of the  effectiveness  of our  disclosure  controls and
procedures  as of March 31,  2005 was made  under the  supervision  and with the
participation of our management,  including our co-chief  executive officers and
our principal financial officer.  Based on that evaluation,  they concluded that
our disclosure controls and procedures are effective as of the end of the period
covered by this report to ensure that information required to be disclosed by us
in reports that we file or submit under the  Securities  Exchange Act of 1934 is
recorded,  processed,  summarized and reported within the time periods specified
in Securities and Exchange  Commission rules and forms. During the most recently
completed fiscal quarter,  there has been no significant  change in our internal
control over financial reporting that has materially affected,  or is reasonably
likely to materially affect, our internal control over financial reporting.

PART II.  OTHER INFORMATION

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

         (a) Unregistered  Sales of Equity  Securities by Small Business Issuer.

             None.

                                       10
<PAGE>

         (b) Use of Proceeds.

         On February 18, 2005, we closed the Offering of 4,800,000  units,  with
each unit consisting of one share of our common stock and two warrants,  each to
purchase one share of our common stock at an exercise  price of $5.00 per share.
The units were sold at an  offering  price of $6.00 per unit,  generating  gross
proceeds of  $28,800,000.  Additionally,  the  underwriters'  purchased  720,000
units,  pursuant  to  the  exercise  of the  over-allotment  option  granted  in
connection  with the Offering,  generating  gross  proceeds of  $4,320,000.  The
representatives  of the  underwriters in the Offering were I-Bankers  Securities
Incorporated and Newbridge  Securities  Corporation.  The securities sold in the
Offering were  registered  under the  Securities  Act pursuant to a registration
statement on Form S-1 (No.  333-118294).  The Securities and Exchange Commission
declared the registration statement effective on February 14, 2005.

         We  paid  a  total  of   $3,081,600  in   underwriting   discounts  and
commissions,  including $432,000 for the underwriters'  non-accountable  expense
allowance,  and  incurred  approximately  $344,500  for other costs and expenses
related to the Offering.

         After  deducting the  underwriting  discounts and  commissions  and the
Offering  expenses,  the  total  net  proceeds  to us  from  the  Offering  were
approximately $29,693,900,  of which $28,483,200 was deposited into a trust fund
and the  remaining  proceeds are  available to be used to provide for  business,
legal and  accounting  due diligence on prospective  business  combinations  and
continuing general and administrative expenses.

         (c) Purchases of Equity Securities by Small Business Issuer.

<TABLE>
<CAPTION>


------------------------- ---------------------- ----------------------- ---------------------- ----------------------
                                                                                                 Maximum number (or
                                                                            Total number of      approximate dollar
                                                                          shares (or units or   value) of shares (or
                             Total Number of                              warrants) purchased    units or warrants)
                           shares (or units or     Average price paid     as part of publicly      that may yet be
                                warrants)         per share (or units     announced plans or     purchased under the
         Period                 purchased             or warrants)             programs           plans or programs
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
<S>                       <C>                    <C>                      <C>                   <C>
Month    #1     (January           n/a                    n/a
1-January 31)
------------------------- ---------------------- ----------------------- ---------------------- ----------------------

Month    #2    (February           n/a                    n/a
1-February 28)
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Month #3 (March  1-         304,700 Warrants             $0.65
March 31)
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
</TABLE>

(1)  All of the  warrants  were  purchased  by Cary M.  Grossman  and W.  Donald
     Brunson, our co-chief executive officers, in open-market transactions.

(2)  The Company does not have any publicly  announced plans or programs for the
     purchase of shares, units or warrants.

                                       11

<PAGE>

Item 5.  Other Information

         In April  2005,  our  board of  directors  adopted  a code of  business
conduct and ethics that applies to our directors, officers and employees as well
as those of our subsidiaries.  A copy of our code of ethics has been filed as an
exhibit to this Quarterly Report on Form 10-QSB.

Item 6:  Exhibits and Reports on Form 8-K

         (a) Exhibits:

             3.1              Amended and Restated Certificate of Incorporation

             10.1             Advisory  Agreement by and between the Company and
                              Sanders Morris Harrison Inc. dated March 8, 2005

             10.2             Amendment to Registration Rights Agreement between
                              the  Company,  the  initial  stockholders  of  the
                              Company and Lawrence Fisher dated April 7, 2005

             10.3             Amendment  to Escrow  Agreement by and between the
                              initial  stockholders  of  the  Company,  Lawrence
                              Fisher  and  Continental  Stock  Transfer  & Trust
                              Company dated April 7, 2005

             10.4             Resignation and Forfeiture  Agreement  executed by
                              Fred S. Zeidman and  acknowledged and agreed to by
                              the Company, I-Bankers Securities Incorporated and
                              Newbridge Securities Corporation

             14               Code of Business Conduct and Ethics

             31.1             Section 302 Certification by Co-CEO

             31.2             Section 302 Certification by Co-CEO

             32.1             Section 906 Certification by Co-CEO

             32.2             Section 906 Certification by Co-CEO


                                       12
<PAGE>

         (b) Reports on Form 8-K:

<TABLE>
<CAPTION>

Date                  Items                          Financial Statements
----                  -----                          --------------------
<S>                   <C>                            <C>
March 24, 2005        1.01
March 28, 2005        8.01, 9.01                      Audited Financial Statements for the periods from
                                                      May 19, 2004 (inception) to December 31, 2004 and
                                                      May 19, 2004 to February 18, 2005
March 11, 2005        1.01, 8.01, 9.01
April 11, 2005        1.01, 1.02, 50.2, 8.01, 9.01

</TABLE>




                                       13
<PAGE>

                                   SIGNATURES

     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Dated:  May 9, 2005

                                       COASTAL BANCSHARES ACQUISITION CORP.

                                       /s/ Gary M. Grossman
                                       ---------------------------------------
                                       Cary M. Grossman
                                       Co-Chief Executive Officer

                                       /s/ W. Donald Brunson
                                       ---------------------------------------
                                       W. Donald Brunson
                                       Co-Chief Executive Officer



                                       14
<PAGE>


                                  EXHIBIT INDEX

             Number           Description
             ------           -----------

             3.1              Amended and Restated Certificate of Incorporation

             10.1             Advisory  Agreement by and between the Company and
                              Sanders Morris Harrison Inc. dated March 8, 2005

             10.2             Amendment to Registration Rights Agreement between
                              the  Company,  the  initial  stockholders  of  the
                              Company and Lawrence Fisher dated April 7, 2005

             10.3             Amendment  to Escrow  Agreement by and between the
                              initial  stockholders  of  the  Company,  Lawrence
                              Fisher  and  Continental  Stock  Transfer  & Trust
                              Company dated April 7, 2005

             10.4             Resignation and Forfeiture  Agreement  executed by
                              Fred S. Zeidman and  acknowledged and agreed to by
                              the Company, I-Bankers Securities Incorporated and
                              Newbridge Securities Corporation

             14               Code of Business Conduct and Ethics

             31.1             Section 302 Certification by Co-CEO

             31.2             Section 302 Certification by Co-CEO

             32.1             Section 906 Certification by Co-CEO

             32.2             Section 906 Certification by Co-CEO




                                       15