March 24, 1997






Dear  Stockholder:

     You  are  cordially  invited  to  attend  the  Annual  Meeting  of  the
stockholders  of  Coastal  Bancorp, Inc. (the "Company").  The meeting will be
held  at  the  Renaissance Houston Hotel, the Plaza III Room, 6 Greenway Plaza
East, Houston, Texas on Thursday, April 24, 1997, at 11:00 a.m., Central Time.

     The  attached  Notice  of Annual Meeting and Proxy Statement describe the
formal  business  to  be transacted at the meeting.  Stockholders will vote to
elect  directors  and ratify the Company's independent auditors. The Company's
Board  of  Directors believes that these proposals are in the best interest of
the  Company  and its stockholders and recommends that stockholders vote "for"
them  at  the  Annual  Meeting.    Directors  and  officers of the Company and
representatives  of  the  Company's  independent  auditors  will be present to
respond  to  any  questions  that  our  stockholders  may  have.

     It  is  very  important  that  you  be  represented at the Annual Meeting
regardless  of  the number of shares you own or whether you are able to attend
the  meeting in person. Let me urge you to mark, sign and date your proxy card
today and return it in the postage paid envelope provided, even if you plan to
attend  the  Annual Meeting.  This will not prevent you from voting in person,
but  will  ensure  that  your  vote  is  counted  if you are unable to attend.

     Your  continued  support  and  interest  in  Coastal  Bancorp,  Inc.  is
appreciated.

                                        Sincerely,




                                   /s/      Manuel  J.  Mehos
                                   Manuel  J.  Mehos
                                   Chairman of the Board, President      
                                   and  Chief  Executive  Officer

<PAGE>
     COASTAL  BANCORP,  INC.
     COASTAL  BANC  TOWER
     8  GREENWAY  PLAZA,  SUITE  1500
     HOUSTON,  TEXAS    77046

     NOTICE  OF  ANNUAL  MEETING  OF  STOCKHOLDERS
     TO  BE  HELD  APRIL  24,  1997


     NOTICE  IS  HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting")  of  Coastal  Bancorp,  Inc.  (the  "Company")  will  be held at the
Renaissance Houston Hotel, the Plaza III Room, 6 Greenway Plaza East, Houston,
Texas  at  11:00  a.m.,  Central  Time,  on  April  24, 1997 for the following
purposes, all of which are more completely set forth in the accompanying Proxy
Statement:

     (1)       To elect two directors of the Company to serve until the annual
meeting  of  stockholders  in  the  year  2000  and until their successors are
elected  and  qualified;

     (2)          To  ratify  the  appointment of KPMG Peat Marwick LLP as the
Company's  independent  auditors for the fiscal year ending December 31, 1997;
and,

     (3)       To transact such other business as may properly come before the
Annual  Meeting,  or  any  adjournment  or  postponement thereof.  Except with
respect  to  procedural matters incident to the conduct of the Annual Meeting,
management  of  the  Company  is not aware of any matters other than those set
forth  above  which  may  properly  come  before  the  Annual  Meeting.

     The  Board of Directors has fixed February 27, 1997 for the determination
of  stockholders entitled to notice of, and to vote at, the Annual Meeting and
any adjournment or postponement thereof.  Only those stockholders of record as
of  the  close of business on that date will be entitled to vote at the Annual
Meeting  or  at  any  such  adjournment  or  postponement.


     BY  ORDER  OF  THE  BOARD  OF
     DIRECTORS



     /s/      Linda  B.  Frazier
     Linda  B.  Frazier
     Secretary
Houston,  Texas
March  24,  1997



     YOU  ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING.  IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN.  EVEN IF YOU
PLAN  TO  BE  PRESENT,  YOU  ARE  URGED TO COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED.  IF YOU ATTEND THIS MEETING,
YOU  MAY VOTE IN PERSON OR BY PROXY.  ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING  OR  IN  PERSON  AT  ANY  TIME  PRIOR  TO  THE  EXERCISE  THEREOF.



                                      25

                            COASTAL BANCORP, INC.


                               PROXY STATEMENT


                        ANNUAL MEETING OF STOCKHOLDERS


     This  Proxy  Statement  is  furnished to the holders of the common stock,
$.01  par  value  per share (the "Common Stock") of Coastal Bancorp, Inc. (the
"Company")  in  connection  with  the solicitation of proxies on behalf of the
Board  of  Directors  of  the  Company,  to  be  used at the Annual Meeting of
Stockholders  to be held at the Renaissance Houston Hotel, the Plaza III Room,
located at 6 Greenway Plaza East, Houston, Texas, at 11:00 a.m., Central Time,
on  April  24,  1997  and  at  any adjournment or postponement thereof for the
purposes  set  forth  in  the  Notice of Annual Meeting of Stockholders.  This
Proxy Statement is expected to be mailed to stockholders on or about March 24,
1997.

     Each  proxy  solicited  hereby,  if  properly  signed and returned to the
Company,  will  be voted in accordance with the instructions contained therein
if it is not revoked prior to its use.  IF NO CONTRARY INSTRUCTIONS ARE GIVEN,
EACH  PROXY  RECEIVED  WILL  BE  VOTED:    (I) FOR THE ELECTION OF THE BOARD'S
NOMINEES  AS  DIRECTORS  OF  THE  COMPANY; (II) FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR
THE  FISCAL  YEAR  ENDING DECEMBER 31, 1997; AND (III) UPON THE TRANSACTION OF
SUCH  OTHER  BUSINESS  AS  MAY  PROPERLY  COME  BEFORE  THE ANNUAL MEETING, IN
ACCORDANCE  WITH  THE  BEST JUDGMENT OF THE PERSONS APPOINTED AS PROXIES.  ANY
HOLDER  OF  COMMON  STOCK  WHO  RETURNS  A  SIGNED  PROXY BUT FAILS TO PROVIDE
INSTRUCTIONS  AS  TO  THE  MANNER IN WHICH SUCH SHARES ARE TO BE VOTED WILL BE
DEEMED  TO  HAVE  VOTED  IN  FAVOR  OF  THE MATTERS SET FORTH IN THE PRECEDING
SENTENCE.

     Any  stockholder  giving  a  proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Company written
notice thereof (Linda B. Frazier, Coastal Bancorp, Inc., Coastal Banc Tower, 8
Greenway  Plaza,  Suite  1500,  Houston, Texas  77046), (ii) submitting a duly
executed  proxy  bearing  a  later  date; or (iii) by appearing at the Annual 
Meeting  and  giving  the  Secretary notice of his or her intention to vote in
person.  Proxies  solicited hereby may be exercised only at the Annual Meeting
and any adjournment or postponement thereof and will not be used for any other
meeting.

<PAGE>
                            BACKGROUND INFORMATION
                                      ON
                            COASTAL BANCORP, INC.
                                     AND
                                 SUBSIDIARIES

     Coastal  Bancorp,  Inc.  was  incorporated  in  Texas  in  March  1994 in
connection  with  the  reorganization of Coastal Banc Savings Association (the
"Association")  into  the holding company form of organization, which occurred
on  July  29,  1994.    In addition, effective July 29, 1994, the Association,
which  had been a Texas-chartered savings and loan association, converted to a
Texas-chartered  savings  bank  known  as  Coastal  Banc  ssb  (the  "Bank"). 
Effective  November  30,  1996,  the Bank engaged in a further holding company
reorganization  whereby  Coastal  Banc  Holding  Company,  Inc.,  a  Delaware
corporation  ("HoCo"),  became  a  first-tier  wholly-owned  subsidiary of the
Company.    As a result of these reorganizations, the Company owns 100% of the
voting stock of HoCo and HoCo owns 100% of the voting stock of the Bank.  HoCo
has  no  operation  other  than the voting common stock of the Bank.  The 9.0%
Noncumulative  Preferred Stock, Series A, issued by the Association on October
21,  1993  continues  to  represent,  on  a  share  for  share basis, the 9.0%
Noncumulative  Preferred  Stock, Series A, of the Bank.  Coastal Bancorp, Inc.
is  a  registered  savings and loan holding company regulated by the Office of
Thrift  Supervision.


                       VOTING SECURITIES AND BENEFICIAL
                              OWNERSHIP THEREOF

     Only  holders  of  record  of  the Company's Common Stock at the close of
business  on  February 27, 1997 ("Record Date") will be entitled to notice of,
and  to vote at, the Annual Meeting.  On the Record Date, there were 4,967,241
shares  of  Common  Stock  outstanding  and  the Company had no other class of
equity  securities  outstanding.  Only holders of Company Common Stock will be
entitled  to vote at the Annual Meeting and each share of Common Stock will be
entitled  to  one vote on all matters properly presented.  Stockholders of the
Company  are  not  permitted  to  cumulate  their  votes  for  the election of
directors.

     The  presence  in  person  or  by  proxy  of  at  least a majority of the
outstanding shares of Common Stock entitled to vote is necessary to constitute
a  quorum  at  the Annual Meeting. Directors will be elected by a plurality of
the  votes  cast at the Annual Meeting.  The affirmative vote of a majority of
the  total votes present at the Annual Meeting is required for approval of the
proposal  to  ratify  the  appointment  of the Company's independent auditors.

     Abstentions will be counted for purposes of determining the presence of a
quorum at the Annual Meeting.  Because of the required votes, abstentions will
have  the same effect as a vote against the proposal to ratify the appointment
of  the  Company's independent auditors, but will not be counted as votes cast
for the election of directors and, thus, will have no effect on the voting for
the  election  of directors.  Under the applicable rules, all of the proposals
for  consideration  at the Annual Meeting are considered "discretionary" items
upon  which  brokerage  firms  may vote in their discretion on behalf of their
clients  if  such clients have not furnished voting instructions.  Thus, there
are  no  proposals to be considered at the Annual Meeting which are considered
"non-discretionary"  and  for  which  there  will  be  "broker  non-votes".

     At  February 27, 1997, directors, executive officers and their affiliates
beneficially  owned  1,151,394  shares  of Common Stock or 22.53% of the total
shares  of  Common Stock outstanding on such date.  It is anticipated that all
of such shares will be voted for the election of the nominees of the Company's
Board of Directors and in favor of all of the proposals of the Board described
herein.

     The  following  table  sets  forth the beneficial ownership of the Common
Stock as of February 27, 1997, with respect to (i) any person or entity who is
known  to  the  Company to be the beneficial owner of 5% or more of the Common
Stock;  (ii)  each  nominee  for director; (iii) each director of the Company;
(iv)  each  of  the executive officers named in the summary compensation table
(see  "Executive  Compensation  -  Summary  Compensation  Table:)  and (v) all
directors  and  executive  officers of the Company and its subsidiary, Coastal
Banc  ssb, as a group. The address for all directors and executive officers of
the  Company and the Bank is Coastal Banc Tower, 8 Greenway Plaza, Suite 1500,
Houston, Texas 77046.  Except as set forth below, as of February 27, 1997, the
Company  was  aware of no other person or entity unaffiliated with the Company
that  was  the  beneficial  owner  of  5%  or  more  of  the  Common  Stock.


<PAGE>
<TABLE>

<CAPTION>

                                         Amount  of  Shares  of
                 Name                       Common  Stock
           (and  Address)of              Beneficially  Owned
     Beneficial  Owner,                  as  of  February  27,          Percent  of
                                              1997(1),                     Class


<S>                                                  <C>         <C>

FMR Corp.                                          423,099(2)  8.28
82 Devonshire Street
Boston, MA   02104

First Manhattan Co.                                481,235(2)  9.42
437 Madison Avenue
New York, NY 10022

Robert Edwin Allday, Director                           0(3)     *
Coastal Bancorp, Inc. and Coastal Banc ssb

D. Fort Flowers, Jr., Director                    179,880(4)  3.52
Coastal Bancorp, Inc. and Coastal Banc ssb

Dennis S. Frank, Director                           126,570   2.48
Coastal Bancorp, Inc. and Coastal Banc ssb

Robert E. Johnson, Jr., Director                   12,880(5)     *
Coastal Bancorp, Inc. and Coastal Banc ssb

Manuel J. Mehos, Chairman of the Board,           357,750(6)  7.00
President and Chief Executive Officer
Coastal Bancorp, Inc., Coastal Banc 
Holding Company, Inc. and Coastal Banc ssb

James C. Niver, Director                          368,952(7)  7.22
Coastal Bancorp, Inc. and Coastal Banc ssb

Clayton T. Stone, Director                              600      *
Coastal Bancorp, Inc. and Coastal Banc ssb

John D. Bird, Executive Vice President,            20,922(6)     *
Chief Administrative Officer and
Assistant Secretary
Coastal Banc ssb

Gary R. Garrett, Executive Vice President and       19,823(6)      *
Chief Lending Officer
Coastal Banc ssb

David R. Graham, Executive Vice President -         18,584(6)      *
Real Estate Lending
Coastal Banc ssb

Sandra S. Orr, Executive Vice President and         15,653(6)      *
Chief Investment Officer
Coastal Banc ssb

Nancy S. Vadasz, Executive Vice President -         10,034(6)      *
Market and Product Strategies
Coastal Banc ssb

Catherine N. Wylie, Executive Vice President and    19,746(6)      *
Chief Financial Officer
Coastal Bancorp, Inc., 
Coastal Banc Holding Company, Inc. and 
Coastal Banc ssb

All directors and executive officers of 
the Company and the Bank as a group                1,151,394   22.53
(13 persons)
</TABLE>





       *     Represents less than 1.0% of the Common Stock outstanding.

(1)         Based upon information furnished by the respective individuals and
filings  pursuant  to  the  Securities  Exchange  Act of 1934, as amended (the
"Exchange  Act").  The information is not necessarily indicative of beneficial
ownership  for  any  other purpose.  Under regulations promulgated pursuant to
the Exchange Act, shares are deemed to be beneficially owned by a person if he
or  she  directly or indirectly has or shares (i) voting power, which includes
the  power  to  vote or to direct the voting of the shares, or (ii) investment
power, which includes the power to dispose or to direct the disposition of the
shares.    Unless  otherwise  indicated,  the  named beneficial owner has sole
voting  and  dispositive  power  with  respect  to  the  shares.

(2)          Based  on  a  Schedule  13G  filed  under  the  Exchange  Act.

(3)      Mr. Allday is the beneficial owner of 2,000 shares of the Bank's 9.0%
Noncumulative  Preferred  Stock,  Series  A.

(4)        Of such shares, 176,880 are owned by a trust over which Mr. Flowers
has  shared  voting  and  dispositive  power  with  two  other  co-trustees.

(5)      Shares are held in trust for his minor children for which Mr. Johnson
serves  as  trustee.

(6)        Under applicable regulations, a person is deemed to have beneficial
ownership  of  any shares of Common Stock which may be acquired within 60 days
of  the  Record  Date  pursuant to the exercise of outstanding stock options. 
Shares  of  Common  Stock  which are subject to stock options are deemed to be
outstanding  for the purpose of computing the percentage of outstanding Common
Stock owned by such person or group but not deemed outstanding for the purpose
of  computing  the  percentage  of  Common  Stock owned by any other person or
group.    The  amounts  set forth in the table include 19,422, 18,323, 18,584,
42,750,  15,653,  10,034  and  17,796  shares  which  may be received upon the
exercise of stock options by Messrs. Bird, Garrett, Graham and Mehos and Mmes.
Orr,  Vadasz  and  Wylie,  respectively,  pursuant  to stock options.  For all
directors  and  executive  officers  as a group, the number of shares includes
142,562  shares  of  Common  Stock  subject  to  outstanding  stock  options.

(7)      Mr. Niver is the co-trustee with his wife of a trust which holds such
shares  for  their  benefit.




              INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
            DIRECTORS WHOSE TERMS CONTINUE AND EXECUTIVE OFFICERS


ELECTION  OF  DIRECTORS

     Coastal  Bancorp,  Inc.  is  a  Texas corporation, formed pursuant to the
Texas Business Corporation Act which requires that the business and affairs of
the  Company  shall  be  managed  by  or  under  the direction of the Board of
Directors.  The Company's Articles of Incorporation provide that the Company's
Board  of Directors be divided into three classes as nearly equal in number as
possible,  with  one  class  to be elected annually, and the Bylaws state that
members  of each class are to be elected for a term of office to expire at the
third  succeeding  annual  meeting  of  stockholders and when their respective
successors  have  been  elected  and  qualified.    The number of directors is
determined  from  time  to time by resolution of the Board.  On July 27, 1995,
the  Board  of Directors voted to increase the size of the Board from seven to
eight members and expected Mr. Clayton T. Stone to fill such vacancy effective
August 24, 1995.  Mr. Stone stood for election by the stockholders at the 1996
annual meeting and was elected to a three year term.  Effective April 1, 1996,
Mr.  Donald  Bonham retired from the Board of Directors for personal reasons. 
The  Board  of  Directors has not nominated anyone to replace Mr. Bonham as of
the  date  hereof.

     Two of the positions on the Board are to be elected in 1997.  Each of the
nominees  listed  below  has  served  as  a  director of the Company since its
inception  and prior to the formation of the Company, these individuals served
as  directors of the Association.  The information set forth below relating to
their  tenure  as  directors  is  as  of  the  date they were first elected as
directors  of the Association, where applicable.  There are no arrangements or
understandings  between  the  Company  and  any  person pursuant to which such
person has been selected as a nominee, and no director is related to any other
director or executive officer of the Company or the Bank by blood, marriage or
adoption.

INFORMATION  WITH  RESPECT  TO CONTINUING DIRECTORS AND NOMINEES FOR DIRECTORS

     Information  concerning  those  members  of  the Board whose terms do not
expire  in  1997,  including  his  age, tenure and principal position with the
Company  and  principal  occupation during the past five years, as well as the
year  his  term  will  expire,  is  set  forth  below:

     R. EDWIN ALLDAY.   Age 46.  Director since 1986.  Mr. Allday is a private
investor  and  in  September  1993  became  a  senior consultant with The Dini
Partners,  Inc.,  Houston,  Texas,  a  company  that  provides  counseling  in
philanthropy and non-profit company management.  Mr. Allday was an independent
consultant  for  community  relations  for charitable organizations from March
1990  to  June 1993.  From August 1988 to March 1990, Mr. Allday was the Chief
Operating  Officer of the American Leadership Forum, a non-profit organization
which  teaches  business  leadership  skills  located in Houston, Texas.  From
March  1982  to  August  1988,  Mr.  Allday  was the General Manager of Anglia
Companies,  a  family-owned investment management business in Houston, Texas. 
His  term  as  a  director  of  the  Company  will  expire  in  1998.

     D.  FORT  FLOWERS, JR.  Age 35.  Director since 1992.  Mr. Flowers is the
Chairman  of  the  Board  of  DIFCO,  Inc.,  a  railroad  car  engineering and
manufacturing  company  located  in  Houston,  Texas.    Mr. Flowers is also a
director  of  The  Ohio  Bank,  Findlay,  Ohio.  His term as a director of the
Company  will  expire  in  1998.


<PAGE>
     DENNIS  S.  FRANK.    Age  40.    Director  since 1988.  Mr. Frank is the
Chairman  of  the  Board,  Chief Executive Officer and President of Silvergate
Thrift  and  Loan,  La Mesa, California, a position he has held since December
1996.   Additionally, he has been the President and Chief Executive Officer of
DSF Management Corp., a private investment company, located in Houston, Texas,
since  March  1994.    Prior  to  that,  Mr.  Frank  was  the  Manager  of the
Association's  Capital  Markets  Division  from  July 1988 to April 1993 and a
consultant  to  the  Association from April 1993 to April 1994.  His term as a
director  of  the  Company  will  expire  in  1998.

     ROBERT  E.  JOHNSON, JR.  Age 43.  Director since 1986.  Mr. Johnson is a
partner  in  the  law firm of Johnson & Johnson, Austin, Texas.  His term as a
director  of  the  Company  will  expire  in  1999.

     CLAYTON  T. STONE.  Age 62.  Director since August 1995.  Mr. Stone is an
Executive  Vice  President  of  Hines  Interests  Limited  Partnership, Aspen,
Colorado.    His  term  as  a  director  of  the  Company will expire in 1999.


THE  NOMINEES

     Unless  otherwise  directed,  each  proxy  executed  and  returned  by  a
stockholder  will  be  voted "FOR" the election of each of the nominees listed
below.    If  any  person  named as a nominee should be unable or unwilling to
stand  for  election at the time of the Annual Meeting, the Board of Directors
will nominate, and the persons named as proxies will vote, for any replacement
nominee  or nominees recommended by the Board of Directors.  At this time, the
Board of Directors knows of no reason why any of the nominees listed below may
not  be  able  to  serve  as  a  director  if  elected.

     Information  concerning  the  nominees  for  director, including his age,
tenure,  principal  position  with the Company and principal occupation during
the  past  five  years, as well as the year his term will expire, is set forth
below:

     MANUEL  J.  MEHOS.    Age  42.    Director  since 1986.  Mr. Mehos is the
Chairman  of  the Board, President and Chief Executive Officer of the Company,
Coastal  Banc  Holding  Company,  Inc.  and  the Bank and also Chief Executive
Officer  of  CoastalBanc  Financial  Corp.,  a  Bank subsidiary.  He is also a
director  of each of the Bank's subsidiaries and is the President of CBS Asset
Corp.,  CBS  Builders,  Inc. and CoastalBanc Investment Corporation, which are
wholly-owned  subsidiaries  of  the Bank located in Houston, Texas.  CBS Asset
Corp., CBS Builders, Inc. and CoastalBanc Investment Corporation are presently
inactive.  Mr. Mehos also currently serves on the Finance Commission of Texas.
 If  elected,  his  term  as  a  director  of the Company will expire in 2000.

     JAMES  C. NIVER.  Age 67.  Director since 1986.  Mr. Niver is retired and
was  President  of Century Land Company, Houston, Texas.  If elected, his term
as  a  director  of  the  Company  will  expire  in  2000.




          THE BOARD OF DIRECTORS RECOMMENDS THAT THE ABOVE NOMINEES
                   BE ELECTED AS DIRECTORS OF THE COMPANY.


STOCKHOLDER  NOMINATIONS

     The  Company's  Articles of Incorporation govern nominations for election
to the Board of Directors and require that all nominations for election to the
Board  of  Directors  other  than  those  made  by  the  Board,  be  made by a
stockholder  who  has  complied  with  the notice provisions in the Articles. 
Written  notice  of  a  stockholder's  nomination  must be communicated to the
attention  of  the  Company's Secretary and either delivered to, or mailed and
received  at,  the principal executive offices of the Company not less than 60
days  prior  to  the anniversary date of the mailing of the proxy materials by
the  Company  in  connection  with the immediately preceding annual meeting of
stockholders  of  the  Company,  and  with  respect  to  a  special meeting of
stockholders  for  the  election of directors, on the close of business on the
tenth day following the date on which notice of such meeting is first given to
stockholders.  Such notice shall include specified matters as set forth in the
Articles  of  Incorporation.  If the nomination is not made in accordance with
the  requirements  set  forth  in the Articles of Incorporation, the defective
nomination  will  be  disregarded  at the Annual Meeting.  The Company did not
receive  any  nominations  from  stockholders  for  the  Annual  Meeting.


BOARD  OF  DIRECTORS  MEETINGS  AND  COMMITTEES
  OF  COASTAL  BANCORP,  INC.  AND  COASTAL  BANC  SSB

     Regular  meetings  of  the  Board  of  Directors  of the Company are held
quarterly and special meetings may be called at any time as necessary.  During
the  year  ended December 31, 1996, the Board of Directors of the Company held
twelve meetings.  No incumbent director of the Company attended fewer than 75%
of  the aggregate of the total number of Board meetings held during the period
in which he served as a director in 1996 except Mr. Bonham.  Mr. Bonham was on
a  medical  leave  of  absence from August, 1995 until his board term ended in
April  1996.    He did not attend any Board Meetings in 1996 and did not stand
for  reelection.


<PAGE>
     The  Board  of  Directors is authorized by its Bylaws to elect members of
the Board to committees of the Board which may be necessary or appropriate for
the  conduct of the business of the Company.  At December 31, 1996, there were
no  committees  of  the  Board  of  the  Company.

     Regular  meetings  of the Board of Directors of the Bank are held monthly
and  special meetings may be called at any time as necessary.  During the year
ended  December  31,  1996,  the  Board  of  Directors of the Bank held twelve
meetings.    No  incumbent director of the Bank attended fewer than 75% of the
aggregate  of  the  total  number  of Board meetings held during the period in
which  he  served  as  a  director  and  the  total number of meetings held by
committees  of  the Board of Directors of the Bank on which he served in 1996,
except for Mr. Bonham who was on a medical leave of absence and did not attend
any  such  meetings  prior  to  the  expiration  of  his  term  in April 1996.

     The  Board  of Directors of the Bank is authorized by its Bylaws to elect
members  of  the  Board  to  committees of the Board which may be necessary or
appropriate  for  the  conduct  of  the business of the Bank.  At December 31,
1996,  the  Bank had an Audit, Compensation, Securities Investment, Directors'
Loan  and  a  Community  Reinvestment  Act  Committee  of  the  Board.

     The  Audit Committee of the Bank's Board is responsible for reviewing the
reports  of  the  independent  auditors  and examination reports of regulatory
authorities,  monitoring the functions of the internal audit department, which
reports  directly  to this Committee, and generally overseeing compliance with
internal  policies  and  procedures.   The Audit Committee members are Messrs.
Niver  (Chairman),  Allday and Johnson.  This Committee met eight times during
1996.

     The  Compensation  Committee reviews the compensation of senior executive
officers and recommends to the Board adjustments in such compensation based on
a  number  of factors, including the profitability of the Bank.  Messrs. Niver
(Chairman), Flowers and Johnson comprise the Compensation Committee, which met
four  times during 1996.  See "Executive Compensation - Report of the Board of
Directors  on  Compensation  During  Fiscal  1996."

     The  Securities  Investment Committee met four times in 1996 to authorize
investment  categories,  overall  investment  limitations  and  brokers  to be
utilized,  to  review  trade recommendations and past trades of the Securities
Investment Subcommittee (composed of executive officers) and compliance of the
Bank's  investment activities with the Bank's Securities Investment Policy and
with  Board  recommendations.    The  Committee  also makes interest rate risk
assessments  and  formulates  investment  policy for the forthcoming quarterly
period.    This Committee consists of Messrs. Frank (Chairman), Flowers, Mehos
and  Stone.

     The  Directors'  Loan  Committee  met twenty-six times in 1996 to approve
certain  loan  requests.   The Committee can approve any class or type of loan
which  is  authorized  for  investment by the Board.  Specified loan authority
limits  are further delegated to the management loan committee, the management
construction  loan  committee  or  an  individual  officer  of  the Bank.  The
Directors'  Loan  Committee  consists  of  Messrs.  Mehos (Chairman), Flowers,
Frank,  Niver,  and  Stone.

     The  Community  Reinvestment  Act  ("CRA")  Committee  was established to
monitor the Bank's efforts in serving the credit needs of the residents of the
communities  in  which it does business, including those credit-worthy persons
having  low  and  moderate  incomes.    The  CRA Committee has appointed a CRA
Officer  who  is  responsible  for developing and administering the Bank's CRA
program  and for training the Bank's staff to comply with CRA regulations, and
Bank  policies  and  procedures.    The  CRA  Officer  chairs a management CRA
Committee  which  works  to  oversee  that  the  Bank  meets  the  procedural
requirements  of  the  CRA.    The CRA Committee is composed of Messrs. Allday
(Chairman),  Mehos  and  Johnson  and  met  one  time  in  1996.

BOARD  FEES

     Through  February 29, 1996, each non-employee director of the Company and
the Bank was paid a fee of $1,250 for each Board meeting attended and a fee of
$250 for each committee meeting attended.  Effective March 1, 1996, those fees
were  increased  to  $1,550 for each Board meeting and $300 for each committee
meeting.    When  Board  and committee meetings of the Company are held on the
same  day as meetings of the Board and committees of the Bank, only one fee is
paid  for  that  date.    No  fees  are paid for non-attendance; attendance by
conference  telephone  is  similarly  not  compensated.    Directors  are also
reimbursed  for  reasonable travel expenses.  Directors who are also employees
of  the  Company  and  the  Bank  receive  no  fees for attendance at Board or
committee  meetings.

SECTION  16(A)  BENEFICIAL  OWNERSHIP REPORTING COMPLIANCE OF THE EXCHANGE ACT

     Section  16(a)  of  the  Exchange Act requires the Company's officers and
directors  of the Company to file reports to indicate ownership and changes in
ownership  with  the  Securities  and  Exchange  Commission and to furnish the
Company  with  copies  of  such  reports.

     Based  upon  a  review  of the copies of such forms, the Company believes
that  during  the  year  ended  December  31,  1996,  all Section 16(a) filing
requirements applicable to the Company's officers and directors of the Company
and/or  the  Bank  were  complied  with,  except  that  one  Form  4  for  two
transactions  for  Mr.  Frank,  a  director  of the Company, which occurred in
February  1996  was  filed  on  February  11,  1997.


<PAGE>
EXECUTIVE  OFFICERS  WHO  ARE  NOT  DIRECTORS

     The  following table sets forth information concerning executive officers
of  the  Bank  or  its  subsidiaries  who  do not serve on the Bank's Board of
Directors.    All  executive officers are elected by the Board of Directors of
the  Bank or of the respective subsidiary and serve until their successors are
elected  and  qualified.    No executive officer is related to any director or
other  executive officer of the Bank or its subsidiaries by blood, marriage or
adoption,  and  there are no arrangements or understandings between a director
and  any  other  person pursuant to which such person was elected an executive
officer.

               Position  with  Bank  and
     Name          Age       Principal Occupation During Last Five Years

     John  D.  Bird          53          Executive Vice President since August
1993,  Chief  Administrative  Officer since June 1993, and Assistant Secretary
since  March  1986;  Chief  Operations  Officer  from March 1986 to June 1993;
President  and  sole  stockholder  of  Coastal Banc Insurance Agency, Inc., an
affiliate  of  the  Bank,  since  May  1987.

     Gary  R.  Garrett              50          Executive Vice President since
August  1993  and  a  director of each of the Bank's subsidiaries; Senior Vice
President--Mortgage  Lending from October 1991 to August 1993; Chief Executive
Officer  and President of CBS Mortgage Corp. since August 1993; Executive Vice
President,  CBS  Mortgage  Corp.  from  January  1989  to  August  1993.

     David  R.  Graham            53     Executive Vice President since August
1993  and  a  director  of  each  of  the  Bank's  subsidiaries;  Senior  Vice
President--Real  Estate Lending Division from May 1988 to August 1993.  Senior
Vice  President  of  CBS  Asset  Corp.  since  April  1993.

Sandra  S.  Orr      41          Executive Vice President since August of 1993
and  Chief Investment Officer since March 1993; Senior Vice President--Capital
Markets  Division  from  October  1989  to  August  1993.

     Nancy  S. Vadasz          43          Executive Vice President since June
of  1994,  Senior  Vice  President  since September 1991.  Prior thereto, Mrs.
Vadasz  was  a  Vice President, Director of Marketing with San Jacinto Savings
Association,  Houston,  Texas.

     Catherine  N.  Wylie              42          Executive Vice President of
Coastal  Banc Holding Company, Inc. since November, 1996, of the Company since
July  1994  and  of  the Bank since August 1993 and a director of Coastal Banc
Holding Company, Inc., and of each of the Bank's subsidiaries; Chief Financial
Officer  since  October 1993; Controller from April 1989 to October 1993; also
Executive  Vice  President/Treasurer  of each of the Bank's subsidiaries since
October  1990.

<PAGE>

EXECUTIVE  COMPENSATION

     REPORT  OF  THE  BOARD  OF DIRECTORS ON COMPENSATION DURING FISCAL 1996. 
Officers  of  the  Company  do  not  receive  compensation for their committee
services.

     The  Compensation  Committee  of  the Board of Directors of the Bank (the
"Committee")  is  composed  entirely  of  independent  outside directors.  See
"Information  With  Respect  to  Nominees  for Director, Directors Whose Terms
Continue  and  Executive Officers - Board of Directors Meetings and Committees
of  Coastal Bancorp, Inc. and Coastal Banc ssb."  The Committee is responsible
for  reviewing  the  compensation  of  executive  officers  of  the  Bank  and
recommending executive compensation proposals to the Bank's Board of Directors
for  approval.

     The Board of Directors of the Bank has a compensation philosophy pursuant
to  which  executive  compensation  is designed to be at least comparable with
average  executive  compensation  for  the  Bank's  peers,  which is generally
considered  to  be  companies  of  approximately the same size and in the same
industry.    Companies included are independent financial companies, banks and
savings  and  loan  associations  ranging from $900 million to $2.0 billion in
asset  size.    In  May  1992,  the  Bank  retained  an executive compensation
consultant  to  review  its  executive  compensation policies.  The consultant
developed  a compensation program for the Bank's executive officers which is a
combination  of  base  salary plus incentive compensation linked to the Bank's
profitability.

     The  Committee  evaluates  the  base  salaries  of  the  Bank's executive
officers  annually.    An  executive officer's base salary is determined based
upon  longevity  with  the  Bank,  the  effectiveness  of  such  individual in
performing  his  or  her duties, peer averages at the position in question and
the  Bank's  overall  performance.   No particular weight is assigned to these
variables.  The  base salary component alone, while designed to be competitive
with  peer  group  averages,  is  not  designed  to  produce  top  levels  of
compensation  for  the  Bank's  executive  officers  when compared to its peer
group.    The incentive component, as described below, which requires the Bank
to  achieve returns at a pre-specified level before additional compensation is
paid,  is the element which is designed to make total compensation for each of
the  Bank's  executive  officers  comparable  or  better  than  the comparable
executive  compensation  for the executive officers in the Bank's peer group. 
Based  upon  the  foregoing,  Mr.  Mehos,  the Chief Executive Officer, earned
$241,000  in  base  salary  during  1996.

     The amount of incentive compensation is related to the performance of the
Bank.    No  cash  incentive compensation will be paid to the Bank's executive
officers  unless  the  Committee  determines the Bank is safe and sound in the
following areas:  capital adequacy, earnings composition, earnings capability,
liquidity,  risk  management  (classified  assets),  strategic  planning,  and
compliance  with  laws  and  regulations.

     During  1996,  the Board of Directors determined that no incentive awards
to  its  Executive  Management  would  be paid unless a 7.5% return on average
equity ("ROE") was achieved.  Any earnings from extraordinary items or unsound
practices  are  excluded  from  such  calculations at the Board's discretion. 
Gains  on  sales  of  securities from the investment account, net of losses of
sales  from  the  investment  account,  are  deducted from the earnings pool. 
During  1996,  the  compensation committee calculated that the Bank achieved a
12.53%  ROE  before  the  SAIF  insurance  special  assessment.

     Accordingly,  during  1996, a bonus pool of $418,228 in the aggregate was
established  and  incentive  awards  were  paid  to  executive officers of the
Company  or  Bank.    See  "Summary  Compensation  Table."

          By  the  Committee:


     /s/  James  C.  Niver
          James  C.  Niver  (Chairman)
          D.  Fort  Flowers,  Jr.
          Robert  E.  Johnson,  Jr.


<PAGE>
     SUMMARY COMPENSATION TABLE.  To meet the goal of providing shareholders a
concise, comprehensive overview of compensation awarded, earned or paid in the
reporting  period, the Summary Compensation Table is utilized by the Company. 
The  Summary  Compensation  Table includes individual compensation information
with  respect  to  the  Chief Executive Officer and the four other most highly
compensated  executive  officers  of the Bank and its subsidiaries whose total
compensation  exceeded $100,000 for services rendered in all capacities during
the  fiscal  years  ended  December  31,  1996,  1995  and  1994.

<TABLE>

<CAPTION>


                                      ANNUAL                          ALL
NAME  AND  PRINCIPAL               COMPENSATION        AWARDS        OTHER
POSITION  (1)               YEAR  SALARY(2)  BONUS(3) OPTIONS(4) COMPENSATION(5)


<S>                            <C>   <C>       <C>       <C>        <C>

Manuel J. Mehos
Chairman of the Board,         1996  $241,000  $131,228  30,000  $1,425
 President and                 1995   222,000         0  19,000   2,310
 Chief Executive Officer       1994   216,000   141,827  13,000   2,310

John D. Bird                   1996   121,000    40,000   5,000   7,425
Executive Vice President and   1995   111,565         0   4,448   8,310
Chief Administrative Officer   1994   108,315    30,000   2,530   8,310

Gary R. Garrett                1996   160,000    70,000  10,000   4,425
Executive Vice President and   1995   113,300         0   5,445   4,700
 Chief Lending Officer         1994   110,500    60,000   2,453   2,310

David R. Graham                1996   121,000    40,000   7,500   1,425
Executive Vice President       1995   110,335         0   4,881   2,310
 Real Estate Lending Division  1994   107,120    45,000   2,502   2,310

Catherine N. Wylie             1996   160,000    70,000  10,000   4,425
Executive Vice President and   1995   113,300         0   5,445   4,060
 Chief Financial Officer       1994   107,500    60,000   2,453   2,310



</TABLE>



(1)          Principal  positions  are  for  fiscal  1996.
(2)          Does  not  include amounts attributable to miscellaneous benefits
received  by  executive  officers  of  the  Bank,  including use of Bank owned
vehicles.    In  the  opinion  of  management of the Company, the costs to the
Company  of providing such benefits to any individual executive officer during
the  year ended December 31, 1996, did not exceed the lesser of $50,000 or 10%
of  the  total  of  annual  salary  and  bonus  reported  for  the individual.
(3)       Includes lump sum cash bonuses earned for the fiscal year stated and
paid  in  some  cases  the  subsequent  year.
(4)          Free  standing stock options; see "- Option Grants in Last Fiscal
Year."
(5)         Includes for the named individuals employer matching contributions
accrued  pursuant  to  the  Company's  Profit  Sharing (401k) Plan and any car
allowances.

EXECUTIVE  SEVERANCE  AGREEMENTS

     On  May 23, 1996, the Company entered into executive severance agreements
(the  "Executive  Severance  Agreements")  with Mr. Garrett and Ms. Wylie (the
"Employees").    The Executive Severance Agreements provide for the payment of
certain  severance  benefits  to  Mr.  Garrett and Ms. Wylie in the event of a
trigger  event  under  the Executive Severance Agreements, which means (i) the
occurrence of a change in control of the Company as defined below, or (ii) the
voluntary  termination  within  90  days  of  an event which occurs during the
"Protected Period" (i.e., the period six months before and three years after a
change  of  control  or  after  the  expiration  of  the  Executive  Severance
Agreement)  and  constitutes  "Good  Reason"  (as  defined  below),  or  (iii)
termination  for  any  reason  other  than  "Just  Cause" during the Protected
Period.    If  a  trigger  event occurs, the Employees will be entitled to (x)
payment  by  the  Company or the Bank of one times the annual salary and bonus
for  incentive  compensation  (not including stock compensation plans) paid to
the Employee during his or her immediately preceding year of employment or (y)
the  payment by the Company or the Bank of an amount equal to 2.99 times their
annual salary plus bonuses paid during the immediately preceding year; and (z)
the  Company  will  cause any and all outstanding options to purchase stock of
the Company held by each executive to become immediately exercisable in full. 
The  Executive  Severance  Agreement  also  provides  that  the  Company  will
reimburse  the  Executive  for  all  costs  and expenses, including reasonable
attorney's  fees incurred by the executive to enforce rights or benefits under
such  agreements.

     Under  the  Executive  Severance Agreements, a "Change In Control" of the
Company  would  be  deemed  to  occur if, (i) the Company is not the surviving
entity  in  any  merger, consolidation, or other reorganization (ii) the sale,
exchange,  lease,  transfer  or  other  disposition  to any person of all or a
substantial part of the assets, liabilities, or business of the Company or the
Bank,  (iii)  any  change in business of the Company or the Bank such that the
Company  does not own the voting stock of the Bank or the business of the Bank
is  not  as  an  insured  depository  institution,  (iv)  any person or entity
including  a  "group"  as contemplated by Section 13(d)(3) of the Exchange Act
acquires  or  gains ownership or control (including, without limitation, power
to  vote)  of  more  than  25%  of the outstanding shares of the Bank's or the
Company's  voting  stock,  or  (v)  as  a  result  of  or in connection with a
contested election of directors, the persons who were directors of the Bank or
the  Company  before  such election cease to constitute at least two-thirds of
the  Board  of Directors other than the foregoing, the Company has not entered
into  any  employment  contracts  with  any  of  its  officers.

     Under the Executive Severance Agreements, (a)  "Good Reason" means any of
the  following  events,  which  has  not  been  consented to in advance by the
Employee  in  writing:   (i) the requirement that the Employee move his or her
personal  residence, or perform his or her principal executive functions, more
than  thirty  (30)  miles from his or her primary office as of the date of the
Change  in  Control;  (ii) a material (defined to be 10% or more) reduction in
the  Employee's  base  compensation  as in effect on the date of the Change in
Control  or  as the same may be increased from time to time; (iii) a successor
to  the  Company  or the Bank fails or refuses to assume the Company's and the
Bank's  obligations  under  this  Agreement;  (iv)  the  Company,  the Bank or
successor  thereto  breaches  any  provision  of  this  Agreement;  or (v) the
Employee  is terminated for other than Just Cause after the Change in Control;
and  (b)  "Just Cause" means, in the good faith determination of the Company's
and  the  Bank's  Boards  of  Directors,  the  Employee's personal dishonesty,
incompetence,  willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final  cease-and-desist  order,  or  material  breach of any provision of this
Agreement.    The  Employee shall have the right to make a presentation to the
Board  of  Directors  with counsel prior to rendering of such determination by
the  Board.  The Employee shall have no right to receive compensation or other
benefits  for any period after termination for Just Cause.  No act, or failure
to  act,  on  the  Employee's part shall be considered "willful" unless he has
acted,  or  failed  to  act,  with  the  absence  of  good  faith an without a
reasonable  belief  that his action or failure to act was in the best interest
of  the  Bank  and  the  Company.

     In the event that the Employee and the Company or the Bank agree that the
Employee  will be paid an amount under the Executive Severance Agreement which
triggers  the requirement to pay the excise tax required under Section 280G of
the  Internal  Revenue  Code of 1986, as amended, the Company or the Bank will
reimburse  the  Employee  for  all  such  excise  taxes.

     The  Executive  Severance  Agreement  remains  in  effect  for the period
commencing on May 23, 1996 (the "Effective Date") and ending on the earlier of
(i)  the  date  36 months after the Effective Date, and (ii) the date on which
the  Employee  terminates his or her employment with the Company or the Bank. 
Any  payments  made  to  the  Employee  pursuant  to  the  Executive Severance
Agreement,  or otherwise, are subject to and conditioned upon their compliance
with  the Federal Deposit Insurance Act and any regulations promulgated by the
Federal  Deposit  Insurance  Corporation  thereunder.

OPTION  GRANTS  IN  LAST  FISCAL  YEAR

     On  March  23,  1995,  the  Board  of  Directors  adopted  the 1995 Stock
Compensation  Program  (the  "New  Program").    Stockholders  of  the Company
approved  the  New  Program  at  the  April  27, 1995 annual meeting.  The New
Program is substantially similar to the 1991 Program, as described below.  The
Board  reserved  255,261  shares  of  common  stock for issuance under the New
Program  at  the time of adoption.  There were 112,000 shares issued under the
New  Program  in  1996.

     The  Board  of  Directors  adopted  the  1991  Program for the benefit of
officers and other selected key employees of the Company and the Bank who were
deemed  to  be responsible for the future growth of the Company.  Stockholders
of  the Company approved the program at a Special Meeting of Stockholders held
in December 1991.  In connection with the reorganization of the Association in
1994, the Program was adopted by the Company, and approved by stockholders for
the  benefit of officers and key employees of the Company and the Bank and its
subsidiaries.

     An  aggregate  of  241,001  shares  of  authorized but unissued shares of
company  common  stock  were originally reserved for future issuance under the
1991  Program.    All  shares  of  the  1991 Program have been issued.  Shares
issuable  under  the  New  Program  and  the  1991  Program (collectively, the
"Programs")  pursuant  to the exercise of stock options and/or the granting of
stock  appreciation rights and performance shares, are subject to modification
or  adjustment  to  reflect  changes  in  the  Company's  capitalization.

     Of  the  shares  reserved for issuance under the Programs, 138,476 shares
are not currently subject to option.  The Programs will remain in effect for a
term  of  ten  years  from  the  date  of adoption unless sooner terminated in
accordance  with  the  provisions  of  the  Programs.    Four kinds of rights,
evidenced  by  four plans, are contained in the Programs and are available for
grant:  (i)  incentive  stock  options; (ii) compensatory stock options; (iii)
stock  appreciation  rights;  and  (iv)  performance  share  awards.

     The  Programs are administered by Messrs. Niver, Flowers and Johnson (the
"Program  Administrators").    The  Program  Administrators are given absolute
discretion  under  each  Program to select the persons to whom options, rights
and  awards  will  be granted and to determine the number of shares subject to
each option, right or award.  Only regular, full-time employees of the Company
or  the  Bank,  or  any subsidiary of the Company or the Bank are eligible for
selection  by  the  Program  Administrators  to  participate in the Programs. 
Non-employee  directors are not eligible to receive awards under the Programs.

     The option prices per share for incentive stock options granted under the
Programs  may  not  be less than the fair market value of the Company's Common
Stock  on  the date of the grant; provided, however, that if any employee owns
more  than  10%  of  the  combined voting power of all classes of stock of the
Company, the purchase price for shares acquired pursuant to the exercise of an
option  shall  not  be  less  than 110% of the fair market value of the Common
Stock. The per share exercise price for compensatory options granted under the
Programs  may  be  equal  to or less than the fair market value on the date of
grant.   The purchase price for shares of Common Stock subject to incentive or
compensatory  options  may  be  paid in cash, by check, or if permitted by the
Program  Administrators at the time the option is granted, by shares of Common
Stock,  or  by  a  combination  thereof.

     In  the  event  of  a  change  in control of the Company, as defined, all
incentive  and  compensatory  stock  options  previously  granted  may  become
immediately  exercisable  notwithstanding  any existing installment limitation
which  may  be  established  by  the Program Administrators, provided that the
exercisability  of  an  option  may  not be accelerated prior to the six month
anniversary  of  the  date  the  option  is  granted.


<PAGE>
AGGREGATE  OPTIONS  GRANTED  IN  LAST  FISCAL  YEAR

     The  following  table  sets  forth individual grants of options that were
made  during  the  last  fiscal  year  to  the executive officers named in the
Summary  Compensation  Table.  This table is intended to allow stockholders to
ascertain  the  number  and size of option grants made during the fiscal year,
the  expiration  date of the grants and the potential realizable present value
of  such  options  under  specified  assumptions.

<TABLE>

<CAPTION>

                               PERCENT  OF
                   OPTIONS     TOTAL  OPTIONS
                   GRANTED     GRANTED  TO        EXERCISE               GRANT DATE
                  (NO. OF      EMPLOYEES          PRICE      EXPIRATION     PRESENT
NAME               SHARES)(1)  IN FISCAL YEAR     PER SHARE   DATE         VALUE(2)


<S>                 <C>             <C>                <C>       <C>        <C>


Manuel J. Mehos     30,000       26.79%          $17.00      3/28/06  $189,930
John D. Bird         5,000        4.46           $17.00      3/28/06    31,655
Gary R. Garrett     10,000        8.93           $17.00      3/28/06    63,310
David R. Graham      7,500        6.70           $17.00      3/28/06    47,483
Catherine N. Wylie  10,000        8.93           $17.00      3/28/06    63,310
</TABLE>




(1)       The options vest 25% during the first year and an additional 25% for
each  of  the  next  three  years.

(2)      The potential realizable value of the grant of options is the present
value of the grant at the date of grant using a variation of the Black-Scholes
option  pricing  model. Assumptions used to calculate the present value of the
options  were  as follows:  an expected volatility rate of 20.93%, a risk free
rate  of  return of 6.40%, a dividend yield of $.40 per share per year and the
expiration  date  of  March  28,  2006.


<PAGE>
AGGREGATE  OPTIONS  EXERCISED  IN  LAST YEAR AND FISCAL YEAR-END OPTION VALUES

     The  following  table  sets forth, with respect to the executive officers
named  in  the  Summary  Compensation  Table,  information with respect to the
aggregate  amount  of options exercised during the last fiscal year, any value
realized  thereon,  the number of unexercised options at the end of the fiscal
year  (exercisable  and  unexercisable)  and  the  value with respect thereto.

<TABLE>

<CAPTION>

                                                                Value  of  Unexercised
                 Shares               Number of Unexercised     in-the-Money Options at
                Acquired on   Value  Options at Fiscal Year-End     Fiscal Year-End(1)
Name              Exercise  Realized  Exercisable  Unexercisable  Exercisable  Unexercisable


<S>                   <C>       <C>        <C>           <C>            <C>          <C>


Manuel J. Mehos       --        --       42,750         35,250     $330,188    $220,938
John D. Bird          --        --       19,422          6,606      200,336      42,070
Gary R. Garrett       --        --       18,323         10,836      177,176      67,667
David R. Graham       --        --       18,584          8,691      185,306      54,642
Catherine N. Wylie    --        --       17,796         10,836      170,903      67,667
</TABLE>




(1)     Based upon a closing market price for the Company's Common Stock as of
December  31,  1996  of  $22.875.

COMPARATIVE  STOCK  PERFORMANCE  GRAPH

     The  stock  performance  graph  below  compares  the  cumulative  total
stockholder  return  of  the  Company's  Common Stock from March 25, 1992 (the
effective date of the Company's public offering) to December 31, 1996 with the
cumulative  total  return  of  the  National Association of Securities Dealers
Automated  Quotations  ("NASDAQ")  Market  Index  and  certain  SNL  thrift
institutions  traded on the NASDAQ, as compiled by SNL Securities, L.P. in its
OTC  Thrift  Index,  assuming  an investment of $100 on March 25, 1992 and the
reinvestment  of  all  dividends.  The  Company  did  not pay dividends on the
Company's  Common  Stock  during  1992 or 1993.  In 1994, the Company paid its
first dividend of $.08 per share on June 15, 1994.  Quarterly dividends of the
same  amount  were  paid  on  September 15, 1994, December 15, 1994, March 15,
1995,  June 15, 1995, September 15, 1995, and December 15, 1995.  The Board of
Directors  voted  at the January 25, 1996 regularly scheduled Board Meeting to
increase  the  dividend  for the fourth quarter of 1995 from $.08 per share to
$.10  per share.  Quarterly dividends of $.10 per share were paid on March 15,
1996,  June  15,  1996,  September  15,  1996  and  December  15,  1996.

<PAGE>
         Comparison of Five Year-Cumulative Total Return Performance


<TABLE>

<CAPTION>

                                         Period  Ending
Index                3/25/92  12/31/92  12/31/93   12/31/94   12/31/95  12/31/96


<S>                    <C>         <C>     <C>       <C>       <C>        <C>

Coastal Bancorp, Inc.  100.00    106.25    110.42    121.46    150.91     201.51
NASDAQ - Total US      100.00    109.87    126.12    123.28    174.34     214.45
OTC Thrifts            100.00    143.05    198.18    199.86    303.90     395.36
</TABLE>




























Notes:
     A.          Initial  Public  Offering
     B.      Each index is weighted for all companies that fit the criteria of
that  particular  index.  The index is calculated to exclude companies as they
are  acquired,  and  add them to the index calculation as they become publicly
traded  companies.   All companies in existence at a certain time are included
in  the  calculations.
     C.          Each  index value measures dividend re-investment by assuming
dividends  are  received  in cash on the ex-date and re-invested back into the
company  stock  paying  the  dividend on the same day.  The stock price on the
ex-date  is used to calculate how many shares can be bought with the dividend.

Prepared  by  SNL  Securities  LP
Charlottesville,  VA  22902

CERTAIN  TRANSACTIONS

     The  Company  may  make  home  mortgage  or  consumer loans to directors,
officers  and employees.  Any such loan will be made in the ordinary course of
business  and  on  the same terms and conditions, including interest rates and
collateral,  as those prevailing for comparable transactions at that time with
non-affiliated  parties.    The Company had no loans to directors or executive
officers  outstanding  at the year ended 1996.  However, Ms. Vadasz had a loan
collateralized  by  a  certificate  of  deposit that was paid off in the first
quarter  of  1996.  As a result of the enactment of the Financial Institutions
Reform,  Recovery,  and  Enforcement Act of 1989 ("FIRREA") on August 9, 1989,
Section  22(h)  of  the  Federal  Reserve  Act  became applicable to a savings
institution,  such  as  the Bank.  This law generally provides that any credit
extended by a savings institution to its executive officers, directors and, to
the  extent  otherwise  permitted,  principal  stockholder(s),  or any related
interest  of  the  foregoing,  must  (i)  be  on substantially the same terms,
including  interest  rates and collateral, as those prevailing at the time for
comparable  transactions  by  the  savings  association  with  non-affiliated
parties; (ii) be pursuant to underwriting standards that are no less stringent
than  those applicable to comparable transactions with non-affiliated parties;
(iii)  not  involve  more  than  the normal risk of repayment or present other
unfavorable features; and (iv) not exceed, in the aggregate, the institution's
unimpaired  capital  and  surplus,  as  defined.

     In  1987, the Bank entered into an Administrative Services Agreement with
Coastal  Banc  Insurance  Agency,  Inc. ("CBIA"), a Texas business corporation
licensed  under  Texas  law  to  act  as  a  life  insurance  agent.   CBIA is
wholly-owned  by  an  executive  officer of the Bank who receives no salary or
dividends  from CBIA.  CBIA has granted to the Bank the legal ownership of all
of  its  books and records and the stockholder of CBIA has granted to the Bank
the  right  to  assign all of its stock in CBIA to any other properly licensed
life  insurance  agent  in the Bank's sole discretion.  The Bank has agreed to
provide  to  CBIA  certain  services,  including  but  not limited to employee
training,  office  space,  furniture,  fixtures, equipment, clerical services,
data  processing and other services as well as marketing leads and information
to assist CBIA in the sale of annuities underwritten by an independent annuity
company  to  the Bank's deposit and loan customers.  In consideration for such
services,  CBIA  has  agreed  to  pay  the Bank a flat fee which is subject to
renegotiation  on  a  quarterly  basis.   The fee payable to the Bank was last
negotiated  on December 16, 1996, and was $230,000 for the year ended December
31, 1996.  Such fee represented substantially all of CBIA's net income for the
year  then  ended.

             RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS


     The Board of Directors of the Company has appointed KPMG Peat Marwick LLP
as independent auditors for the Company for the year ending December 31, 1997,
and  has  further  directed  that  the  selection of auditors be submitted for
ratification  by the stockholders at the Annual Meeting.  The Company has been
advised  by  KPMG  Peat  Marwick  LLP  that  neither  the  firm nor any of its
associates  has  any  relationship  with the Company or its subsidiaries other
than the usual relationship that exists between independent public accountants
and  clients.   KPMG Peat Marwick LLP will have one or more representatives at
the  Annual Meeting who will have an opportunity to make a statement, if he or
she  so  desires,  and  will be available to respond to appropriate questions.


     THE  BOARD  OF  DIRECTORS  RECOMMENDS  A  VOTE  "FOR" RATIFICATION OF THE
APPOINTMENT  OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS FOR FISCAL 1997.

                            STOCKHOLDER PROPOSALS

     Any  proposal  which  a  stockholder wishes to have presented at the next
Annual  Meeting  of  Stockholders  of  the  Company  and included in the proxy
materials used by the Company in connection with such meeting must be received
at  the  corporate headquarters office of the Company at Coastal Banc Tower, 8
Greenway  Plaza,  Suite 1500, Houston, Texas 77046, no later than November 25,
1997.   If such proposal is in compliance with all of the requirements of Rule
14a-8  promulgated  under  the  Exchange Act, it will be included in the Proxy
Statement  and  set  forth  on  the  form  of proxy issued for the next Annual
Meeting  of  Stockholders.    It  is  urged that any such proposals be sent by
certified  mail,  return  receipt  requested.

     Stockholder  proposals  which  are  not  submitted  for  inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought  before  an  annual  meeting  pursuant  to  the  Company's Articles of
Incorporation,  which  provides  that business must be properly brought before
the  meeting  by  or  at the direction of the Board of Directors, or otherwise
properly  brought  before  the  meeting  by a stockholder.  For business to be
properly  brought  before  an annual meeting by a stockholder, the stockholder
must  have  given  timely  notice  thereof  in writing to the Secretary of the
Company.  To be timely, a stockholder's notice must be delivered to, or mailed
and  received at, the principal executive offices of the Company not less than
60 days prior to the anniversary date of the mailing of proxy materials by the
Company  in  connection  with  the  immediately  preceding  annual  meeting of
stockholders  of  the  Company.   A stockholder's notice shall set forth as to
each  matter  the  stockholder proposes to bring before an annual meeting such
information  specified  in  the  Company's  Articles of Incorporation.  If the
proposal  is  not  made  in  accordance  with  the  terms  of  the Articles of
Incorporation, such proposal will not be acted upon at the Annual Meeting.  No
stockholder  proposals  were  received  by  the Company in connection with the
Annual  Meeting.

                                OTHER MATTERS

     Management is not aware of any business to come before the Annual Meeting
other than those matters described above in this Proxy Statement and possibly,
procedural  matters  incident  to the conduct of the meeting.  However, if any
other matters should properly come before the meeting, it is intended that the
proxies  solicited hereby will be voted with respect to those other matters in
accordance  with  the  judgment  of  the  persons  voting  the  proxies.

     The  cost  of  the solicitation of proxies will be borne by the Company. 
The  Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries  for  reasonable  expenses  incurred  by  them  in  sending  proxy
materials to the beneficial owners of the Company's Common Stock.  In addition
to  solicitations by mail, directors, officers and employees of the Company or
its  subsidiary  may  solicit  proxies  personally  or  by  telephone  without
additional  compensation.

                    ANNUAL REPORT AND FINANCIAL STATEMENTS

     A  copy  of  the  Company's Annual Report for the year ended December 31,
1996 ("Annual Report") accompanies this Proxy Statement.  The Annual Report is
not  a  part  of  the  proxy  solicitation  materials.

     UPON  RECEIPT  OF  A  WRITTEN  REQUEST,  THE  COMPANY WILL FURNISH TO ANY
STOCKHOLDER,  WITHOUT  CHARGE,  A  COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-K  FOR  THE YEAR ENDED DECEMBER 31, 1996, AND ANY EXHIBITS THERETO REQUIRED
TO  BE  FILED  WITH  THE SECURITIES AND EXCHANGE COMMISSION UNDER THE EXCHANGE
ACT.    SUCH  WRITTEN  REQUEST SHOULD BE DIRECTED TO CATHERINE N. WYLIE, CHIEF
FINANCIAL  OFFICER,  COASTAL  BANCORP,  INC.,  COASTAL  BANC TOWER, 8 GREENWAY
PLAZA,  SUITE  1500, HOUSTON, TEXAS 77046.  THE FORM 10-K IS NOT A PART OF THE
PROXY  SOLICITATION  MATERIALS.

                              By  Order  of  the  Board  of  Directors




     /s/    Linda  B.  Frazier
     Linda  B.  Frazier
     Secretary

March  24,  1997