March 28, 2000


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
corporate  offices  of Coastal Bancorp, Inc., at 5718 Westheimer, Houston, Texas
in  the  Coastal  Banc  auditorium,  Suite 1101, on Thursday, April 27, 2000, 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  of  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 PLAZA
                           5718 WESTHEIMER, SUITE 600
                              HOUSTON, TEXAS  77057

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                            TO BE HELD APRIL 27, 2000

     NOTICE  IS  HEREBY  GIVEN  that the Annual Meeting of Stockholders ("Annual
Meeting") of Coastal Bancorp, Inc. (the "Company") will be held at the corporate
offices of Coastal Bancorp, Inc., at 5718 Westheimer, Suite 1101, Houston, Texas
at  11:00  a.m., Central Time, on April 27, 2000 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 2003 and until their successors are elected
and  qualified;

     (2)     To  ratify the appointment of KPMG LLP as the Company's independent
auditors  for  the  fiscal  year  ending  December  31,  2000;  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 29, 2000 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  28,  2000


     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.

<PAGE>
------





                              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 corporate offices of Coastal Bancorp, Inc., at 5718 Westheimer,
Houston,  Texas  in  the  Coastal  Banc  auditorium,  Suite 1101, at 11:00 a.m.,
Central  Time,  on April 27, 2000 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
28,  2000.

     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  LLP  as the  company's   independent  auditors  for the fiscal year ending
December  31, 2000; 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  of  revocation thereof (Linda B. Frazier, Coastal Bancorp, Inc., Coastal
Banc Plaza, 5718 Westheimer, Suite 600, Houston, Texas 77057), (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. (the "Company") is engaged primarily in the business
of serving as the parent holding company for Coastal Banc ssb (the "Bank").  The
Company  was incorporated in March 1994 in connection with the reorganization of
Coastal  Banc  Savings  Association,  a  Texas-chartered thrift institution (the
"Association")  into  the  holding  company form of organization.  In connection
with  the  reorganization,  which  was  completed  in July 1994, the Association
concurrently  converted into a Texas-chartered savings bank and took its present
name.  In  November  1996,  in  order  to  minimize  state  taxes, the Company's
corporate  structure  was  again  reorganized  by  forming  Coastal Banc Holding
Company,  Inc.  ("HoCo")  as  a  Delaware  holding  company.  HoCo  became  a
wholly-owned  subsidiary  of  the  Company  and  the  Bank became a wholly-owned
subsidiary  of  HoCo.  Coastal Bancorp, Inc. is a registered unitary 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 29, 2000 ("Record Date") will be entitled to notice of, and
to vote at, the Annual Meeting.  On the Record Date, there were 6,354,187 shares
of  Common Stock outstanding and the Company had no other class of voting 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 in
interest  of  those  present  (in  person  or by proxy) at the Annual Meeting is
required  to  approve  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 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."


<PAGE>
     At  February  29,  2000, directors, executive officers and their affiliates
beneficially  owned  1,636,960  shares  of  Common  Stock or 24.46% 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 the proposal to ratify the selection of KPMG
LLP  as  the  Company's  independent  auditors.

     The following table sets forth the beneficial ownership of the Common Stock
as  of  February 29, 2000, 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 Plaza, 5718 Westheimer, Suite 600, Houston, Texas 77057.  Except as
set  forth  below,  as  of  February 29, 2000, 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.

<TABLE>
<CAPTION>


                                              Amount of Shares of
                                                  Common Stock
Name                                           Beneficially Owned
(and Address) of                               as of February 29,     Percent of
Beneficial Owner                                    2000(1)              Class
------------------------------------------  ------------------------  -----------
<S>                                         <C>                       <C>

First Manhattan Co.
437 Madison Avenue
New York, New York 10022                                  616,095(2)        9.21%

Thomson Horstmann & Bryant, Inc.
Park 80 West, Plaza II
Saddle Brook, New Jersey 07662                            608,300(2)        9.09

Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401                            460,550(2)        6.88

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

D. Fort Flowers, Jr., Director
Coastal Bancorp, Inc. and Coastal Banc ssb                274,020(4)        4.09

Dennis S. Frank, Director                                                      *
Coastal Bancorp, Inc. and Coastal Banc ssb                    2,700

Paul W. Hobby, Director
Coastal Bancorp, Inc. and Coastal Banc ssb                    1,000            *
                                            (continued on next page)
</TABLE>




<PAGE>
<TABLE>
<CAPTION>
                                                Amount of Shares of
                                                    Common Stock
Name                                             Beneficially Owned
(and Address) of                                 as of February 29,   Percent of
Beneficial Owner                                      2000(1)            Class
----------------------------------------------  --------------------  -----------
<S>                                             <C>                   <C>


Robert E. Johnson, Jr., Director
Coastal Bancorp, Inc. and Coastal Banc ssb                   19,320            *

Manuel J. Mehos, Chairman of the Board,
President and Chief Executive Officer
Coastal Bancorp, Inc., Coastal Banc Holding
Company, Inc. and Coastal Banc ssb                        601,500(5)        8.99

James C. Niver, Director
Coastal Bancorp, Inc. and Coastal Banc ssb                553,428(6)        8.27%

Gary R. Garrett, Sr. Executive Vice President
and Chief Lending Officer                                  61,241(5)
Coastal Banc ssb                                                               *

David R. Graham, Executive Vice President
-Real Estate Lending
Coastal Banc ssb                                           29,780(5)           *

Nancy S. Vadasz, Executive Vice President
Market and Product Strategies
Coastal Banc ssb                                           29,094(5)           *

Catherine N. Wylie, Sr. Executive Vice
President and Chief Financial Officer Coastal
Bancorp, Inc., Coastal Banc Holding
Company, Inc. and Coastal Banc ssb                      64,877(5)(7)           *

All directors and executive officers of the
Company and the Bank as a group (11 persons)            1,636,960(5)       24.46
</TABLE>

----------------------

     (footnotes  on  next  page)



*     Represents  less  than  1.0%  of  the  Common  Stock  beneficially  owned.







<PAGE>
(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, 269,520 are owned by a trust over which Mr. Flowers has
shared  voting  and  dispositive  power  with  two  other  co-trustees.

(5)     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 60,741, 29,780, 158,000, 29,094 and 60,952 shares
which  may  be  received  upon the exercise of stock options by Messrs. Garrett,
Graham  and  Mehos  and  Mmes. Vadasz and Wylie, respectively, pursuant to stock
options.  For  all  directors  and  executive officers as a group, the number of
shares  includes  338,567  shares  of  Common Stock subject to outstanding stock
options.

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

(7)     Ms.  Wylie  is  the beneficial owner of 2,000 shares of the Bank's 9.12%
Cumulative  Preferred  Stock,  Series  A.

----------------------


               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.

     Two directors are to be elected at this Annual Meeting to hold office until
the  Annual Meeting in 2003 or until their successors are elected and qualified.
The  information  set  forth  below relating to a director's tenure is as of the
date  he was first elected as director of either the Association or the Company,
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

     Information concerning those members of the Board whose terms do not expire
in  2000,  including  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  49.  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  2001.

     D.  FORT  FLOWERS,  JR.  Age  38.  Director since 1992.  Mr. Flowers is the
President  of  Sentinel  Trust  Company,  a  Texas  Limited Banking Association,
Houston,  Texas,  providing  fiduciary  and  investment  management  services to
affluent  families,  their closely held corporations and foundations, a position
he has held since January 1997.  Mr. Flowers was Chairman of the Board of DIFCO,
Inc.,  a railroad car engineering and manufacturing company from before the time
he became a director until August, 1997 when that company was sold.  His term as
a  director  of  the  Company  will  expire  in  2001.

     DENNIS  S. FRANK.  Age 43.  Director since 1988.  Mr. Frank is the Chairman
of  the  Board,  Chief Executive Officer and President of Silvergate Bancorp, 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 2001.


<PAGE>
     PAUL  W.  HOBBY.  Age  39.  Director  since  January,  1999.  Mr.  Hobby is
Chairman  and  Chief  Executive  Officer of Hobby Media Services, Inc., Houston,
Texas,  a  Houston  based corporation which invests in traditional and new media
services.  Mr.  Hobby  also  serves  on the board of directors of various civic,
charitable and professional associations.  His term as a director of the Company
will  expire  in  2002.

     ROBERT  E.  JOHNSON,  JR.  Age  46.  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  2002.


INFORMATION  WITH  RESPECT  TO  NOMINEES  FOR  DIRECTOR

     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 either of the nominees listed below
may  not  be  able  to  serve  as  a  director  if  elected.

     Information  concerning  the  nominees for director, including 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 45.  Director since 1986.  Mr. Mehos is the Chairman
of the Board, President and Chief Executive Officer of the Company, Coastal Banc
Holding  Company,  Inc., Coastal Banc Capital Corp., 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,  all of which are 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  2003.

     JAMES  C.  NIVER.  Age  70.  Director since 1986.  Mr. Niver is retired and
from  1972  until  1995  was  employed  by Century Land Company, Houston, Texas,
retiring  as  its  President.  If elected, his term as a director of the Company
will  expire  in  2003.

                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 at least
quarterly  and  special meetings may be called at any time as necessary.  During
the  year  ended  December  31, 1999, the Board of Directors of the Company held
eleven  meetings.  No  incumbent director of the Company attended fewer than 75%
of the Board meetings held during the period in which he served as a director in
1999.

     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.

     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, 1999, 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  1999.

     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, 1999,
the  Bank  had  various  committees,  including  an  Audit,  Compensation,
Asset/Liability,  Directors'  Loan  Review  and  Community  Reinvestment  Act
Committee.

     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  six times during 1999.

     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
three  times  during 1999.  See "Executive Compensation - Report of the Board of
Directors  on  Compensation  During  Fiscal  1999."

     The  Asset/Liability Committee met four times in 1999 to review and analyze
the  investment  securities portfolio, insure that the Bank's interest rate risk
policy is followed and to insure that policies and procedures for all investment
securities are adequate and appropriate.  The Committee also makes interest rate
risk  assessments  and  formulates  asset/liability  management  policy  for the
forthcoming  quarterly  period.  This  Committee  consists  of  Messrs.  Frank
(Chairman),  Flowers,  Mehos  and  Hobby.

     The  Directors'  Loan  Review Committee met twelve times in 1999 to approve
and/or  review  certain  loans.  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  Review Committee consists of Messrs. Mehos (Chairman), Flowers
and  Niver.

     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), Frank, Mehos and Johnson and
met  two  times  in  1999.

BOARD  FEES

     During  1999,  each  non-employee  director of the Company and the Bank was
paid  a  fee of $2,000 for attendance at Board meetings, $400 for each committee
meeting attended and $800 for each Loan Review Committee meeting attended.  When
the  Board  of  the Company meets on the same day as the Board of the Bank, only
one  attendance 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,
directors  and  beneficial  owners  of  more  than  10%  of  any class of equity
securities  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, 1999, all Section 16(a) filing requirements
applicable  to  the  Company's  officers and directors of the Company and/or the
Bank  were  complied  with.


<PAGE>
EXECUTIVE  OFFICERS  WHO  ARE  NOT  DIRECTORS

     The following table sets forth information concerning executive officers of
the  Company,  the  Bank or other subsidiaries who do not serve on the Company's
Board  of  Directors.  All  executive  officers  are  elected  by  the  Board of
Directors  of  the Company or the Bank or of the respective subsidiary and serve
until  their successors are elected and qualified.  No such executive officer is
related to any director or other executive officer of the Company or 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.

<TABLE>
<CAPTION>
                                             Position with the Company and/or
                                             the Bank and other subsidiaries
 Name               Age                 Principal Occupation During Last Five Years
----------------    ----  --------------------------------------------------------------------

<S>                 <C>  <C>
John D. Bird         56  Retired from the Bank on January 31, 2000; Executive Vice President of
                         the Bank since August 1993, Chief Administrative Officer since June
                         1993, and Assistant Secretary of the Bank since March 1986; Chief
                         Operations Officer of the Bank 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      53  Senior Executive Vice President of the Bank since July 1999 and
                         Executive Vice President of the Bank from August 1993 to July 1999 and
                         a director of each of the Bank's subsidiaries; Chief Lending Officer of the
                         Bank since 1995; Senior Vice President-Mortgage Lending of the Bank
                         from October 1991 to August 1993; Chief Executive Officer and President
                         of CBS Mortgage Corp. from August 1993 through its dissolution into the
                         Bank in December 1998; Executive Vice President, CBS Mortgage Corp.
                         from January 1989 to August 1993.  Director and Executive Vice President
                         of Coastal Banc Capital Corp., an affiliate of the Bank, since August 1997.

David R. Graham      56  Executive Vice President of the Bank since August 1993 and a director of
                         each of the Bank's subsidiaries; Senior Vice President-Real Estate Lending
                         Division of the Bank from May 1988 to August 1993.  Senior Vice
                         President of CBS Asset Corp. since April 1993.

Nancy S. Vadasz      46  Executive Vice President of the Bank since June of 1994, Senior Vice
                         President since September 1991.  Ms. Vadasz is responsible for Market
                         and Product Strategies.

Catherine N. Wylie   45  Senior Executive Vice President of the Company, Coastal Banc Holding
                         Company, Inc. and the Bank since July 1999 and a director of Coastal
                         Banc Holding Company, Inc., and of each of the Bank's subsidiaries;
                         Executive Vice President of Coastal Banc Holding Company, Inc. from
                         November 1996 to July 1999, of the Company from July 1994 to July
                         1999 and of the Bank from August 1993 to July 1999; Chief Financial
                         Officer of the Company and the Bank since October 1993; Controller of
                         the Bank from April 1989 to October 1993; also Executive Vice
                         President/Treasurer of each of the Bank's subsidiaries since October 1990.
                         Director and Executive Vice President of  Coastal Banc Capital Corp., an
                         affiliate of the Bank  since August 1997.
</TABLE>



<PAGE>

                             EXECUTIVE COMPENSATION

     REPORT  OF  THE  COMPENSATION  COMMITTEE  OF  THE  BOARD  OF  DIRECTORS  ON
COMPENSATION  DURING  FISCAL  1999.  Officers  of  the  Company  do  not receive
separate  compensation  for  their  services  to  the  Company.

     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  senior  executive  officers  of  the  Bank and
recommending  senior  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  are 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 $4.0 billion in
asset size.  In May 1992, the Bank retained an executive compensation consultant
to  review its senior executive compensation policies.  The consultant developed
a  compensation  program  for  the  Bank's  senior 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 senior executive
officers annually.  A senior 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
senior  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 senior executive
officers comparable or better than the comparable executive compensation for the
senior  executive  officers in the Bank's peer group.  Based upon the foregoing,
Mr.  Mehos,  the  Chief Executive Officer, earned $303,500 in base salary during
1999.

     The  amount  of  incentive  compensation  is  related  to  the  financial
performance  of  the  Bank.  No  cash incentive compensation will be paid to the
Bank's  senior  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  1999, the Board of Directors determined that no incentive awards to
its  Senior  Executive Management would be paid unless a 10.0% 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 1999, the
Committee  calculated  that  the  Company  achieved  a  8.83%  ROE, therefore no
incentive  awards were paid to senior executive officers of the Company or Bank.
During  1999,  Ms.  Wylie  received a $100,000 bonus.  See "Summary Compensation
Table."

                                        By  the  Committee:




                                        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,  1999,  1998  and  1997.

<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,           1999   $303,500   $     --        45,000       $ 2,850
 President and                   1998    269,900    174,899        10,000         2,000
 Chief Executive Officer         1997    264,000    127,900        22,000         2,000

John D. Bird                     1999    132,500         --         4,000         8,866
Executive Vice President and     1998    128,369     27,000         2,000         8,000
 Chief Administrative Officer    1997    124,630     30,000         5,000         8,000

Gary R. Garrett                  1999    210,000         --        20,000         7,000
Sr. Executive Vice President     1998    179,900     87,149         3,000         5,669
 and Chief Lending Officer       1997    164,800     64,000        11,000         5,000

David R. Graham                  1999    137,700     29,500         6,000         3,203
Executive Vice President         1998    131,071     34,291         2,000         2,000
 Real Estate Lending Division    1997    124,630     32,895         8,000         2,000

Catherine N. Wylie               1999    210,000    100,000        20,000        25,119
Sr. Executive Vice President     1998    179,900     87,149         3,000        26,120
 and Chief Financial Officer     1997    164,800     64,000        11,000         5,000

</TABLE>

----------------------


(1)     Principal  positions  are  for  fiscal  1999.
(2)     Does not include amounts attributable to miscellaneous benefits received
by  executive  officers  of  the  Bank, including use of Bank-owned vehicles and
reimbursement  of  educational  expenses.  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, 1999 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  casesin  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  (401(k))  Plan,  any car
allowances  and  educational  reimbursements.

<PAGE>
EXECUTIVE  SEVERANCE  AGREEMENTS

     On  May  27,  1999,  the  Company  and  the  Bank  extended the term of the
executive  severance  agreements (the "Executive Severance Agreements") with Mr.
Garrett  and  Ms. Wylie (the "Employees" or "Employee") three years to expire on
May  31,  2003.  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 of the
Employee's  employment  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 for a trigger event described in (i)
above  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 for a trigger event described in (ii) or (iii) above 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 Employee to become immediately
exercisable  in  full.  The Executive Severance Agreement also provides that the
Company  will  reimburse  the  Employee  for  all  costs and expenses, including
reasonable  attorney's  fees  incurred  by  the  Employee  to  enforce rights or
benefits  under  such  agreements. Other than the foregoing, the Company has not
entered  into  any  employment  contracts  with  any  of  its  officers.

     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.

     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
the  Executive  Severance  Agreement;  (iv)  the  Company, the Bank or successor
thereto  breaches any provision of the Executive Severance 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 the
Executive  Severance  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 and
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 modified period
commencing  on  May 31, 1999 (the "Effective Date") and ending on the earlier of
(i)  May  31, 2003, or (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.


<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          45,000       24.35%         $16.00       5/27/09       $365,220
John D. Bird              4,000        2.16           16.00       5/27/09         32,464
Gary R. Garrett          20,000       10.82           16.00       5/27/09        162,320
David R. Graham           6,000        3.25           16.00       5/27/09         48,696
Catherine N. Wylie       20,000       10.82           16.00       5/27/09        162,320
</TABLE>

----------------------

(1)     Total options granted in 1999 were 184,800 shares.  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  granted  on  May  27, 1999, respectively, were as follows:  an expected
volatility  rate  of  36.156%,  a risk free rate of return of 5.628%, a dividend
yield  of  $.32  per  share  per  year  and the expiration date of May 27, 2009,
respectively.


<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              --             --       158,000       47,000        $865,586       $61,984
John D. Bird             27,880       $169,792        18,786        5,875         176,410         8,869
Gary R. Garrett              --             --        60,741       22,495         377,086        34,721
David R. Graham              --             --        29,780        8,791         144,856        14,008
Catherine N. Wylie           --             --        60,952       21,494         369,614        34,136
</TABLE>

----------------------

(1)     Based  upon  a closing market price for the Company's Common Stock as of
December  31,  1999  of  $17.50.


COMPARATIVE  STOCK  PERFORMANCE  GRAPH

     The stock performance graph below compares the cumulative total stockholder
return of the Company's Common Stock from December 31, 1994 to December 31, 1999
with  the  cumulative  total  return  of  the National Association of Securities
Dealers  Automated  Quotations  ("NASDAQ")  Market  Index  and  certain  thrift
institutions  traded  on  the NASDAQ, as compiled by SNL Securities, L.P. in its
OTC  Thrift  Index,  assuming an investment of $100 on December 31, 1994 and the
reinvestment  of all dividends.  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.  During  1997,  the Company paid
quarterly  dividends  in  the  amount  of  $.10  per share on March 15, 1997 and
quarterly  dividends  of $.12 per share on June 15, 1997, September 15, 1997 and
December  15,  1997.  In 1998, the Company split the stock 3:2 at which time the
$.12 per share dividend, adjusted for the split was $.08 per share.  During 1998
and  1999, the Company paid quarterly dividends in the amount of $.08 per share,
as adjusted for the stock split, on March 15, 1998, June 15, 1998, September 15,
1998,  December  15, 1998, March 15, 1999, June 15, 1999, September 15, 1999 and
December  15,  1999.

<PAGE>
            COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURN PERFORMANCE

<TABLE>
<CAPTION>
                                                 PERIOD  ENDING
                         ---------------------------------------------------------------
INDEX                    12/31/94   12/31/95   12/31/96   12/31/97   12/31/98   12/31/99
<S>                       <C>       <C>        <C>        <C>        <C>        <C>
Coastal Bancorp, Inc.     100.00     124.25     165.91     257.17     196.48     200.14
NASDAQ - Total US*        100.00     141.33     173.89     213.07     300.25     542.43
SNL OTC Thrift Index      100.00     152.05     197.81     321.29     280.92     241.62
SNL $1B-$5B Bank Index    100.00     134.48     174.33     290.73     290.06     266.58
SNL $1B-$5B Thrift Index  100.00     153.72     201.70     358.03     321.38     287.80
</TABLE>


SNL  Securities  LC                                            (804)  977-1600
  2000

*  Source:  CRSP,  Center  for  Research  in Security Prices, Graduate School of
Business,  The  University  of  Chicago 1999.  Used with permission.  All rights
reserved.  crsp.com.

______________

Notes:
     A.     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  the  particular  Index that were in existence at
December  31,  1999  are  included  in  the  calculations.
     B.     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.

CERTAIN  TRANSACTIONS

     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 31, 1999,
and  was  $580,000  for  the year ended December 31, 1999.  Such fee represented
substantially  all  of  CBIA's  net  income  for  the  year  then  ended.


<PAGE>
           PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS

     The Board of Directors of the Company has appointed KPMG LLP as independent
auditors  for the Company for the year ending December 31, 2000, 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 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 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  LLP  AS  INDEPENDENT  AUDITORS  FOR  FISCAL  2000.

                              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 Plaza, 5718
Westheimer,  Suite  600,  Houston, Texas 77057, no later than November 28, 2000.
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  provide 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 2000 Annual Meeting.

                               PROXY SOLICITATION

     The  Company  has  not  retained a professional proxy solicitation firm, to
assist  in  the  solicitation  of  proxies  or  for  related  services.


<PAGE>
                                  OTHER MATTERS

     Management  is  not  aware  of  any business to come before the 2000 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, 1999
("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, 1999, 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 PLAZA, 5718 WESTHEIMER, SUITE 600,
HOUSTON,  TEXAS  77057.  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  28,  2000