March 26, 2002





Dear  Stockholder:

     You  are cordially invited to attend the Annual Meeting of the Stockholders
(the  "Annual  Meeting")  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  25,  2002,  at  12:00  noon,  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  a  director  and ratify the Company's independent public accountants. 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"  the proposals at the Annual Meeting.  Directors and officers of the
Company and representatives of the Company's independent public accountants 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 25, 2002

     NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "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
77057  at  12:00  noon,  Central  Time,  on April 25, 2002.  At the meeting, the
holders  of the Company's common stock will act on the following matters, all of
which  are  more  completely  set  forth  in  the  accompanying Proxy Statement:

     (1)     To  elect  one  director  of  the Company to serve until the annual
meeting  of stockholders in the year 2005 and until his successor is elected and
qualified;

     (2)     To  ratify the appointment of KPMG LLP as the Company's independent
public  accountants  for  the  fiscal  year  ending  December  31,  2002;  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 26, 2002 for the determination of
the holders of the Company's common stock 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  26,  2002


     YOU  ARE  CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING.  EACH SHAREHOLDER
AND  GUEST  MAY  BE  REQUIRED  TO  PRESENT  A  VALID  PICTURE IDENTIFICATION FOR
ADMISSION.  CAMERAS,  RECORDING DEVICES AND OTHER ELECTRONIC DEVICES WILL NOT BE
PERMITTED  AT  THE  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.
                       2002 ANNUAL MEETING OF STOCKHOLDERS
                                 PROXY STATEMENT

                                TABLE OF CONTENTS


PROXY  STATEMENT                                                          1
BACKGROUND  INFORMATION                                                   2
VOTING  SECURITIES  AND  BENEFICIAL  OWNERSHIP                            2
NOMINEE FOR DIRECTOR AND INFORMATION WITH RESPECT TO CONTINUING DIRECTORS 6
STOCKHOLDER  NOMINATIONS                                                  8
BOARD  AND  COMMITTEE  MEETINGS                                           8
BOARD  FEES                                                               9
2002  NON-EMPLOYEE  DIRECTOR  STOCK  PURCHASE  PLAN                      10
REPORT  OF  THE  AUDIT  COMMITTEE                                        10
COMPENSATION  COMMITTEE  INTERLOCKS  AND  INSIDER  PARTICIPATION         13
EXECUTIVE  OFFICERS  WHO  ARE  NOT  DIRECTORS                            13
EXECUTIVE  COMPENSATION                                                  14
EXECUTIVE  SEVERANCE  AGREEMENTS                                         17
AGGREGATE  OPTIONS  GRANTED  IN  LAST  FISCAL  YEAR                      19
COMPARATIVE  STOCK  PERFORMANCE  GRAPH                                   20
PROPOSAL  TO  RATIFY  THE  INDEPENDENT  PUBLIC  ACCOUNTANTS              22
STOCKHOLDER  PROPOSALS                                                   23
PROXY  SOLICITATION                                                      24
OTHER  MATTERS                                                           24
ANNUAL  REPORT  AND  FINANCIAL  STATEMENTS                               24

APPENDIX
---------
AUDIT  COMMITTEE  CHARTER                                               A-1


<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
(the  "Annual  Meeting") to be held at the corporate offices of Coastal Bancorp,
Inc.,  at  5718 Westheimer, Houston, Texas in the Coastal Banc auditorium, Suite
1101,  at  12:00 noon, Central Time, on April 25, 2002 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  26,  2002.

     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 nominee as
Director of the Company; (ii) for the proposal to ratify the appointment of KPMG
LLP  as  the Company's independent public accountants for the fiscal year ending
December  31, 2002; 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  77057-5745), (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.  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 subsidiary of HoCo.  Coastal Bancorp, Inc.
is a registered unitary savings and loan holding company regulated by the Office
of  Thrift  Supervision,  a  division  of  the  U.S. Department of the Treasury.


                        VOTING SECURITIES AND BENEFICIAL
                                OWNERSHIP THEREOF

     Only  holders  of  record  of  the  Company's  Common Stock at the close of
business on February 26, 2002 (the "Record Date") will be entitled to notice of,
and  to  vote  at, the Annual Meeting.  On the Record Date, there were 5,848,167
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  public  accountants.

     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 public accountants, 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  26,  2002, directors, executive officers and their affiliates
beneficially  owned  1,695,771  shares  of  Common  Stock or 27.25% 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 nominee 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  public  accountants.

     The following table sets forth the beneficial ownership of the Common Stock
as  of  February 26, 2002, 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 wholly-owned subsidiary, Coastal Banc Holding
Company,  Inc.  ("HoCo")  and  its subsidiary, Coastal Banc ssb, as a group. The
address  for  all  directors and executive officers of the Company, HoCo and the
Bank  is  Coastal  Banc Plaza, 5718 Westheimer, Suite 600, Houston, Texas 77057.
Except  as set forth below, as of February 26, 2002, 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 26,     Percent of
Beneficial Owner                                    2002(1)             Class
------------------------------------------  ------------------------  ----------
<S>                                         <C>                       <C>

First Manhattan Co.
437 Madison Avenue
New York, New York 10022                                 548,302 (2)        8.81

Thomson Horstmann & Bryant, Inc.
Park 80 West, Plaza One, 5th Floor
Saddle Brook, New Jersey 07663                           261,150 (2)        4.20

Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401                           455,450 (2)        7.32

Tontine Partners, L.P.
200 Park Avenue, Suite 3900
New York, New York 10166                                 375,450 (2)(7)     6.03

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)        4.40

Dennis S. Frank, Director
Coastal Bancorp, Inc. and Coastal Banc ssb                     0               *

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, Coastal Banc ssb and Co-Chairman
of Coastal Banc Capital Corp.                            650,250 (5)       10.45

James C. Niver, Director
Coastal Bancorp, Inc. and Coastal Banc ssb               553,428            8.89

Gary R. Garrett, Co-Chairman Coastal Capital Corp.        77,736 (5)        1.25

David R. Graham, Executive Vice President
-Commercial Real Estate Lending
Coastal Banc ssb                                          27,071 (5)           *

Robert V. New, Executive Vice President
and Chief Banking Officer
Coastal Banc ssb                                               0               *

Michael A. Presley, President
Coastal Banc Capital Corp                                  9,000 (5)           *

Catherine N. Wylie, Sr. Executive Vice
President and Chief Financial Officer
Coastal Bancorp, Inc., Coastal Banc Holding
Company, Inc., Coastal Banc ssb and the Principal
of Coastal Banc Capital Corp                              84,946 (5)(6)     1.36

All directors and executive officers of the
Company and the Bank as a group (10 persons)           1,695,771 (5)       27.25
                                                       ============     ========
</TABLE>
______________________
*     Represents  less  than  1.0%  of  the  Common  Stock  beneficially  owned.


     (footnotes  on  next  page)

<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  three  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 sixty (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 71,922, 9,962, 206,750, 0, 7,500 and
71,801  shares  which  may  be  received  upon  the exercise of stock options by
Messrs.  Garrett,  Graham,  Mehos,  New,  Presley  and  Ms. Wylie, respectively,
pursuant to stock options.  For all directors and executive officers as a group,
the  number  of  shares  includes  367,935  shares  of  Common  Stock subject to
outstanding  stock  options.

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

(7)     Based  on  information  disclosed  by the group of reporting persons set
forth herein on a Schedule 13G filed with the Securities and Exchange Commission
on  January  22, 2002, the following entities may be deemed to be the beneficial
owners  of  the  common  stock:  Tontine  Partners, L.P., 36,450 shares; Tontine
Overseas  Associates,  L.L.C.,  31,400  shares;  and Tontine Financial Partners,
L.P.,  307,600  shares.  The address for these entities is the same as set forth
in  the  chart  above.

<PAGE>
              INFORMATION WITH RESPECT TO THE NOMINEE 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.  Effective  December  31,  2001,  Mr. Paul Hobby
resigned  from the Board of Directors.  The Board of Directors has not nominated
anyone  to  replace  Mr.  Hobby  as  of  the  date  hereof.

     One  director  is to be elected at this Annual Meeting to hold office until
the  Annual  Meeting  in  2005  or until his successor is elected and qualified.
This  director  has  consented  to  serve if elected.  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  2002,  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  51.  Director  since  1986.  Mr.  Allday is a self
employed  consultant  who provides management consulting services for non-profit
organizations.  From  September  1993  to  January 1999, Mr. Allday was a senior
consultant with The Dini Partners, Inc., Houston, Texas, a company that provides
counseling  in  philanthropy  and  non-profit company management.  His term as a
director  of  the  Company  will  expire  in  2004.

     D.  FORT  FLOWERS,  JR.  Age  40.  Director since 1992.  Mr. Flowers is the
President  and  a  Director  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 is a Director and the
Vice  Chairman  of  the  Board  of  New Covenant Trust Company, a National Trust
Company.  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  2004.

<PAGE>

     DENNIS  S.  FRANK.  Age  45.  Director  since 1988.  Mr. Frank is the Chief
Executive  Officer  and President of Silvergate Capital Corporation, a financial
institution  holding company controlling Silvergate Bank, La Jolla, California a
position  he  has held since December 1996.  Additionally, he is the Chairman of
eClosure,  Inc.,  a  San  Diego based mortgage technology firm, and has been the
President  of  DSF  Management Company, a private investment company, located in
Houston,  Texas,  since  March 1994.  His term as a director of the Company will
expire  in  2004.

     PAUL  W.  HOBBY.  Age  41.  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  is a Director of Stewart Information Services Corp. which
is  the holding company for Stewart Title Company.  Mr. Hobby also serves on the
board  of  directors of various civic, charitable and professional associations.
Mr.  Hobby  resigned  as  a  Director  as  of  December  31,  2001.

     MANUEL  J. MEHOS.  Age 47.  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 as well as the Chief Executive Officer of
CoastalBanc  Financial  Corp.,  a Bank subsidiary and the Co-Chairman of Coastal
Banc  Capital  Corp.,  an  affiliate  of  the  Bank.  He  is also a Director and
President  of  CoastalBanc  Investment  Corporation,  which  is  a  wholly-owned
subsidiary  of  the  Bank,  located  in  Houston, Texas.  CoastalBanc Investment
Corporation  is  presently  inactive.  Mr.  Mehos  also  currently serves on the
Finance  Commission of Texas.  His term as a director of the Company will expire
in  2003.

     JAMES  C.  NIVER.  Age 72.  Director since 1986.  Mr. Niver is retired from
Century  Land Company, a Houston residential real estate development firm, which
he  founded  and  managed  from  1972  to  1995  at which time he retired as its
President.  His  term  as  a  director  of  the  Company  will  expire  in 2003.

INFORMATION  WITH  RESPECT  TO  THE  NOMINEE  FOR  DIRECTOR

     Unless  otherwise  directed,  each  proxy  executed  and  returned  by  a
stockholder  will  be  voted "FOR" the election of the nominee listed below.  If
the  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
the  nominee  listed  below  may  not be able to serve as a director if elected.

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

     ROBERT  E.  JOHNSON,  JR.  Age  48.  Director since 1986.  Mr. Johnson is a
partner  in  the  law firm of Johnson & Johnson, Austin, Texas.  If elected, his
term  as  a  director  of  the  Company  will  expire  in  2005.

<PAGE>

                THE BOARD OF DIRECTORS RECOMMENDS THAT THE ABOVE
                  NOMINEE BE ELECTED A DIRECTOR 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 sixty (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, 2001, the Board of Directors of the Company held
nine  (9)  meetings.  All  incumbent  directors of the Company attended at least
seventy-five percent (75%) of the Board meetings held during the period in which
he  served  as  a  director  in  2001.

     The  Board of Directors of the Company 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, 2001, the Board of Directors of the Bank held twelve (12) meetings.
All incumbent directors of the Bank attended at least seventy-five percent (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 2001.
The members of the Board of Directors of the Company are also the members of the
Board  of Directors of the Bank.  Effective January 2002, the Board of Directors
of  the  Bank  will  hold  a  minimum  of  nine  (9)  meetings  annually.

     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, 2001,
the  Bank  had  various  committees,  including  an  Audit,  Compensation,
Asset/Liability,  Directors'  Loan  Review  and  Community  Reinvestment  Act
Committee.

     Audit  Committee.  The  Audit  Committee of the Bank's Board is responsible
for  reviewing the reports of the independent public accountants 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 pursuant to the
Audit  Committee  Charter  (the  "Charter").  The  Audit  Committee  members are
Messrs.  Niver (Chairman), Allday and Johnson.  The members are "independent" as
defined in Rule 4200(a)(14) of the listing standards of the Nasdaq Stock Market.
This  Committee  met  six  (6)  times  during  2001.  See  "Report  of the Audit
Committee."

     Compensation  Committee.  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 (3) times during 2001.  See
"Executive  Compensation  - Report of the Compensation Committee of the Board of
Directors  on  Compensation  During  Fiscal  2001."

     Asset/Liability  Committee.  The  Asset/Liability  Committee  met  four (4)
times  in  2001  to  review  and  analyze  the  investment securities portfolio,
ascertain  that  the Bank's interest rate risk policy is followed and to confirm
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.

     Directors' Loan Review Committee.  The Directors' Loan Review Committee met
twelve (12) times in 2001 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 Portfolio
Control  Center  ("PCC")  or  an individual officer of the Bank.  The Directors'
Loan  Review  Committee consists of Messrs. Mehos (Chairman), Flowers and Niver.

     Community  Reinvestment  Act  Committee.  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 one (1) time in 2001.

BOARD  FEES

     During  2001,  each  non-employee  director of the Company and the Bank was
paid  a  fee  of  $2,000  for  attendance  at  each Board meeting, $400 for each
committee  meeting  attended  and  $800  for  each Loan Review Committee meeting
attended.  Effective  January  1, 2002, at least nine (9) Board meetings will be
held annually.  Each non-employee director will be paid $4,000 for attendance at
each Board meeting, $500 for each committee meeting attended and $1,000 for each
Loan  Review  Committee  meeting  attended.  When  the Board of Directors of the
Company  meets  on  the same day as the Board of Directors 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.

2002  NON-EMPLOYEE  DIRECTOR  STOCK  PURCHASE  PLAN

     On  January  24,  2002,  the Board of Directors of the Company approved the
2002  Non-Employee  Director  Stock  Purchase  Plan (the "Stock Purchase Plan").
This  Stock  Purchase  Plan  provides eligible members of the Company's Board of
Directors  with  an opportunity to purchase shares of the Company's common stock
with  up  to  half  of their Director and Committee fees.  The maximum number of
shares  of  common  stock  that may be issued over the term of the Plan will not
exceed  twenty-five  thousand  (25,000)  shares.

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, 2001, all Section 16(a) filing requirements
applicable  to  the  Company's  officers  and  directors  were  complied  with.

REPORT  OF  THE  AUDIT  COMMITTEE

     The  following Report of the Audit Committee of the Board of Directors does
not  constitute  soliciting  material  and  should  not  be  deemed  filed  or
incorporated by reference into any other Company filing under the Securities Act
of  1933,  as amended (the "Securities Act"), or the Exchange Act, except to the
extent  the  Company specifically incorporates this Report by reference therein.

     During  fiscal 2001, the Audit Committee of the Board of Directors ratified
and  approved  the Audit Committee Charter (the "Charter"), which was originally
approved by the Board of Directors on August 24, 2000.  The complete text of the
Charter,  which  reflects standards set forth in the new SEC regulations and the
rules  of the Nasdaq Stock Market, is reproduced in the Appendix A to this proxy
statement.

     As  set  forth  in  more  detail in the Charter, the Audit Committee's (the
"Committee")  primary  duties  and  responsibilities  are  to:

-     Monitor  the integrity of the Company's financial statements, consolidated
accounting and financial controls and financial reporting process and systems of
internal  compliance.
-     Monitor  the  selection,  independence  and  performance  of the Company's
independent public accountants and internal auditing, compliance and loan review
functions;  and
-     Provide  an  avenue of communication among independent public accountants,
management,  the  Bank's  Quality  Control  Services Department and the Board of
Directors.

     The  Committee  has implemented procedures to ensure that during the course
of  each  fiscal  year  it  devotes  the  attention  that  it deems necessary or
appropriate  to  each of the matters assigned to it under the Charter.  To carry
out  its  responsibilities,  the Committee met six (6) times during fiscal 2001.

     In overseeing the preparation of the Company's financial statements for the
year  ended  December  31, 2001, the Committee met with both management and KPMG
LLP,  the  Company's  independent  public accountants, to review and discuss the
financial  statements  prior  to  their  issuance  and  to  discuss  significant
accounting  issues.  Management  advised  the  Committee  that  all  financial
statements  were  prepared  in  accordance  with accounting principles generally
accepted  in  the  United  States  of  America,  and the Committee discussed the
financial  statements  with  management  and  KPMG  LLP.  The Committee's review
included  discussion with the independent public accountants of matters required
to  be  discussed  pursuant  to  Statement  on  Auditing  Standards  No.  61
(Communications  With  Audit  Committees).

     The  Committee  also  discussed  with  KPMG  LLP  matters  relating  to its
independence  including  disclosures required to be made to the Committee by the
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees).

     In addition, the Committee reviewed major initiatives and programs aimed at
strengthening the effectiveness of the Company's internal control structure.  As
a part of the process, the Committee continued to monitor the scope and adequacy
of  the  Company's internal auditing program reviewing staffing levels and steps
taken to implement recommended improvements in internal procedures and controls.

     On the basis of these reviews and discussions, the Committee recommended to
the  Board  of  Directors  that the Board approve the inclusion of the Company's
audited financial statements in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001, for filing with the Securities and Exchange
Commission.

     Management  is  responsible  for  the Company's financial reporting process
including  its  system  of  internal  control,  and  for  the  preparation  of
consolidated  financial  statements  in  accordance  with  generally  accepted
accounting  principles.  The  Company's independent auditors are responsible for
auditing those financial statements.  The Audit Committee's responsibility is to
monitor and review these processes.  It is not the Audit Committee's duty or its
responsibility  to  conduct  auditing  or accounting reviews or procedures.  The
members of the Audit Committee are not employees of the Company and they may not
be,  and  do  not  represent  themselves  to  be  or to serve as, accountants or
auditors  by  profession  or  experts  in  the fields of accounting or auditing.
Therefore,  the  Audit  Committee  relied,  without independent verification, on
management's  representation  that  the  financial statements have been prepared
with  integrity  and  objectivity  and  in conformity with accounting principles
generally accepted in the United States of America and on the representations of
the  independent  auditors  included  in their report on the Company's financial
statements.  The  Audit  Committee's  oversight  does  not  provide  the  Audit
Committee  with an independent basis to determine that management has maintained
appropriate  accounting  and  financial  reporting  principles  or  policies, or
appropriate  internal controls and procedures designed to assure compliance with
accounting  standards  and  applicable  laws  and regulations.  Furthermore, the
Audit  Committee's  considerations  and  discussions  with  management  and  the
independent  auditors  do not assure that the Company's financial statements are
presented  in accordance with generally accepted accounting principles, that the
audit  of  the Company's financial statements has been carried out in accordance
with  generally  accepted  auditing  standards or that the Company's independent
accountants  are,  in  fact,  "independent."



                                        By  the  Committee:
                                        James  C.  Niver  (Chairman)
                                        R.  Edwin  Allday
                                        Robert  E.  Johnson,  Jr.

<PAGE>
           COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     None of the members of the Board's Compensation Committee is or has been an
officer  or  employee  of the Company nor on any other committee of the board of
directors  of another entity performing similar functions.  No transactions with
the  Company  affecting  the  members  of  the  Compensation Committee, or their
affiliates,  occurred  during  fiscal  2001.

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, as
applicable, 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>

Gary R. Garrett     55     Co-Chairman  of  Coastal  Banc  Capital  Corp.,  an affiliate of the Bank, as of
                           January  2002;  Previous  to  this he was Senior Executive Vice President of the
                           Bank  from  July  1999 until December 2001; Executive Vice President of the Bank
                           from  August  1993  to July 1999; Chief Lending Officer of the Bank from 1995 to
                           December  2001;  and  Senior  Vice  President-Mortgage  Lending of the Bank from
                           October  1991  to  August  1993.

David R. Graham     58     Executive  Vice  President  of  the  Bank  since  August  1993;  Senior  Vice
                           President-Commercial  Real  Estate  Lending  of the Bank from May 1988 to August
                           993;  and  a  Director  of  CoastalBanc  Financial  Corp.

Robert V. New       50     Executive  Vice  President  and Chief Banking Officer of the Bank since December
                           2001.  From 1988 until December 2001, Mr. New held various Senior Vice President
                           positions  at  Bank  of  America/Nations  Bank  and  NCNB.


Michael A. Presley  48     President  of  Coastal Banc Capital Corp., an affiliate of the Bank since August
                           1997.  From  February  1992  until August 1997, Mr. Presley held the position of
                           First  Vice  President  at  Morgan  Keegan  &  Co.

<PAGE>

Catherine N. Wylie  47     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; Chief Financial Officer
                           of  the  Company and the Bank since October 1993; Chief Operations Officer since
                           May  1999; Senior 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; Controller of the Bank from April
                           1989  to  October  1993; also President/Treasurer of CoastalBanc Financial Corp.
                           since October 1990; also President/Secretary/Treasurer of Coastal Banc Insurance
                           Agency,  Inc.  since  June  2000.  Director,  Senior  Executive  Vice President,
                           Treasurer and Principal of Coastal Banc Capital Corp., an affiliate of the Bank,
                           since  August  1997.
</TABLE>

                             EXECUTIVE COMPENSATION

     The  following  Report  of  the  Compensation  Committee  of  the  Board of
Directors  on  Compensation  During  Fiscal 2001 and the stock performance graph
included elsewhere in this Proxy Statement do not constitute soliciting material
and  should  not  be  deemed  filed  or incorporated by reference into any other
Company filing under the Securities Act, or the Exchange Act, as amended, except
to  the extent the Company incorporates this Report or the performance graphs by
reference  therein.

     REPORT  OF  THE  COMPENSATION  COMMITTEE  OF  THE  BOARD  OF  DIRECTORS  ON
COMPENSATION  DURING  FISCAL  2001.  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  the Nominee for Director, Directors Whose Terms
Continue and Executive Officers" and "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  Committee  evaluates  the base salaries of the Bank's senior executive
officers  annually.  A  senior  executive  officer's  base  salary is determined
mid-year  and  is  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 Company
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
$360,000  in  base  salary  during  2001.

     The  amount  of  incentive  compensation  is  related  to  the  financial
performance  of the Company.  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 2001, the Board of Directors determined that incentive awards to its
senior  executive  officers  would  not be paid unless a 12.0% return on average
equity  ("ROAE") 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 2001, the
Committee  calculated  that  the  Company  achieved  a  15.68%  ROAE,  therefore
incentive awards totaling $538,458 were paid to senior executive officers of the
Bank.  See  "Summary  Compensation  Table."

     During  2001,  the  Compensation Committee reviewed employee performance to
determine  whether  to  issue  stock  compensation.  The  Compensation Committee
authorizes grants of stock options, stock grants and other types of stock awards
permitted  under  the  Company's  stock  compensation  programs  based  on
recommendations  from  the  Company's Chief Executive Officer.  The Compensation
Committee  has  the  discretion  to determine, among other things, to whom stock
compensation  is  granted,  the  form  of  the  compensation,  the amount of the
compensation, the vesting period, if any and the exercise price, if any.  During
2001, the Committee granted incentive stock options to purchase an aggregate ten
thousand  (10,000)  shares of Company common stock to one (1) employee under the
Company's  1995  Stock  Compensation  Plan.

                                        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  Company  and  its  subsidiaries and affiliates whose total compensation
exceeded  $100,000  for  services  rendered  in all capacities during the fiscal
years  ended  December  31,  2001,  2000  and  1999.


<TABLE>
<CAPTION>

                                                   ANNUAL
                                                COMPENSATION
                                ------------------------------------------
                                                                             LONG TERM
                                                                  OTHER        AWARDS         ALL
     NAME  AND  PRINCIPAL                                        ANNUAL     STOCK OPTIONS    OTHER
     POSITION(1)                 YEAR      SALARY(2) BONUS(3) COMPENSATION(4) GRANTED(5) COMPENSATION(6)
-------------------------------  -------  ---------- -------- --------------  ---------  ---------------
<S>                              <C>         <C>        <C>         <C>            <C>          <C>

Manuel J. Mehos                   2001     $360,000  $269,230     $4,285         --           *
Chairman of the Board             2000      343,200   255,947      2,558       26,000         *
President and                     1999      303,500      --        2,850       45,000         *
Chief Executive Officer

Gary R. Garrett                   2001      234,000   134,614      8,250         --           *
Sr. Executive Vice President      2000      234,000   127,973      6,070       13,000         *
and Chief Lending Officer         1999      210,000      --        7,000       20,000         *

David R. Graham                   2001      148,890    39,873      4,722         --           *
Executive Vice President and      2000      142,138    34,258      2,800        5,000         *
Commercial Real Estate Lending    1999      137,700    29,500      3,203        6,000         *

Robert V. New (7)                 2001         --        --         --         10,000         *
Executive Vice President          2000         --        --         --           --          --
and Chief Banking Officer         1999         --        --         --           --          --

Michael A. Presley (8)            2001      440,165      --        5,129         --           *
President, Coastal Banc Capital   2000      240,509      --        2,734         --           *
Corp.                             1999      353,802      --        4,369         --           *

Catherine N. Wylie                2001      250,000   134,614     13,250         --           *
Sr. Executive Vice President,     2000      234,000   127,973     25,810       13,000         *
Chief Financial Officer and       1999      210,000   100,000     25,119       20,000         *
Chief Operations Officer
</TABLE>
______________________

(1)     Principal  positions  are  for  fiscal  2001.
(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  Bank of providing such benefits to any individual
executive  officer  during  the  year ended December 31, 2001 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,in  the  subsequent  year.
(4)     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.  The amounts set for the in the table
include  $4,285  $5,250,  $4,722,  $0,  $5,129 and $5,250 which were 401(k) Bank
matched  funds  for  Messrs. Mehos, Garrett, Graham, New, Presley and Ms. Wylie,
respectively.  The  amounts  also  set forth $3,000 each for Mr. Garrett and Ms.
Wylie  for  annual  car  allowances and for Ms. Wylie $5,000 annual compensation
paid  from  CoastalBanc  Financial  Corp.
(5)     Free  standing  stock  options;  see  "Aggregate Options Granted in Last
Fiscal  Year."
(6)     Asterisk  (*)  denotes  amount  less than $50,000 or 10% of total annual
salary  and  bonus.
(7)     Mr.  New  began  employment  with  the  Bank  on  December  31,  2001.
(8)     Mr.  Presley  is  not  an  officer  of  the  Bank  or the Company but is
President  of  Coastal Banc Capital Corp., an affiliate of the Bank.  His salary
consists of 100% commissions on the sale of single-family mortgages to the Bank.


EXECUTIVE  SEVERANCE  AGREEMENTS

     Other  than  as  set  forth  below,  the  Company  has not entered into any
employment contracts with any of its officers.  On May 31, 1999, the Company and
the Bank extended the term of the executive severance agreements (the "Executive
Severance Agreements") with Mr. Garrett and Ms. Wylie (together the "Employees",
each,  individually  an  "Employee")  for  a  continuous term of thirty-six (36)
months  from any date going forward, subject to annual review of such provision.
On  February  22,  2001,  the  Company  and  the  Bank entered into an Executive
Severance  Agreement with Mr. Mehos.  The Executive Severance Agreements provide
for  the payment of certain severance benefits to Messrs. Mehos, 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
vested and 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

     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 that
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.

     Effective  June  28,  2001,  the Company terminated the automatic extension
provision  of  Mr. Garrett's Severance Agreement, with the resulting effect that
it  will  terminate  no  later  than  June  27,  2004.  The  Executive Severance
Agreements  for  Ms. Wylie and Mr. Mehos were renewed for an additional one year
term  subject to the terms of the May 31, 1999 modification and remain in effect
for  the  modified  period  ending  on  the  earlier of (i) a rolling three year
period, or (ii) the date on which the Employee voluntarily 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.  The  Grant  Date Present Value is a hypothetical
value of the options as of their date of grant and has been calculated using the
Black-Scholes  option-pricing model, as permitted by SEC rules, based upon a set
of  assumptions set forth in the footnote to the table.  It should be noted that
this  model  is only one method of valuing options, and the Company's use of the
model  should  not be interpreted as an endorsement of its accuracy.  The actual
value  of  the  options  may  be significantly different, and the value actually
realized,  if any, will depend upon the excess of the market value of the common
stock  over  the  option  exercise  price  at  the  time  of  exercise, which is
unpredictable.

<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>
Robert  V.  New       10,000           100%           $28.90       12-31-11       --
</TABLE>
______________________

(1)     Total  options granted in 2001 were 10,000 shares.  The options vest 25%
during  the first calendar 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  December  31,  2001,  respectively,  were  as follows:  an
expected  volatility  rate  of  37.20%,  a  risk free rate of return of 4.30%, a
dividend  yield  of $0.48 per share per year and the expiration date of December
31,  2011,  respectively.  The  approach used in developing the assumptions upon
which  the  Black-Scholes  valuations  were  calculated  is  consistent with the
requirements of Statement of Financial Accounting Standards No. 123, "Accounting
for  Stock  Based  Compensation."


<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                                      Value of Unexercised
                  Shares      Realized        Number of Unexercised     in-the-Money Options at
                Acquired on     Upon       Options at Fiscal Year-End     Fiscal Year-End(3)
Name             Exercise     Exercise(2)  Exercisable Unexercisable   Exercisable  Unexercisable
                ------------  -----------  ----------- -------------   -----------  -------------
<S>                 <C>        <C>            <C>      <C>               <C>         <C>
Manuel J. Mehos           --   $     --       206,750    24,250          $3,200,145  $329,075
Gary R. Garrett     12,814(1)   180,304        71,922    11,500           1,085,696   156,475
David R. Graham     30,109(1)    42,165         9,962     4,500             114,393    61,800
Robert V. New            --         --            --     10,000(4)               --        --
Michael A. Presley       --         --          7,500        --              64,275        --
Catherine N. Wylie       --         --         83,946    11,500           1,348,235   156,475
</TABLE>
______________________

(1)     Mr.  Garrett exercised 12,814 shares of which he held 8,000 shares.  Mr.
Graham  exercised  30,109  shares  of  which  he  held  17,109  shares.
(2)     Value  Realized  Upon  Exercise  is  the difference between the exercise
price  and  the  market  price  at  the  time  of  exercise.
(3)     In  accordance  with SEC rules, values are calculated by subtracting the
exercise  price  from the fair market value of the underlying common stock.  For
purposes  of  this  table,  fair  market value is deemed to be $28.90 per share,
which  was  the  closing  sale  price of the common stock on the Nasdaq National
Market  on  December  31,  2001.
(4)     Issued  on  December  31,  2001  at  an  exercise  price  of  $28.90.


COMPARATIVE  STOCK  PERFORMANCE  GRAPH

     The stock performance graph below compares the cumulative total stockholder
return of the Company's Common Stock from December 31, 1996 to December 31, 2001
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, 1996 and the
reinvestment of all dividends.  In 1996, the Company paid quarterly dividends in
the  amount  of  $.10  per share 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.
During  2000,  the  Company  paid  quarterly dividends in the amount of $.08 per
share  on  March  15,  2000 and June 15, 2000.  Quarterly dividends paid for the
September  15,  2000  and December 15, 2000 periods were $.10 per share.  During
2001,  the  Company  paid quarterly dividends in the amount of $.10 per share on
March  15,  2001 and dividends in the amount of $.12 per share on June 15, 2001,
September  15,  2001  and  December  15,  2001.


           COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURN PERFORMANCE


                              COASTAL BANCORP, INC.





                               [GRAPHIC  OMITED]

<TABLE>

<CAPTION>

                                                 PERIOD  ENDING
                                               ------------------
    INDEX                 12/31/96   12/31/97  12/31/98    12/31/99   12/31/00    12/31/01
<S>                       <C>        <C>        <C>        <C>        <C>        <C>
Coastal Bancorp, Inc.      100.00     155.00     118.42     120.63     168.99     206.53
Nasdaq - Total US*         100.00     122.48     172.68     320.89     193.01     153.15
SNL OTC Thrift Index       100.00     162.42     142.01     122.15     153.21     196.62
SNL $1B-$5B Bank Index     100.00     177.50     159.33     142.69     172.47     245.89
SNL $1B-$5B Thrift Index   100.00     166.77     166.38     152.91     173.52     210.83
</TABLE>

______________
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,  2001  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.  Until June 22, 2000,
CBIA  was  affiliated  with  the  Bank  by virtue of its being wholly-owned by a
former  executive  officer  of the Bank who received no salary or dividends from
CBIA.  On  June  22,  2000,  CBIA became a subsidiary of the Bank.  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, 2001, and was $510,000 for the year
ended  December  31, 2001.  Such fee represented substantially all of CBIA's net
income  for  the  year  then  ended.


                       PROPOSAL TO RATIFY THE SELECTION OF
                         INDEPENDENT PUBLIC ACCOUNTANTS

     The  Board of Directors of the Company has selected KPMG LLP as independent
public accountants for the Company and the Bank for the year ending December 31,
2002,  and  has  further  directed  that  the  selection  of  independent public
accountants  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 provided certain non-audit services to the
Company  and  the  Bank in 2001 which are described below under "Other Fees".  A
representative  of KPMG LLP is expected to be present at the Annual Meeting with
the  opportunity  to  make  a  statement  if  he  or  she so desires and will be
available  to  respond  to  appropriate  questions.

FEES  BILLED  TO  THE  COMPANY  BY  KPMG  LLP  DURING  FISCAL  2001

Audit  Fees:
------------

     Fees  paid  by  the  Company  to  KPMG  LLP  for  audit services during the
Company's  2001 fiscal year for examination of the Company's annual consolidated
financial  statements,  including those consolidated financial statements in the
Company's  quarterly  reports  on  Form  10-Q,  totaled  $246,500.

Other  Fees:
------------

     Other fees paid by the Company to KPMG LLP during the Company's 2001 fiscal
year  were  $30,125 for preparation of the Company's 2000 income tax returns and
$10,300  for  the  2000  fiscal  year  audit  of  the  Bank's  401(k)  Plan.

     All non-audit services were reviewed by the Audit Committee which concluded
that  the  performance  of  such  service  by  KPMG  LLP was compatible with the
maintenance  of  that  firm's  independence  in  the  conduct  of  its  auditing
functions.  Stockholder  ratification  of  the  selection  of  KPMG  LLP  as the
Company's independent public accountants is not required by the Company's Bylaws
or  other  applicable  legal  requirement.  However, the Board is submitting the
selection  of  KPMG LLP to the stockholders for ratification as a matter of good
corporate  practice.

     In  the  event  that  stockholders  fail to ratify the selection, the Audit
Committee  and  the  Board  will  reconsider whether or not to retain that firm.
Even  if  the  selection is ratified, the Board at its discretion may direct the
appointment  of  a  different independent accounting firm at any time during the
year  if  it  determines that such a change would be in the best interest of the
Company  and  its  stockholders.


     THE  BOARD  OF  DIRECTORS  RECOMMENDS  A  VOTE  "FOR"  RATIFICATION  OF THE
APPOINTMENT  OF  KPMG  LLP  AS  INDEPENDENT  PUBLIC ACCOUNTANTS FOR FISCAL 2002.



                              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 77057-5745, no later than November 26,
2002.  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  (whether  or not it is
submitted  for inclusion in the Company's proxy materials), 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 2002 Annual Meeting.



<PAGE>
                               PROXY SOLICITATION

     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 the
Bank  may  solicit  proxies  personally  or  by  telephone  without  additional
compensation.

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


                                  OTHER MATTERS

     Management  is  not  aware  of  any business to come before the 2002 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.


                     ANNUAL REPORT AND FINANCIAL STATEMENTS

     A  copy of the Company's Annual Report for the year ended December 31, 2001
("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, 2001, 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 77057-5745. 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  26,  2002

<PAGE>



                                   APPENDIX  A-1

                             AUDIT COMMITTEE CHARTER
                              COASTAL BANCORP, INC.


1.     Audit  Committee  Purpose  and  Authority

The Audit Committee (the "Committee") of Coastal Bancorp, Inc., its subsidiaries
and  affiliates  (the  "Company")  is  appointed  by the Board of Directors (the
"Board")  to  assist  the  Board in fulfilling its oversight responsibilities to
financial  institution  regulators, the shareholders, potential shareholders and
the  investment  community.  The Committee's primary duties and responsibilities
are  to:

     Monitor  the  integrity of the Company's financial statements, consolidated
accounting  and financial controls, the financial reporting process, in addition
to  the  Company's  systems  of  internal  controls.

     Monitor  the  selection,  independence  and  performance  of  the Company's
independent  auditors  and  the  internal  auditing  and  loan review functions.
Evaluate,  and  where  appropriate,  replace  the  independent  auditors.

     Provide  an  avenue  of  communication  among  the  independent  auditors,
management,  the  Quality  Control Services department and the Board.  It is the
expectation  of  the Committee that management will fulfill is responsibility of
bringing  any  significant  matters  to  the  attention  of  the  Committee.

     The Committee has the authority to conduct any investigation appropriate to
fulfill its responsibilities and shall have unrestricted access to the personnel
records,  systems  and  facilities  of the Company and the Company's independent
public  accountants,  internal  and external legal counsel and consultants.  The
Committee  shall  have  the  authority to request any officer or employee of the
Company  or  the  Company's  outside counsel or independent auditors to attend a
meeting  of the Committee or to meet with any members of, or consultants to, the
Committee.  The  Committee  has  the  ability  to retain, at the Bank's expense,
special  legal, accounting or other consultants or experts it deems necessary in
the  performance  of  its  duties.  The  Committee  may  also  require  that the
Company's  legal  counsel  disclose  at  the Board meetings the existence of any
legal  matter  that  might  have a significant impact on the Company's financial
statements,  and  notify  the  members of the Committee of any significant legal
matters  that  might  arise  between  Board  meetings.

     Any  change in the employment status, title or scope of responsibilities of
the Group Manager, Quality Control Services of the Company or any utilization of
that  officer  or  the  staff  of  that  department  for  assignments  which are
inconsistent  with  the  departmental charter must be approved in writing by the
Committee.

<PAGE>

2.     Audit  Committee  Composition  and  Meetings

Committee  members  shall  meet  the  requirements of Section 112 of the Federal
Deposit  Insurance  Corporation  Improvement  Act  of  1991  and  the  National
Association  of  Securities Dealers (NASD).  The Committee shall be comprised of
three  or  more directors as determined and appointed by the Board, each of whom
shall  be  independent  nonexecutive  directors, free from any relationship that
would  interfere  with  the  exercise  of  his  or  her  independent  judgment.

A  director  of  the Company with any of the following relationships will not be
considered  independent:  (i) employment by the Company or any of its affiliates
for the current year or during any part of the past three years; (ii) acceptance
of  any  compensation  from  the  Company  or any of its affiliates in excess of
$60,000.00  during  the  Company's previous fiscal year, other than compensation
for  board  service,  benefits  under  a  tax-qualified  retirement  plan,  or
non-discretionary  compensation;  (iii)  member  of  the  immediate family of an
individual  who is, or has been in any part of the past three years, employed by
the  Company  or any of its affiliates as an executive officer; (iv) partnership
in,  or  a  controlling  shareholder  or  an  executive offer of, any for-profit
business  organization  to  which  the  Company  made, or from which the Company
received,  payments  (other  than  those  arising solely from investments in the
Company's securities) that exceed five percent (5%) of the company's or business
organization's  gross revenues for that year, or $200,000.00, whichever is more,
in  any  of  the  past three years; or (v) employment as an executive officer of
another  entity  where  any  of  the Company's executives serve on that entity's
compensation  committee.

All  members  of  the  Committee shall have a basic understanding of finance and
accounting  and be able to read and understand fundamental financial statements,
and  at  least  two  members  of  the Committee shall have accounting or related
financial  management  expertise.

The  Committee  will meet at least quarterly on the date of a normally scheduled
meeting  of  the  Board.  The  Chairman of the Committee may schedule additional
meetings  as  required.  Meetings  of the Committee will be conducted in private
with  a  member  of  the  Quality  Control  Services department and/or any other
employee, officer, outside counsel or independent auditors of the Company as the
Committee  or  the  Board  deems  necessary  or  appropriate.

3.     Audit  Committee  Responsibilities  and  Duties

Review  Procedures
------------------

     Review and reassess the adequacy of this charter at least annually.  Submit
the  charter  to the Board for approval and have the document published at least
every  three  years  in  accordance  with  SEC  regulations.

     Review the Company's annual audited financial statements prior to filing or
distribution.  This  review  may  include  discussion  with  management  and the
Company's  independent  auditors  concerning  any  significant  issues regarding
accounting  principles,  practices  and judgments employed in the preparation of
the  annual  consolidated  financial  statements.

     In  consultation  with management, the independent auditors and the Quality
Control  Services  department, consider the integrity of the Company's financial
reporting  processes and controls.  Discuss significant financial risk exposures
and  the  steps  management  has  taken  to  monitor,  control  and  report such
exposures.  Review significant findings prepared by the independent auditors and
the  Quality  Control  Services department together with management's responses.

     Review  with  the  financial  management of the Company and the independent
auditors  any  significant issues that arise during any interim period for which
the  Company  discloses  financial  results.

     Independent  Auditors
     ---------------------

     The  independent  auditors  are ultimately accountable to the Committee and
the  Board.  The  Committee shall review the independence and performance of the
auditors and annually recommend to the Board the appointment or discharge of the
independent  auditors  when  circumstances  warrant.

     Approve  the  fees  and  other  significant  compensation to be paid to the
independent  auditors.

     On  an  annual  basis,  the  Committee  shall  meet  separately  with  the
independent  auditors  to  review  and  discuss  with  them  all  significant
relationships  said  independent  auditors  have with the Bank that could impair
their  independence.

     Review  the  independent  auditor's  engagement  letter.

     Discuss  the  results  of  the year end audit with the independent auditors
including  those  matters  required  to  be  communicated to audit committees in
accordance  with  AICPA  SAS  61.

     Quality  Control  Services  Department  and  Legal  Compliance
     --------------------------------------------------------------

     Review  the  budget,  audit  plan, activities, organizational structure and
qualifications  of  the  Quality  Control  Services  department  as  needed.

     Review  significant  reports  prepared  by  the  Quality  Control  Services
department  together with management's responses and follow-up to those reports.

     Review  all  Suspicious  Activity  Reports and other reports concerning any
significant  fraud  or  regulatory  noncompliance  that  occurs  at the Company.

     On  at least an annual basis, review with the Company's general counsel any
legal  matters  that  could have a significant impact on the Company's financial
statements.

     Other  Audit  Committee  Responsibilities
     -----------------------------------------

     Annually prepare a report to shareholders as required by the Securities and
Exchange  Commission.  The  report  should  state whether the Committee has: (i)
reviewed  and  discussed  the audited financial statements with management; (ii)
discussed  with the independent auditors the matters required to be discussed by
SAS  No.  61,  including:  (a)  the  methods  used  to  account  for significant
transactions; (b) the effect of significant accounting policies in controversial
or  emerging  areas  for  which  there  is  a  lack of authoritative guidance or
consensus;  (c)  the  process  used  by  management  in formulating particularly
sensitive  accounting  estimates  and  the  basis  for the auditor's conclusions
regarding  the  reasonableness  of  those  estimates; and (d) disagreements with
management  over  the  application  of  accounting  principles,  the  basis  for
management's  accounting  estimates,  and  the  disclosures  in  the  financial
statements;  (iii)  received  written  disclosures from the independent auditors
regarding  their  independence  as  required  by  Independence  Standards  Board
Standard  No.  1,  and has discussed the independent auditors' independence with
the  independent  auditors;  and  (iv)  based on the foregoing, recommend to the
Board  that the audited financial statements be included in the Company's annual
report  for  the  last  fiscal  year  for  filing  with  the  SEC.

     Perform  any  other  activities consistent with this charter, the Company's
by-laws,  and  governing  law that the Committee or the Board deems necessary or
appropriate.

     Review  examination reports rendered by regulatory authorities and evaluate
the  adequacy  of  management's  response.

4.     Safe  Harbor  Statement

While  the  Committee  has  the  responsibilities  and  powers set forth in this
charter,  it  is  not  the duty of the Committee to plan or conduct audits or to
determine  that the Company's financial statements are complete, accurate and in
accordance  with  generally  accepted  accounting  principles.  That  is  the
responsibility  of  management and the independent auditors.  Nor is it the duty
of  the Committee to conduct investigations or to resolve disagreements, if any,
between  members  of  management.