March 27, 2001






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  26,  2001,  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  directors  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 26, 2001

     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 26, 2001 for the following purposes,
all  of which are more completely set forth in the accompanying Proxy Statement:

     (1)     To  elect  three directors of the Company to serve until the annual
meeting  of stockholders in the year 2004 and until their successors are 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,  2001;  and,

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

     The Board of Directors has fixed February 27, 2001 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  27,  2001


     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
(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 26, 2001 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  27,  2001.

     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 PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR
ENDING  DECEMBER 31, 2001; 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. (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 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 27, 2001 (the "Record Date") will be entitled to notice of,
and  to  vote  at, the Annual Meeting.  On the Record Date, there were 5,737,376
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  27,  2001, directors, executive officers and their affiliates
beneficially  owned  1,675,183  shares  of  Common  Stock or 27.46% 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  public  accountants.

     The following table sets forth the beneficial ownership of the Common Stock
as  of  February 27, 2001, 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 27, 2001, 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 27,     Percent of
Beneficial Owner                                    2001(1)              Class
------------------------------------------  ------------------------  -----------
<S>                                         <C>                       <C>

First Manhattan Co.
437 Madison Avenue
New York, New York 10022                                  552,868(2)        9.06%

Thomson Horstmann & Bryant, Inc.
Park 80 West, Plaza II
Saddle Brook, New Jersey 07662                            581,800(2)        9.54

Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401                            460,350(2)        7.55

Tontine Partners, L.P. et al.
200 Park Avenue, Suite 3900
New York, New York 10166                                  359,850(2)        5.90

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)        4.49
                                                         (continued on next page)
</TABLE>


<PAGE>
------
<TABLE>
<CAPTION>
                                                Amount of Shares of
                                                    Common Stock
Name                                             Beneficially Owned
(and Address) of                                 as of February 27,   Percent of
Beneficial Owner                                      2001(1)            Class
----------------------------------------------  --------------------  -----------
<S>                                             <C>                   <C>
                                                --------------------  -----------

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            *

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                                      10.33
Coastal Bancorp, Inc., Coastal Banc Holding
Company, Inc. and Coastal Banc ssb                        630,000(5)

James C. Niver, Director
Coastal Bancorp, Inc. and Coastal Banc ssb                  553,428         9.07

Gary R. Garrett, Sr. Executive Vice President
and Chief Lending Officer                                  76,861(5)
Coastal Banc ssb                                                               *

Tim D. Gearhart, Executive Vice President -
Rio Grande Valley Region - Hildago County
Coastal Banc ssb                                            2,500(5)           *

David R. Graham, Executive Vice President -
Commercial Real Estate Lending
Coastal Banc ssb                                           36,483(5)           *

Catherine N. Wylie, Sr. Executive Vice
President and Chief Financial Officer
Coastal Bancorp, Inc., Coastal Banc
Holding Company, Inc. and Coastal Banc ssb              78,871(5)(6)           *

All directors and executive officers of the
Company and the Bank as a group
(11 persons)                                            1,675,183(5)       27.46%
</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 62,547, 2,500, 36,483, 186,500 and
74,946  shares  which  may  be  received  upon  the exercise of stock options by
Messrs.  Garrett,  Gearhart, Graham, Mehos and Ms. Wylie, respectively, pursuant
to  stock  options.  For  all  directors  and executive officers as a group, the
number  of shares includes 362,976 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.



               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.

     Three  directors  are  to  be elected at this Annual Meeting to hold office
until  the  Annual  Meeting  in  2004  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  2001,  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:

     PAUL  W.  HOBBY.  Age  40.  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.
His  term  as  a  director  of  the  Company  will  expire  in  2002.

     ROBERT  E.  JOHNSON,  JR.  Age  47.  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.

     MANUEL  J. MEHOS.  Age 46.  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 Chairman of the Board of
Coastal  Banc Capital Corp. and Chief Executive Officer of CoastalBanc Financial
Corp.,  a  Bank  subsidiary.  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  71.  Director since 1986.  Mr. Niver is retired and
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.



<PAGE>
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 any 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:

     R.  EDWIN  ALLDAY.  Age  50.  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.  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 Houston-based
non-profit  organization  which  teaches business leadership skills.  From March
1982  to  August 1988, Mr. Allday was the General Manager of Anglia Companies, a
family-owned  investment management business in Houston, Texas.  If elected, his
term  as  a  director  of  the  Company  will  expire  in  2004.

     D.  FORT  FLOWERS,  JR.  Age  39.  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.  If  elected, his term as a
director  of  the  Company  will  expire  in  2004.

     DENNIS  S.  FRANK.  Age  44.  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.  Prior to that, Mr. Frank was the Manager of
the  Bank's  Capital  Markets  Division  from  July  1988  to  April  1993 and a
consultant to the Bank from April 1993 to April 1994.  If elected, his term as a
director  of  the  Company  will  expire  in  2004.

                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 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, 2000, 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  2000.

     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, 2000, 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 2000
except  for  Mr.  Paul  W.  Hobby  who  attended  72%.

     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, 2000,
the  Bank  had  various  committees,  including  an  Audit  and  Compliance,
Compensation, Asset/Liability, Directors' Loan Review and Community Reinvestment
Act  Committee.

     Audit  and Compliance Committee.  The Audit and Compliance 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  and  Compliance  Committee  Charter  (the
"Charter").  The  Audit  and  Compliance  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  five  (5)  times  during  2000.  See  "Report  of  the Audit and Compliance
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 two (2) times during 2000.  See
"Executive  Compensation  - Report of the Compensation Committee of the Board of
Directors  on  Compensation  During  Fiscal  2000."

     Asset/Liability  Committee.  The  Asset/Liability  Committee  met  four (4)
times  in  2000  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
thirteen  (13)  times  in  2000  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 2000.

BOARD  FEES

     During  2000,  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  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.

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, 2000, all Section 16(a) filing requirements
applicable  to  the  Company's  officers and directors of the Company and/or the
Bank  were  complied  with.

REPORT  OF  THE  AUDIT  AND  COMPLIANCE  COMMITTEE

     The  following  Report  of  the  Audit  and  Compliance  Committee 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  2000,  the  Audit  and Compliance Committee of the Board of
Directors  ratified  and  approved  the  Audit and Compliance Committee Charter,
which  was  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 and Compliance
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 five (5) times during fiscal 2000.

     In overseeing the preparation of the Company's financial statements for the
year  ended  December  31, 2000, 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).

     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, 2000, for filing with the Securities and Exchange
Commission.


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


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  2000.











                      [THIS SPACE INTENTIONALLY LEFT BLANK]

<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>
 Gary R. Garrett   54    Senior Executive Vice President of the Bank since July 1999
                         and Executive Vice President of the Bank from August 1993
                         to July 1999; Chief Lending Officer of the Bank since 1995;
                         Senior Vice President-Mortgage Lending of the Bank from
                         October 1991 to August 1993; Director and Senior Executive
                         Vice President of Coastal Banc Capital Corp., an affiliate of the
                         Bank, since August 1997; and a Director of CoastalBanc
                         Financial Corp.

Tim D. Gearhart   53     Executive Vice President of the Bank since August 1998 when
                         the Bank acquired twelve branches from Pacific Southwest
                         Bank, FSB in the Rio Grande Valley of Texas.  Prior to that, Mr.
                         Gearhart was Executive Vice President and Director of San
                         Benito Bank and Trust since December 1989.  Mr. Gearhart is a
                         Regional Manager in the Rio Grande Valley responsible for
                         lending and banking in Hildago County.

David R. Graham   57     Executive Vice President of the Bank since August 1993; Senior
                         Vice President-Commercial Real Estate Lending of the Bank
                         from May 1988 to August 1993; and a Director of CoastalBanc
                         Financial Corp.

Catherine N. Wylie   46  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 27, 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 22, 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 2000 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  2000.  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" 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
$343,200  in  base  salary  during  2000.

     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 2000, 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 2000, the
Committee  calculated  that  the  Company  achieved  a  16.51%  ROAE,  therefore
incentive awards totaling $511,893 were paid to senior executive officers of the
Bank.  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,  2000,  1999  and  1998.

<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                  2000  $  343,200   $255,947      26,000        $ 2,558
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

Gary R. Garrett                  2000     234,000    127,973      13,000          6,070
Sr. Executive Vice President     1999     210,000         --      20,000          7,000
 and Chief Lending Officer       1998     179,900     87,149       3,000          5,669

Tim D. Gearhart                  2000     144,495     25,000       5,000          3,080
Executive Vice President -       1999     127,740     10,000       2,500          4,436
 Rio Grande Valley Region        1998   45,000 (6)        --          --          1,183

David R. Graham                  2000     142,138     34,258       6,000          2,800
Executive Vice President -       1999     137,700     29,500       6,000          3,203
 Commercial Real Estate Lending  1998     131,071     34,291       2,000          2,000

Catherine N. Wylie               2000     234,000    127,973      13,000         25,810
Sr. Executive Vice President,    1999     210,000    100,000      20,000         25,119
 Chief Financial Officer and     1998     179,900     87,149       3,000         26,120
 Chief Operations Officer
</TABLE>


______________________
----------------------
     (footnotes  on  next  page)

(1)     Principal  positions  are  for  fiscal  2000.
(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, 2000 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)     Free  standing  stock  options;  see  "Aggregate Options Granted 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.  The amounts set for the in the table
include $2,558, $3,070, $3,070, $2,800 and $3,500 which were 401(k) Bank matched
funds  for Messrs. Mehos, Garrett, Gearhart, Graham and Ms. Wylie, respectfully.
The  amounts also set forth $3,000 each for Mr. Garrett and Ms. Wylie for annual
car  allowances and $14,310 for education reimbursement for Ms. Wylie and $5,000
annual  compensation  paid  from  CoastalBanc  Financial  Corp.  for  Ms. Wylie.
(6)     Salary  for  partial  year  due to the August 1998 acquisition of twelve
branches  in  the  Rio  Grande  Valley  of  Texas.


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, 2002.  These Executive Severance Agreements further were modified on May
31,  1999  to automatically renew for one year each year.  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. 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 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.

     The Executive Severance Agreements remain in effect for the modified period
commencing  on  May 31, 1999 (the "Effective Date") and ending on the earlier of
(i)  May 31, 2002, 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.

<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. .       26,000       19.7%        $14.75       05/25/10       $165,256
Gary R. Garrett. .       13,000        9.8          14.75       05/25/10         82,628
Tim D. Gearhart. .        5,000        3.8          14.75       05/25/10         31,780
David R. Graham. .        6,000        4.5          14.75       05/25/10         38,136
Catherine N. Wylie       13,000        9.8          14.75       05/25/10         82,628
</TABLE>


______________________
----------------------

(1)     Total options granted in 2000 were 132,000 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  25, 2000, respectively, were as follows:  an expected
volatility rate of 37.21%, a risk free rate of return of 6.40%, a dividend yield
of  $0.36  per  share  per  year  and  the  expiration  date  of  May  25, 2010,
respectively.





                      [THIS SPACE INTENTIONALLY LEFT BLANK]



<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(3)
   Name                  Exercise        Realized(2)     Exercisable     Unexercisable    Exercisable     Unexercisable
------------------      -------------    ------------   ------------------------------    -----------------------------
<S>                     <C>             <C>              <C>             <C>              <C>              <C>
Manuel J. Mehos. .             --        $     --         186,500         44,500          $2,048,195       $360,375
Gary R. Garrett. .       12,814(1)        180,304          62,547         20,875             666,591        197,188
Tim D. Gearhart. .             --              --           2,500          5,000              21,563         44,687
David R. Graham. .             --              --          36,483          8,088             386,451         79,737
Catherine N. Wylie             --              --          74,946         20,500             870,212        188,188
</TABLE>


______________________
----------------------

(1)     Options  were  exercised  and  held.
(2)     Value  Realized  is  the  difference  between the exercise price and the
        market  price  at  the  time  of  exercise.
(3)     Based  upon  a closing market price for the Company's Common Stock as of
        December  31,  2000  of  $24.00.


COMPARATIVE  STOCK  PERFORMANCE  GRAPH

     The stock performance graph below compares the cumulative total stockholder
return of the Company's Common Stock from December 31, 1995 to December 31, 2000
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, 1995 and the
reinvestment of all dividends.  In 1995, the Company paid quarterly dividends in
the  amount  of  $.08  per share on 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.  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.

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






















<TABLE>
<CAPTION>
                                             PERIOD  ENDING
                                             --------------
INDEX                     12/31/95  12/31/96  12/31/97  12/31/98  12/31/99  12/31/00
<S>                       <C>       <C>       <C>       <C>       <C>       <C>
Coastal Bancorp, Inc.      124.25   133.53    206.98    158.14    161.08    225.66
NASDAQ - Total US*         141.33   123.04    150.69    212.51    394.92    237.62
SNL OTC Thrift Index       152.05   130.10    211.30    184.76    158.91    199.32
SNL $1B-$5B Bank Index     134.48   131.21    232.91    209.06    187.22    226.30
SNL $1B-$5B Thrift Index   153.72   129.63    216.19    215.69    198.23    224.95
</TABLE>


SNL  Securities  LC
  2001

*  Source:  CRSP,  Center  for  Research  in Security Prices, Graduate School of
Business,  The  University  of  Chicago 2001.  Used with permission.  All rights
reserved.

______________

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,  2000  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.


<PAGE>
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 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, 2000, and was $580,000
for the year ended December 31, 2000.  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,
2001,  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.  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  2000

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

     Fees  billed  to  the  Company  by  KPMG  LLP for audit services during the
Company's  2000 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  $242,000.

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

     Other  fees  billed  to  the  Company by KPMG LLP during the Company's 2000
fiscal  year  were  $30,725  for  preparation  of  the Company's 1999 income tax
returns  and  $10,000  for  the  audit  of  the  Bank's  401(k)  Plan.

     Stockholder  ratification  of  the  selection  of KPMG LLP as the Company's
independent public accountants is not required by the Company's By-Laws 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 2001.


                              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 29,
2001.  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 2001 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 2001 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, 2000
("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, 2000, 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  27,  2001

<PAGE>


                                      A-4
                                   APPENDIX  A

                              Coastal Bancorp, Inc.
                     Audit and Compliance Committee Charter


1.          Audit  and  Compliance  Committee  Purpose  and  Authority

          The  Audit  and  Compliance  Committee  (the  "Committee")  of Coastal
Bancorp,  Inc. and its subsidiaries (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 and financial reporting process and systems of
internal  compliance.

-     Monitor  the  selection,  independence  and  performance  of the Company's
independent  auditors  and  the  internal  auditing,  compliance and loan review
functions.  Evaluate,  and  where appropriate, replace the independent auditors.
(The  Quality Control Services department performs internal auditing, compliance
and  loan  review.)

-     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 its responsibility of
bringing  any  significant  matters  to  the  attention  of  the  Committee.

The  Committee  has  the  authority  to conduct any investigation appropriate to
fulfilling  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
Internal  Auditing  and  Compliance officer 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.

2.     Audit  and  Compliance  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  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 officer 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 of the company's or that business
organization's  gross revenues for that year, or $200,000, whichever is more, in
any of the past three years; or (v) employment as an executive 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  the  Internal  Auditing  and  Compliance  officer of the Company.

3.          Audit  and  Compliance  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.  Review  should  include  discussion  with  management and the
independent  auditors  of  significant  issues  regarding accounting principles,
practices,  and  judgments.

-     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  financial  management  and  the  independent  auditors  any
significant  issues  that  arise  during  the  interim  audit  of  the Company's
quarterly  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  should  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 response and follow-up to these 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,  the  Bank's  compliance  with  applicable  laws  and
regulations,  and  inquiries  received from regulators or governmental agencies.

          Other  Audit  and  Compliance  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, recommended 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 deem 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.