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

                                    FORM 10-Q


          [  X  ]   Quarterly  Report  Under  Section  13  or  15  (d) of
                    the  Securities  Exchange  Act  of  1934
                    For  the  Quarterly  Period  Ended  March  31,  1998

          [    ]    Transition Report Pursuant to Section 13 or 15 (d) of
                    the  Securities  Exchange  Act  of  1934
                    For the Transition Period from ________ to ________

                        Commission File Number:  0-24526
                                                --------

                              COASTAL BANCORP, INC.
                              ---------------------
             (Exact name of Registrant as specified in its charter)


                Texas                                  76-0428727
---------------------                              ------------------
(State or other jurisdiction of                    (I.R.S.  Employer
incorporation or organization)                    Identification  No.)

                           5718 Westheimer, Suite 600
                              Houston, Texas 77057
                            ------------------------
                     (Address of principal executive office)

                                 (713) 435-5000
                               ------------------
                         (Registrant's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to  be  filed  by  Section  13  or 15 (d) of the Securities Exchange Act of 1934
during  the  preceding 12 months (or for such shorter period that the Registrant
was  required  to  file  such  reports), and (2) has been subject to such filing
requirements  for  the  past  90  days.

                                  YES   X         NO
                                      -----           -----

Indicate  the  number  of  shares outstanding of each of the issuer's classes of
Common  Stock,  as  of  the  latest  practicable  date.

       COMMON STOCK ISSUED AND OUTSTANDING: 5,041,177 AS OF APRIL 30, 1998


<PAGE>

                     COASTAL BANCORP, INC. AND SUBSIDIARIES

                                Table of Contents



PART  I.          FINANCIAL  INFORMATION
--------          ----------------------
<TABLE>
<CAPTION>



<S>     <C>                                                                           <C>
Item 1  Financial Statements
        Consolidated Statements of Financial Condition at March 31, 1998
        (unaudited) and December 31, 1997                                              1

        Consolidated Statements of Income for the Three-Month Periods Ended
        March 31, 1998 and 1997 (unaudited)                                            2

        Consolidated Statements of Comprehensive Income (Loss)  for the Three-
        Month Periods Ended March 31, 1998 and 1997 (unaudited)                        3

        Consolidated Statements of Cash Flows for the Three-Month Periods
        Ended March 31, 1998 and 1997 (unaudited)                                      4

        Notes to Consolidated Financial Statements                                     6

Item 2  Management's Discussion and Analysis of Financial Condition and Results
        of Operations                                                                 15

Item 3  Quantitative and Qualitative Disclosures About Market Risk                    19
</TABLE>



PART  II.          OTHER  INFORMATION
---------          ------------------
<TABLE>
<CAPTION>

<S>     <C>                                                       <C>
Item 1  Legal Proceedings                                         20
Item 2  Changes in Securities                                     20
Item 3  Default upon Senior Securities                            20
Item 4  Submission of Matters to a Vote of Security Holders       20
Item 5  Other Information                                         20
Item 6  Exhibits and Reports on Form 8-K                          20
</TABLE>



SIGNATURES





ITEM  1.          FINANCIAL  STATEMENTS
--------          ---------------------

<TABLE>
<CAPTION>

                              COASTAL BANCORP, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                (IN THOUSANDS, EXCEPT SHARE DATA)


                                                            March 31,    December 31,
                                                               1998          1997
                                                           ------------  ------------ 
ASSETS                                                     (Unaudited)
---------------------------------------------------------                 
<S>                                                        <C>                <C>  
Cash and amounts due from depository institutions          $     25,026   $   37,096
Federal funds sold                                                3,500           --
Loans receivable (note 4)                                     1,335,955    1,261,435
Mortgage-backed securities held-to-maturity (note 3)          1,325,249    1,345,090
Mortgage-backed securities available-for-sale, at market
 value (note 3)                                                 169,783      169,997
Mortgage loans held for sale                                      7,154           --
Accrued interest receivable                                      15,219       14,813
Property and equipment                                           22,955       22,250
Stock in the Federal Home Loan Bank of Dallas (FHLB)             30,162       27,801
Goodwill                                                         15,248       15,717
Mortgage servicing rights                                         5,279        5,653
Prepaid expenses and other assets                                10,672       11,558
                                                           ------------   ----------
                                                           $  2,966,202   $2,911,410
                                                           ============   ==========
</TABLE>


<TABLE>
<CAPTION>

     LIABILITIES  AND  STOCKHOLDERS'  EQUITY
     ---------------------------------------

<S>                                                            <C>              <C>
Liabilities:
 Savings deposits (note 5)                                     $1,367,371   $1,375,060 
 Advances from the FHLB (note 6)                                  556,805      540,475 
 Securities sold under agreements to repurchase (note 6)          829,202      791,760 
 Senior notes payable (note 7)                                     50,000       50,000 
 Advances from borrowers for taxes and insurance                    7,116        3,975 
 Other liabilities and accrued expenses                            16,451       16,560 
                                                               -----------  -----------
     Total liabilities                                          2,826,945    2,777,830 
                                                               -----------  -----------

9.0% noncumulative preferred stock of Coastal Banc ssb             28,750       28,750 

Commitments and contingencies (notes 4 and 8)

Stockholders' equity (notes 3, 9, 10 and 14):
 Preferred stock, no par value; authorized shares 5,000,000;
   no shares issued                                                    --           -- 
 Common stock, $.01 par value; authorized shares 30,000,000;
   5,035,493 and 5,008,926 shares issued and outstanding in
   1998 and 1997                                                       50           50 
 Additional paid-in capital                                        33,556       33,186 
 Retained earnings                                                 79,204       73,868 
 Accumulated other comprehensive income (loss) -
   unrealized loss on securities available-for-sale                (2,303)      (2,274)
                                                               -----------  -----------
     Total stockholders' equity                                   110,507      104,830 
                                                               -----------  -----------
                                                               $2,966,202   $2,911,410 
                                                               ===========  ===========
</TABLE>


See  accompanying  Notes  to  Consolidated  Financial  Statements

<PAGE>
                     COASTAL BANCORP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>

                                                                         Three Months Ended
                                                                              March 31,
                                                                         --------------------     
                                                                         1998           1997
                                                                        --------      -------
                                                                         (Unaudited)

<S>                                                                       <C>            <C>
Interest income:
 Mortgage-backed securities                                          $   23,446       $23,192
 Loans receivable                                                        26,940        26,015
 Federal funds sold, certificates of deposit and other investments.         502           397
                                                                     ----------      --------
                                                                         50,888        49,604
                                                                     ----------      --------

Interest expense:
 Savings deposits                                                        15,507        15,166
 Other borrowed money                                                    11,229        13,780
 Senior notes payable                                                     1,250         1,250
 Advances from the FHLB:
   Short-term                                                             3,955         1,856
   Long-term                                                              3,947         2,904
                                                                     ----------      --------
                                                                         35,888        34,956
                                                                     ----------      --------

   Net interest income                                                   15,000        14,648
Provision for loan losses                                                 1,450           450
                                                                     ----------      --------
   Net interest income after provision for loan losses                   13,550        14,198
                                                                     ----------      --------

Noninterest income:
 Loan fees and service charges on deposit accounts                        1,324           894
 Loan servicing income, net                                                 240           407
 Writedown of purchased mortgage loan premium                              (709)           --
 Other                                                                      192           168
                                                                     ----------      --------
                                                                          1,047         1,469
                                                                     ----------      --------

Noninterest expense:
 Compensation, payroll taxes and other benefits                           4,940         4,625
 Office occupancy                                                         1,989         1,611
 Insurance premiums                                                         265           271
 Data processing                                                            608           513
 Amortization of goodwill                                                   469           437
 Real estate owned                                                          252           239
 Other                                                                    1,812         1,861
                                                                     ----------      --------
                                                                         10,335         9,557
                                                                     ----------      --------

       Income before provision (benefit) for Federal income taxes         4,262         6,110

Provision (benefit) for Federal income taxes (note 11)                   (2,326)        2,225
                                                                     ----------      --------
     Net income before preferred stock dividends                          6,588         3,885
Preferred stock dividends of Coastal Banc ssb (Series A)                    647           647
                                                                     ----------      --------
     Net income available to common stockholders                     $    5,941       $ 3,238
                                                                     ==========      ========

Basic earnings per share (note 9)                                    $     1.18       $  0.65
                                                                     ==========      ========

Diluted earnings per share (note 9)                                  $     1.14       $  0.63
                                                                     ==========      ========
</TABLE>


See  accompanying  Notes  to  Consolidated  Financial  Statements

<PAGE>
                     COASTAL BANCORP, INC. AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                      Three Months Ended
                                                                          March 31,
                                                                     -------------------------
                                                                         1998           1997
                                                                     ----------        --------
                                                                         (Unaudited)
<S>                                                                  <C>               <C>

Net income available to common stockholders                          $   5,941        $3,238

Other comprehensive income (loss), net of tax:
 Unrealized holding gains (losses) on securities available-for-sale
 arising during period                                                     (29)          693
                                                                     ----------       ------

Total comprehensive income                                           $   5,912        $3,931
                                                                     ==========       ======
</TABLE>


See  accompanying  Notes  to  Consolidated  Financial  Statements

<PAGE>
                     COASTAL BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                              Three Months Ended
                                                                                   March 31,
                                                                         ------------------------
                                                                             1998           1997
                                                                         ----------       --------
                                                                          (Unaudited)
<S>                                                                          <C>            <C>
Cash flows from operating activities:
 Net income before preferred stock dividends                          $      6,588   $     3,885 
 Adjustments to reconcile net income to net cash provided
   by operating activities:
 Depreciation and amortization of property and equipment,
   mortgage servicing rights and prepaid expenses and other assets           2,004         1,648 
 Net premium amortization                                                    1,867           112 
 Provision for loan losses                                                   1,450           450 
 Amortization of goodwill                                                      469           437 
 Originations and purchases of mortgage loans held for sale                 (7,154)       (4,162)
 Sales of mortgage loans held for sale                                          --         3,229 
 Decrease (increase) in:
   Accrued interest receivable                                                (406)          165 
   Other, net                                                                1,714         7,558 
 Stock dividends from the FHLB                                                (431)         (370)
                                                                     --------------  ------------

   Net cash provided by operating activities                                 6,101        12,952 
                                                                     --------------  ------------

Cash flows from investing activities:
 Net increase in federal funds sold                                         (3,500)           -- 
 Principal repayments on mortgage-backed securities held-to-maturity        19,794         6,995 
 Principal repayments on mortgage-backed securities
   available-for-sale                                                          169            88 
 Purchases of loans receivable                                            (121,593)       (9,232)
 Net decrease in loans receivable                                           42,226         9,727 
 Net purchases of property and equipment                                    (1,661)         (746)
 Purchase of FHLB stock                                                     (1,930)           -- 
 Proceeds from sales of FHLB stock                                              --         9,000 
                                                                     --------------  ------------

   Net cash provided (used) by investing activities                        (66,495)       15,832 
                                                                     --------------  ------------

                                                                                      (continued)
</TABLE>



<PAGE>
                     COASTAL BANCORP, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                           Three Months Ended
                                                                               March 31,
                                                                       ------------------------
                                                                           1998           1997
                                                                       ----------       --------
                                                                        (Unaudited)
<S>                                                                        <C>            <C>
Cash flows from financing activities:
 Net increase (decrease) in savings deposits                          $   (7,707)  $     4,886 
 Advances from the FHLB                                                1,013,550     1,295,000 
 Principal payments on advances from the FHLB                           (997,220)   (1,378,884)
 Securities sold under agreements to repurchase                        1,817,924     2,588,007 
 Purchases of securities sold under agreements to repurchase          (1,780,482)   (2,543,065)
 Exercise of stock options for purchase of common stock, net                 369            21 
 Net increase in advances from borrowers for taxes and insurance           3,141         2,996 
 Dividends paid                                                           (1,251)       (1,144)
                                                                      -----------  ------------
   Net cash provided (used) by financing activities                       48,324       (32,183)
                                                                      -----------  ------------

   Net decrease in cash and cash equivalents                             (12,070)       (3,399)
 Cash and cash equivalents at beginning of period                         37,096        27,735 
                                                                      -----------  ------------
 Cash and cash equivalents at end of period                           $   25,026   $    24,336 
                                                                       ==========  ============

 Supplemental schedule of cash flows-interest paid                    $   33,920   $    32,704 
                                                                       ==========  ============

 Supplemental schedule of noncash investing and financing activities:
   Foreclosures of loans receivable                                   $    1,595   $     2,037 
                                                                       ==========  ============
</TABLE>

See  accompanying  Notes  to  Consolidated  Financial  Statements

<PAGE>

                     COASTAL BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  BASIS  OF  PRESENTATION

     The  accompanying unaudited Consolidated Financial Statements were prepared
in accordance with the instructions for Form 10-Q and, therefore, do not include
all  disclosures  necessary  for a complete presentation of financial condition,
results  of  operations,  and  cash  flows in conformity with generally accepted
accounting principles.  All adjustments which are, in the opinion of management,
of  a  normal  recurring nature and are necessary for a fair presentation of the
interim financial statements, have been included.  The results of operations for
the  periods  ended March 31, 1998 are not necessarily indicative of the results
that  may  be  expected  for the entire fiscal year or any other interim period.

     Coastal  Bancorp,  Inc.  and  subsidiaries adopted the Financial Accounting
Standards  Boards  Statement No. 130 ("Statement 130"), "Reporting Comprehensive
Income"  as  of  January  1, 1998.  Statement 130 requires the disclosure of all
components  of  comprehensive  income,  which  includes  net  income  and  other
comprehensive  income.  Other comprehensive income includes all nonowner related
changes  to  stockholders'  equity,  which  is  the  unrealized  gain  (loss) on
securities  available-for-sale.    These  amounts  have  been  disclosed  on the
consolidated  statements  of comprehensive income.  Statement 130 did not change
the  current  accounting  treatment for components of other comprehensive income
(i.e.  changes  in  unrealized  gain  (loss)  on securities available-for-sale).

(2)  PRINCIPLES  OF  CONSOLIDATION

     The  accompanying  unaudited  Consolidated Financial Statements include the
accounts  of Coastal Bancorp, Inc. and its wholly-owned subsidiary, Coastal Banc
Holding  Company,  Inc.  and its wholly-owned subsidiaries, Coastal Banc ssb and
subsidiaries  and  Coastal  Banc Capital Corp. (collectively, Coastal).  Coastal
Banc ssb's subsidiaries include CoastalBanc Financial Corp., CBS Mortgage Corp.,
and  CBS  Asset  Corp.  (collectively  with  Coastal  Banc  ssb,  the Bank). All
significant  intercompany  balances  and  transactions  have  been eliminated in
consolidation.

(3)  MORTGAGE-BACKED  SECURITIES

     Mortgage-backed  securities  at  March 31, 1998 (unaudited) were as follows
(dollars  in  thousands):

<TABLE>
<CAPTION>

                                         Gross       Gross
                           Amortized  Unrealized   Unrealized  Market
                             Cost        Gains       Losses     Value
                           ---------  -----------  ----------  -------  
<S>                           <C>         <C>         <C>       <C>
Held-to-Maturity:
 REMICS - Agency         $   942,955  $ 6,117  $  (21,783)  $   927,289
   REMICS - Non-agency       273,139      674      (6,333)      267,480
 FNMA certificates            68,167      150        (398)       67,919
 GNMA certificates            27,002      506          --        27,508
 Non-agency securities        13,970      243         (72)       14,141
 Interest-only securities         16       --          --            16
                         -----------   -------  ----------  -----------
                         $ 1,325,249   $ 7,690  $ (28,586)  $ 1,304,353
                         ===========   =======  ==========  ===========

Available-for-sale:
 REMICS - Agency         $   171,169   $   390  $  (3,916)  $   167,643
 REMICS - Non-agency           2,156        --        (16)        2,140
                         -----------   -------  ----------  -----------
                         $   173,325   $   390  $  (3,932)  $   169,783
                         ===========   =======  ==========  ===========
</TABLE>


     Mortgage-backed securities at December 31, 1997 were as follows (dollars in
thousands):

<TABLE>
<CAPTION>

                                         Gross       Gross
                           Amortized  Unrealized   Unrealized  Market
                             Cost        Gains       Losses     Value
                           ---------  -----------  ----------  -------  
<S>                           <C>         <C>         <C>       <C>
Held-to-maturity:
 REMICS - Agency         $   950,689   $ 5,022  $ (20,478)  $   935,233
   REMICS - Non-agency       279,131       701     (5,610)      274,222
 FNMA certificates            71,887       144       (683)       71,348
 GNMA certificates            28,808       566         --        29,374
 Non-agency securities        14,555       239        (23)       14,771
 Interest-only securities         20        --         --            20
                         -----------   -------  ----------  -----------
                         $ 1,345,090   $ 6,672  $ (26,794)  $ 1,324,968
                         ===========   =======  ==========  ===========

Available-for-sale:
 REMICS - Agency         $   171,167   $   579  $  (4,044)  $   167,702
 REMICS - Non-agency           2,328        --        (33)        2,295
                         -----------   -------  ----------  -----------
                         $   173,495   $   579  $  (4,077)  $   169,997
                         ===========   =======  ==========  ===========
</TABLE>


(4)          LOANS  RECEIVABLE

     Loans  receivable  at  March 31, 1998 and December 31, 1997 were as follows
(dollars  in  thousands):
<TABLE>
<CAPTION>


                                                   March 31, 1998      December 31, 1997
                                                   ---------------     -----------------        
                                                     (Unaudited)
<S>                                                <C>                        <C>
Real estate mortgage loans:
 First-lien mortgage, primarily residential          $   720,623          $   689,767 
 Commercial                                              197,797              181,315 
 Multifamily                                             132,707              131,454 
 Residential construction                                 87,041               83,359 
 Acquisition and development                              34,005               31,619 
 Commercial construction                                  16,997               14,506 
Commercial loans, secured by residential mortgage
 loans held for sale                                     137,182               98,679 
Commercial loans, secured by mortgage servicing           15,880               32,685 
 rights
Commercial, financial and industrial                      27,183               30,877 
Loans secured by savings deposits                          7,402                8,695 
Consumer and other loans                                  24,753               15,030 
                                                    ------------          ------------
                                                       1,401,570            1,317,986 
Loans in process                                         (55,441)             (47,893)
Allowance for loan losses                                 (8,685)              (7,412)
Unearned interest and  loan fees                          (2,933)              (2,926)
Premium to record purchased loans, net                     1,444                1,680 
                                                    ------------          ------------

                                                     $ 1,335,955          $ 1,261,435 
                                                    ============          ============

Weighted average yield                                     8.27%                8.30%
                                                    ============          ============
</TABLE>


     At  March  31,  1998,  Coastal  had outstanding commitments to originate or
purchase  $69.9  million  of  real  estate  mortgage  and  other  loans  and had
commitments  under  lines  of credit to originate primary construction and other
loans  of approximately $106.9 million.  In addition, at March 31, 1998, Coastal
had  $3.6  million of outstanding letters of credit.  Management anticipates the
funding  of  these  commitments  through  normal  operations.

     At  March  31, 1998 and December 31, 1997, the carrying value of loans that
were  considered  to  be  impaired  totaled  approximately $1.4 million and $2.0
million,  respectively  (all  of  which  are  on  nonaccrual),  and  the related
allowance  for  loan losses on those impaired loans totaled $1.1 million at both
period ends.  The average recorded investment in impaired loans during the three
months  ended  March  31,  1998  and  1997  was  $1.9  million  and  $722,000,
respectively.

     An  analysis  of  activity  in  the allowance for loan losses for the three
months  ended  March  31,  1998  and  1997  is  as  follows  (in  thousands):

<TABLE>
<CAPTION>

                                   Three months ended March 31,
                                  ------------------------------     
                                        1998                1997
                                  ------------          ----------
                                         (Unaudited)
<S>                                  <C>                     <C>
Balance, beginning of period       $  7,412               $6,880 
Provision for loan losses             1,450                  450 
Charge-offs, net of recoveries         (177)                (424)
                                ------------              -------

Balance, end of period             $  8,685               $6,906 
                                ============              =======
</TABLE>


     Coastal  services for others loans receivable which are not included in the
Consolidated  Financial  Statements. The total amounts of such loans were $639.0
million  and  $675.7  million  at  March  31,  1998  and    December  31,  1997,
respectively.


<PAGE>

(5)  SAVINGS  DEPOSITS

     Savings  deposits,  their  stated  rates  and  the related weighted average
interest rates at March 31, 1998 and December 31, 1997 are summarized as follows
(dollars  in  thousands):

<TABLE>
<CAPTION>

                                      Stated Rate     March 31, 1998    December 31, 1997
                                     --------------  ----------------  -------------------
                                                       (Unaudited)
<S>                                  <C>                  <C>                   <C>
Noninterest-bearing checking                  0.00%  $        49,467   $          101,782 
Interest-bearing checking            1.49  -  2.00             8,373               69,972 
Savings accounts                     2.18  -  2.75            25,963               25,555 
Money market demand accounts         0.00  -  4.51           283,632              165,986 
                                                     ----------------  -------------------

                                                             367,435              363,295 
                                                     ----------------  -------------------

Certificate accounts                 2.00  -  2.99             3,038                5,142 
                                     3.00  -  3.99             4,483                2,763 
                                     4.00  -  4.99            68,411               64,478 
                                     5.00  -  5.99           825,860              834,727 
                                     6.00  -  6.99            90,591               94,405 
                                     7.00  -  7.99             5,556                7,624 
                                     8.00  -  8.99             1,649                1,854 
                                     9.00  -  9.99               405                  847 
                                                     ----------------  -------------------
                                                             999,993            1,011,840 
                                                     ----------------  -------------------
Discount to record savings
deposits at fair value, net                                      (57)                 (75)
                                                     ----------------  -------------------

                                                     $     1,367,371   $        1,375,060 
                                                     ================  ===================

Weighted average rate                                           4.63%                4.67%
                                                     ================  ===================
</TABLE>


     The  scheduled  maturities of certificate accounts outstanding at March 31,
1998  were  as  follows  (dollars  in  thousands):

<TABLE>
<CAPTION>

                   March 31, 1998
                  ----------------
                    (Unaudited)
<S>               <C>
 0 to 12 months   $        782,844
 12 to 24 months           179,735
 24 to 36 months            22,899
 36 to 48 months             6,652
 48 to 60 months             7,657
 Over 60 months                206
                  ----------------
                  $        999,993
                  ================
</TABLE>

     Effective  January 1, 1998, Coastal implemented a program whereby a portion
of  the  balances  in noninterest-bearing and interest-bearing checking accounts
are  reclassified  to  money  market  demand  accounts  under  Federal  Reserve
Regulation  D.

(6)  SECURITIES  SOLD  UNDER  AGREEMENTS TO REPURCHASE AND FHLB ADVANCES

     (a)          The  weighted  average interest rates on securities sold under
agreements  to repurchase at March 31, 1998 and December 31, 1997 were 5.51% and
6.00%,  respectively.    The  stated  interest  rates  on  securities sold under
agreements  to  repurchase  ranged  from  4.93%  to  5.67%  at  March  31, 1998.

     (b)         The weighted average interest rate on advances from the FHLB at
March  31,  1998  and December 31, 1997 were 5.62% and 5.95%, respectively.  The
scheduled  maturities  and  related  weighted average interest rates on advances
from the FHLB at March 31, 1998 are summarized as follows (dollars in thousands)
(unaudited):

<TABLE>
<CAPTION>

Due during the year ended December 31,  Weighted Average
--------------------------------------  -----------------      
                                          Interest Rate     Amount
                                        -----------------  ---------
<S>                                     <C>                <C>
1998                                                5.59%  $ 287,178
1999                                                5.84     120,291
2000                                                6.17       7,929
2001                                                6.22       8,604
2002                                                5.62      69,649
2004                                                6.52       2,764
2006                                                6.91       3,102
2007                                                6.78       1,057
2008                                                4.66      50,000
2009                                                8.25       4,413
2011                                                6.78       1,268
2018                                                6.00         550
                                                           ---------

                                                           $ 556,805
                                                           =========
</TABLE>



     FHLB  advances  are  secured  by  certain  first-lien  mortgage  loans  and
mortgage-backed  securities  owned  by  Coastal.

(7)  SENIOR  NOTES  PAYABLE

     On  June  30,  1995, Coastal issued $50.0 million of 10.0% Senior Notes due
June 30, 2002.  The Senior Notes are redeemable at Coastal's option, in whole or
in  part,  on  or  after  June  30,  2000,  at par, plus accrued interest to the
redemption  date.    Interest  on  the  Senior  Notes  is  payable  quarterly.


<PAGE>

(8)  FINANCIAL  INSTRUMENTS  WITH  OFF-BALANCE  SHEET  RISK

     Coastal  is a party to financial instruments with off-balance sheet risk in
the  normal  course  of  business  to reduce its own exposure to fluctuations in
interest  rates.    These  financial  instruments  include  interest  rate  swap
agreements  and  interest  rate  cap  agreements.

     Coastal  utilizes  interest  rate  swap and interest rate cap agreements to
reduce  exposure  to  floating  interest  rates  by  altering  the interest rate
sensitivity  of  a portion of its variable-rate assets and borrowings.  At March
31,  1998,  Coastal  had  interest  rate swap and cap agreements having notional
principal  amounts  totaling  $45.8  million  and  $217.2 million, respectively.

     The  terms  of  the  interest rate swap agreements outstanding at March 31,
1998  (unaudited)  and  December  31, 1997 are summarized as follows (dollars in
thousands):

<TABLE>
<CAPTION>

                                                           Floating Rate    Fair Value at
                       Notional        LIBOR       Fixed         at         End of Period
                                                                           ---------------
Maturity                Amount         Index        Rate   End of Period     gain (loss)
---------------------  ---------    -----------    ------  --------------         
<S>                    <C>          <C>            <C>     <C>             <C>
At March 31, 1998:
1998                   $   4,400    Three-month    6.709%          5.625%  $          (24)
1999                      14,600    Three-month    6.926           5.625             (221)
2000                       4,800    Three-month    6.170           5.684              (31)
                           2,485    Three-month    6.000           5.688               (3)
2005                      19,527    Three-month    6.500           5.676             (623)
                       ---------                                                          
                       $  45,812                                           $         (902)
                       =========                                           ===============

At December 31, 1997:
1998                   $   4,400    Three-month    6.709%          5.875%  $          (28)
1999                      14,600    Three-month    6.926           5.875             (239)
2000                       4,800    Three-month    6.170           5.906              (99)
                           2,520    Three-month    6.000           5.906               -- 
2005                      19,527    Three-month    6.500           5.879             (230)
                       ---------                                           ---------------
                       $  45,847                                           $         (596)
                       =========                                           ===============
</TABLE>


     The  interest  rate  swap  agreements  provide for Coastal to make weighted
average  fixed  interest payments and receive payments based on a floating LIBOR
index,  as  defined  in  each  agreement.  The weighted average interest rate of
payments  received on all of the interest rate swap agreements was approximately
5.80% and the weighted average interest payment rate on all of the interest rate
swap  agreements  was  approximately  6.56% for the three months ended March 31,
1998.    Payments on the interest rate swap agreements are based on the notional
principal amount of the agreements; no funds were actually borrowed or are to be
repaid.    The interest rate swap agreements are used to alter the interest rate
sensitivity  of  a  portion  of  Coastal's  variable-rate  borrowings.  As such,
Coastal  records net interest expense or income related to these agreements on a
monthly  basis in "interest expense on other borrowed money" in the accompanying
consolidated  statements  of  income.  The net interest expense related to these
agreements  was  approximately $86,000 for the three months ended March 31, 1998
and  approximately  $137,000 for the three months ended March 31, 1997.  Coastal
had  pledged  approximately $5.8 million of mortgage-backed securities to secure
interest  rate  swap  agreements  at  March  31,  1998.

     Coastal  has  interest  rate  cap  agreements  with  third  parties.    The
agreements  provide for the third parties to make payments to Coastal whenever a
defined floating rate exceeds rates ranging from 5.0% to 12.5%, depending on the
agreement.    Payments  on  the  interest  rate  cap agreements are based on the
notional  principal amount of the agreements; no funds were actually borrowed or
are  to  be repaid.  The purchase prices of the interest rate cap agreements are
capitalized  and  included  in  "prepaid  expenses  and  other  assets"  in  the
accompanying  consolidated  statements  of financial condition and are amortized
over the life of the agreements using the straight-line method.  The unamortized
portion  of  the  purchase  price  of  the  interest  rate  cap  agreements  was
approximately  $186,000  and  $286,000  at March 31, 1998 and December 31, 1997,
respectively, with the estimated fair value of the agreements being $202,000 and
$300,000  at  March  31, 1998 and December 31, 1997, respectively.  The interest
rate cap agreements are used to alter the interest rate sensitivity of a portion
of  Coastal's  mortgage-backed  securities,  loans  receivable and their related
funding  sources.  As  such, the amortization of the purchase price and interest
income from the interest rate cap agreements are recorded in "interest income on
mortgage-backed  securities  or  loans  receivable,"  as  appropriate,  in  the
accompanying  consolidated  statements  of income.  The net decrease in interest
income related to the interest rate cap agreements was approximately $24,000 and
$134,000  for  the  three  months  ended  March  31, 1998 and 1997 respectively.

     Interest  rate  cap  agreements  outstanding  at March 31, 1998 (unaudited)
expire  as  follows  (dollars  in  thousands):

<TABLE>
<CAPTION>

Year of       Strike rate    Notional
expiration       range        amount
----------  ---------------  ---------
<S>              <C>              <C>
1998        5.00  -  12.50%  $ 129,300
1999        7.25  -  11.00      63,564
2000         8.50  -  9.50       8,000
2001        7.00      9.00      16,315
                             ---------
                             $ 217,179
                             =========
</TABLE>


     Market risk, or the risk of loss due to movement in market prices or rates,
is  quantified by Coastal through a risk monitoring process of marking to market
the portfolio to expected market level changes in an instantaneous shock of plus
and  minus  200  basis  points on a quarterly basis.  This process discloses the
effects  on  market  values  of the assets and liabilities, unrealized gains and
losses,  including  off-balance sheet items, as well as potential changes in net
interest  income.

     The fluctuation in the market value, however, has no effect on the level of
earnings of Coastal because the securities are categorized as "held-to-maturity"
or  "available-for-sale."

     Coastal  is  exposed  to  credit loss in the event of nonperformance by the
counterparty to the swap or cap and controls this risk through credit monitoring
procedures.  The notional principal amount does not represent Coastal's exposure
to  credit  loss.

<PAGE>

(9)  EARNINGS  PER  SHARE

     The  following  summarizes  information related to the computation of basic
and diluted earnings per share ("EPS") for the three months ended March 31, 1998
and  1997  (dollars  in  thousands,  except  per  share  data):

<TABLE>
<CAPTION>
                                                    Three  months  ended  March  31,
                                                    --------------------------------
<S>                                                           <C>         <C>
                                                              1998        1997
                                                        ----------  ----------

Net income available to common stockholders             $    5,941  $    3,238
                                                        ==========  ==========
Weighted average number of common shares
 outstanding used in basic EPS calculation               5,027,540   4,968,126
Add assumed exercise of outstanding stock options
 as adjusted for dilutive securities                       171,918     139,831
                                                        ----------  ----------
Weighted average number of common shares
 outstanding used in diluted EPS calculation             5,199,458   5,107,957
                                                        ==========  ==========
Basic EPS                                               $     1.18  $     0.65
                                                        ==========  ==========
Diluted EPS                                             $     1.14  $     0.63
                                                        ==========  ==========
</TABLE>


(10) STATUTORY  CAPITAL  REQUIREMENTS

     The  applicable  regulations  require federally insured institutions, which
are not the highest rated, to have a minimum regulatory tier 1 (core) capital to
total  assets  ratio  equal to a minimum of 4.0%, a tier 1 risk-based capital to
risk-weighted assets ratio of 4.0% and total risk-based capital to risk-weighted
assets  ratio  of  8.0%.

     At March 31, 1998, the Bank's regulatory capital (unaudited) in relation to
its  existing regulatory capital requirements for capital adequacy purposes were
as  follows  (dollars  in  thousands):

<TABLE>
<CAPTION>

                           Minimum For Capital      Well-Capitalized
                                 Actual             Adequacy Purposes     Requirements
                           -------------------     ------------------     -------------  
<S>                       <C>          <C>           <C>       <C>         <C>       <C> 
Capital Requirement      Amount       Ratio         Amount    Ratio       Amount    Ratio
--------------------   ----------   ---------      --------  ------      --------  ------
 Tier 1 (core)         $  166,351      5.69%       $116,933   4.00%       $146,166   5.00%
 Tier 1 risk-based        166,351     11.24          59,214   4.00          88,822   6.00 
 Total risk-based         175,036     11.82         118,429   8.00         148,036  10.00 

</TABLE>


     As of March 31, 1998, the most recent notification from the Federal Deposit
Insurance  Corporation  ("FDIC")  categorized the Bank as well capitalized under
the  regulatory framework for prompt corrective action.  There are no conditions
or  events  since  that  notification  that management believes have changed the
institution's  category.

<PAGE>
(11) FEDERAL  INCOME  TAXES

     In  March  1998,  Coastal  announced  that  it had successfully resolved an
outstanding  tax  benefit  issue with the FDIC as Manager of the Federal Savings
and  Loan  Insurance  Corporation  Resolution Fund.  The resolution of the issue
resulted  in  Coastal  recording  a $3.7 million, or 71 cents per diluted share,
reversal  of  accrued income taxes during the three months ended March 31, 1998;
therefore  a  one-time positive effect on net income.  The resolution of the tax
benefit  issue  also contributes an ongoing quarterly tax benefit of $226,000 or
approximately  4  cents  per  diluted  share,  as  of  March  31,  1998.

(12) RECENT  ACCOUNTING  STANDARDS

     The  Financial  Accounting  Standards Board's Statement No. 131 ("Statement
131"),  "Disclosure  about  Segments  of  an Enterprise and Related Information"
requires  public  companies  to report certain information about their operating
segments  in  their  annual financial statements and quarterly reports issued to
stockholders  for years after implementation.  It also requires public companies
to  report certain information about their products and services, the geographic
areas  in  which  they  operate,  and  their  major customers.  Statement 131 is
effective  for  fiscal  years  beginning  after  December  15,  1997.    Coastal
anticipates implementing Statement 131 for its fiscal 1998 Annual Report on Form
10-K.    Implementation  of  Statement  131  should  have  no material effect on
Coastal's  Consolidated  Financial  Statements.

(13) PENDING  BRANCH  PURCHASE

     On  May  4, 1998, Coastal announced the execution of a definitive agreement
to  purchase  the  Valley  Branches of Pacific Southwest Bank, also known as San
Benito  Bank  and  Trust  Company,  a  unit  of  Pacific Southwest Bank.  Twelve
branches  located  in  Harlingen,  San  Benito,  Mission,  Pharr,  Edinburg,
Brownsville, McAllen and South Padre with deposits of approximately $357 million
and  loans  of approximately $175 million, will be acquired in this transaction.
The  acquisition  is pending regulatory approval and is expected to close in the
third  quarter  of  1998.

(14) STOCK  SPLIT

     On April 23, 1998, the Board of Directors declared a 3:2 stock split on the
common  stock  of Coastal payable on June 15, 1998 to the stockholders of record
at  the  close  of  business  on  May  15,  1998.



ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
         ---------------------------------------------------------------

Financial  Condition
--------------------

     Total  assets  increased  1.9%  or  $54.8 million from December 31, 1997 to
March  31,  1998.  The net increase resulted primarily from an increase in loans
receivable  of $74.5 million, an increase in Federal funds sold of $3.5 million,
an  increase  of $7.2 million in loans held for sale and a $2.4 million increase
in  Stock  in the Federal Home Loan Bank of Dallas, offset by decreases of $19.8
million  and  $12.1  million  in mortgage-backed securities held-to-maturity and
cash  and  amounts due from depository institutions, respectively.  The increase
in  loans  receivable  was  primarily  due  to  bulk  residential  mortgage loan
purchases  of  $114.4  million  and $6.4 million of consumer loan purchases from
correspondent  lenders,  in  addition  to  increases  of $38.5 million and $16.5
million in commercial loans, secured by residential mortgage loans held for sale
and  commercial  real  estate loans, respectively, during the three months ended
March  31,  1998.    These  increases were somewhat offset by principal payments
received.    The decrease in mortgage-backed securities held-to-maturity was due
to  principal  payments  received.

     Savings  deposits  decreased slightly by 0.6% or $7.7 million from December
31,  1997  to  March  31,  1998.  Securities sold under agreements to repurchase
increased  4.7%  or  $37.4  million and advances from the FHLB increased 3.0% or
$16.3  million  from  December 31, 1997 to March 31, 1998.  Stockholders' equity
increased  5.4%  or  $5.7  million from December 31, 1997 to March 31, 1998 as a
result  primarily  of  net  income  offset  by  dividends declared and a $29,000
decrease  in  accumulated  other  comprehensive  income  (loss).

Results  of  Operations  for  the  Three  Months  Ended  March 31, 1998 and 1997
--------------------------------------------------------------------------------

     General
     ------- 

     For  the  three  months  ended  March 31, 1998, net income before preferred
stock  dividends  was $6.6 million compared to $3.9 million for the three months
ended  March  31, 1997.  The increase in net income in the first quarter of 1998
was primarily due to the resolution of an outstanding tax benefit issue with the
Federal Deposit Insurance Corporation as Manager of the Federal Savings and Loan
Insurance  Corporation Resolution Fund.  The resolution of the issue resulted in
Coastal  recording  a  $3.7  million, or 71 cents per diluted share, reversal of
accrued  income  taxes;  resulting  in a one-time positive effect on net income.
The  resolution  of  the  tax  benefit  issue  will  also  contribute an ongoing
quarterly tax benefit of $226,000 or approximately 4 cents per diluted share (as
of  March  31,  1998);  which  is  expected to continue for approximately 3 to 4
years.

     The positive effect of the tax benefit issue resolution was somewhat offset
by  the  recording  in  the first quarter of 1998 of an additional provision for
loan  losses  of $1.0 million and a writedown of purchased mortgage loan premium
of  $709,000.    The additional provision for loan losses of $1.0 million, or 13
cents  per  diluted  share after tax, was recorded to increase the allowance for
loan  losses  due  to  the  continuing  change  in  the composition of the loans
receivable  portfolio.    This  change  is occurring as a result of management's
current  emphasis  on business lending.  The writedown of the purchased mortgage
loan premium of $709,000, or 9 cents per diluted share after tax, was related to
an  adjustable  rate whole loan package purchased in the second quarter of 1997,
on  which  Coastal  experienced high prepayments during 1997 and continuing into
1998,  resulting  from  a comparatively lower current interest rate environment.

     The  net  benefit  of recording the resolution of the tax issue after these
adjustments  (net  of  their  applicable  income  tax  effects) amounted to $2.6
million  or approximately 49 cents per diluted share.  Excluding the net benefit
from  these  nonrecurring items recorded during the three months ended March 31,
1998,  net  income available to common stockholders from ongoing core operations
was  $3.4  million  or  65  cents  per  diluted  share  (as  of March 31, 1998).

     Net interest income increased $352,000 for the three months ended March 31,
1998  as  compared  to the three months ended March 31, 1997. Noninterest income
(excluding  the  writedown  of purchased mortgage loan premium) increased during
such  period  by  $287,000.    Noninterest expense increased by $778,000 and the
provision  (benefit)  for federal income taxes (excluding the one-time effect of
the  $3.7  million  reversal of accrued income taxes) decreased by $872,000 from
the  1997  to  the  1998 three month period due to the ongoing quarterly benefit
attributable to the tax benefit issue and the tax effect of the recording of the
additional provision for loan losses and the writedown of the purchased mortgage
loan  premium  during  the  first  quarter  of  1998.

     Interest  Income
     ----------------

     Interest  income  for  the three months ended March 31, 1998 increased $1.3
million  or  2.6%  from the three months ended March 31, 1997.  The increase was
primarily  due to an increase of $925,000 in interest earned on loans receivable
over  the  prior  comparable  quarter.  The increase in interest income on loans
receivable  was  due to a $74.6 million increase in the average balance of loans
receivable  offset  by  a decrease in the average yield from 8.40% for the three
months  ended March 31, 1997 to 8.20% for the three months ended March 31, 1998.
The  decrease  in  the  average  yield  on loans receivable was primarily due to
$749,000  (or 9 cents per diluted share after tax) of additional amortization of
purchased  mortgage  loan  premium during the three months ended March 31, 1998.
This  amortization  was  attributable  to  an adjustable rate whole loan package
purchased  in  the  second  quarter  of  1997, on which Coastal experienced high
prepayments  during  1997  and  through the first quarter of 1998.  As discussed
previously, Coastal recorded a $709,000 writedown of the purchased mortgage loan
premium  on  this  package  in  March  1998,  which should positively impact the
average  yield  in  the  future.

     In  addition,  interest  income  on  mortgage-backed securities and federal
funds sold, certificates of deposit and other investments increased $254,000 and
$105,000,  respectively.    Total  interest-earning  assets for the three months
ended  March  31, 1998 averaged $2.9 billion as compared to $2.8 billion for the
three  months  ended  March  31,  1997.

     Interest  Expense
     -----------------

     Interest  expense on interest-bearing liabilities was $35.9 million for the
three  months  ended  March  31, 1998, as compared to $35.0 million for the same
period  in  1997.    The increase in interest expense was due to a $39.3 million
increase  in  the  average  balance  of interest-bearing liabilities during such
period  and an increase in the average rate paid on interest-bearing liabilities
from  5.31%  for  the  three  months ended March 31, 1997 to 5.37% for the three
months  ended  March  31,  1998.    The  increase  in  average  interest-bearing
liabilities  consisted  of  a  $220.5 million increase in FHLB advances, a $34.2
million  increase  in  interest-bearing  savings  deposits,  offset  by a $215.6
million  decrease  in  securities  sold  under  agreements  to  repurchase.

     Net  Interest  Income
     ---------------------

     Net  interest income was $15.0 million for the three months ended March 31,
1998  and  $14.6  million  for  the  same  period  in 1997.  Net interest margin
("Margin")  was  2.10%  for  both  three  month  periods.  Margin represents net
interest  income  as  a  percentage  of  average  interest-earning  assets.  Net
interest  spread  ("Spread"),  defined  to exclude noninterest-bearing deposits,
decreased  from 1.79% for the three months ended March 31, 1997 to 1.74% for the
three  months  ended  March 31, 1998.  Management also calculates an alternative
Spread which includes noninterest-bearing deposits.  Under this calculation, the
alternative  Spreads  for  the  three  months ended March 31, 1998 and 1997 were
1.92% and 1.94%, respectively.  Margin and Spread are affected by the changes in
the  amount  and  composition  of  interest-earning  assets and interest-bearing
liabilities.    The  average interest rates paid on interest-bearing liabilities
increased  from 5.31% for the three months ended March 31, 1997 to 5.37% for the
same  period  in  1998.  This increase was slightly offset by an increase in the
average  yield  on interest-earning assets from 7.10% for the three months ended
March  31,  1997 to 7.11% for the same period in 1998.  In addition, average net
interest-earning  assets  increased  $27.6  million  from the three months ended
March  31,  1997  to  the  three  months  ended  March  31,  1998.

     Spread for the three months ended March 31, 1998 was negatively affected by
the  additional  amortization  of  purchased  mortgage loan premium as discussed
previously  and  by  the  higher  borrowing  costs  experienced by Coastal.  The
writedown  of  the  purchased  mortgage  loan  premium recorded during the three
months  ended  March 31, 1998 should decrease the ongoing amortization effect of
prepayments  related  to  the  adjustable rate whole loan package.  In addition,
while management believes that the higher borrowing costs are temporary, efforts
are  being  made  to  replace  borrowings  with  lower  cost  deposits.

     Management's  goal  is  to  achieve  a  more  desirable  asset/liability
composition  which  is  less  vulnerable  to  market interest rate fluctuations,
primarily through the addition of loans tied to variable rates such as LIBOR and
local  and  regional  prime rates and through the efforts to replace LIBOR based
borrowings  with  lower  cost  deposits.    In  addition,  management intends to
gradually  increase  commercial  business  loans  to  approximately 15% of total
assets  and  commercial business (noninterest-bearing) deposits to approximately
10%  of  total  deposits  within  three  to  five  years.

     Provision  for  Loan  Losses
     ----------------------------

     The  provision  for  loan  losses was $1,450,000 for the three months ended
March  31,  1998 and $450,000 for the three months ended March 31, 1997.  During
the  three months ended March 31, 1998, Coastal recorded an additional provision
for loan losses of $1.0 million to increase the allowance for loan losses due to
the  continuing  change  in  the  composition of the loans receivable portfolio.
This  change  is  occurring  as  a  result  of  management's current emphasis on
business  lending.  The allowance for loan losses as a percentage of total loans
was  0.65% at March 31, 1998 and 0.56% at March 31, 1997.  Although no assurance
can  be given, management believes that the present allowance for loan losses is
adequate  considering historical loss experience, delinquency trends and current
economic  conditions. Management will continue to review its loan loss allowance
policy as Coastal's loan portfolio grows and diversifies to determine if changes
to  the  policy  and  resulting  allowance  for  loan  losses  are  necessary.

     Noninterest  Income
     -------------------

     For  the  three  months ended March 31, 1998, noninterest income (excluding
the writedown of purchased mortgage loan premium) increased $287,000 or 19.5% to
$1.8  million,  compared  to  $1.5  million for the three months ended March 31,
1997.    The  increase in noninterest income was primarily due to an increase of
$430,000  in  loan  fees  and  service charges on deposit accounts and a $24,000
increase in other noninterest income.  These increases were somewhat offset by a
$167,000  decrease  in  loan  servicing  income.    In  addition,  as  discussed
previously,  during  the  three  months ended March 31, 1998, Coastal recorded a
writedown  of  purchased  mortgage  loan  premium  of  $709,000.

     Noninterest  Expense
     --------------------

     For  the  three  months ended March 31, 1998, noninterest expense increased
$778,000  from  the  three  months  ended March 31, 1997.  Compensation, payroll
taxes  and other benefits as well as office occupancy expense increased $315,000
and  $378,000,  respectively,  from the three months ended March 31, 1997 to the
three  months  ended  March  31,  1998,  primarily due to the staffing increases
related to the expansion of the loan product base and the continuing development
of  commercial  business lending programs.  In addition, occupancy expenses also
increased  due  to  the  acquisition of assets and other expenses related to the
relocation of Coastal's corporate headquarters in the third quarter of 1997.  In
addition,  data  processing  expenses and the amortization of goodwill increased
$95,000 and $32,000, respectively.  Other changes included a $13,000 increase in
real  estate  owned  expenses,  a  $6,000  decrease  in insurance premiums and a
$49,000  decrease  in  other  operating  expenses.

     Provision  (Benefit)  for  Federal  Income  Taxes
     -------------------------------------------------

     For  the  three  months  ended  March 31, 1998, the provision (benefit) for
federal income taxes (excluding the one-time effect of the $3.7 million reversal
of accrued income taxes) was $1.4 million compared to $2.2 million for the three
months  ended  March 31, 1997.  The decrease from 1997 to 1998 was due primarily
to  the  ongoing quarterly benefit attributable to the tax benefit issue and the
tax  benefit effect of the recording of the additional provision for loan losses
and  the  writedown  of  the  purchased  mortgage  loan premium during the first
quarter  of  1998.

     Liquidity  and  Capital  Resources
     ----------------------------------

     Coastal's  primary  sources  of  funds  consist of savings deposits bearing
market  rates  of  interest,  securities  sold  under  agreements to repurchase,
advances  from the FHLB, federal funds purchased and principal payments on loans
receivable  and  mortgage-backed securities.  Coastal uses its funding resources
principally  to  meet  its  ongoing  commitments  to  fund maturing deposits and
deposit  withdrawals,  repay  borrowings,  purchase  loans  receivable  and
mortgage-backed  securities,  fund  existing  and  continuing  loan commitments,
maintain  its  liquidity, meet operating expenses and fund acquisitions of other
banks and thrifts, either on a branch office or whole bank acquisition basis. At
March  31,  1998, Coastal had binding commitments to originate or purchase loans
totaling  approximately $69.9 million and had $55.4 million of undisbursed loans
in process. Scheduled maturities of certificates of deposit during the 12 months
following  March  31,  1998 totaled $782.8 million at March 31, 1998. Management
believes  that  Coastal  has  adequate resources to fund all of its commitments.

     As  of  March 31, 1998, Coastal operated 37 retail banking offices in Texas
cities,  including  Houston,  Austin,  Corpus  Christi  and  small cities in the
southeast  quadrant  of  Texas.   Management's five year goal is to have over $5
billion  in  assets,  over  $3 billion in deposits, $2.5 billion in loans and 80
branches  in cities throughout central and south Texas, although there can be no
assurance  that  this  goal  can be accomplished through growth or acquisitions.

     Forward-Looking  Information
     ----------------------------

     "Safe  Harbor" Statement under the Private Securities Litigation Reform Act
of  1995:   The statements contained in this Quarterly Report on Form 10-Q which
are  not  historical  facts  contain forward looking information with respect to
plans, projections or future performance of the Company, the occurrence of which
involve  certain  risks and uncertainties detailed in the Company's filings with
the  Securities  and  Exchange  Commission.

     The  above  discussion  should  be read in conjunction with the information
contained  in  the Consolidated Financial Statements and the Notes thereto.  The
above  information  contains  "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "Reform Act"), and are
subject  to  the  safe harbor created by that Reform Act.  The words "estimate,"
"project,"  "anticipate,"  "expect,"  "intend,"  "believe," "plans," and similar
expressions  are  intended  to identify forward-looking statements. Because such
forward-looking  statements involve risks and uncertainties, there are important
factors  that  could  cause  actual  results  to  differ  materially  from those
expressed  or  implied by such forward-looking statements. Factors, all of which
are  difficult  to  predict and many of which are beyond the control of Coastal,
that  could  cause  actual  results  to  differ  materially include, but are not
limited to:  risks related to Coastal's acquisition strategy, including risks of
adversely changing results of operations and factors affecting Coastal's ability
to  consummate  further  acquisitions;  changes in general economic and business
conditions;  changes  in  market  rates  of  interest;  changes  in the laws and
regulations  applicable  to  Coastal;  the  risks  associated  with  the  Bank's
non-traditional  lending  (loans  other  than single-family residential mortgage
loans  such  as multifamily, real estate acquisition and development, commercial
real  estate,  commercial  business,  warehouse  and  mortgage  servicing rights
loans);  and  changes  in  business strategies and other factors as discussed in
Coastal's  Annual  Report  on Form 10-K for the year ended December 31, 1997, as
filed  with  the  Securities  and  Exchange  Commission (SEC) on March 24, 1998.

ITEM 3.   QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT MARKET RISK
           --------------------------------------------------------------

     There  have  been  no  material  changes  in  Coastal's  interest rate risk
position  since  December 31, 1997.  Coastal's principal market risk exposure is
to  interest  rates.


<PAGE>
     PART  II  -  OTHER  INFORMATION

Item  1.          Legal  Proceedings
                  ------------------

     Coastal  is involved in routine legal proceedings occurring in the ordinary
course  of  business  which,  in the aggregate, are believed by management to be
immaterial.

Item  2.         Changes  in  Securities
                 -----------------------

                 a)  Not  applicable.

                 b)  Not  applicable.

Item  3.         Default  Upon  Senior  Securities
                 ---------------------------------

                 Not  applicable.

Item  4.         Submission  of  Matters  to  a  Vote  of  Security  Holders
                 -----------------------------------------------------------

                 Not  applicable.

Item  5.         Other  Information
                 ------------------

                 Not  applicable.

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

     The  following  exhibits  are  filed  as  part  of  this  report:

          Exhibit  27  -  Financial  Data  Schedule  (filed  via  EDGAR)
          Exhibit  99  -  Forward-Looking  Information


                                   SIGNATURES


     Pursuant  to  the  requirement  of the Securities Exchange Act of 1934, the
Registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.



Dated:       5/15/98                    By/s/     Manuel J. Mehos
             -------                         -------------------------
                                             Manuel  J.  Mehos
                                             Chairman  of  the  Board
                                             Chief  Executive  Officer




Dated:       5/15/98                    By/s/     Catherine N. Wylie
             -------                         ------------------------
                                             Catherine  N.  Wylie
                                             Chief  Financial  Officer

                                   Exhibit 27


                             Financial Data Schedule


                                (filed via EDGAR)
                                   Exhibit 99


                           Forward-Looking Information


     Forward-Looking  Information

     "Safe  Harbor" Statement under the Private Securities Litigation Reform Act
of  1995:   The statements contained in this Quarterly Report on Form 10-Q which
are  not  historical  facts  contain forward looking information with respect to
plans, projections or future performance of the Company, the occurrence of which
involve  certain  risks and uncertainties detailed in the Company's filings with
the  Securities  and  Exchange  Commission.

     The  above  discussion  should  be read in conjunction with the information
contained  in  the Consolidated Financial Statements and the Notes thereto.  The
above  information  contains  "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "Reform Act"), and are
subject  to  the  safe harbor created by that Reform Act.  The words "estimate,"
"project,"  "anticipate,"  "expect,"  "intend,"  "believe," "plans," and similar
expressions  are  intended  to identify forward-looking statements. Because such
forward-looking  statements involve risks and uncertainties, there are important
factors  that  could  cause  actual  results  to  differ  materially  from those
expressed  or  implied by such forward-looking statements. Factors, all of which
are  difficult  to  predict and many of which are beyond the control of Coastal,
that  could  cause  actual  results  to  differ  materially include, but are not
limited to:  risks related to Coastal's acquisition strategy, including risks of
adversely changing results of operations and factors affecting Coastal's ability
to  consummate  further  acquisitions;  changes in general economic and business
conditions;  changes  in  market  rates  of  interest;  changes  in the laws and
regulations  applicable  to  Coastal;  the  risks  associated  with  the  Bank's
non-traditional  lending  (loans  other  than single-family residential mortgage
loans  such  as multifamily, real estate acquisition and development, commercial
real  estate,  commercial  business,  warehouse  and  mortgage  servicing rights
loans);  and  changes  in  business strategies and other factors as discussed in
Coastal's  Annual  Report  on Form 10-K for the year ended December 31, 1997, as
filed  with  the  Securities  and  Exchange  Commission (SEC) on March 24, 1998.