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,  1997

          [     ]        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.)

                         8 Greenway Plaza, Suite 1500
                              Houston, Texas 77046
                   (Address of principal executive office)

                                 (713) 623-2600
                       (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: 4,968,591 AS OF MARCH 31, 1997


<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, 1997 (unaudited) and
        December 31, 1996                                                                  1

        Consolidated Statements of Income for the Three-Month Periods Ended March 31, 1997
        and 1996 (unaudited)                                                               2

        Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 31, 1997
        and 1996 (unaudited)                                                               3

        Notes to Consolidated Financial Statements                                         5

Item 2  Management's Discussion and Analysis of Financial Condition and 
        Results of Operations                                                             13

</TABLE>






PART  II.          OTHER  INFORMATION
<TABLE>

<CAPTION>



<S>     <C>                                                    <C>

Item 1  Legal Proceedings                                      16
Item 2  Changes in Securities                                  16
Item 3  Default upon Senior Securities                         16
Item 4  Submission of Matters to a Vote of Securities Holders  16
Item 5  Other Information                                      16
Item 6  Exhibits and Reports on Form 8-K                       16
</TABLE>




SIGNATURES

4

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,
                                                                     1997          1996
                                                                 ------------  -------------
ASSETS                                                           (Unaudited)
<S>                                                              <C>           <C>

Cash and amounts due from depository institutions                $     24,336  $      27,735
Loans receivable (note 4)                                           1,226,687      1,229,748
Mortgage-backed securities held-to-maturity (note 3)                1,337,588      1,344,587
Mortgage-backed securities available-for-sale, at market value        181,634        180,656
U.S. Treasury security available-for-sale, at market value                 11             11
Mortgage loans held for sale                                            1,231            298
Accrued interest receivable                                            14,525         14,690
Property and equipment                                                 15,026         14,987
Stock in the Federal Home Loan Bank of Dallas (FHLB)                   17,341         25,971
Goodwill                                                               15,159         15,596
Mortgage servicing rights                                               6,530          6,810
Prepaid expenses and other assets                                      12,699         14,818
                                                                 ------------  -------------
                                                                 $  2,852,767  $   2,875,907
                                                                 ============  =============
</TABLE>


<TABLE>

<CAPTION>

     LIABILITIES  AND  STOCKHOLDERS'  EQUITY


<S>                                                               <C>             <C>

Liabilities:
 Savings deposits (note 5)                                     $1,315,751   $1,310,835 
 Advances from the FHLB (note 6)                                  325,836      409,720 
 Securities sold under agreements to repurchase (note 6)        1,011,929      966,987 
 Senior notes payable (note 7)                                     50,000       50,000 
 Advances from borrowers for taxes and insurance                    7,672        4,676 
 Other liabilities and accrued expenses                            15,226       10,791 
                                                               -----------  -----------

   Total liabilities                                            2,726,414    2,753,009 
                                                               -----------  -----------

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

Commitments and contingencies (notes 4 and 8)

Stockholders' equity (notes 2 and 10):
 Preferred stock, no par value; authorized shares 5,000,000;
   no shares issued                                                    --           -- 
 Common stock, $.01 par value; authorized shares 30,000,000;
   4,968,591 and 4,966,941 shares issued and outstanding in
   1997 and 1996                                                       50           50 
 Additional paid-in capital                                        32,625       32,604 
 Retained earnings                                                 67,338       64,597 
 Unrealized gain (loss) on securities available-for-sale           (2,410)      (3,103)
                                                               -----------  -----------
   Total stockholders' equity                                      97,603       94,148 
                                                               -----------  -----------
                                                               $2,852,767   $2,875,907 
                                                               ===========  ===========
</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,
                                                                     --------------------  
                                                                      1997            1996
                                                              --------------------  --------
                                                                   (Unaudited)

<S>                                                                    <C>             <C>

Interest income:
 Mortgage-backed securities                                       $    23,192      $24,497 
 Loans receivable                                                      26,015       23,680 
 Investment securities, certificates, time deposits and 
   other investments                                                      397          377 
                                                             --------------------  --------
                                                                       49,604       48,554 
                                                             --------------------  --------

Interest expense:
 Savings deposits                                                      15,166       15,082 
 Other borrowed money                                                  13,780       13,997 
 Senior notes payable                                                   1,250        1,250 
 Advances from the FHLB:
   Short-term                                                           1,856        1,119 
   Long-term                                                            2,904        3,259 
                                                                ------------------  --------
                                                                       34,956       34,707 
                                                                ------------------  --------

   Net interest income                                                 14,648       13,847 
Provision for loan losses (note 4)                                        450          575 
                                                                ------------------  -------
   Net interest income after provision for loan losses                 14,198       13,272 
                                                                ------------------  --------

Noninterest income:
 Loan fees and service charges                                           894          795 
 Loan servicing income, net                                              407          393 
 Gain (loss) on sales of mortgage-backed securities
   available-for-sale, net                                                --           (4)
 Other                                                                   168          111 
                                                               ------------------  --------
                                                                       1,469        1,295 
                                                               ------------------  --------

Noninterest expense:
 Compensation, payroll taxes and other benefits                        4,625        3,887 
 Office occupancy                                                      1,611        1,417 
 Insurance premiums                                                      271          746 
 Data processing                                                         513          598 
 Amortization of goodwill                                                437          448 
 Real estate owned                                                       239          253 
 Other                                                                 1,861        1,791 
                                                                ------------------  --------
                                                                       9,557        9,140 
                                                                ------------------  --------

       Income before provision for Federal income taxes                6,110        5,427 

Provision for Federal income taxes                                     2,225        1,987 
                                                                ------------------  --------
     Net income before preferred stock dividends                       3,885        3,440 

Preferred stock dividends of Coastal Banc ssb                            647          647 
                                                                ------------------  --------
     Net income after preferred stock dividends                  $     3,238      $ 2,793 
                                                                ==================  ========

Net earnings per share (note 9)                                  $      0.64       $  0.56 
                                                                ==================  ========
</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,
                                                                        -----------------      
                                                                        1997        1996
                                                                 ----------------  ---------
                                                                    (Unaudited)

<S>                                                                      <C>          <C>

Cash flows from operating activities:
 Net income before preferred stock dividends                     $       3,885   $  3,440 
 Adjustments to reconcile net income to net cash provided
   by operating activities:
 Depreciation and amortization of property and equipment,
   purchased loans servicing rights, capitalized excess servicing fees
   and prepaid expenses and other assets                                 1,648      1,273 
 Net premium amortization                                                  112        466 
 Provision for loan losses                                                 450        575 
 Amortization of goodwill                                                  437        448 
 Originations and purchases of mortgage loans held for sale             (4,162)    (7,579)
 Sales of mortgage loans held for sale                                   3,229      5,901 
 Loss on sales of mortgage-backed securities available-for-sale             --          4 
 Decrease (increase) in:
   Accrued interest receivable                                             165        757 
   Other, net                                                            7,558     10,756 
 Stock dividends from the FHLB                                            (370)      (262)
                                                             --------------------  ---------

   Net cash provided by operating activities                            12,952     15,779 
                                                             --------------------  ---------

Cash flows from investing activities:
 Principal repayments on mortgage-backed securities                      6,995     10,970 
 Principal repayments on mortgage-backed securities
   available-for-sale                                                       88         88 
 Proceeds from sales of mortgage-backed securities available-for-sale       --        856 
 Purchases of loans receivable                                          (9,232)   (11,300)
 Net (increase) decrease in loans receivable                             9,727    (15,217)
 Net purchases of property and equipment                                  (746)    (1,176)
 Purchase of FHLB stock                                                     --         -- 
 Proceeds from sales of FHLB stock                                       9,000      5,000 
                                                             --------------------  ---------

    Net cash provided (used) by investing activities                    15,832    (10,779)
                                                             --------------------  ---------

</TABLE>



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

<CAPTION>



                                                                      Three Months Ended
                                                                          March 31,
                                                                     --------------------        
                                                                   1997              1996
                                                                ---------          ---------
                                                              (Unaudited)

<S>                                                                <C>                 <C>

Cash flows from financing activities:
 Net increase (decrease) in savings deposits                      $  4,886   $   (16,619)
 Advances from the FHLB                                          1,295,000       461,050 
 Principal payments on advances from the FHLB                   (1,378,884)     (464,449)
 Securities sold under agreements to repurchase                  2,588,007     2,462,224 
 Purchases of securities sold under agreements to repurchase    (2,543,065)   (2,433,971)
 Exercise of stock options for purchase of common stock, net            21            -- 
 Net increase in advances from borrowers for taxes and insurance     2,996         1,441 
 Dividends paid                                                     (1,144)       (1,143)
                                                          --------------------  ------------
   Net cash provided (used) by financing activities                (32,183)        8,533 
                                                          --------------------  ------------

   Net increase (decrease) in cash and cash equivalents             (3,399)       13,533 
 Cash and cash equivalents at beginning of period                   27,735        10,044 
                                                         --------------------  ------------
 Cash and cash equivalents at end of period                   $     24,336   $    23,577 
                                                         ====================  ============

 Supplemental schedule of cash flows-interest paid            $     32,704   $    36,375 
                                                         ====================  ============

 Supplemental schedule of noncash investing and financing activities:
   Foreclosures of loans receivable                           $      2,037   $     1,474 
                                                         ====================  ============

</TABLE>


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


5

(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 period ended March 31, 1997 are not necessarily
indicative  of  the results that may be expected for the entire fiscal year or
any  other  interim  period.

(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 subsidiary, Coastal Banc ssb
and  subsidiaries  (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.

     Certain amounts within the accompanying consolidated financial statements
and  the  related  notes have been reclassified to conform to the current year
presentation.    Such  reclassifications  had no effect on net income or total
stockholders'  equity.

(3)          MORTGAGE-BACKED  SECURITIES

     Mortgage-backed  securities at March 31, 1997 (unaudited) were as follows
(dollars  in  thousands):
<TABLE>

<CAPTION>



                                              Gross           Gross
                              Amortized     Unrealized     Unrealized       Market
                                Cost          Gains          Losses          Value
                              ---------     ----------     -----------     ---------
<S>                        <C>  <C>        <C>  <C>         <C>  <C>          <C>  <C>

Held-to-Maturity:
 REMICS - Agency           $    930,734  $       3,994  $     (29,518)  $    905,210
   REMICS - Non-agency          275,879            883        (12,060)       264,702
 FNMA certificates               78,742              5         (1,861)        76,886
 GNMA certificates               33,022            111             --         33,133
 Non-agency securities           19,178            186           (243)        19,121
 Interest-only securities            33              2             --             35
                              ---------     ----------     -----------     ---------
                           $  1,337,588  $       5,181  $     (43,682)  $  1,299,087
                              =========     ==========     ===========     =========

Available-for-sale:
 REMICS - Agency           $    182,468  $       1,104  $      (4,783)  $    178,789
 REMICS - Non-agency              2,874             --            (29)         2,845
                              ---------     ----------     -----------     ---------
                           $    185,342  $       1,104  $      (4,812)  $    181,634
                              =========     ==========     ===========     =========
</TABLE>




9

     Mortgage-backed  securities at December 31, 1996 were as follows (dollars
in  thousands):
<TABLE>

<CAPTION>



                                              Gross           Gross
                              Amortized     Unrealized     Unrealized       Market
                                Cost          Gains          Losses          Value
                              ---------     ----------     -----------     ---------
<S>                        <C>  <C>        <C>  <C>         <C>  <C>          <C>  <C>

Held-to-maturity:
 REMICS - Agency           $    932,488  $       4,730  $     (31,142)  $    906,076
   REMICS - Non-agency          278,612            834         (9,958)       269,488
 FNMA certificates               79,628             72         (1,072)        78,628
 GNMA certificates               34,031            282             --         34,313
 Non-agency securities           19,790            363            (95)        20,058
 Interest-only securities            38             --             (3)            35
                              ---------     ----------     ----------      ---------

                           $  1,344,587  $       6,281  $     (42,270)  $  1,308,598
                              =========     ==========     ===========     =========

Available-for-sale:
 REMICS - Agency           $    182,467  $       1,207  $      (5,946)  $    177,728
 REMICS - Non-agency              2,962             --            (34)         2,928
                              ---------     ----------     ----------      ---------
                           $    185,429  $       1,207  $      (5,980)  $    180,656
                              =========     ==========     ===========     =========
</TABLE>



(4)          LOANS  RECEIVABLE

     Loans  receivable at March 31, 1997 and December 31, 1996 were as follows
(dollars  in  thousands):
<TABLE>

<CAPTION>



                                                      March 31, 1997      December 31, 1996
                                                      ---------------     ------------------
                                                      (Unaudited)
<S>                                                     <C>   <C>              <C>  <C>

Real estate mortgage loans:
 First-lien mortgage, primarily residential         $    763,971   $            791,337 
 Multifamily                                             137,661                139,486 
 Residential construction                                 76,607                 77,146 
 Acquisition and development                              29,619                 26,132 
 Commercial                                              141,021                119,004 
 Commercial construction                                   5,140                  3,963 
Commercial loans, secured by residential mortgage 
 loans held for sale                                      58,112                 53,573 
Commercial loans, secured by mortgage servicing rights    18,956                 21,380 
Commercial, financial and industrial                      24,302                 21,965 
Loans secured by savings deposits                          8,063                  8,849 
Consumer and other loans                                  13,423                 14,400 
                                                     ---------------     ------------------
                                                       1,276,875              1,277,235 
Loans in process                                         (41,363)               (38,742)
Allowance for loan losses                                 (6,906)                (6,880)
Unearned loan fees                                        (2,379)                (2,344)
Premium to record purchased loans, net                       460                    479 
                                                     ---------------     ------------------

                                                   $   1,226,687   $          1,229,748 
                                                     ===============     ==================

Weighted average yield                                    8.50%                  8.37%
                                                     ===============     ==================
</TABLE>



     At  March  31,  1997, Coastal had outstanding commitments to originate or
purchase  $36.9  million  of  real  estate  mortgage  and  other loans and had
commitments  under lines of credit to originate primary construction and other
loans of approximately $92.3 million.  In addition, at March 31, 1997, Coastal
had $1.4 million of outstanding letters of credit.  Management anticipates the
funding  of  these  commitments  through  normal  operations.

     At March 31, 1997 and December 31, 1996, the carrying value of loans that
were  considered  to  be impaired totaled approximately $895,000 and $725,000,
respectively,  (all  of which are on nonaccrual) and the related allowance for
loan  losses  on  those  impaired  loans  totaled  $564,000  and  $524,000,
respectively.    The  average recorded investment in impaired loans during the
three  months  ended  March  31,  1997 and 1996 was $722,000 and $1.2 million,
respectively.

     An  analysis  of  activity in the allowance for loan losses for the three
months  ended  March  31,  1997  and  1996  is  as  follows  (in  thousands):
<TABLE>

<CAPTION>



                                 Three months ended March 31,
                                ------------------------------     
                                       1997                1996
                                ------------------------------  -------
                                   (Unaudited)
<S>                                     <C>                 <C>

Balance, beginning of period    $       6,880                  $5,703 
Provision for loan losses                 450                     575 
Charge-offs, net of recoveries           (424)                   (205)
                                ----------------               -------

Balance, end of period          $       6,906                  $6,073 
                                ===============                =======
</TABLE>



     Coastal  services  for  others loans receivable which are not included in
the  Consolidated  Financial Statements.  The total amounts of such loans were
$753.1  million  and  $776.7 million at March 31, 1997 and  December 31, 1996,
respectively.



<PAGE>
(5)          SAVINGS  DEPOSITS

     Savings  deposits,  their  stated  rates and the related weighted average
interest  rates  at  March  31,  1997  and December 31, 1996 are summarized as
follows  (dollars  in  thousands):
<TABLE>

<CAPTION>



                                    Stated Rate        March 31, 1997      December 31, 1996
                                     ----------------     ---------------     --------------
                                                            (Unaudited)
<S>                                  <C>               <C>  <C>              <C>  <C>

Noninterest-bearing checking                0.00%  $          79,610   $             85,259 
NOW accounts                                2.00              56,380                 56,862 
Savings accounts                   2.28  -  2.75              22,075                 22,135 
Money market demand accounts       3.15  -  4.65             156,226                151,046 
                                                      ---------------     ------------------

                                                             314,291                315,302 
                                                      ---------------     ------------------

Certificate accounts               2.00  -  2.99              15,310                 12,930 
                                   3.00  -  3.99               1,641                  1,905 
                                   4.00  -  4.99              74,152                 95,087 
                                   5.00  -  5.99             817,470                776,765 
                                   6.00  -  6.99              79,741                 91,128 
                                   7.00  -  7.99               8,585                 12,964 
                                   8.00  -  8.99               3,504                  3,515 
                                   9.00  -  9.99                 963                  1,171 
                                  10.00  -  10.99                245                    249 
                                  11.00  -  11.99                 17                     17 
                                                      --------------      ------------------
                                                           1,001,628                995,731 
                                                      ---------------     ------------------
Discount to record savings deposits
at fair value, net                                             (168)                  (198)
                                                          ---------------     --------------

                                                       $   1,315,751   $          1,310,835 
                                                          ===============  =================

Weighted average rate                                          4.71%                  4.67%
                                                          ===============  =================
</TABLE>



     The scheduled maturities of certificate accounts outstanding at March 31,
1997  were  as  follows  (dollars  in  thousands):
<TABLE>

<CAPTION>



                     March 31, 1997
                     ---------------
                       (Unaudited)
<S>               <C>  <C>

 0 to 12 months   $          753,417
 12 to 24 months             189,039
 24 to 36 months              45,159
 36 to 48 months               8,417
 48 to 60 months               5,470
 Over 60 months                  126
                     ---------------
                  $        1,001,628
                     ===============
</TABLE>



<PAGE>
(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, 1997 and December 31, 1996 were 5.49%
and  5.55%,  respectively.  The stated interest rates on securities sold under
agreements  to  repurchase  ranged  from  5.27%  to  5.66%  at March 31, 1997.

     (b)       The weighted average interest rate on advances from the FHLB at
March 31, 1997 and December 31, 1996 were 5.60% and 5.61%, respectively.  FHLB
advances  and  related  interest  rates  and  maturities at March 31, 1997 and
December  31,  1996  are  summarized  as  follows  (dollars  in  thousands):
<TABLE>

<CAPTION>



Maturity  Interest rates                 March 31, 1997     December 31, 1996
--------  ---------------                --------------     -----------------
                           (Unaudited)
<S>       <C>              <C>           <C>             <C>  <C>

1997       4.93  -  8.31%  $                    155,683  $            189,127
1998      5.25   -  6.96                         19,636                19,674
1999       4.95  -  8.11                        120,759               170,871
2000       5.57  -  7.76                          8,245                 8,320
2001       6.03  -  6.46                          8,805                 8,854
2004                6.52                          3,117                 3,201
2006                6.91                          3,155                 3,167
2007       6.80  -  7.94                            484                   488
2009                8.25                          4,629                 4,681
2011       6.35  -  7.24                          1,323                 1,337
                                         --------------     -----------------

                           $                    325,836  $            409,720
                                         ==============     =================
</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.

(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 is a party to interest rate swap and interest rate cap agreements
in  order  to  reduce  its exposure to floating interest rates by altering the
interest  rate  sensitivity  of  a  portion  of  its  variable-rate assets and
borrowings.    At  March  31,  1997,  Coastal  had  interest rate swap and cap
agreements  totaling  $60.9  million  and  $403.2  million,  respectively.


<PAGE>
     The  terms  of the interest rate swap agreements outstanding at March 31,
1997  (unaudited)  and December 31, 1996 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>             <C>

At March 31, 1997:
1997                   $     5,000  One-month    4.990%          5.477%  $           13 
                             6,000  Three-month  6.493           5.473              (14)
1998                         4,400  Three-month  6.709           5.473              (14)
1999                        14,600  Three-month  6.926           5.473              (64)
2000                         4,800  Three-month  6.170           5.598               90 
                             2,625  Three-month  6.000           5.750               66 
2005                        23,442  Three-month  6.500           5.539               45 
                          --------                                       ---------------
                       $    60,867                                       $          122 
                          ========                                       ===============

At December 31, 1996:
1997                   $     5,000  One-month    4.990%          5.633%  $            6 
                             6,000  Three-month  6.493           5.500              (65)
1998                         4,400  Three-month  6.709           5.500             (111)
1999                        14,600  Three-month  6.926           5.500             (619)
2000                         4,800  Three-month  6.170           5.543              (64)
                             2,660  Three-month  6.000           5.617               24 
2005                        23,442  Three-month  6.500           5.500              (15)
                          --------                                       ---------------
                       $    60,902                                       $         (844)
                          ========                                       ===============
</TABLE>




     The  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 received rate on all
of  the interest rate swap agreements was approximately 5.51% and the weighted
average  interest payment rate on all of the interest rate swap agreements was
approximately 6.41% for the three months ended March 31, 1997. 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"  in  the  accompanying  consolidated  statements  of
operations.    The  net  interest  expense  related  to  these  agreements was
approximately  $137,000  for  the  three  months  ended  March  31,  1997  and
approximately $114,000 for the three months ended March 31, 1996.  Coastal had
pledged  approximately  $6.1  million  of mortgage-backed securities to secure
interest  rate  swap  agreements  at  March  31,  1997.

     Coastal  has  interest  rate cap agreements with various counterparties. 
The  agreements  provide  for  the  counterparties 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  
<PAGE>
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
$802,000  and  $1.1  million  at  March  31,  1997  and  December  31,  1996,
respectively,  with  the  estimated  fair  value  of the agreements being $1.3
million  and  $639,000 at March 31, 1997 and December 31, 1996, 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
operations.   The net decrease in interest income related to the interest rate
cap  agreements  was  approximately $134,000 and $113,000 for the three months
ended  March  31,  1997  and  1996  respectively.

     Interest  rate  cap  agreements  outstanding  at March 31, 1997 expire as
follows  (dollars  in  thousands):
<TABLE>

<CAPTION>



Year of      Strike rate    Notional
expiration      range        amount
----------  --------------  ---------
<S>         <C>             <C>

1997          5.0  -  9.0%  $ 195,650
1998         5.0  -  12.5     156,400
1999        7.25  -  11.0      43,162
2000          8.5  -  9.5       8,000
                            ---------
                            $ 403,212
                            =========
</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  mortgage-backed securities portfolio to expected market level
changes  in  an  instantaneous  shock  of plus and minus 200 basis points on a
monthly  basis  and  300  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)          NET  EARNINGS  PER  SHARE

     Net  earnings  per  share  is  calculated  by  dividing  net income after
preferred  stock dividends by the weighted average number of common shares and
common  stock  equivalents.   Stock options outstanding are regarded as common
stock  equivalents  and  are,  therefore,  considered  in  earnings  per share
calculations  if  dilutive.  Common  stock  equivalents are computed using the
treasury  stock  method.    The  weighted average number of shares used in the
computation  of  earnings  per  share is 5,097,829 and 5,010,101 for the three
months  ended  March  31,  1997  and  1996,  respectively  (unaudited).

     On  February  1997,  the  Financial  Accounting  Standards  Board  issued
Statement  of  Financial  Accounting  Standards  No. 128, "Earnings Per Share"
(Statement  128).   Statement 128 supersedes APB Opinion No. 15, "Earnings Per
Share" and specifies the computation, presentation and disclosure requirements
for  earnings  per  share (EPS) for entities with publicly held common stock. 
Statement  128 replaces the presentation of primary and fully diluted EPS with
basic  EPS  and  diluted  EPS,  respectively.   Statement 128 is effective for
financial statements for both interim and annual periods ending after December
15,  1997.    After  adoption,  all  prior-period  EPS  data presented will be
restated  to conform with Statement 128.  The adoption of Statement 128 is not
expected  to  have  a  material  impact  on  Coastal's  consolidated financial
statements.

(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, 1997, the Bank's regulatory capital (unaudited) in relation
to  its  current  existing  regulatory  capital  requirements  were as follows
(dollars  in  thousands):
<TABLE>

<CAPTION>



                       Actual                Requirement               Excess
                      --------               -----------               -------      
Capital Requirement    Dollar   Percent        Dollar     Percent      Dollar   Percent
--------------------  --------  --------     -----------  --------     -------  --------
<S>                   <C>       <C>       <C>  <C>          <C>       <C>  <C>      <C>

Tier 1 (Core)         $155,778     5.46%  $      114,058     4.00%  $   41,720     1.46%
Tier 1 risk-based      155,778    11.98           52,010     4.00      103,768     7.98 
Total risk-based       162,684    12.51          104,021     8.00       58,663     4.51 
</TABLE>



     At  March  31,  1997, the Bank, according to certain capital requirements
outlined  by  the  FDIC,  was  categorized  as  "well  capitalized".

(11)          PENDING  BRANCH  PURCHASE

     On  March  12,  1997,  Coastal  announced  the  execution of a definitive
agreement  to  purchase  the  Wells  Fargo  Bank (Texas) branch located at 441
Austin  Avenue  in  Port  Arthur,  Texas.   At March 31, 1997, the Port Arthur
location  had  approximately  $65.4  million  in  deposits.


                                      14
ITEM  2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS  OF  OPERATIONS

Financial  Condition

     Total  assets  decreased  0.8% or $23.1 million from December 31, 1996 to
March 31, 1997.  The net decrease resulted primarily from decrease in stock in
the  Federal  Home  Loan  Bank  of  Dallas  of  $8.6  million,  a  decrease in
mortgage-backed  securities  held-to-maturity of $7.0 million due to principal
repayments received, a decrease in amounts due from depository institutions of
$3.4  million  and  a  decrease  in  loans  receivable  of  $3.1  million.

     Savings deposits increased slightly by 0.4% or $4.9 million from December
31,  1996 to March 31, 1997.  This increase was due to a $5.9 million increase
in  certificate  accounts,  due to interest credited, offset by a $1.0 million
decrease in other types of savings deposits.  Advances from the FHLB decreased
by  $83.9  million or 20.5% and securities sold under agreements to repurchase
increased  4.7%  or  $44.9  million  from December 31, 1996 to March 31, 1997,
which  resulted in a net decrease in borrowings of $38.9 million or 2.8%.  The
reallocation  of  the  borrowings  outstanding during such period was directly
attributable  to Coastal's change in funding sources to take advantage of more
favorable  interest rates. Stockholders' equity increased 3.7% or $3.5 million
from  December  31, 1996 to March 31, 1997 as a result primarily of net income
and  a  $693,000  decrease  in  the  unrealized  loss  on  securities
available-for-sale,  offset  by  dividends  declared.

Results  of  Operations  for  the Three Months Ended March 31, 1997 and 1996

     General

     For  the  three  months ended March 31, 1997, net income before preferred
stock  dividends  increased  12.9%  to  $3.9 million from $3.4 million for the
three months ended March 31, 1996.  Net interest income increased $801,000 for
the  three  months  ended March 31, 1997 as compared to the three months ended
March  31, 1996 as a result of increased interest income of $1.1 million which
was  partially  offset by increased interest expense of $249,000.  Noninterest
income  increased  during  such  period  by  $174,000.    Noninterest  expense
increased  by  $417,000.

     Interest  Income

     Interest  income for the three months ended March 31, 1997 increased $1.1
million  or 2.2% from the three months ended March 31, 1996.  The increase was
primarily  due  to  an  increase  of  $2.3 million in interest earned on loans
receivable over the prior comparable quarter.  The increase in interest income
on  loans  receivable  was  due  to  a  $129.3 million increase in the average
balance  of  loans receivable offset by a slight decrease in the average yield
from  8.54%  for  the three months ended March 31, 1996 to 8.40% for the three
months  ended  March  31,  1997.    This increase was offset by a $1.3 million
decrease  in  interest income on mortgage-backed securities primarily due to a
lower  average  balance.    Total interest-earning assets for the three months
ended March 31, 1997 averaged $2.8 billion as compared to $2.7 billion for the
three  months  ended  March  31,  1996.

     Interest  Expense

     Interest  expense  on  interest-bearing liabilities was $35.0 million for
the  three  months  ended March 31, 1997, as compared to $34.7 million for the
same  period  in  1996.    The increase in interest expense was due to a $77.7
million increase in the average balance of interest-bearing liabilities during
such  period offset by a decrease in the average rate paid on interest-bearing
liabilities  from 5.43% for the three months ended March 31, 1996 to 5.31% for
the  three  months  ended  March  31,  1997.    The  increase  in  average
interest-bearing  liabilities  consisted  of  a  $5.4  million  increase  in
securities  sold  under  agreements to repurchase, a $38.6 million increase in
interest-bearing  savings  deposits  and  a  $33.7  million  increase  in FHLB
advances.

     Net  Interest  Income

     Net  interest  income  was $14.6 million for the three months ended March
31,  1997  as  compared  to  $13.8  million  for the same period in 1996.  The
increase  in  net  interest income was due to the improved net interest margin
(Margin)  and  net  interest  rate  spread  (Spread)  percentages.     Margin 
increased from 2.04%  for the three months ended March 31, 1996 to  2.10% for 
the three months ended  March 31, 1997.  Margin represents net interest income
as a percentage of  average interest-earning  assets.    Spread,  defined  to 
exclude noninterest-bearing deposits, increased from 1.72% for the three months
ended March 31,  1996  to  1.79% for  the three months ended March 31, 1997.  
Management   also   calculates   an   alternative   Spread   which   includes 
noninterest-bearing deposits.  Under this calculation, the Spread for the three
months ended March 31, 1997 and 1996 were 1.94% and 1.88%, respectively.  Margin
and Spread are  affected  by  the  changes  in  the  amount and composition of 
interest-earning  assets  and  interest-bearing  liabilities.    The   increase
in the Margin and Spread  were  primarily  due  to the decrease in the average 
interest rates on interest-bearing liabilities from 5.43% for  the three months
ended March 31, 1996  to 5.31% for the same period in 1997,  offset by a slight
decrease in the average yield on interest-earning assets  from 7.15%  for  the 
three months ended March 31, 1996 to 7.10% for the same period  in  1997.   In 
addition, average net interest-earning assets increased $2.2  million  from the
three months ended March  31,  1996  to the  three months ended March 31, 1997.

     The  improvement  in  the  Margin  and  Spread  levels is consistent with
management's  goal  of  achieving 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 the London 
Interbank offered Rate (LIBOR) and local and regional prime rates. To  continue
the  improvement  in  the  Margin  and Spread levels, management intends to 
gradually increase commercial business loans to approximately 15% of total 
assets and commercial business deposits to approximately 10% of total deposits
within three  to  five  years.

     Provision  for  Loan  Losses

     Provision  for  loan losses was $450,000 for the three months ended March
31,  1997  as compared to $575,000 for the three months ended March 31, 1996. 
The  decrease  in the provision for loan losses was due to the adequacy of the
allowance  for  loan  losses established based on Coastal's loan loss policy. 
The  allowance  for  loan  losses  as a percentage of total loans was 0.56% at
March  31,  1997  and  0.54%  at March 31, 1996.  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  are  necessary.

     Noninterest  Income

     For  the  three months ended March 31, 1997, noninterest income increased
$174,000  or  13.4%  to  $1.5  million, compared to $1.3 million for the three
months ended March 31, 1996.  The increase in noninterest income was primarily
due  to  an increase of $99,000 in loan fees and service charges and a $57,000
increase  in  other noninterest income.  The increase in loan fees and service
charges  was  due  to  an  increase  of $105,000 in service charges on deposit
accounts,  offset  by  a  slight  decrease  in  loan related fees and charges.


<PAGE>
     Noninterest  Expense

     For  the three months ended March 31, 1997, noninterest expense increased
$417,000 or 4.6% to $9.6 million compared to $9.1 million for the three months
ended  March 31, 1996.  Compensation, payroll taxes and other benefits as well
as  office  occupancy  expense  increased $738,000 and $194,000, respectively,
from the three months ended March 31, 1996 to the three months ended March 31,
1997,  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, other expenses increased slightly by $70,000. 
These  increases  were  somewhat  offset  by  a $475,000 decrease in insurance
premiums.    This decrease from the prior related quarter was due primarily to
the  decreased  deposit insurance premiums as a result of the lower assessment
rates  applicable  to  Coastal  in 1997 pursuant to the passage of the Deposit
Insurance  Funds Act of 1996.  Other decreases included an $85,000 decrease in
data  processing  expenses,  a  $14,000  decrease  in expenses related to real
estate  owned  and  a  $11,000  decrease  in  the  amortization  of  goodwill.

     Provision  for  Federal  Income  Taxes

     For  the  three  months  ended  March 31, 1997, the provision for Federal
income  taxes  was  $2.2 million compared to $2.0 million for the three months
ended  March  31,  1996  at  an average effective rate of approximately 36.5%.

     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  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  branch office or whole bank acquisitions. At March 31, 1997,
Coastal  had  binding  commitments  to  originate  or  purchase loans totaling
approximately  $36.9  million  and  had  $41.4 million of undisbursed loans in
process.  Scheduled maturities of certificates of deposit during the 12 months
following  March 31, 1997 totaled $753.4 million at March 31, 1997. Management
believes  that  Coastal has adequate resources to fund all of its commitments.

     As of March 31, 1997, Coastal operated 36 retail banking offices in Texas
cities,  including Houston, Austin, Corpus Christi and small cities in central
and  south  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.

<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

     a)          The following exhibits are filed as part of this report:

                 Exhibit 27 - Financial Data Schedule
                 Exhibit 99 - Forward-Looking Information

b)(1)    Form  8-K  filed  on  March 18, 1997 concerning the execution of a
definitive  agreement  to purchase the Wells Fargo Bank (Texas) branch in Port
Arthur,  Texas.

   (2)   Form 8-K filed on May 5, 1997 to disclose an increase in the dividends
declared  on  common  stock from $0.10 to $0.12 per common share for the first
quarter  of  1997  for shareholders of record on May 15, 1997, payable on June
15,  1997.

                                  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:   5/13/97                         By/s/     Manuel J. Mehos
                                                   Manuel  J.  Mehos
                                                   Chairman  of  the  Board
                                                   Chief  Executive  Officer









Dated:      5/13/97                         By/s/     Catherine N. Wylie
                                                      Catherine  N.  Wylie
                                                      Chief  Financial  Officer






                                               Exhibit 99



Forward-Looking Information


The information included in Item 2 (Management's Discussion and Analysis 
of Financial Condition and Results of Operations) 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 is 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, 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 as filed 
with the Securities and Exchange Commission.