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,  2000

          [    ]     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 OUTSTANDING:   6,143,453 AS OF APRIL 30, 2000


<PAGE>
                     COASTAL BANCORP, INC. AND SUBSIDIARIES

                                Table of Contents



PART  I.     FINANCIAL  INFORMATION
--------     ----------------------

<TABLE>
<CAPTION>


<S>     <C>                                                                       <C>
Item 1  Financial Statements (unaudited)
        Consolidated Statements of Financial Condition at March 31, 2000
        and December 31, 1999                                                      1

        Consolidated Statements of Income for the Three-Month Periods Ended
        March 31, 2000 and 1999                                                    2

        Consolidated Statements of Comprehensive Income for the Three-Month
        Periods Ended March 31, 2000 and 1999                                      3

        Consolidated Statements of Cash Flows for the Three-Month Periods
        Ended March 31, 2000 and 1999                                              4

        Notes to Consolidated Financial Statements                                 6

Item 2  Management's Discussion and Analysis of Financial Condition and Results
        of Operations                                                             16

Item 3  Quantitative and Qualitative Disclosures About Market Risk                20
</TABLE>


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


<S>     <C>                                                  <C>
Item 1  Legal Proceedings                                    21
Item 2  Changes in Securities                                21
Item 3  Default upon Senior Securities                       21
Item 4  Submission of Matters to a Vote of Security Holders  21
Item 5  Other Information                                    21
Item 6  Exhibits and Reports on Form 8-K                     21
</TABLE>



SIGNATURES

<PAGE>


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,
ASSETS                                                                                 2000             1999
---------------------------------------------------------------------               ----------      ------------
                                                                                            (Unaudited)
<S>                                                                                 <C>         <C>
Cash and cash equivalents                                                           $   36,879      $   48,098
Federal funds sold                                                                       9,200              --
Loans receivable (note 4)                                                            1,902,021       1,735,081
Mortgage-backed securities held-to-maturity (note 3)                                   909,557         917,212
Mortgage-backed securities available-for-sale, at fair value (note 3)                   95,864          99,665
U.S. Treasury securities held-to-maturity                                                  992             299
Accrued interest receivable                                                             18,467          16,150
Property and equipment                                                                  29,704          30,708
Stock in the Federal Home Loan Bank of Dallas (FHLB)                                    65,276          56,753
Goodwill                                                                                26,883          27,636
Mortgage servicing rights (note 4)                                                          --           3,035
Prepaid expenses and other assets                                                       15,318          13,315
                                                                                    ----------      ----------
                                                                                    $3,110,161      $2,947,952
                                                                                    ==========      ==========
</TABLE>


<TABLE>
<CAPTION>

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

<S>                                                            <C>          <C>
Liabilities:
 Deposits (note 5)                                             $1,636,489   $1,624,289
 Advances from the FHLB (note 6)                                1,240,581    1,096,931
 Senior notes payable, net (note 7)                                46,900       46,900
 Advances from borrowers for taxes and insurance                    5,709        3,852
 Other liabilities and accrued expenses                            16,592       13,774
                                                               -----------  -----------
     Total liabilities                                          2,946,271    2,785,746
                                                               -----------  -----------

Minority interest - 9.0% noncumulative preferred stock of
 Coastal Banc ssb (note 10)                                        28,750       28,750

Commitments and contingencies (notes 4 and 8)

Stockholders' equity (notes 1, 3, 9, 11 and 13):
 Preferred stock, no par value; authorized shares 5,000,000;
   9.12% Cumulative, Series A, 1,100,000 shares issued and
   outstanding                                                     27,500       27,500
 Common stock, $.01 par value; authorized shares
   30,000,000; 7,643,453 and 7,616,227 shares issued
   in 2000 and 1999, respectively                                      76           76
 Additional paid-in capital                                        32,912       32,683
 Retained earnings                                                 98,861       95,508
 Accumulated other comprehensive loss -
   unrealized loss on securities available-for-sale                (3,746)      (1,848)
 Treasury stock at cost (1,283,679 shares in 2000
   and 1999)                                                      (20,463)     (20,463)
                                                               -----------  -----------
     Total stockholders' equity                                   135,140      133,456
                                                               -----------  -----------
                                                               $3,110,161   $2,947,952
                                                               ===========  ===========
</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,
                                                                    --------------------
                                                                           2000     1999
                                                                    ------------  -------
                                                                        (Unaudited)

<S>                                                                 <C>                   <C>
Interest income:
 Loans receivable                                                   $     38,506  $31,004
 Mortgage-backed securities                                               15,433   17,750
 FHLB stock, federal funds sold and other interest-earning assets            975      772
                                                                    ------------  -------
                                                                          54,914   49,526
                                                                    ------------  -------

Interest expense:
 Deposits                                                                 16,533   16,810
 Advances from the FHLB                                                   17,095   11,565
 Other borrowed money                                                          1    1,518
 Senior notes payable                                                      1,173    1,217
                                                                    ------------  -------
                                                                          34,802   31,110
                                                                    ------------  -------

   Net interest income                                                    20,112   18,416
Provision for loan losses                                                  2,400    2,331
                                                                    ------------  -------
   Net interest income after provision for loan losses                    17,712   16,085
                                                                    ------------  -------

Noninterest income:
 Loan fees and service charges on deposit accounts                         2,057    1,814
 Loan servicing income, net                                                  201      134
 Other                                                                        96      492
 Gain on sale of mortgage servicing rights                                 2,172       --
                                                                    ------------  -------
                                                                           4,526    2,440
                                                                    ------------  -------

Noninterest expense:
 Compensation, payroll taxes and other benefits                            7,469    7,115
 Office occupancy                                                          2,806    2,802
 Data processing                                                             859      899
 Amortization of goodwill                                                    753      753
 Insurance premiums                                                          149      303
 Real estate owned                                                           127      154
 Other                                                                     2,731    1,454
                                                                    ------------  -------
                                                                          14,894   13,480
                                                                    ------------  -------

       Income before provision for Federal income taxes and
         minority interest                                                 7,344    5,045

Provision for Federal income taxes                                         2,209    1,626
                                                                    ------------  -------
     Income before minority interest                                       5,135    3,419
Minority interest - preferred stock dividends of Coastal Banc ssb
 (Series A) (note 10)                                                        647      647
                                                                    ------------  -------
     Net income                                                     $      4,488  $ 2,772
                                                                    ============  =======
     Net income available to common stockholders                    $      3,861  $ 2,772
                                                                    ============  =======

Basic earnings per share (note 9)                                   $       0.61  $  0.40
                                                                    ============  =======

Diluted earnings per share (note 9)                                 $       0.60  $  0.40
                                                                    ============  =======
</TABLE>


See  accompanying  Notes  to  Consolidated  Financial  Statements

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

<TABLE>
<CAPTION>

                                                                        Three Months Ended
                                                                            March 31,
                                                                     ----------------------
                                                                            2000      1999
                                                                     ------------  --------
                                                                            (Unaudited)
<S>                                                                  <C>           <C>


Net income                                                           $      4,488   $2,772

Other comprehensive income (loss), net of tax:
 Unrealized holding gains (losses) on securities available-for-sale
 arising during period                                                     (1,898)     316
                                                                     -------------  ------

Total comprehensive income                                           $      2,590   $3,088
                                                                     =============  ======
</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,
                                                                      --------------------------------
                                                                              2000             1999
                                                                      --------------------  ----------
                                                                                      (Unaudited)

<S>                                                                   <C>                   <C>
Cash flows from operating activities:
 Net income                                                            $       4,488         $   2,772
 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             2,305             2,437
 Net premium amortization                                                        248               140
 Provision for loan losses                                                     2,400             2,331
 Amortization of goodwill                                                        753               753
 Originations and purchases of mortgage loans held for sale                       --            (2,381)
 Stock dividends from the FHLB                                                  (920)             (676)
 Gain on sale of mortgage servicing rights                                    (2,172)               --
 Decrease (increase) in:
   Accrued interest receivable                                                (2,317)              332
   Other, net                                                                  5,671             2,159
                                                                      ---------------        ----------

   Net cash provided by operating activities                                  10,456             7,867
                                                                      ---------------        ----------

Cash flows from investing activities:
 Net increase in federal funds sold                                           (9,200)          (18,000)
 Purchases of mortgage-backed securities held-to-maturity                         --            (3,080)
 Purchase of U.S. Treasury securities                                           (692)               --
 Principal repayments on mortgage-backed securities held-to-maturity           7,604            95,269
 Principal repayments on mortgage-backed securities
   available-for-sale                                                            874            11,219
 Purchases of loans receivable                                              (225,226)         (143,690)
 Net decrease in loans receivable                                             54,847            74,556
 Net purchases of property and equipment                                        (240)             (772)
 Purchases of FHLB stock                                                      (7,603)              (10)
 Proceeds from the sale of mortgage servicing rights                           1,127                --
                                                                      ---------------        ----------

   Net cash provided (used) by investing activities                         (178,509)           15,492
                                                                      ---------------        ----------
</TABLE>


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

<TABLE>
<CAPTION>

                                                                            Three Months Ended
                                                                                March 31,
                                                                       ---------------------------
                                                                              2000           1999
                                                                       -------------  ------------
                                                                                (Unaudited)

<S>                                                                    <C>                   <C>
Cash flows from financing activities:
 Net increase (decrease) in deposits                                   $     12,233   $   (39,776)
 Advances from the FHLB                                                   2,655,303     1,602,772
 Principal payments on advances from the FHLB                            (2,511,653)   (1,572,916)
 Securities sold under agreements to repurchase and federal funds
   purchased                                                                  6,400        37,783
 Purchases of securities sold under agreements to repurchase and
   federal funds purchased                                                   (6,400)      (37,783)
 Net increase in advances from borrowers for taxes and insurance              1,857         2,206
 Exercise of stock options for purchase of common stock, net                    229            18
 Purchase of Treasury Stock                                                      --       (10,659)
 Repurchase of Senior Notes                                                      --        (2,100)
 Dividends paid                                                              (1,135)         (556)
                                                                       -------------  ------------
   Net cash provided (used) by financing activities                         156,834       (21,011)
                                                                       -------------  ------------

   Net increase (decrease) in cash and cash equivalents                     (11,219)        2,348
 Cash and cash equivalents at beginning of period                            48,098        45,453
                                                                       -------------  ------------
 Cash and cash equivalents at end of period                            $     36,879   $    47,801
                                                                       =============  ============

 Supplemental schedule of cash flows-interest paid                     $     34,003   $    31,463
                                                                       =============  ============

 Supplemental schedule of noncash investing and financing activities:
   Foreclosures of loans receivable                                    $        814   $       528
                                                                       =============  ============
</TABLE>

See  accompanying  Notes  to  Consolidated  Financial  Statements



<PAGE>
                     COASTAL BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

(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, 2000 are not necessarily indicative of the results
that  may  be  expected  for the entire fiscal year or any other interim period.

     On  August  27, 1998, December 21, 1998 and February 25, 1999, the Board of
Directors  authorized  three  separate repurchase plans for up to 500,000 shares
each of the outstanding shares of common stock through an open-market repurchase
program  and  privately  negotiated  repurchases, if any.  As of March 31, 2000,
1,283,679  shares  had  been  repurchased  in  the  open  market  at  an average
repurchase  price  of  $15.94  per  share for a total cost of $20.5 million.  On
April  27,  2000,  the  Board of Directors authorized the fourth such repurchase
plan  for up to an additional 500,000 shares of the outstanding shares of common
stock.

(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
its  subsidiary,  CoastalBanc  Financial  Corp.  (collectively, the "Bank"), and
Coastal  Banc  Capital  Corp.  (collectively  with Coastal Bancorp, Inc. and the
Bank,  "Coastal").  All  significant intercompany balances and transactions have
been  eliminated  in  consolidation.

<PAGE>
(3)     MORTGAGE-BACKED  SECURITIES

     Mortgage-backed  securities  at  March 31, 2000 were as follows (dollars in
thousands):

<TABLE>
<CAPTION>

                                                 Gross      Gross
                                    Amortized  Unrealized  Unrealized   Fair
                                        Cost      Gains      Losses     Value
                                   --------------------------------------------
<S>                                <C>              <C>      <C>         <C>
Held-to-maturity:
 REMICS - Agency                   $   654,967  $ 1,429  $ (26,355)  $ 630,041
 REMICS - Non-agency                   177,490       --    (10,567)    166,923
 FNMA certificates                      54,411        3     (2,561)     51,853
 GNMA certificates                      15,456       --       (245)     15,211
 Non-agency securities                   7,233        6        (30)      7,209
                                   -----------  -------  ----------  ---------
                                   $   909,557  $ 1,438  $ (39,758)  $ 871,237
                                   ===========  =======  ==========  =========

Available-for-sale:
 REMICS - Agency                   $    77,345  $    --  $  (5,120)  $  72,225
 REMICS - Non-agency                       268       --         (3)        265
 GNMA certificates                      24,015       --       (641)     23,374
                                   -----------  -------  ----------  ---------
                                   $   101,628  $    --  $  (5,764)  $  95,864
                                   ===========  =======  ==========  =========
</TABLE>


     Mortgage-backed securities at December 31, 1999 were as follows (dollars in
thousands):

<TABLE>
<CAPTION>

                                                  Gross       Gross
                                     Amortized  Unrealized   Unrealized   Fair
                                       Cost        Gains       Losses     Value
                                   ----------------------------------------------
<S>                                <C>          <C>       <C>       <C>
Held-to-maturity:
 REMICS - Agency                   $   657,305  $ 2,560  $ (13,224)  $ 646,641
 REMICS - Non-agency                   180,163       41     (4,094)    176,110
 FNMA certificates                      56,068        9     (2,306)     53,771
 GNMA certificates                      16,129       --        (89)     16,040
 Non-agency securities                   7,547       --       (175)      7,372
                                   -----------  -------  ----------  ---------
                                   $   917,212  $ 2,610  $ (19,888)  $ 899,934
                                   ===========  =======  ==========  =========

Available-for-sale:
 REMICS - Agency                   $    77,343  $    --  $  (2,400)  $  74,943
 REMICS - Non-agency                       372       --         (4)        368
 GNMA certificates                      24,792       --       (438)     24,354
                                   -----------  -------  ----------  ---------
                                   $   102,507  $    --  $  (2,842)  $  99,665
                                   ===========  =======  ==========  =========
</TABLE>




<PAGE>
(4)     LOANS  RECEIVABLE

     Loans  receivable  at  March 31, 2000 and December 31, 1999 were as follows
(dollars  in  thousands):

<TABLE>
<CAPTION>

                                                    March 31, 2000   December 31, 1999
                                                   ----------------  -----------------
<S>                                                <C>               <C>
Real estate mortgage loans:
 First-lien mortgage, primarily residential        $     1,026,271       $  836,005
 Commercial                                                315,729          314,292
 Multifamily                                               171,040          163,059
 Residential construction                                  134,622          136,675
 Acquisition and development                                95,943          103,357
 Commercial construction                                    78,411           65,934
Commercial loans, secured by residential mortgage
 loans held for sale                                        45,038           60,372
Commercial, financial and industrial                        93,878          100,195
Loans secured by savings deposits                           13,598           13,094
Consumer and other loans                                    60,476           63,383
                                                   ----------------      -----------
                                                         2,035,006        1,856,366
Loans in process                                          (112,216)        (108,561)
Allowance for loan losses                                  (12,894)         (10,493)
Unearned interest and  loan fees                            (3,482)          (2,947)
(Discount) premium to record purchased loans, net           (4,393)             716
                                                   ----------------      -----------

                                                   $     1,902,021       $1,735,081
                                                   ================      ===========

Weighted average yield                                        8.54%            8.67%
                                                   ================      ===========
</TABLE>



     At  March  31,  2000,  Coastal  had outstanding commitments to originate or
purchase  $109.5  million  of  real  estate  mortgage  and  other  loans and had
commitments  under  lines  of credit to originate primary construction and other
loans  of approximately $144.1 million.  In addition, at March 31, 2000, Coastal
had  $7.4  million of outstanding letters of credit.  Management anticipates the
funding  of  these  commitments  through  normal  operations.

     At  March  31, 2000 and December 31, 1999, the carrying value of loans that
were  considered  to  be  impaired  totaled  approximately $3.6 million and $2.0
million,  respectively  and  the  related  allowance  for  loan  losses on those
impaired  loans totaled $1.1 million and $778,000 at March 31, 2000 and December
31,  1999,  respectively.  The  average  recorded  investment  in impaired loans
during  the three months ended March 31, 2000 and 1999 was $2.7 million and $9.4
million,  respectively.


<PAGE>
     An  analysis  of  activity  in  the allowance for loan losses for the three
months  ended  March  31,  2000  and  1999  is  as  follows  (in  thousands):

<TABLE>
<CAPTION>

                                          Three Months Ended March 31,
                                          ----------------------------
                                              2000           1999
                                            --------       --------
<S>                                         <C>            <C>
Balance, beginning of period                $10,493         $11,358
Provision for loan losses                     2,400           2,331
Charge-offs                                    (283)           (553)
Recoveries                                      284              21
                                            --------        --------

Balance, end of period                      $12,894         $13,157
                                            ========        ========
</TABLE>



     On  August  11,  1998,  Coastal  approved  the  purchase of a $10.0 million
participation  in  a  warehouse  loan aggregating $25.0 million to MCA Financial
Corp.,  and  certain  of  its  affiliates, of Southfield, Michigan (collectively
"MCA").  The  lead lender ("Lead Lender") in this facility is a major commercial
bank  and  the  loan was secured by subprime residential loans.  In late January
1999,  due  to a lack of liquidity, MCA ceased operations and shortly thereafter
was  seized by the Michigan Bureau of Financial Institutions.  A conservator was
appointed  to  take  control  of MCA's books and records, marshal that company's
assets  and  continue its loan servicing operations.  A voluntary petition under
Chapter  11  of  the U.S. Bankruptcy Code was filed in the U.S. Bankruptcy Court
for  the  Eastern District of Michigan for MCA on or about February 10, 1999, by
the  conservator,  who  was  appointed  the "debtor-in-possession," to allow the
conservator time to develop a plan of reorganization while protecting the assets
of  MCA.

Effective  December  31,  1998,  Coastal  placed this loan on nonaccrual and had
allocated  $1.5  million  of  the  general allowance to this loan.  During 1999,
based  on  updated information received, management made the decision to provide
for  and charge-off the remaining balance of the loan.  Throughout 1999, Coastal
worked with the Lead Lender and the bankruptcy trustee to determine the value of
and  sell  the  underlying  collateral.  As  of  December  31, 1999, Coastal had
received  only $1.1 million in proceeds from the collateral on the MCA loan.  In
addition,  on  January 12, 2000, Coastal filed a lawsuit against the Lead Lender
in  the  participation seeking to recover losses incurred as a result of actions
or  omissions  of  the  Lead  Lender  related  to  the  loan to MCA.  Due to the
uncertainty  of the value of the remaining collateral, its marketability and the
timing  of recovery, if any, from the lawsuit, Coastal charged-off the remaining
$8.9  million  balance of this loan in 1999.  Coastal will continue to work with
the  Lead  Lender  and the bankruptcy trustee to recover any funds, if possible,
from  the  collateral  or  MCA.  During  the  three months ended March 31, 2000,
Coastal  received $180,000 in proceeds from the MCA loan which was recorded as a
recovery  in  the  allowance  for  loan  losses  during  the  period.

     Effective  March  31,  2000,  Coastal  sold  its  mortgage servicing rights
portfolio  and  recorded  a  nonrecurring  gain  of $2.2 million.  Pursuant to a
purchase  and  sale  agreement, Coastal sold its rights to service approximately
$391.9  million  of  mortgage  loans  for  third  party  investors.  Coastal  is
subservicing  the  mortgage  loans  until the transfer to the purchaser which is
expected  to  occur  in May 2000.  Coastal will continue to service loans in its
own  loans  receivable  portfolio.

<PAGE>
(5)     DEPOSITS

     Deposits,  their  stated  rates  and  the related weighted average interest
rates,  at  March  31,  2000  and  December  31, 1999, are summarized as follows
(dollars  in  thousands):

<TABLE>
<CAPTION>

                                 Stated Rate          March 31, 2000      December 31, 1999
                                --------------       --------------      -------------------
<S>                             <C>                 <C>                  <C>
Noninterest-bearing checking             0.00%      $   100,772             $   97,146
Interest-bearing checking       0.75  -  1.75            66,577                 65,229
Savings accounts                1.49  -  2.75            47,498                 46,011
Money market demand accounts    0.00  -  5.84           333,855                331,082
                                                    ------------            -----------

                                                        548,702                539,468
                                                    ------------            -----------

Certificate accounts            2.00  -  2.99               245                    461
                                3.00  -  3.99             8,540                 23,288
                                4.00  -  4.99           308,339                446,746
                                5.00  -  5.99           580,046                543,980
                                6.00  -  6.99           188,736                 62,363
                                7.00  -  7.99             1,515                  7,580
                                8.00  -  8.99               104                    103
                                9.00  -  9.99                99                     99
                                over  10.00                   7                     12
                                                    ------------            -----------
                                                      1,087,631              1,084,632
                                                    ------------            -----------

Premium on purchased deposits                               156                    189
                                                    ------------            -----------

                                                    $ 1,636,489             $1,624,289
                                                    ============            ===========

Weighted average interest rate                            4.13%                   3.96%
                                                    ===========             ===========
</TABLE>


     The  scheduled  maturities of certificate accounts outstanding at March 31,
2000  were  as  follows  (dollars  in  thousands):

<TABLE>
<CAPTION>

                  March 31, 2000
                  ---------------
<S>               <C>
 0 to 12 months   $       963,230
 13 to 24 months           91,869
 25 to 36 months           17,548
 37 to 48 months            8,927
 49 to 60 months            5,719
 Over 60 months               338
                  ---------------
                  $     1,087,631
                  ===============
</TABLE>

<PAGE>
(6)     ADVANCES  FROM  THE  FHLB

     The  weighted average interest rates on advances from the FHLB at March 31,
2000  and  December  31, 1999 were 6.04% and 5.72%, respectively.  The scheduled
maturities and related weighted average interest rates on advances from the FHLB
at  March  31,  2000  are  summarized  as  follows  (dollars  in  thousands):

<TABLE>
<CAPTION>

                                            Weighted Average
Due during the year ending December 31,       Interest Rate          Amount
---------------------------------------     -----------------      -----------
<S>                                         <C>                    <C>
2000                                                 5.98%          $  887,595
2001                                                 6.22               38,694
2002                                                 6.15              279,245
2003                                                 6.97                5,583
2004                                                 5.75                5,222
2005                                                 5.57                  129
2006                                                 6.85                3,123
2007                                                 6.66                1,078
2008                                                 5.51                1,774
2009                                                 8.14                4,097
2010                                                 5.66                  187
2011                                                 6.62                1,347
2012                                                 5.68                  217
2013                                                 5.75                7,731
2014                                                 5.43                2,956
2018                                                 5.05                1,603
                                         -----------------          ----------

                                                     6.04%          $1,240,581
                                         =================          ==========
</TABLE>

Advances  from  the  FHLB  are  secured  by  certain  first-lien  mortgage  and
multifamily  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.  During
1999,  Coastal, after receipt of unsolicited offers, repurchased $3.1 million of
the  Senior  Notes  outstanding  at  par.


<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 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,  2000,  Coastal  had  interest  rate swap and cap agreements having notional
principal  amounts  totaling  $42.0  million  and  $163.2 million, respectively.

     The  terms  of  the  interest rate swap agreements outstanding at March 31,
2000  and  December  31,  1999 are summarized as follows (dollars in thousands):

<TABLE>
<CAPTION>

                                                                        Fair Value at
                                                       Floating Rate       End of
                       Notional      LIBOR     Fixed         at            Period
Maturity                Amount       Index      Rate   End of Period    (gain (loss))
---------------------  ---------  -----------  ------  --------------  ---------------
<S>                    <C>        <C>          <C>     <C>             <C>
At March 31, 2000:
2000                   $   4,800  Three-month  6.170%      6.191%       $       7
2000                       2,205  Three-month  6.000       6.280               11
2003                      17,729  One-month    5.345       5.913              243
2004                       3,821  One-month    5.635       6.004              178
2005                      13,440  Three-month  6.500       6.101               62
                       ---------                                        ----------
                       $  41,995                                        $     501
                       =========                                        ==========

At December 31, 1999:
2000                   $   4,800  Three-month  6.170%      6.140%       $     (70)
2000                       2,240  Three-month  6.000       6.184               10
2003                      19,290  One-month    5.345       6.476              248
2004                       3,842  One-month    5.635       6.463              160
2005                      13,440  Three-month  6.500       6.110              215
                       ---------                                        ----------
                       $  43,612                                        $     563
                       =========                                        ==========
</TABLE>

     The  interest  rate  swap  agreements  provide  for  Coastal  to make 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 6.09% and
the  weighted  average  interest  payment  rate on all of the interest rate swap
agreements  was  approximately  5.92% for the three months ended March 31, 2000.
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 reduction in interest expense related
to  these  agreements  was $19,000 for the three months ended March 31, 2000 and
the  net interest expense related to these agreements was approximately $134,000
for  the  three  months ended March 31, 1999.  Coastal had pledged approximately
$954,000  of  mortgage-backed securities to secure interest rate swap agreements
at  March  31,  2000.

     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 7.0% to 9.5%, 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  $83,000  and  $90,000  at  March  31, 2000 and December 31, 1999,
respectively, with the estimated fair value of the agreements being $474,000 and
$750,000  at  March  31, 2000 and December 31, 1999, respectively.  The interest
rate cap agreements are used to alter the interest rate sensitivity of a portion
of  Coastal's  mortgage-backed  securities  and  loans  receivable. 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  $6,000 for the three months ended March 31, 2000
and  1999,  respectively.  No  payments  were made to Coastal under the interest
rate  cap  agreements  during  the  three  months  ended March 31, 2000 or 1999.

     Interest  rate  cap  agreements  outstanding  at  March  31, 2000 expire as
follows  (dollars  in  thousands):

<TABLE>
<CAPTION>

Year of      Strike Rate    Notional
Expiration      Range        Amount
----------  --------------  ---------
<S>         <C>             <C>
2000        8.50  -  9.50%  $  11,620
2001        7.00  -  9.00      33,968
2002        8.75  -  9.00      18,625
2003        8.00  -  8.50      99,000
                            ---------
                            $ 163,213
                            =========
</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 attempts to control 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- month periods ended March
31,  2000  and  1999  (dollars  in  thousands,  except  per  share  data):

<TABLE>
<CAPTION>

                                                           Three Months Ended
                                                             March 31,
                                                        ----------------------
<S>                                                       <C>         <C>
                                                           2000        1999
                                                        ----------  ----------

Net income                                              $    4,488  $    2,772
Preferred stock dividends                                      627          --
                                                        ----------  ----------
Net income available to common stockholders             $    3,861  $    2,772
                                                        ==========  ==========
Weighted average number of common shares
 outstanding used in basic EPS calculation               6,345,075   6,856,505
Add assumed exercise of outstanding stock
 options as adjusted for dilutive securities               130,726     155,166
                                                        ----------  ----------
Weighted average number of common shares
 outstanding used in diluted EPS calculation             6,475,801   7,011,671
                                                        ==========  ==========
Basic EPS                                               $     0.61  $     0.40
                                                        ==========  ==========
Diluted EPS                                             $     0.60  $     0.40
                                                        ==========  ==========
</TABLE>



     The  weighted  average number of common shares outstanding has been reduced
by  the  treasury stock held by Coastal.  As of March 31, 2000 and 1999, Coastal
had  1,283,679  and  1,160,679  common  shares  in  treasury,  respectfully.

(10)     COASTAL  BANC  ssb PREFERRED  STOCK

     On October 21, 1993, the Bank issued 1,150,000 shares of 9.0% Noncumulative
Preferred  Stock,  no  par  value,  Series A, at a price of $25 per share to the
public.  Dividends  on  the  Preferred Stock are payable quarterly at the annual
rate  of  $2.25 per share, when, as and if declared by the Board of Directors of
the Bank.  At any time on or after December 15, 1998, the Preferred Stock may be
redeemed  in  whole  or  in part only at the Bank's option at $25 per share plus
unpaid  dividends  (whether  or  not  earned  or  declared) for the then current
dividend  period  to  the  date  fixed  for  redemption.

(11)     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%.


<PAGE>
     At  March  31,  2000,  the  Bank's  regulatory  capital  in relation to its
existing  regulatory  capital  requirements for capital adequacy purposes was 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)               $    172,258     5.77%     $119,322     4.00%    $149,153     5.00%
 Tier 1 risk-based                172,258     9.51        72,442     4.00      108,664     6.00
 Total risk-based                 185,152    10.22       144,885     8.00      181,106    10.00
</TABLE>


     As of March 31, 2000, 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.  To be categorized as
well  capitalized,  the  Bank  must  maintain  minimum  Tier  1  (core),  Tier 1
risk-based  and  total risk-based ratios as set forth in the table above.  There
are  no  conditions  or  events since that notification that management believes
have  changed  the  institution's  category.

(12)     RECENT  ACCOUNTING  STANDARDS

     The  Financial  Accounting  Standards  Board  ("FASB")  Statement  No. 137,
"Accounting  for Derivative Instruments and Hedging Activities - Deferral of the
Effective  Date  of  FASB  Statement No. 133, an Amendment of FASB Statement No.
133"  ("Statement  137")  was  issued  in  June  1999.  Statement 137 defers the
effective date of FASB Statement 133, "Accounting for Derivative Instruments and
Hedging  Activities" ("Statement 133") for one year.  Statement 133, as amended,
is  now  effective  for  all fiscal quarters of all fiscal years beginning after
June 15, 2000.  Statement 133 generally requires that changes in fair value of a
derivative  be recognized currently in earnings unless specific hedge accounting
criteria  are  met.  Upon implementation of Statement 133, hedging relationships
may  be  redesignated  and  securities  held-to-maturity  may  be transferred to
available-for-sale  or  trading.  Coastal  is  evaluating  the  impact,  if any,
Statement  133  may  have  on  its  future  consolidated  financial  statements.

(13)     COASTAL  BANCORP,  INC.  PREFERRED  STOCK

     On  May 11, 1999, Coastal Bancorp, Inc. ("Bancorp") issued 1,100,000 shares
of  9.12%  Series  A Cumulative Preferred Stock, no par value, at a price of $25
per  share  to the public ("Bancorp Preferred Stock").  Dividends on the Bancorp
Preferred  Stock  are  payable  quarterly at the annual rate of $2.28 per share.
The  preferred stock is callable on May 15, 2003 at Bancorp's option.  The $26.0
million  net  proceeds  has  been  used  for  repurchases  in the open market of
Bancorp's outstanding common stock and of Bancorp's outstanding 10% Senior Notes
with  the remaining being invested on a short-term basis.  Pursuant to Coastal's
tax  benefit  agreement  with  the  FDIC,  Coastal  receives  a  tax benefit for
dividends  paid  on  the  Bancorp  Preferred  Stock.

<PAGE>


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

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

     Total  assets  increased  5.5%  or $162.2 million from December 31, 1999 to
March  31, 2000.  The net increase resulted primarily from an increase of $166.9
million  in  loans receivable, in addition to increases of $9.2 million and $8.5
million  in  federal  funds  sold  and  stock  in the FHLB, respectively.  These
increases  were only slightly offset by decreases of $11.2 million, $7.7 million
and  $3.8  million  in  cash  and  cash  equivalents, mortgage-backed securities
held-to-maturity  and  mortgage-backed  securities  available-for-sale,
respectively.  The  increase  in  loans  receivable  was primarily due to a bulk
residential  mortgage loan purchase of $225.2 million (net of purchase discount)
offset  by  principal  payments  received  and  a  decrease  of $15.3 million in
commercial loans secured by residential mortgage loans held for sale, because of
the  decreased  emphasis  on  this  type  of  lending.  The  decrease  in
mortgaged-backed  securities  was  due  to  principal  payments  received.

     Deposits  increased  $12.2  million or 0.8% from December 31, 1999 to March
31,  2000  and  advances  from  the  FHLB  increased  13.1%  or  $143.7 million.
Stockholders'  equity  increased  1.3% or $1.7 million from December 31, 1999 to
March  31,  2000 as a result of net income, offset by a $1.9 million increase in
accumulated  other  comprehensive  loss  and  dividends  declared.


Results  of  Operations  for  the  Three  Months  Ended  March 31, 2000 and 1999
--------------------------------------------------------------------------------

General
-------

     For  the  three  months  ended  March 31, 2000, net income was $4.5 million
compared  to  $2.8  million  for  the  three  months  ended March 31, 1999.  The
increase  was  due  to  a  $1.7  million increase in net interest income, a $2.1
million  increase  in  noninterest  income, offset by a $1.4 million increase in
noninterest  expense and a $583,000 increase in the provision for Federal income
taxes.  The  increase  in noninterest income was primarily due to a $2.2 million
nonrecurring gain recorded on the sale of Coastal's mortgage servicing rights in
2000.

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

     Interest  income  for  the three months ended March 31, 2000 increased $5.4
million  or  10.9%  from the three months ended March 31, 1999.  The increase is
due  to  an increase in average interest-earning assets of $110.8 million and an
increase in the average yield of 0.47% to 7.58% for the three months ended March
31,  2000.  Interest  income on loans receivable increased $7.5 million due to a
$296.0  million  increase  in the average balance and an increase in the average
yield from 8.15% for the three months ended March 31, 1999 to 8.47% for the same
period  in  2000.  Interest  income on mortgage-backed securities decreased $2.3
million due to a $190.8 million decrease in the average balance, offset somewhat
by  an increase in the average yield from 5.89% for the three months ended March
31,  1999  to  6.08%  for  the  same  period  in  2000.

     In  addition,  interest  income on FHLB stock, federal funds sold and other
interest-earning  assets  increased $203,000.  Total interest-earning assets for
the  three months ended March 31, 2000 averaged $2.9 billion as compared to $2.8
billion  for  the  three  months  ended  March  31,  1999.

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

     Interest  expense on interest-bearing liabilities was $34.8 million for the
three  months  ended  March  31, 2000, as compared to $31.1 million for the same
period  in  1999.  The increase in interest expense was due to a increase in the
average  rate  paid  on  interest-bearing  liabilities  from 4.81% for the three
months  ended  March 31, 1999 to 5.18% for the three months ended March 31, 2000
and  a  $73.5  million  increase  in  the  average  balance  of interest-bearing
liabilities.  The  0.37%  increase  in the average rate paid on interest-bearing
liabilities  was  due primarily to higher wholesale funding costs.  The increase
in  average interest-bearing liabilities consisted primarily of a $240.2 million
increase in advances from the FHLB, offset somewhat by a $112.5 million decrease
in federal funds purchased and securities sold under agreements to repurchase, a
$52.4  million decrease in interest-bearing deposits and a $1.7 million decrease
in senior notes payable due to repurchases.  The increase in the average balance
of  advances  from the FHLB was primarily due to the additional borrowing in the
first  quarter  of  2000  to  finance the $225.2 million loan purchase mentioned
earlier.

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

     Net  interest income was $20.1 million for the three months ended March 31,
2000  and  $18.4  million  for  the  same  period  in 1999.  Net interest margin
("Margin") was 2.78% for the three months ended March 31, 2000 compared to 2.64%
for  the  three  months  ended  March  31, 1999.  Margin represents net interest
income  as a percentage of average interest-earning assets.  Net interest spread
("Spread"),  defined  to  exclude  noninterest-bearing  deposits, increased from
2.30%  for  the  three months ended March 31, 1999 to 2.40% for the three months
ended  March  31,  2000.  Management also calculates an alternative Spread which
includes  noninterest-bearing deposits.  Under this calculation, the alternative
Spreads for the three months ended March 31, 2000 and 1999 were 2.68% and 2.55%,
respectively.  Margin  and  Spread are affected by the changes in the amount and
composition  of  interest-earning  assets and interest-bearing liabilities.  The
overall increase in Margin and Spread was primarily due to the 0.47% increase in
the  average  yield  on  interest-earning assets, primarily on loans receivable,
offset  by  a  0.37%  increase  in  the  average  rate  paid on interest-bearing
liabilities.  Average  net  interest-earning assets increased $37.2 million from
the  three months ended March 31, 1999 to the three months ended March 31, 2000.

     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 retail deposits.  In addition, management intends to
gradually  increase  commercial,  financial  and  industrial  loans  and
noninterest-bearing  deposits  as  a  percentage  of  total  assets and deposits
respectively.

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

     The  provision  for loan losses was $2.4 million for the three months ended
March  31,  2000  compared  to $2.3 million for the three months ended March 31,
1999.  For  the  remainder  of  2000,  Coastal's  planned quarterly provision is
$900,000,  although  no assurance can be given that provisions in excess of this
amount  will  not  be  required  based  on  Coastal's  then  current policy, the
composition  of  the  loans  receivable  portfolio,  the  existing nonperforming
assets,  delinquency  trends  and  current economic conditions at the time.  The
allowance  for loan losses as a percentage of total loans was 0.68% at March 31,
2000 and 0.82% at March 31, 1999. Management believes that the present allowance
for  loan  losses  is adequate considering the changing composition of the loans
receivable portfolio, historical loss experience, delinquency trends and current
economic  conditions.  Management will continue to review its allowance for loan
losses  as  Coastal's  loan  portfolio  diversifies  to  determine if changes or
additions  are  necessary.

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

     For  the  three  months  ended March 31, 2000, noninterest income increased
$2.1  million  to  $4.5  million,  compared to $2.4 million for the three months
ended  March  31,  1999.  As  mentioned  previously, the increase in noninterest
income  was  primarily  due  to  the  $2.2  million gain recorded on the sale of
Coastal's  mortgage  servicing  rights  during  the three months ended March 31,
2000.  Due  to  the  declining servicing portfolio (with an average loan life of
approximately  seven  years), management decided to take the opportunity to sell
Coastal's  entire  servicing  rights  portfolio  based  on  the  current  market
conditions  for loan servicing rights and the expected declining income benefits
of  that  servicing  portfolio  on an ongoing basis.  Pursuant to a purchase and
sale  agreement, Coastal sold its rights to service approximately $391.9 million
of  mortgage  loans  for  third  party investors, primarily the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation.  As part of
this  business  decision  to sell the mortgage servicing rights, management also
decided  to  purchase  a  $230.6  million  ($225.2  million  net of the purchase
discount)  package  of single family mortgage loans.  This package will not only
utilize  existing  servicing  staff  once  the  loan servicing is transferred to
Coastal,  but  will  also  provide expected net interest income of approximately
$750,000  per quarter (or $490,000 net of tax) for the next four quarters.  This
positive  earnings  impact  offsets  the  expected  ongoing  negative  impact on
earnings  of  the March 2000 servicing sale (due to the loss of the related loan
servicing  income). Once the transfer of the servicing to the purchaser has been
completed,  management  expects  the  sale  of  the servicing to have an ongoing
slightly  negative  impact on earnings, net of tax of approximately $150,000 per
quarter  for  the  next  four  quarters.  In  addition to the nonrecurring gain,
comparing  the  first  quarter  1999 to the first quarter in 2000, loan fees and
service  charges  on  deposit accounts increased $243,000, loan servicing income
increased  slightly  by $67,000 and other noninterest income decreased $396,000.

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

     For  the  three  months ended March 31, 2000, noninterest expense increased
$1.4  million  from the three months ended March 31, 1999.  The increase was due
to  a  $1.3  million increase in other noninterest expenses primarily because of
the  reduction  of  certain accrued liabilities totaling $1.1 million during the
first quarter of 1999 and a $354,000 increase in compensation, payroll taxes and
other  benefits, offset by smaller decreases of $154,000, $40,000 and $27,000 in
insurance  premiums  expense,  including  deposit  insurance  premiums,  data
processing  expense  and  real  estate  owned  expense,  respectively.

Provision  for  Federal  Income  Taxes
--------------------------------------

     The provision for Federal income taxes for the three months ended March 31,
2000  was $2.2 million compared to $1.6 million for the three months ended March
31,  1999.  The  increase  was  due to the increased income before provision for
federal  income  taxes and minority interest in 2000, somewhat offset by the tax
benefit  received  from  the dividends declared on the 9.12% Series A Cumulative
Preferred  Stock  issued  in  May  1999.

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

     Coastal's primary sources of funds consist of deposits bearing market rates
of  interest,  advances  from  the  FHLB,  securities  sold  under agreements to
repurchase,  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, in addition
to purchasing treasury stock. At March 31, 2000, Coastal had binding commitments
to  originate  or  purchase  loans totaling approximately $109.5 million and had
$112.2  million  of  undisbursed  loans  in  process.  Scheduled  maturities  of
certificates  of  deposit  during the 12 months following March 31, 2000 totaled
$963.2 million at March 31, 2000.  Management believes that Coastal has adequate
resources to fund all of its commitments.  In addition, Coastal has historically
experienced  a  retention  rate of maturing certificates of deposit of $5,000 or
greater  of  approximately  80%.

     As  of  March 31, 2000, Coastal operated 50 retail banking offices in Texas
cities,  including  Houston,  Austin,  Corpus Christi, the Rio Grande Valley 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.


<PAGE>
The  Year  2000
---------------

     Coastal has not experienced any significant disruptions to our financial or
operating  activities  caused  by  failure of our computerized systems resulting
from  Year  2000  issues.  Management does not expect Year 2000 issues to have a
material  adverse  effect  on Coastal's operations or financial results in 2000.

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 Coastal, the occurrence of which
involve  certain  risks and uncertainties detailed in Coastal's filings with the
Securities  and  Exchange  Commission  ("SEC").

     The Management's Discussion and Analysis of Financial Condition and Results
of  Operations set forth in the Form 10-Q should be read in conjunction with the
information  contained  in  the  Consolidated Financial Statements and the Notes
thereto.  Such  discussion  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;  risks  involved  in
Coastal's  ability  to  quickly  and  efficiently  integrate  the  operations of
acquired  entities  with  those  of  Coastal;  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  and  warehouse  and  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, 1999, as filed with the SEC on March
28,  2000.


<PAGE>
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, 1999. Coastal's principal market risk exposure is to
interest  rates.  See  note 8 of the Notes to Consolidated Financial Statements.


<PAGE>
PART  II  -  OTHER  INFORMATION

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

     In January 2000, Coastal, through its subsidiary, the Bank, filed a lawsuit
against  the  lead  lender on a $25.0 million loan in which the Bank purchased a
40%  participation  interest.  Such lawsuit is described more fully in Coastal's
Current  Report  on  Form  8-K  filed  on  January  12,  2000.

     In  addition to the above, 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 to the financial condition of Coastal.

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)     Form  8K filed on January 12, 2000 concerning a lawsuit filed by Coastal
against  the  lead  lender on a $25.0 million loan in which the Bank purchased a
40%  participation  interest.
(c)     Form 8K filed on February 14, 2000 concerning the declaration by Coastal
of  a  quarterly  cash  dividend  of $0.08 per share on its common stock and the
declaration  of  dividends  on Coastal's 9.12% Cumulative Preferred Stock and on
the  9.0%  Noncumulative  Preferred  Stock  of  the  Bank.


<PAGE>



                                   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:     5/15/00                           By     /s/  Manuel J. Mehos
           -------                                  --------------------
                                                    Manuel  J.  Mehos
                                                    Chairman  of  the  Board
                                                    Chief  Executive  Officer









Dated:     5/15/00                            By   /s/  Catherine  N. Wylie
           -------                                 --------------------------
                                                   Catherine  N.  Wylie
                                                   Chief  Financial  Officer

<PAGE>



                                   Exhibit 27

                             Financial Data Schedule

[ARTICLE] 9
[LEGEND]
This schedule contains summary financial information extracted from the
consolidated statement of financial condition, the consolidated statement of
income and notes thereto found on pages 1 through 15 of the Company's Form
10-Q for the year-to-date March 31, 2000 and is qualified in its
entirety by reference to such financial statements
[/LEGEND]
<TABLE>
<CAPTION>
<S>                             <C>
[PERIOD-TYPE]                   3-MOS
[FISCAL-YEAR-END]                          DEC-31-2000
[PERIOD-START]                             JAN-01-2000
[PERIOD-END]                               MAR-31-2000
[CASH]                                          36,879
[INT-BEARING-DEPOSITS]                               0
[FED-FUNDS-SOLD]                                 9,200
[TRADING-ASSETS]                                     0
[INVESTMENTS-HELD-FOR-SALE]                     95,864
[INVESTMENTS-CARRYING]                         910,549
[INVESTMENTS-MARKET]                           872,229
[LOANS]                                      1,902,021
[ALLOWANCE]                                     12,894
[TOTAL-ASSETS]                               3,110,161
[DEPOSITS]                                   1,636,489
[SHORT-TERM]                                   919,321
[LIABILITIES-OTHER]                             51,051
[LONG-TERM]                                    368,160
[PREFERRED-MANDATORY]                                0
[PREFERRED]                                     27,500
[COMMON]                                            76
[OTHER-SE]                                     107,564
[TOTAL-LIABILITIES-AND-EQUITY]               3,110,161
[INTEREST-LOAN]                                 38,506
[INTEREST-INVEST]                               15,433
[INTEREST-OTHER]                                   975
[INTEREST-TOTAL]                                54,914
[INTEREST-DEPOSIT]                              16,533
[INTEREST-EXPENSE]                              34,802
[INTEREST-INCOME-NET]                           20,112
[LOAN-LOSSES]                                    2,400
[SECURITIES-GAINS]                                   0
[EXPENSE-OTHER]                                 15,541
[INCOME-PRETAX]                                  6,697
[INCOME-PRE-EXTRAORDINARY]                       4,488
[EXTRAORDINARY]                                      0
[CHANGES]                                            0
[NET-INCOME]                                     4,488
[EPS-BASIC]                                     0.61
[EPS-DILUTED]                                     0.60
[YIELD-ACTUAL]                                       0
[LOANS-NON]                                          0
[LOANS-PAST]                                         0
[LOANS-TROUBLED]                                     0
[LOANS-PROBLEM]                                      0
[ALLOWANCE-OPEN]                                10,493
[CHARGE-OFFS]                                      283
[RECOVERIES]                                       284
[ALLOWANCE-CLOSE]                               12,894
[ALLOWANCE-DOMESTIC]                            12,894
[ALLOWANCE-FOREIGN]                                  0
[ALLOWANCE-UNALLOCATED]                              0
</TABLE>


<PAGE>


                                   Exhibit 99

                           Forward-Looking Information


<PAGE>


                                   EXHIBIT 99

     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 Coastal, the occurrence of which
involve  certain  risks and uncertainties detailed in Coastal's filings with the
Securities  and  Exchange  Commission  ("SEC").

     The Management's Discussion and Analysis of Financial Condition and Results
of  Operations set forth in the Form 10-Q should be read in conjunction with the
information  contained  in  the  Consolidated Financial Statements and the Notes
thereto.  Such  discussion  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;  risks  involved  in
Coastal's  ability  to  quickly  and  efficiently  integrate  the  operations of
acquired  entities  with  those  of  Coastal;  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  and  warehouse  and  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, 1999, as filed with the  SEC on March
28,  2000.