Registration No. 333-______________
                                                             Filed June 17, 1999

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                ________________

                                    FORM S-8


                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                                ________________

                              Coastal Bancorp, Inc.
                              ---------------------
             (Exact Name of Registrant as Specified in Its Charter)


                                      Texas
                                      -----
         (State or Other Jurisdiction of Incorporation or Organization)


                                   76-0428727
                                   ----------
                      (I.R.S. Employer Identification No.)


      Coastal Banc Plaza, 5718 Westheimer, Suite 600, Houston, Texas 77057
      --------------------------------------------------------------------
          (Address of Principal Executive Offices, including zip code)


              Coastal Bancorp, Inc. 1999 Stock Compensation Program
              -----------------------------------------------------
                            (Full Title of the Plan)


                               Catherine N. Wylie
                               ------------------
                Executive Vice President/Chief Financial Officer
                ------------------------------------------------
                               Coastal Banc Plaza
                              Coastal Bancorp, Inc.
                           5718 Westheimer, Suite 600
                              Houston, Texas 77057

                                   Copies to:
                                   ----------
                            Jeffrey A. Koeppel, Esq.
                      Elias, Matz, Tiernan & Herrick L.L.P.
                        734 15th Street, N.W., 12th Floor
                             Washington, D.C. 20005

                     (Name and Address of Agent For Service)


<PAGE>
CALCULATION  OF  REGISTRATION  FEE


<TABLE>
<CAPTION>



<S>                <C>            <C>               <C>              <C>
                   Proposed       Proposed
Title of           Maximum        Maximum           Amount of
Securities to be   Amount to be   Offering Price    Aggregate        Registration
Registered         Registered(l)  Per Share         Offering Price   Fee
-----------------  -------------  ----------------  ---------------  -------------

Common Stock,
 .01 par value        340,000(2)  $       16.00(3)  $  5,440,000.00  $    1,512.32

</TABLE>



(1)     Together  with an indeterminate number of additional shares which may be
necessary  to  adjust the number of shares reserved for issuance pursuant to the
Coastal  Bancorp,  Inc.  ("Company"  or  "Registrant")  1999  Stock Compensation
Program  ("Program")  as  the result of a stock split, stock dividend or similar
adjustment  of  the  outstanding  Common  Stock  of  the  Company.

(2)     Represents the number of shares currently reserved for issuance pursuant
to  the  Program.

(3)     Estimated  solely  for  the purposes of calculating the registration fee
and  based in accordance with Rule 457(h) under the Securities Act of 1933.  The
Proposed Maximum Offering Price Per Share for the 340,000 shares for which stock
options  have  not been granted under the Program is equal to the average of the
high  and low sales price of the common stock of the Company on June 15, 1999 on
the  National  Association  of Securities Dealers Automated Quotation ("NASDAQ")
National  Market  System.



     THIS  REGISTRATION  STATEMENT SHALL BECOME EFFECTIVE AUTOMATICALLY UPON THE
DATE  OF FILING IN  ACCORDANCE  WITH  SECTION 8(A)  OF  THE  SECURITIES  ACT  OF
1933,  AS  AMENDED,  AND  17  C.F.R.    230.462.


<PAGE>
PART  I

INFORMATION  REQUIRED  IN  SECTION  10(A)  PROSPECTUS

ITEM  1.     PLAN  INFORMATION.

     No  Plan information is included in this Registration Statement pursuant to
the  Note  Preceding  Item  I  in  Part  I  in  Form  S-8 and Rule 428 under the
Securities  Act  of  1933.

ITEM  2.     REGISTRANT  INFORMATION  AND  EMPLOYEE  PLAN  ANNUAL  INFORMATION.

     No  Registrant  information or employee plan annual information is included
in  this  Registration Statement Pursuant to the Note Preceding Item I in Part I
in  Form  S-8  and  Rule  428  under  the  Securities  Act  of  1933.

<PAGE>
PART  11

INFORMATION  REQUIRED  IN  THE  REGISTRATION  STATEMENT

ITEM  3.          INCORPORATION  OF  DOCUMENTS  BY  REFERENCE.

     The  following  documents  filed  or  to  be  filed with the Securities and
Exchange  Commission  (the  "Commission")  are incorporated by reference in this
Registration  Statement:

     (a)     The  Annual  Report on Form 10-K for the Company for the year ended
December  31,  1998,  filed  with  the  Commission  on  March 23, 1999 (File No.
000-24526);

     (b)     All  reports  filed  by  the  Company pursuant to Sections 13(a) or
15(d)  of the Securities Exchange Act of 1934, as amended ("Exchange Act") since
December  31,  1998;

     (c)     The  description  of  the  Common  Stock  of  the Company under the
caption "Description of Holding Company Capital Stock" contained in the Form 8-B
(SEC  No.  0-24526)  as  filed  with  the  Commission  on  July  15,  1994.

     (d)     All  documents  filed  by  the  Company pursuant to Sections 13(a),
13(c),  14  or  15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which indicates that all securities offered
have  been  sold  or  which  deregisters  all  securities then remaining unsold.

     Any  statement  contained  in this Registration Statement, or in a document
incorporated  or  deemed to be incorporated by reference herein, shall be deemed
to  be modified or superseded for purposes of this Registration Statement to the
extent  that  a  statement  contained herein, or in any other subsequently filed
document  which  also  is  or  is deemed to be incorporated by reference herein,
modifies  or  supersedes  such  statement.  Any  such  statement  so modified or
superseded  shall  not  be  deemed,  except  as  so  modified  or superseded, to
constitute  a  part  of  this  Registration  Statement.

ITEM  4.     DESCRIPTION  OF  SECURITIES.

     Not applicable since the Company's Common Stock is registered under Section
12  of  the  Exchange  Act.

ITEM  5.     INTERESTS  OF  NAMED  EXPERTS  AND  COUNSEL.

     The  validity  of  the Company Stock offered hereby will be passed upon for
the  Company by Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C.  Certain
partners  in  such  firm  own  shares  of  the  Common  Stock  of  the  Company.


<PAGE>
ITEM  6.     INDEMNIFICATION  OF  DIRECTORS  AND  OFFICERS.

     Coastal  Bancorp, Inc. is incorporated under the Texas Business Corporation
Act,  of  which  Section  2.02-1  provides  as  follows:

2.02-1     POWER  TO  INDEMNIFY  AND  TO  PURCHASE  INDEMNITY INSURANCE; DUTY TO
INDEMNIFY.

A.  In  this  article:

     (1)     "Corporation"  includes  any domestic or foreign predecessor entity
of  the  corporation in a merger, conversion, or other transaction in which some
or  all of the liabilities of the predecessor are transferred to the corporation
by  operation  of  law  and  in  any  other transaction in which the corporation
assumes  the  liabilities  of  the predecessor but does not specifically exclude
liabilities  that  are  the  subject  matter  of  this  article.

     (2)     "Director"  means  any  person  who  is  or  was  a director of the
corporation  and  any person who, while a director of the corporation, is or was
serving  at  the  request  of  the  corporation as a director, officer, partner,
venturer,  proprietor,  trustee,  employee,  agent,  or  similar  functionary of
another  foreign  or  domestic  corporation,  employee  benefit  plan,  other
enterprise,  or  other  entity.

     (3)     "Expenses"  include  court  costs  and  attorneys'  fees.

     (4)     "Official  capacity"  means

     (a)     when used with respect to a director, the office of director in the
corporation,  and

     (b)     when  used  with  respect  to  a  person other than a director, the
elective  or  appointive  office  in  the corporation held by the officer or the
employment  or agency relationship undertaken by the employee or agent in behalf
of  the  corporation,  but

     (c)     in  both  paragraphs  (a)  and (b) does not include service for any
other  foreign  or  domestic  corporation  or  employee  benefit  plan,  other
enterprise,  or  other  entity.

     (5)     "Proceeding"  means  any  threatened, pending, or completed action,
suit,  or  proceeding,  whether civil, criminal, administrative, arbitrative, or
investigative,  any  appeal  in  such  an  action,  suit, or proceeding, and any
inquiry or investigation that could lead to such an action, suit, or proceeding.


<PAGE>
B.     A  corporation may indemnify a person who was, is, or is threatened to be
made  a  named  defendant or respondent in a proceeding because the person is or
was  a  director  only  if it is determined in accordance with Section F of this
article  that  the  person:

(1)     conducted  himself  in  good  faith,

(2)     reasonably  believed:

     (a)     in  the  case  of conduct in his official capacity as a director of
the  corporation,  that his conduct was in the corporation's best interests; and

     (b)     in  all  other  cases, that his conduct was at least not opposed to
the  corporation's  best  interests;  and

(3)     in  the case of any criminal proceeding, had  no  reasonable  cause  to
believe  his  conduct  was  unlawful.

C.     Except to the extent permitted  by  Section E of this article, a director
director  may not be indemnified under Section B of this article in respect of a
proceeding:

     (1)     in  which  the  person  is  found liable on the basis that personal
benefit was improperly received by him, whether or not the benefit resulted from
an  action  taken  in  the  person's  official  capacity;  or

(2)     in  which  the  person  is  found  liable  to  the  corporation.

D.     The  termination  of  a  proceeding  by  judgment,  order, settlement, or
conviction,  or  on a plea of nolo contendere or its equivalent is not of itself
determinative that the person did not meet the requirements set forth in Section
B  of  this  article.  A  person  shall  be  deemed to have been found liable in
respect  of  any claim, issue or matter only after the person shall have been so
adjudged  by  a  court of competent jurisdiction after exhaustion of all appeals
therefrom.

E.     A  person may be indemnified under Section  B  of  this  article  against
judgments,  penalties  (including excise and similar taxes), fines, settlements,
and  reasonable  expenses actually incurred by the person in connection with the
proceeding,  but  if  the  person is found liable to the corporation or is found
liable on the basis that personal benefit was improperly received by the person,
the  indemnification  (1) is limited to reasonable expenses actually incurred by
the  person  in  connection  with  the  proceeding  and (2) shall not be made in
respect  of  any proceeding in which the person shall have been found liable for
willful  or  intentional  misconduct  in  the  performance  of  his  duty to the
corporation.

F.     A  determination  of indemnification under Section B of this article must
be  made:

     (1)     by  a  majority vote of a quorum consisting of directors who at the
time  of  the  vote  are  not named defendants or respondents in the proceeding;

     (2)     if  such  a  quorum  cannot  be  obtained,  by a majority vote of a
committee  of  the  board  of  directors,  designated  to act in the matter by a
majority  vote  of all directors, consisting solely of two or more directors who
at  the  time  of  the  vote  are  not  named  defendants  or respondents in the
proceeding;

     (3)     by  special  legal  counsel selected by the board of directors or a
committee  of  the  board  by vote as set forth in Subsection (1) or (2) of this
section, or, if such a quorum cannot be obtained, and such a committee cannot be
established,  by  a  majority  vote  of  all  directors;  or

     (4)     by  the  shareholders  in  a  vote that excludes the shares held by
directors  who  are  named  defendants  or  respondents  in  the  proceeding.

G.     Authorization  of  indemnification  and  determination  as  to
reasonableness  of expenses must be made in the same manner as the determination
that  indemnification  is  permissible,  except  that  if the determination that
indemnification  is  permissible is made by special legal counsel, authorization
of  indemnification  and  determination as to reasonableness of expenses must be
made  in the manner specified by Subsection (3) of Section F of this article for
the  selection  of special legal counsel.  A provision contained in the articles
of  incorporation,  the bylaws, a resolution of shareholders or directors, or an
agreement  that makes mandatory the indemnification permitted under Section B of
this  article  shall be deemed to constitute authorization of indemnification in
the manner required by this section even though such provision may not have been
adopted  or  authorized  in  the  same  manner  as  the  determination  that
indemnification  is  permissible.

H.     A corporation shall indemnify  a  director  against  reasonable  expenses
incurred by him in connection with a proceeding in which he is a named defendant
or  respondent because he is or was a director if he has been wholly successful,
on  the  merits  or  otherwise,  in  the  defense  of  the  proceeding.

I.     If,  in a suit for  the  indemnification  required  by  Section H of this
article,  a  court  of  competent  jurisdiction  determines that the director is
entitled  to   indemnification  under   that  section,  the  court  shall  order
indemnification  and  shall  award  to  the  director  the  expenses incurred in
securing  the  indemnification.

J.     If,  upon  application  of  a  director,  a  court  of  competent
jurisdiction  determines, after giving any notice the court considers necessary,
that  the  director is fairly and reasonably entitled to indemnification in view
of  all  the  relevant circumstances, whether or not he has met the requirements
set  forth  in  Section  B  of  this  article  or  has  been found liable in the
circumstances  described  by  Section C of this article, the court may order the
indemnification  that  the  court determines is proper and equitable; but if the
person  is  found liable to the corporation or is found liable on the basis that
personal  benefit  was  improperly  received  by the person, the indemnification
shall  be  limited  to  reasonable  expenses  actually incurred by the person in
connection  with  the  proceeding.

K.     Reasonable  expenses  incurred  by  a  director  who  was, is, or is
threatened  to  be  made  a named defendant or respondent in a proceeding may be
paid  or  reimbursed  by the corporation, in advance of the final disposition of
the  proceeding  and  without  the  determination specified in Section F of this
article  or  the  authorization  or determination specified in Section G of this
article, after the corporation receives a written affirmation by the director of
his  good  faith  belief  that  he has met the standard of conduct necessary for
indemnification  under this article and a written undertaking by or on behalf of
the  director  to  repay  the  amount  paid  or  reimbursed  if it is ultimately
determined  that  he has not met that standard or if it is ultimately determined
that  indemnification  of  the  director  against  expenses  incurred  by him in
connection  with  that proceeding is prohibited by Section E of this article.  A
provision  contained  in the articles of incorporation, the bylaws, a resolution
of  shareholders  or directors, or an agreement that makes mandatory the payment
or  reimbursement  permitted  under  this  section shall be deemed to constitute
authorization  of  that  payment  or  reimbursement.

L.     The  written  undertaking required by Section K of this article must
be  an unlimited general obligation of the director but need not be secured.  It
may  be  accepted  without  reference  to  financial  ability to make repayment.

M.     A provision for a corporation to indemnify or to advance expenses to
a  director  who  was,  is,  or  is  threatened  to be made a named defendant or
respondent  in a proceeding, whether contained in the articles of incorporation,
the  bylaws,  a  resolution  of  shareholders  or  directors,  an  agreement, or
otherwise, except in accordance with Section R of this article, is valid only to
the  extent  it  is  consistent  with this article as limited by the articles of
incorporation,  if  such  a  limitation  exists.

N.     Notwithstanding  any  other provision of this article, a corporation
may  pay  or  reimburse  expenses  incurred by a director in connection with his
appearance as a witness or other participation in a proceeding at a time when he
is  not  a  named  defendant  or  respondent  in  the  proceeding.

O.     An  officer  of  the corporation shall be indemnified as, and to the
same extent, provided by Sections H, I, and J of this article for a director and
is entitled to seek indemnification under those sections to the same extent as a
director.  A  corporation  may  indemnify  and  advance  expenses to an officer,
employee,  or  agent of the corporation to the same extent that it may indemnify
and  advance  expenses  to  directors  under  this  article.

P.     A  corporation may indemnify and advance expenses to persons who are
not or were not officers, employees, or agents of the corporation but who are or
were  serving at the request of the corporation as a director, officer, partner,
venturer,  proprietor,  trustee,  employee,  agent,  or  similar  functionary of
another foreign or domestic corporation, employee benefit plan, other enterprise
or other entity to the same extent that it may indemnify and advance expenses to
directors  under  this  article.

Q.     A  corporation  may  indemnify  and  advance expenses to an officer,
employee,  agent,  or  person identified in Section P of this article and who is
not  a  director to such further extent, consistent with law, as may be provided
by  its  articles  of  incorporation,  bylaws, general or specific action of its
board  of  directors,  or  contract  or  as permitted or required by common law.

R.     A  corporation  may  purchase  and  maintain  insurance  or  another
arrangement on behalf of any person who is or was a director, officer, employee,
or  agent  of  the  corporation  or  who is or was serving at the request of the
corporation  as  a  director,  officer,  partner, venturer, proprietor, trustee,
employee,  agent,  or  similar  functionary  of  another  foreign  or  domestic
corporation,  employee  benefit  plan, other enterprise or other entity, against
any  liability  asserted  against  him and incurred by him in such a capacity or
arising out of his status as such a person, whether or not the corporation would
have  the  power to indemnify him against that liability under this article.  If
the  insurance  or  other  arrangement  is  with  a person or entity that is not
regularly engaged in the business of providing insurance coverage, the insurance
or  arrangement may provide for payment of a liability with respect to which the
corporation  would  not have the power to indemnify the person only if including
coverage  for  the additional liability has been approved by the shareholders of
the  corporation.  Without  limiting  the power of the corporation to procure or
maintain  any kind of insurance or other arrangement, a corporation may, for the
benefit  of persons indemnified by the corporation, (1) create a trust fund; (2)
establish  any  form  of  self-insurance; (3) secure its indemnity obligation by
grant  of a security interest or other lien on the assets of the corporation; or
(4)  establish  a  letter  of  credit,  guaranty,  or  surety  arrangement.  The
insurance  or  other  arrangement  may  be  procured, maintained, or established
within the corporation or with any insurer or other person deemed appropriate by
the  board  of directors regardless of whether all or part of the stock or other
securities  of  the  insurer  or  other person are owned in whole or part by the
corporation.  In the absence of fraud, the judgment of the board of directors as
to  the  terms  and  conditions  of  the  insurance or other arrangement and the
identity of the insurer or other person participating in an arrangement shall be
conclusive  and the insurance or arrangement shall not be voidable and shall not
subject  the  directors  approving the insurance or arrangement to liability, on
any  ground,  regardless  of whether directors participating in the approval are
beneficiaries  of  the  insurance  or  arrangement.

S.     Any  indemnification  of  or  advance  of  expenses to a director in
accordance  with  this  article shall be reported in writing to the shareholders
with  or before the notice or waiver of notice of the next shareholders' meeting
or  with  or  before  the next submission to shareholders of a consent to action
without  a  meeting pursuant to Section A, Article 9.10, of this Act and, in any
case,  within  the  12-month  period  immediately  following  the  date  of  the
indemnification  or  advance.

T.     For  purposes  of  this  article,  the corporation is deemed to have
requested  a  director  to  serve  as  a  trustee,  employee,  agent, or similar
functionary  of  an employee benefit plan whenever the performance by him of his
duties  to the corporation also imposes duties on or otherwise involves services
by  him  to the plan or participants or beneficiaries of the plan.  Excise taxes
assessed  on  a  director  with  respect to an employee benefit plan pursuant to
applicable law are deemed fines.  Action taken or omitted by him with respect to
an  employee  benefit  plan  in  the  performance  of  his  duties for a purpose
reasonably  believed  by  him  to  be  in  the  interest of the participants and
beneficiaries  of the plan is deemed to be for a purpose which is not opposed to
the  best  interests  of  the  corporation.

U.     The  articles  of  incorporation  of  a corporation may restrict the
circumstances  under which the corporation is required or permitted to indemnify
a  person  under  Section  H,  I,  J,  O,  P,  or  Q  of  this  article.


<PAGE>
   Article VIII of Coastal Bancorp, Inc.'s Articles of Incorporation provides as
                                    follows:

ARTICLE  VIII

INDEMNIFICATION,  ETC.  OF  OFFICERS,  DIRECTORS,  EMPLOYEES  AND
AGENTS

     A.     Limitation  of Liability.  No director shall be personally liable to
the Corporation or its stockholders for monetary damages for any act or omission
by  such  director as a director; provided that a director's liability shall not
be  eliminated  to  the  extent  provided  by  Section  7.06B.  of  the  Texas
Miscellaneous  Corporation  Laws  Act  or  any  successor provision thereto.  No
amendment  to or repeal of this Subsection (A) to Article VIII shall apply to or
have  any  effect  on  the liability or alleged liability of any director of the
Corporation  for  or  with  respect  to  any  acts or omissions of such director
occurring  prior  to  such  amendment.

     B.     Indemnification.  The Corporation shall indemnify any person who was
or  is  a party or is threatened to be a made a party to any threatened, pending
or  completed  action,  suit  or  proceeding,  whether  civil,  criminal,
administrative,  arbitrative  or  investigative, by reason of the fact that such
person  is  or  was a director, officer, employee or agent of the Corporation or
any  predecessor  of the Corporation, or is or was serving at the request of the
Corporation  or  any  predecessor  of  the  Corporation  as a director, officer,
employee  or  agent of another corporation, partnership, joint venture, trust or
other  enterprise,  against  liability  and  expenses (including court costs and
attorney's  fees),  judgments,  fines,  excise  taxes  and  amounts  paid  in
satisfaction,  settlement or compromise actually and reasonably incurred by such
person  in  connection  with  such action, suit or proceeding to the full extent
authorized  by  law.

     C.     Advancement  of  Expenses.  Reasonable  expenses  incurred  by  a
director,  officer, employee or agent of the Corporation in defending a civil or
criminal  action, suit or proceeding described in Article VIII.B.  shall be paid
by  the  Corporation in advance of the final disposition of such action, suit or
proceeding  as authorized by the Board of Directors only upon receipt of written
affirmation  by or on behalf of such person of his good faith belief that he has
met the standard of conduct necessary for indemnification under relevant law and
a  written undertaking to repay such amount if it shall ultimately be determined
that the person has not met that standard or if it is ultimately determined that
indemnification  of  the  person  against expenses incurred by him in connection
with  that  proceeding  is  prohibited  by  relevant  law.

     D.     Other  Rights  and  Remedies.  The  indemnification provided by this
Article  VIII  shall  not  be  deemed to exclude any other rights to which those
seeking  indemnification  or  advancement  of expenses may be entitled under the
Corporation's  Articles of Incorporation, any insurance or other agreement, vote
of  stockholders  or disinterested directors or otherwise, both as to actions in
their official capacity and as to actions in another capacity while holding such
office,  and  shall  continue  as  to  a person who has ceased to be a director,
officer,  employee  or  agent  and  shall  inure  to  the  benefit of the heirs,
executors  and  administrators  of such person; provided that no indemnification
shall  be  made  to  or  on behalf of an individual if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the  cause  of  action  as adjudicated and (i) the person is found liable on the
basis  that  personal benefit was improperly received by him; (ii) the person is
found liable to the Corporation; or (iii) the person is found liable for willful
or  intentional  misconduct  in  the performance of his duty to the Corporation;
provided,  however,  that persons found liable under clauses (i) and (ii) above,
may  still  be indemnified solely as to reasonable expenses actually incurred by
such  person  in  connection  with  the  proceeding.

     E.     Insurance.  Upon resolution passed by the Board, the Corporation may
purchase  and  maintain  insurance  on  behalf  of  any  person  who is or was a
director,  officer,  employee or agent of the Corporation, or was serving at the
request  of the Corporation as a director, officer, employee or agent of another
corporation,  partnership,  joint  venture, trust or another enterprise, against
any  liability  asserted against him or incurred by him in any such capacity, or
arising  out  of his status, whether or not the Corporation would have the power
to  indemnify him against such liability under the provisions of this Article or
the  Act.

     F.     Modification.  The  duties  of  the  Corporation to indemnify and to
advance expenses to a director or officer provided in this Article VIII shall be
in  the  nature  of a contract between the Corporation and each such director or
officer,  and no amendment or repeal of any provision of this Article VIII shall
alter, to the detriment of such director or officer, the right of such person to
the advance of expenses or indemnification related to a claim based on an act or
failure  to  act  which  took  place  prior  to  such  amendment  or  repeal.

     G.     Proceedings  Initiated  by Indemnified Persons.  Notwithstanding any
other  provision  of  this  Article  VIII, the Corporation shall not indemnify a
director,  officer,  employee  or agent for any liability incurred in an action,
suit  or  proceeding  initiated  by  (which  shall  not  be  deemed  to  include
counter-claims  or  affirmative defenses) or participated in as an intervenor or
amicus curiae by the person seeking indemnification unless such initiation of or
participation  in the action, suit or proceeding is authorized, either before or
after  its  commencement, by the affirmative vote of a majority of the directors
then  in  office.


        Article XI of Coastal Bancorp, Inc.'s Bylaws provides as follows:

ARTICLE  XI

PERSONAL  LIABILITY  OF  DIRECTORS;  INDEMNIFICATION

     (a)     A  director  of  the Corporation shall not be personally liable for
monetary damages for action taken, or any failure to take action, as a director,
to  the  extent  set forth in the Corporation's Articles of Incorporation, which
provisions  are  incorporated  herein  with  the same affect as if they were set
forth  herein.

     (b)     The  Corporation  shall  indemnify  any  person  who is a director,
agent,  officer, employee or agent of the Corporation to the extent set forth in
the  Corporation's  Articles of Incorporation, which provisions are incorporated
herein  with  the  same  affect  as  if  they  were  set  forth  herein.

ITEM  7.     EXEMPTION  FROM  REGISTRATION  CLAIMED.

     Not  applicable  since no restricted securities will be reoffered or resold
pursuant  to  this  Registration  Statement.


<PAGE>
ITEM  8.     EXHIBITS.

     The  following  exhibits  are  filed with or incorporated by reference into
this  Registration Statement on Form S-8 (numbering corresponds to Exhibit Table
in  Item  601  of  Regulation  S-K):

No.     Exhibit
---     -------
4       Common  Stock  Certificate*
5       Opinion  of  Elias,  Matz,  Tiernan & Herrick L.L.P. as to the legality
        of the  Common  Stock
10      1999  Stock  Compensation  Program
24.1    Consent  of  Elias,  Matz.  Tiernan & Herrick L.L.P.  (contained in the
        opinion  included  as  Exhibit  5)
24.2    Consent  of  KPMG  LLP
25     Power  of  attorney  for  any  subsequent  amendments  is  located in the
       signature  pages  of  this  Registration  Statement

______________

     *Incorporated  by  reference  from  the Company's Registration Statement on
Form  8-B  (Commission  File No.  0-24526) filed with the Commission on July 15,
1994.

     **Incorporated  by  reference  from the Company's Registration Statement on
Form  S-I (Commission File No.  33-91206) filed with the Commission on April 14,
1995.

ITEM  9.     UNDERTAKINGS.

The  undersigned  Registrant  hereby  undertakes:

     1.     To  file, during any period in which offers or sales are being made,
a  post-effective  amendment  to  this Registration Statement (i) to include any
prospectus  required  by Section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect  in  the prospectus any facts or events arising after the effective date
of  the  Registration  Statement  (or  the  most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement, and (iii) to include
any material information with respect to the plan of distribution not previously
disclosed  in  the  Registration  Statement  or  any  material  change  in  such
information  in  the Registration Statement; provided, however, that clauses (i)
and  (ii)  do  not  apply  if  the  information  required  to  be  included in a
post-effective amendment by those clauses is contained in periodic reports filed
by  the  Registrant  pursuant to Section 13 or Section 15(d) of the Exchange Act
that  are  incorporated  by  reference  in  this  Registration  Statement.

     2.      That,  for  the  purpose of determining  any  liability  under  the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering  of such securities at that time shall be deemed to be the initial bona
fide  offering  thereof.

     3.     To  remove  from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the  offering.

     4.     That,  for  the  purposes  of  determining  any  liability under the
Securities  Act  of 1933, each filing of the Registrant's annual report pursuant
to  Section  13(a)  or Section 15(d) of the Exchange Act that is incorporated by
reference  in  this  Registration  Statement  shall  be  deemed  to  be  a  new
registration  statement  relating  to  the  securities  offered therein, and the
offering  of such securities at that time shall be deemed to be the initial bona
fide  offering  thereof.

     5.     Insofar  as  indemnification  for  liabilities  arising  under  the
Securities  Act  of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant  has  been  advised  that  in  the  opinion  of  the  Commission such
indemnification  is  against public policy as expressed in the Securities Act of
1933  and  is,  therefore,  unenforceable.  In  the  event  that  a  claim  for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
Registrant  of  expenses  incurred or paid by a director, officer or controlling
person  of  the  Registrant  in  the  successful  defense of any action, suit or
proceeding)  is  asserted  by  such  director,  officer or controlling person in
connection  with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit  to  a  court  of  appropriate  jurisdiction  the  question  whether such
indemnification  by  it  is against public policy as expressed in the Securities
Act  of  1933  and  will  be  governed  by the final adjudication of such issue.


<PAGE>
SIGNATURES

     Pursuant  to the requirements of the Securities Act of 1933, the Registrant
certifies  that  it  has  reasonable grounds to believe that it meets all of the
requirements  for  filing  on  Form  S-8  and  has duly caused this Registration
Statement  to  be  signed  on  its  behalf  by  the  undersigned, thereunto duly
authorized,  in  the  City  of  Houston, State of Texas on the 18th day of June,
1999.

COASTAL  BANCORP,  INC.

By:     /s/  Manuel  J.  Mehos
        ----------------------
        Manuel  J.  Mehos
        Chairman  of  the  Board
        President  and  Chief  Executive  Officer

     Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities  and  on  the  dates  indicated.  Each person whose signature appears
below  hereby  makes,  constitutes and appoints Manuel J.  Mehos or Catherine N.
Wylie,  his  or  her  true and lawful attorney, with full power to sign for such
person  and  in  such  person's name and capacity indicated below, and with full
power  of  substitution  any  and all amendments to this registration statement,
hereby  ratifying  and confirming such person's signature as it may be signed by
said  attorney  to  any  and  all  amendments.


Signature                       Title                             Date
---------                       -----                             ----

/s/  Manuel J. Mehos
--------------------          Chairman of the Board, President    June 17, 1999
Manuel  J.  Mehos             and  Chief  Executive  Officer
                              (Principal  Executive  Officer)


/s/  Catherine  N.  Wylie
-------------------------     Senior Executive Vice President,     June 17, 1999
Catherine  N.  Wylie          Chief  Financial  Officer  and  Treasurer
                              (Principal  Financial  &  Accounting  Officer)


/s/  R.  Edwin  Allday
----------------------        Director                           June  17,  1999
R.  Edwin  Allday



/s/  D.  Fort  Flowers
----------------------        Director                           June  17,  1999
D.  Fort  Flowers



/s/  Dennis  S.  Frank
----------------------        Director                           June  17,  1999
Dennis  S.  Frank





Signature                       Title                             Date
---------                       -----                             ----



/s/  Paul  W.  Hobby
--------------------        Director                           June  17,  1999
Paul  W.  Hobby



/s/  Robert  E.  Johnson
------------------------     Director                           June  17,  1999
Robert  E.  Johnson



/s/  James  C.  Niver
---------------------        Director                           June  17,  1999
James  C.  Niver


<PAGE>
EXHIBIT  INDEX

                                                                 Sequentially
                                                                   Numbered
                                                                     Page
     No.         Description                Method  of  Filing     Location
     ---         -----------                ------------------     --------
     5           Opinion of Elias, Matz,      Filed  herewith          17
                 Tiernan &  Herrick  L.L.P.

     10          1999  Stock  Compensation    Filed  herewith          18
                 Program

     24.1        Consent of Elias, Matz,     Included in Exhibit 5     --
                 Tiernan &  Herrick  L.L.P.

     24.2        Consent  of  KPMG  LLP      Filed herewith            41

     25          Power  of  Attorney         Located  in  the          --
                                             Signature Pages

<PAGE>
                                    EXHIBIT 5

                OPINION OF ELIAS, MATZ, TIERNAN & HERRICK L.L.P.

<PAGE>

     Law  Offices
     ELIAS,  MATZ,  TIERNAN  &  HERRICK  L.L.P.
     12th  Floor
     734  15th  Street,  N.W.
     Washington,  D.C.  20005


<TABLE>
<CAPTION>

<S>                             <C>                          <C>
                                Telephone:  (202) 347-0300
                                Facsimile:   (202) 347-2172

TIMOTHY B. MATZ                 JEFFREY D. HAAS
STEPHEN M. EGE                  KEVIN M. HOULIHAN
RAYMOND A. TIERNAN              KENNETH B. TABACH
W. MICHAEL HERRICK              PATRICIA J. WOHL
GERARD L. HAWKINS               FIORELLO J. VICENCIO*
NORMAN B. ANTIN                 DANIEL R. KLEINMAN*
JOHN P. SOUKENIK*               ANDREW ROSENSTEIN
GERALD F. HEUPEL, JR.           DAVID TEEPLES
JEFFREY A. KOEPPEL              CRISTIN ZEISLER*
DANIEL P. WEITZEL               ERIC M. MARION*
PHILIP ROSS BEVAN
HUGH T. WILKINSON               OF COUNSEL
                                ALLIN P. BAXTER
                                JACK I. ELIAS
                                SHERYL JONES ALU
 *NOT ADMITTED IN D.C.

                  June 17, 1999
                    VIA EDGAR
</TABLE>


Board  of  Directors
Coastal  Bancorp,  Inc.
Coastal  Banc  Plaza
5718  Westheimer,  Suite  600
Houston,  Texas  77057

     Re:     Registration  Statement  on  Form  S-8
             340,000  Shares  of  Common  Stock

Gentlemen:

     We  are  special counsel to Coastal Bancorp, Inc., a Texas corporation (the
"Corporation"),  in  connection  with  the  preparation  and  filing  with  the
Securities  and  Exchange  Commission pursuant to the Securities Act of 1933, as
amended, of a Registration Statement on Form S-8 (the "Registration Statement"),
relating  to  the registration of up to 340,000 shares of common stock, $.01 par
value  per  share  ("Common Stock"), of the Corporation to be issued pursuant to
the  Corporation's  1999  Stock  Compensation  Program  (the "Program") upon the
exercise  of  stock options and/or stock appreciation rights and/or the grant of
Common  Stock  (together, the "Option Rights").  The Registration Statement also
registers  an  indeterminate  number of additional shares which may be necessary
under  the  Program to adjust the number of shares reserved thereby for issuance
as  the  result  of  a  stock split, stock dividend or similar adjustment of the
outstanding  Common  Stock  of  the Corporation.   We have been requested by the
Corporation  to  furnish  an  opinion  to  be  included  as  an  exhibit  to the
Registration  Statement.

For  this  purpose, we have reviewed the Registration Statement, the Articles of
Incorporation  and  the Bylaws of the Corporation, the Program, a specimen stock
certificate  evidencing  the  Common  Stock  of  the  Corporation and such other
corporate  records  and documents as we have deemed appropriate.  We are relying
upon  the  originals,  or  copies  certified  or  otherwise  identified  to  our
satisfaction,  of  the  corporate  records  of  the  Corporation  and such other
instruments,  certificates and representations of public officials, officers and
representatives of the Corporation as we have deemed relevant as a basis for the
opinions  expressed  herein.  In  addition, we have assumed, without independent
verification,  the  genuineness  of  all  signatures and the authenticity of all
documents  furnished  to  us  and  the  conformance in all respects of copies to
originals.  Furthermore,  we  have made such factual inquiries and reviewed such
laws  as  we  determined  to  be  relevant  for  this  opinion.

     For  purposes  of this opinion, we have also assumed that (i) the shares of
Common  Stock  issuable pursuant to Option Rights granted under the terms of the
Program  will continue to be validly authorized on the dates the Common Stock is
issued  pursuant  to  the Option Rights; (ii) on the dates the Option Rights are
exercised,  the  Option  Rights  granted  under  the  terms  of the Program will
constitute  valid,  legal  and  binding  obligations of the Corporation and will
(subject  to  applicable  bankruptcy, moratorium, insolvency, reorganization and
other  laws  and  legal  principles  affecting  the enforceability of creditors'
rights  generally) be enforceable as to the Corporation in accordance with their
terms;  (iii) the Option Rights are exercised in accordance with their terms and
the exercise price, if any, therefor is paid and the terms and conditions of the
grant  of  the Option Rights are satisfied in accordance with the terms thereof;
(iv)  no  change  occurs  in  applicable law or the pertinent facts; and (v) the
provisions  of  "blue  sky"  and other securities laws as may be applicable will
have  been  complied  with  to  the  extent  required.

     Based on the foregoing, and subject to the assumptions set forth herein, we
are  of  the opinion as of the date hereof that the shares of Common Stock to be
issued pursuant to the Program, when issued and sold pursuant to the Program and
upon  receipt  of  the  consideration  required thereby, will be legally issued,
fully  paid  and  non-assessable  shares  of  Common  Stock  of the Corporation.

     We  hereby  consent  to the reference to this firm under the caption "Legal
Opinion"  in  the Prospectus of the Program and to the filing of this opinion as
an  exhibit  to  the  Registration  Statement.

     Very  truly  yours,

     ELIAS,  MATZ,  TIERNAN  &  HERRICK  L.L.P.

     By:  /s/  Jeffrey  A.  Koeppel
          -------------------------
            Jeffrey  A.  Koeppel,  a  Partner


<PAGE>
                                   EXHIBIT 10

                         1999 STOCK COMPENSATION PROGRAM

<PAGE>


     COASTAL  BANCORP,  INC.

     1999  STOCK  COMPENSATION  PROGRAM

     1.     PURPOSE.  This Coastal Bancorp, Inc. 1999 Stock Compensation Program
            -------
("Program") is intended to secure for Coastal Bancorp, Inc. (the "Company"), any
Subsidiaries thereof and its stockholders the benefits arising from ownership of
the  Company's Common Stock, par value $.01 per share ("Common Stock"), by those
selected  Officers  and  other  key  Employees of the Company and any Subsidiary
thereof  who will be responsible for its future growth.  The Program is designed
to  help  attract  and  retain  superior  personnel for positions of substantial
responsibility  with the Company and to provide key Employees with an additional
incentive  to  contribute  to  the  success of the Company.  All Incentive Stock
Options  issued  under  the  Incentive  Plan  are  intended  to  comply with the
requirements of Section 422 of the Code, and the regulations thereunder, and all
provisions  under the Incentive Plan shall be read, interpreted and applied with
that  purpose  in  mind.  Capitalized  terms  are  defined  in Article 15 of the
General  Provisions  of  the  Stock  Compensation  Program.

     2.     ELEMENTS  OF  THE  PROGRAM.  In order to maintain flexibility in the
            --------------------------
award of stock benefits, the Program is comprised of four parts.  The first part
is  the  Incentive Stock Option Plan ("Incentive Plan").  The second part is the
Compensatory  Stock  Option  Plan  ("Compensatory Plan").  The third part is the
Stock  Appreciation  Rights  Plan  ("S.A.R.  Plan").  The  fourth  part  is  the
Performance  Share  Plan  ("Performance  Plan").  Copies  of the Incentive Plan,
Compensatory  Plan, S.A.R. Plan and Performance Plan are attached hereto as Part
I, Part II, Part III and Part IV, respectively, and are collectively referred to
herein  as  the  "Plans"  or  the  "Program."  The  grant  of  an  Option, Stock
Appreciation  Right  or  Performance  Share  under one of the Plans shall not be
construed  to  prohibit  the  grant  of  an  Option, Stock Appreciation Right or
Performance  Share  under  any  of  the  other  Plans.

     3.     APPLICABILITY  OF  GENERAL PROVISIONS.  Unless any Plan specifically
            -------------------------------------
indicates  to the contrary, all Plans shall be subject to the General Provisions
of  the  Stock  Compensation  Program  set  forth  below.

     4.     ADMINISTRATION  OF  THE  PLANS.  The  Plans  shall  be administered,
            ------------------------------
construed, governed and amended in accordance with the General Provisions of the
Stock  Compensation  Program  and  their  respective  terms.

GENERAL  PROVISIONS  OF  THE  STOCK  COMPENSATION  PROGRAM

     ARTICLE  1.  ADMINISTRATION.  The  Program  shall  be  administered  by  a
                  --------------
committee appointed by the Board of Directors of the Company and composed of not
less than three directors of the Company, none of whom is an Officer or Employee
of the Company or any Subsidiary thereof.  The Board of Directors may, from time
to  time,  remove  members from, or add members to this Committee, provided that
the  Committee  shall continue to consist of three or more members of the Board,
none of whom is an Officer or Employee of the Company or any Subsidiary thereof,
and  each  of  whom shall be a "disinterested person" within the meaning of Rule
16b-3  under  the  Exchange  Act.  The  Committee, when acting to administer the
Program,  is  referred to herein as the "Program Administrators."  Any action of
the  Program  Administrators  shall  be  taken  by  majority vote or the written
consent  of  a  majority  of the Program Administrators.  Subject to the express
provisions  and limitations of the Program, this Committee may adopt such rules,
regulations  and  procedures  as  it  deems  appropriate  for the conduct of its
affairs.  It  may  appoint  one  of  its members to be chairman, and any person,
whether  or  not a member of this Committee, to be its secretary or agent.  This
Committee  shall  report  its actions and decisions to the Board of Directors at
appropriate  times,  but  in  no event less than one time per calendar year.  No
Program  Administrator or member of the Board of Directors of the Company, shall
be liable for any action or determination made in good faith with respect to the
Program or to any Option, Stock Appreciation Right, or Performance Share granted
thereunder.  If a Program Administrator is a party or is threatened to be made a
party  to  any  threatened,  pending  or  completed  action, suit or proceeding,
whether  civil, criminal, administrative or investigative, by reason of anything
done  or  not  done  by him or her in such capacity under or with respect to the
Program,  the  Company shall, subject to the requirements of applicable laws and
regulations,  indemnify  such  member  against  all  liabilities  and  expenses
(including  attorneys'  fees),  judgments,  fines and amounts paid in settlement
actually  and  reasonably incurred by him or her in connection with such action,
suit  or  proceeding  if he or she acted in good faith and in a manner he or she
reasonably  believed  to  be in the best interests of the Company and any of its
Subsidiaries  and,  with  respect  to  any criminal action or proceeding, had no
reasonable  cause  to  believe  his  conduct  was  unlawful.

     ARTICLE  2.  AUTHORITY  OF  PROGRAM  ADMINISTRATORS.  Subject  to the other
                  --------------------------------------
provisions  of  this  Program,  and  with  a  view to effecting its purpose, the
Program  Administrators  shall have sole authority in their absolute discretion:
(a)  to construe and interpret the Program; (b) to define the terms used herein;
(c)  to  prescribe, amend and rescind rules, regulations and procedures relating
to the Program, including, without limitation, rules, regulations and procedures
which  (i)  deal  with  satisfaction of an Employee's tax withholding obligation
pursuant  to  Article  11  hereof,  (ii)  include arrangements to facilitate the
Employee's ability to borrow funds for payment of the exercise or purchase price
of  an  Award,  if  applicable,  from  securities brokers and dealers, and (iii)
include  arrangements  which  provide  for  the  payment  of some or all of such
exercise  or  purchase  price  by  delivery of previously-owned shares of Common
Stock or other property and/or by withholding some of the shares of Common Stock
which are being acquired; (d) to determine the Employees to whom Awards shall be
granted  under  the  Program; (e) to determine the time or times at which Awards
shall  be  granted  under  the  Program;  (f)  to determine the number of shares
subject  to  any  Option  or  Stock Appreciation Right under the Program and the
number  of  shares to be awarded as Performance Shares under the Program as well
as  the  option  exercise  price,  and the duration of each Award, and any other
terms  and  conditions  of Awards; (g) to terminate the Program; and (h) to make
any  other  determinations  necessary or advisable for the administration of the
Program and to do everything necessary or appropriate to administer the Program.
All  decisions,  determinations  and  interpretations  made  by  the  Program
Administrators shall be final, binding and conclusive on all participants in the
Program  and  on  their  legal  representatives,  heirs  and  beneficiaries.

     ARTICLE 3.  MAXIMUM NUMBER OF SHARES SUBJECT TO THE PROGRAM.  The aggregate
                 -----------------------------------------------
number  of  shares of Common Stock available to be issued pursuant to the Plans,
subject to adjustment as provided in Article 6 hereof, shall be equal to 340,000
shares  of the Company's Common Stock.  If any of the Options granted under this
Program  are surrendered before exercise (including surrender in connection with
the  exercise of a Stock Appreciation Right), expire or terminate for any reason
before they have been exercised in full, the unpurchased shares subject to those
surrendered,  expired  or  terminated  Options  shall again be available for the
purposes of the Program as if no Awards had been previously granted with respect
to  such shares.  If the performance objectives associated with the grant of any
Performance Share(s) are not achieved within the specified performance period or
if  the Performance Share grant terminates for any reason before the performance
objective  date  arrives,  the  shares  of  Common  Stock  associated  with such
Performance  Shares  shall  again  be available for the purposes of the Program.
The  shares  of  Common  Stock  issued  under  the Program may be authorized but
unissued  shares, treasury shares or shares purchased by the Company on the open
market  or  from  private  sources  for  use  under  the  Program.


<PAGE>
     ARTICLE  4.  ELIGIBILITY  AND  PARTICIPATION.  Only  regular  full-time
                  -------------------------------
Employees  of  the Company or any Subsidiary thereof, including Officers whether
or  not  directors  of  the Company, or of any Subsidiary, shall be eligible for
selection  by  the  Program  Administrators  to  participate  in  the  Program.
Directors  of  the  Company shall not be eligible to participate in the Program.

     ARTICLE  5.  EFFECTIVE  DATE AND TERM OF PROGRAM.  The Program shall become
                  -----------------------------------
effective  upon  its  adoption  by  the  Board  of  Directors of the Company and
subsequent  approval  of the Program by the affirmative vote of the holders of a
majority  of the shares entitled to vote thereon at a meeting of stockholders of
the  Company  and  represented  in person or by proxy at such meeting at which a
quorum is present, which vote shall be taken within 12 months of adoption of the
Program  by the Company's Board of Directors; provided, however, that Awards may
be  granted  under  this  Program prior to obtaining stockholder approval of the
Program,  except  that any such Awards shall be contingent upon such stockholder
approval  being  obtained  and may not be exercised prior to such approval.  The
Program  shall  continue  in  effect  for  a  term  of  ten  years unless sooner
terminated  under Article 2 or Article 7 of the General Provisions.  Termination
of  the  Program  shall not affect any Awards previously granted and such Awards
shall remain valid and in effect until they have been fully exercised or earned,
are  surrendered  or  by  their  terms  expire  or  are  forfeited.

     ARTICLE 6.  ADJUSTMENTS.  If the shares of Common Stock of the Company as a
                 -----------
whole are increased, decreased, changed into or exchanged for a different number
or  kind  of  shares  or  securities through merger, consolidation, combination,
exchange  of  shares,  other reorganization, recapitalization, reclassification,
stock  dividend,  stock  split  or  reverse  stock  split,  an  appropriate  and
proportionate  adjustment shall be made in the maximum number and kind of shares
as  to  which  Awards  may  be  granted  under  this  Program.  A  corresponding
proportionate  adjustment  of  the  exercise  price  of  any  Option  or  Stock
Appreciation  Right and of the number or kind of shares allocated to unexercised
Options,  Stock  Appreciation  Rights,  Performance  Shares or portions thereof,
which  shall have been granted prior to any such change, shall likewise be made.
In making any adjustment pursuant to this Article 6, any fractional shares shall
be  rounded in the discretion of the Program Administrators.  If, upon a merger,
consolidation,  reorganization, liquidation, recapitalization or the like of the
Company,  the  shares of the Company's Common Stock shall be exchanged for other
securities  of the Company or of another corporation, each recipient of an Award
shall  be  entitled,  subject  to  the  conditions herein stated, to purchase or
acquire  such  number of shares of Common Stock or amount of other securities of
the  Company  or  such  other corporation as were exchangeable for the number of
shares  of  Common  Stock  of  the  Company which such Optionees would have been
entitled  to  purchase  or  acquire  except  for  such  action,  and appropriate
adjustments shall be made to the per share exercise price of outstanding Options
and  Stock  Appreciation  Rights.

     ARTICLE  7.  TERMINATION  AND  AMENDMENT  OF  PROGRAM.  The  Program  shall
                  ----------------------------------------
terminate  no  later than ten years from the date such Program is adopted by the
Board  of  Directors  or  the date such Program is approved by the stockholders,
whichever  is  earlier.  No Awards shall be granted under the Program after that
date.  The Board of Directors may amend, suspend or terminate the Program or any
portion  thereof  at  any time, except that it may not amend the Program without
stockholder  approval where the absence of such approval would cause the Program
to  fail  to  comply  with Rule 16b-3 under the Exchange Act, Section 422 of the
Code,  the  requirements of any securities exchange or national quotation system
on  which  the  shares  of  Common Stock are then listed or traded, or any other
requirement  of  applicable  law  or  regulation.  Subject  to  the  limitation
contained in Article 8 of the General Provisions, the Program Administrators may
at  any  time  amend  or revise the terms of the Program, including the form and
substance  of  the  Option,  Stock  Appreciation  Right,  and  Performance Share
agreements  to  be  used hereunder; provided that no amendment or revision shall
(a)  increase  the  maximum  aggregate  number  of  shares  that  may  be  sold,
appreciated  or  distributed  pursuant  to Options, Stock Appreciation Rights or
Performance Shares granted under this Program, except as permitted under Article
6  of  the  General Provisions; (b) change the minimum purchase price for shares
under  Section  4  of Plans I and II, except as permitted under Article 6 of the
General  Provisions;  (c)  increase the maximum term established under the Plans
for any Option, Stock Appreciation Right or Performance Share; or (d) permit the
granting  of  an Option, Stock Appreciation Right or Performance Share to anyone
other  than  as  provided  in  Article  4  of  the  General  Provisions.

     ARTICLE  8.  PRIOR  RIGHTS  AND  OBLIGATIONS.  No  amendment, suspension or
                  -------------------------------
termination  of  the  Program  shall, without the consent of an Employee who has
received  an Award, alter or impair any of that Employee's rights or obligations
under any Award granted under the Program prior to such amendment, suspension or
termination.

     ARTICLE 9.  PRIVILEGES OF STOCK OWNERSHIP.  Notwithstanding the exercise of
                 -----------------------------
any  Options  or Stock Appreciation Rights granted pursuant to the terms of this
Program  or  the  achievement  of  any  performance  objective  specified in any
Performance  Share  granted  pursuant  to the terms of this Program, no Employee
shall  have  any  of the rights or privileges of a stockholder of the Company in
respect  of  any shares of stock issuable upon the exercise of his or her Option
or  achievement  of  his or her performance goal until certificates representing
the  shares  have  been issued and delivered.  No shares shall be required to be
issued  and  delivered  upon  exercise  of  any  Option  or  achievement  of any
performance goal as specified in a Performance Share unless and until all of the
requirements  of law and of all regulatory agencies having jurisdiction over the
issuance and delivery of the securities shall have been fully complied with.  No
adjustment  shall be made for dividends or any other distributions for which the
record  date  is  prior  to  the date on which such stock certificate is issued.

     ARTICLE  10.  RESERVATION  OF  SHARES OF COMMON STOCK.  The Company, during
                   ---------------------------------------
the  term  of  this  Program,  will at all times reserve and keep available such
number  of  shares  of  its  Common  Stock as shall be sufficient to satisfy the
requirements  of  the Program.  All Awards granted hereunder shall be subject to
all  applicable  federal  and  state  laws,  rules  and  regulations and to such
approval  by  any  governmental  or  regulatory  agency as may be required.  The
Company  will  from  time to time, as is necessary to accomplish the purposes of
this  Program,  seek  to obtain all necessary and appropriate approvals from any
governmental  authority  or  regulatory agency having jurisdiction any requisite
authority  in  order  to  issue  and sell shares of Common Stock hereunder.  The
inability  of  the  Company  to  obtain  from  any  regulatory  agency  having
jurisdiction  the  authority deemed by the Company's counsel to be necessary for
the  lawful issuance and sale of any shares of its stock hereunder shall relieve
the Company of any liability in respect of the non-issuance or sale of the stock
as  to  which  the  requisite  authority  shall  not  have  been  obtained.

     ARTICLE  11.  TAX WITHHOLDING.  The exercise of any Award granted under the
                   ---------------
Program  is  subject  to  the  condition  that  if at any time the Company shall
determine,  in its discretion, that the satisfaction of withholding tax or other
withholding liabilities under any state or federal law is necessary or desirable
as  a  condition of, or in any connection with, such exercise or the delivery or
purchase  of  shares  pursuant  thereto, then in such event, the exercise of the
Option,  Stock  Appreciation  Right  or Performance Share shall not be effective
unless  such  withholding  tax  or other withholding liabilities shall have been
satisfied  in a manner acceptable to the Company.  The Company may withhold from
any  cash  payment  made  under  this  Program  sufficient  amounts to cover any
applicable  withholding  and  employment  taxes,  and if the amount of such cash
payment  is  insufficient,  the  Company  may require the Optionee to pay to the
Company  the  amount  required  to  be withheld as a condition to delivering the
shares  acquired pursuant to an Award.  The Company also may withhold or collect
amounts  with  respect  to a disqualifying disposition of shares of Common Stock
acquired  pursuant  to  exercise  of  an  Incentive Stock Option, as provided in
Section  16  of the Incentive Stock Option Plan.  The Program Administrators are
authorized  to  adopt  rules,  regulations,  or procedures which provide for the
satisfaction of an Employee's tax withholding obligation by, among other things,
the retention of shares of Common Stock to which the Employee would otherwise be
entitled  pursuant  to  an  Award  and/or  by  the  Employee's  delivery  of
previously-owned  shares  of  Common  Stock  or  other  property.

     ARTICLE  12.  EMPLOYMENT.  Nothing  in  the Program or in any Option, Stock
                   ----------
Appreciation  Right,  or Performance Share award, shall confer upon any eligible
Employee  any  right  to  continued  employment by the Company or any Subsidiary
thereof, or limit in any way the right of the Company or any Subsidiary thereof,
at  any  time  to  terminate  or  alter  the  terms  of  that  employment.

     ARTICLE  13.  REVOCATION FOR MISCONDUCT.  The Program Administrators may by
                   -------------------------
resolution  immediately  revoke,  rescind  and  terminate any Option, or portion
thereof,  to  the extent not yet vested, or any Stock Appreciation Right, to the
extent not yet exercised, previously granted or awarded under this Program to an
Employee  who  is  discharged  from  the employ of the Company or any Subsidiary
thereof  for cause, which, for purposes hereof, shall mean termination for:  (i)
conviction  of  a  felony involving the misappropriation of the Company's or any
Subsidiaries  assets or a conviction of a felony which results in a substantial,
demonstrable  threat  to  the  Company's or any Subsidiaries reputation, or (ii)
gross  and  willful  failure  to perform a substantial portion of the Employee's
duties  and  responsibilities  as  an  Employee.

     ARTICLE 14.  RESTRICTIONS ON TRANSFER.  The Company may place a legend upon
                  ------------------------
any  certificate  representing  shares  acquired  pursuant  to  an Award granted
hereunder  noting  that  the  transfer  of  such  shares  may  be  restricted by
applicable  laws  and  regulations.

     ARTICLE  15.  DEFINITIONS.
                   -----------

          (a)  "Award"  means an Option, Stock Appreciation Right or Performance
Share  granted  pursuant  to  the  terms  of  this  Program.

          (b)  "Board"  means  the  Board  of  Directors  of  the  Company.

          (c)  "Code"  means  the  Internal  Revenue  Code  of 1986, as amended.

          (d)  "Committee"  means  a  Committee  of  three  or  more  directors
appointed  by  the Board pursuant to Article 1 of the General Provisions hereof,
none  of  whom shall be an Officer or Employee of the Company or any Subsidiary,
and  each  of  whom shall be a "disinterested person" within the meaning of Rule
16b-3  under  the  Exchange  Act.

          (e)  "Common  Stock"  means shares of the common stock, $.01 par value
per  share,  of  the  Company.

          (f)  "Disability"  means any disability which makes a person unable to
engage  in  any  substantial  gainful  activity  by  reason  of  any  medically
determinable physical or mental impairment as defined in Section 22(e)(3) of the
Code.

          (g)  "Employee"  means  any  person  who  is employed full time by the
Company  or  any  Subsidiary, or is an Officer of the Company or any Subsidiary,
but  not including directors who are not also Officers of, or otherwise employed
by,  the  Company  or  any  Subsidiary.

          (h)  "Exchange  Act"  means  the  Securities  Exchange Act of 1934, as
amended.

          (i)  "Fair  Market  Value" shall be equal to the fair market value per
share  of  the  Company's  Common  Stock  on  the date an Award is granted.  For
purposes  hereof,  the Fair Market Value of a share of Common Stock shall be the
closing  sale  price  of a share of Common Stock on the date in question (or, if
such  day  is  not  a  trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the composite
of  the  markets,  if  more than one) or national quotation system in which such
shares  are  then  traded,  or  if no such closing prices are reported, the mean
between  the  high  bid and low asked prices that day on the principal market or
national  quotation  system then in use, or if no such quotations are available,
the  price furnished by a professional securities dealer making a market in such
shares  selected  by  the  Committee.

          (j)  "Incentive  Stock  Option"  means  any  Option granted under this
Program  which  the Board intends (at the time it is granted) to be an Incentive
Stock  Option  within  the  meaning  of  Section  422  of  the  Code.

          (k)  "Non-Qualified  Option"  means any Option granted under this Plan
which  is  not  an  Incentive  Stock  Option.

          (l)  "Officer"  means an Employee whose position in the Company or any
Subsidiary  thereof  is that of a corporate officer, as determined by the Board.

          (m)  "Option"  means  a  right  granted under this Program to purchase
Common  Stock.

          (n)  "Optionee"  means  an  Employee  or  former  Employee  to whom an
Option,  Stock  Appreciation  Right,  or  Performance  Share, as appropriate, is
granted  under  the  Program.

          (o)  "Performance Shares" means a specified number of shares of Common
Stock  granted  to  an  Employee,  as  provided in the discretion of the Program
Administrators  in  accordance  with  Performance  Share  Plan.

               (p)  "Retirement"  means  a  termination  of  employment  which
constitutes  a "retirement" pursuant to the personnel policies of the Company or
any  Subsidiary  thereof  or under any applicable qualified pension benefit plan
maintained  by  the  Company  or  any  Subsidiary  thereof.

          (q)  "Stock  Appreciation  Right" means a right to surrender an Option
in  consideration  for  a payment by the Company in cash and/or Common Stock, as
provided  in the discretion of the Program Administrators in accordance with the
Stock  Appreciation  Rights  Plan.

          (r)  "Subsidiary"  or  "Subsidiaries"  means those subsidiaries of the
Company,  including  Coastal  Banc ssb, which meet the definition of "Subsidiary
corporations"  set  forth in Section 424(f) of the Code, at the time of granting
of  the  Award  in  question.

          (s)  "Termination  Date" means the date the employee is effectively no
longer  an  employee.  This  does  not  cover  time  paid  for  severance.

          (t)  Other  terms  are  defined as set forth in the General Provisions
and  the  respective  Plans.


<PAGE>
     ARTICLE 16.  STOCK OPTION AGREEMENT.  The proper Officers, on behalf of the
                  ----------------------
Company,  and  each  Optionee shall execute a Stock Option Agreement which shall
set  forth  the total number of shares of Common Stock to which it pertains, the
exercise  price,  whether  it  is  a  Non-Qualified Option or an Incentive Stock
Option,  and  such  other  terms, conditions, restrictions and privileges as the
Program  Administrators  in each instance shall deem appropriate.  Each Optionee
shall  receive  a  copy  of  his  or  her  executed  Stock  Option  Agreement.

     ARTICLE  17.  GOVERNING  LAW.  To the extent not superseded by federal law,
                   --------------
the provisions of the Program shall be governed by and interpreted in accordance
with  the  laws  of  the  State  of  Texas.

<PAGE>
                                COASTAL BANCORP, INC.
                         1999 STOCK COMPENSATION PROGRAM

PLAN  I  -  INCENTIVE  STOCK  OPTION  PLAN

     SECTION  1.  PURPOSE.  The  purpose of this Coastal Bancorp, Inc. Incentive
                  -------
Stock  Option  Plan  ("Incentive  Plan")  is  to  promote the growth and general
prosperity of the Company by permitting the Company to grant Options to purchase
shares  of its Common Stock.  The Incentive Plan is designed to help attract and
retain  superior  personnel for positions of responsibility with the Company, or
of  any Subsidiary, and to provide key Employees with an additional incentive to
contribute  to  the  success  of  the Company.  The Company intends that Options
granted  pursuant  to the provisions of the Incentive Plan will qualify and will
be  identified as "incentive stock options" within the meaning of Section 422 of
the Code.  This Incentive Plan is Part I of the Coastal Bancorp, Inc. 1999 Stock
Compensation  Program.  Unless  any  provision herein indicates to the contrary,
this  Incentive  Plan shall be subject to the General Provisions of the Program.

     SECTION  2.  OPTION  TERMS  AND  CONDITIONS.  The  terms  and conditions of
                  ------------------------------
Options  granted  under  the  Incentive  Plan may differ from one another as the
Program  Administrators  shall,  in their sole discretion, determine, as long as
all  Options  granted  under  the Incentive Plan satisfy the requirements of the
Incentive  Plan.

     SECTION  3.  DURATION  OF  OPTIONS.  Each  Option and all rights thereunder
                  ---------------------
granted  pursuant to the terms of the Incentive Plan shall be exercisable at any
time  on  or after it vests and becomes exercisable and shall expire on the date
determined  by  the  Program  Administrators,  but  in no event shall any Option
granted  under  the  Incentive Plan expire later than ten years from the date on
which  the Option is granted, except that any Employee who owns more than 10% of
the  combined  voting  power  of  all classes of stock of the Company, or of any
Subsidiary thereof, must exercise any Options within five years from the date of
grant.  In  addition,  each  Option  shall  be  subject  to early termination as
provided  in  the  Incentive  Plan.

     SECTION  4.  PURCHASE  PRICE.  The  purchase  price  for  shares  acquired
                  ---------------
pursuant  to  the  exercise,  in whole or in part, of any Incentive Stock Option
shall  not be less than one hundred percent (100%) of the Fair Market Value of a
share  of  Common  Stock at the time of the grant of the Option; except that for
any  Employee who owns more than 10% of the combined voting power of all classes
of  stock  of the Company, or of any Subsidiary, the purchase price shall not be
less than one hundred and ten percent (110%) of the Fair Market Value of a share
of  Common  Stock.  All shares sold under the Incentive Plan shall be fully paid
and  non-assessable.

     SECTION  5.  MAXIMUM AMOUNT OF OPTIONS IN ANY CALENDAR YEAR.  The aggregate
                  ----------------------------------------------
Fair  Market  Value  (determined  as  of  the time the Option is granted) of the
Common  Stock  with respect to which Incentive Stock Options, as defined in Code
Section  422(b),  are  exercisable for the first time by any Employee during any
calendar  year  (under  the terms of this Plan and all such plans of the Company
and  any Subsidiary thereof) shall not exceed $100,000.  Any Option in excess of
the  foregoing limitations shall be pursuant to the Company's Compensatory Stock
Option  Plan  (Plan  II) and shall be clearly and specifically designated as not
being  an  Incentive  Stock  Option.


<PAGE>
     SECTION  6.  EXERCISE  OF  INCENTIVE  STOCK  OPTIONS.  Each Incentive Stock
                  ---------------------------------------
Option  shall  become  vested and exercisable in one or more installments during
its  term,  and  the  right  to  exercise may be cumulative as determined by the
Program  Administrators;  provided,  however,  that in the case of any Incentive
Stock  Options  exercisable  within  the first six months following the date the
Incentive  Stock Option is granted, the shares of Common Stock received upon the
exercise  of  such Option may not be sold or disposed of by the Optionee for the
first six months following the date of grant, provided further, however, that in
the  case  of  any  Incentive  Stock  Option  granted prior to the date that the
Program  is  approved  by the requisite vote of the stockholders of the Company,
the  shares of Common Stock received upon the exercise of such Option may not be
sold  or disposed of by the Optionee for the first six months following the date
stockholder approval is received.  In determining the number of shares of Common
Stock  with  respect  to  which  Incentive  Stock  Options  are  vested  and/or
exercisable, fractional shares will be rounded up to the nearest whole number if
the  fraction  is  0.5 or higher, and down if it is less.  The purchase price of
any  shares purchased shall be paid in full in cash or by certified or cashier's
check  payable  to  the  order  of  the  Company  or  by  shares of Common Stock
(including  shares  acquired  pursuant  to  the  exercise of an Option) or other
property,  or  by withholding some of the shares of Common Stock which are being
purchased  upon  exercise  of  an  Option,  if  permitted  by  the  Program
Administrators,  or by a combination of cash, check or shares of Common Stock or
other property equal in Fair Market Value to the purchase price of the shares to
be  acquired  pursuant  to  the  Option,  at the time of exercise of the Option.

     SECTION  7.  ACCELERATION  OF  RIGHT  OF  EXERCISE  OF  INSTALLMENTS.
                  -------------------------------------------------------
Notwithstanding  the  first sentence of Section 6 of this Incentive Plan, in the
event  the Company or its stockholders enter into an agreement to dispose of all
or  substantially  all of the assets or stock of the Company (or of Coastal Banc
ssb)  by  means  of  a  sale,  merger  or  other  reorganization, liquidation or
otherwise,  any Option granted pursuant to the terms of the Incentive Plan shall
become immediately exercisable with respect to the full number of shares subject
to  that  Option during the period commencing as of the date of the agreement to
dispose  of  all  or substantially all of the assets or stock of the Company and
ending when the disposition of assets or stock contemplated by that agreement is
terminated  or  the  Option  is  otherwise  terminated  in  accordance  with its
provisions  or  the  provisions  of this Incentive Plan, whichever occurs first;
provided,  however,  that  no Option shall be immediately exercisable under this
Section  7 on account of any agreement to dispose of all or substantially all of
the  assets or stock of the Company (or of Coastal Banc ssb) by means of a sale,
merger  or other reorganization, liquidation or otherwise where the stockholders
of  the  Company immediately before the consummation of the transaction will own
at least 50% of the total combined voting power of all classes of stock entitled
to  vote  of  the  surviving  entity,  whether the Company or some other entity,
immediately  after  the  consummation  of  the  transaction.  In  the  event the
transaction  contemplated  by the agreement referred to in this Section 7 is not
consummated, but rather is terminated, cancelled or expires, the Options granted
pursuant  to the Incentive Plan shall thereafter be treated as if that agreement
had  never  been  entered  into.

     Notwithstanding  the first sentence of Section 6 of this Incentive Plan, in
the  event of a change in control of the Company or threatened change in control
of  the Company as determined by a vote of not less than a majority of the Whole
Board of Directors and a majority of the Continuing Directors of the Company, as
such terms are defined in the Company's Articles of Incorporation, all Incentive
Stock  Options  granted  prior to such change in control or threatened change of
control  shall  become immediately exercisable.  The term "control" for purposes
of  this  Section  shall refer to the acquisition (subsequent to the approval of
the  Program  by  the  stockholders of the Company) of 10% or more of the voting
securities  of  the Company by any person or by persons acting as a group within
the  meaning  of  Section 13(d) of the Exchange Act; provided, however, that for
purposes  of  this  Incentive Plan, no change in control or threatened change in
control  shall  be  deemed  to  have occurred if prior to the acquisition of, or
offer to acquire, 10% or more of the voting securities of the Company, the Whole
Board  of  Directors  of  the  Company  shall  have  adopted  by not less than a
two-thirds  vote  a  resolution specifically approving such acquisition or offer
for  the  specific purpose of preventing the acceleration of the vesting of such
Options.  The term "person" for purposes of this Section refers to an individual
or  a  corporation,  partnership,  trust,  association,  joint  venture,  pool,
syndicate, sole proprietorship, unincorporated organization or any other form of
entity  not  specifically  listed  herein.

     SECTION  8.  WRITTEN  NOTICE  REQUIRED.  Any Option granted pursuant to the
                  -------------------------
terms  of  the  Incentive  Plan  shall  be exercised when written notice of that
exercise  has  been  given  to the Company at its principal office by the person
entitled  to exercise the Option and full payment for the shares with respect to
which  the  Option  is  exercised  has  been  received  by  the  Company.

     SECTION  9.  COMPLIANCE WITH SECURITIES LAWS.  Shares of Common Stock shall
                  -------------------------------
not be issued with respect to any Option granted under the Incentive Plan unless
the  exercise  of  that  Option  and  the  issuance and delivery of those shares
pursuant to that exercise shall comply with all relevant provisions of state and
federal  law  including,  without  limitation,  the  Securities  Act of 1933, as
amended,  the rules and regulations promulgated thereunder, and the requirements
of  any  stock  exchange  or national quotation system upon which the shares may
then  be listed, and shall be further subject to the approval of counsel for the
Company  with  respect  to such compliance.  The Program Administrators may also
require  an Optionee to whom an Option has been granted under the Incentive Plan
to  furnish evidence satisfactory to the Company, including a written and signed
representation  letter  and  consent  to  be  bound  by any transfer restriction
imposed  by  law,  legend,  condition  or  otherwise,  that the shares are being
purchased  only  for  investment  and  without  any present intention to sell or
distribute  the  shares  in  violation  of  any  state  or  federal law, rule or
regulation.  Further,  each Optionee shall consent to the imposition of a legend
on  the  shares  of  Common Stock subject to his or her Option restricting their
transferability  as  required  by  law  or  by  this  Section  9.

     SECTION  10.  EMPLOYMENT  OF  OPTIONEE.  Each Optionee, if requested by the
                   ------------------------
Program  Administrators  when  the Option is granted, must agree in writing as a
condition  of  receiving  his  or  her Option, that he or she will remain in the
employ  of  the  Company,  or  any  parent  or  Subsidiary  of the Company (or a
corporation  or a parent or Subsidiary of such corporation issuing or assuming a
stock  option  in a transaction to which Section 424(a) of the Code applies), as
the  case may be, following the date of the granting of that Option for a period
specified  by  the Program Administrators, which period shall in no event exceed
three  years.  Nothing  in  the  Plan  or  in any Option granted hereunder shall
confer  upon  any  Optionee any right to continued employment by the Company, or
any  Subsidiary  thereof,  or  limit  in any way the right of the Company or any
Subsidiary  thereof,  at  any  time  to  terminate  or  alter  the terms of that
employment.

     SECTION  11.  OPTION RIGHTS UPON TERMINATION OF EMPLOYMENT.  If an Optionee
                   --------------------------------------------
ceases  to  be  employed  by  the  Company,  or  any  Subsidiary  thereof  (or a
corporation  or a parent or Subsidiary of such corporation issuing or assuming a
stock  option in a transaction to which Section 424(a) of the Code applies), for
any  reason  other than death, Disability or Retirement, his or her Option shall
immediately  terminate.  Should  an employee be re-hired within the mandatory 30
day  exercise  window,  they  will  be  allowed to not exercise their previously
granted  options  at  their  discretion.

     SECTION  12.  OPTION  RIGHTS UPON DISABILITY OR RETIREMENT.  If an Optionee
                   --------------------------------------------
becomes  disabled  within  the  meaning  of  Section  22(e)(3) of the Code while
employed  by the Company or any Subsidiary thereof (or a corporation or a parent
or  Subsidiary  of  such  corporation  issuing  or  assuming a stock option in a
transaction  to  which  Section  424(a)  of  the  Code  applies) or ceases to be
employed  thereby  due  to  his  Retirement, the Option may be exercised, to the
extent  exercisable on the date of termination of employment, at any time within
one  year  after  the  date  of  termination  of employment due to Disability or
Retirement,  unless  either the Option or this Incentive Plan otherwise provides
for  earlier  termination.

     SECTION  13.  OPTION  RIGHTS  UPON  DEATH OF OPTIONEE.  Except as otherwise
                   ---------------------------------------
limited  by the Program Administrators at the time of the grant of an Option, if
an  Optionee  dies while employed by the Company or any Subsidiary thereof (or a
corporation  or  a  Subsidiary  of  such corporation issuing or assuming a stock
option  in a transaction to which Section 424(a) of the Code applies), or within
three  months  after  ceasing to be an Employee thereof, his or her Option shall
expire  one  year  after the date of death unless by its term it expires sooner.
During  this  one  year  or  shorter period, the Option may be exercised, to the
extent  that  it  remains  unexercised  on  the  date of death, by the person or
persons  to whom the Optionee's rights under the Option shall pass by will or by
the  laws  of descent and distribution, but only to the extent that the Optionee
is  entitled to exercise the Option at the date of death.  However, in order for
the  Option to continue to be treated as an Incentive Stock Option under Section
422  of  the Code, the Option must be exercised no later than three months after
the  date  of  termination  of  employment.

     SECTION  14.  OPTIONS  NOT  TRANSFERABLE.  Options  granted pursuant to the
                   --------------------------
terms of this Incentive Plan may not be sold, pledged, hypothecated, assigned or
transferred  in  any  manner  otherwise  than  by will or the laws of descent or
distribution  and  may  be  exercised during the lifetime of an Optionee only by
that  Optionee.

     SECTION  15.  ADJUSTMENTS  TO NUMBER AND PURCHASE PRICE OF OPTIONED SHARES.
                   ------------------------------------------------------------
All  Options  granted  pursuant  to  the  terms  of this Incentive Plan shall be
adjusted in the manner prescribed by Article 6 of the General Provisions of this
Program.

     SECTION 16.  NOTICE OF DISPOSITION; WITHHOLDING; ESCROW.  An Optionee shall
                  ------------------------------------------
immediately  notify  the Company in writing of any sale, transfer, assignment or
other disposition (or action constituting a disqualifying disposition within the
meaning  of  Section  421  of  the  Code) of any shares of Common Stock acquired
through  exercise of an Incentive Stock Option, within two years after the grant
of  such Incentive Stock Option or within one year after the acquisition of such
shares,  setting  forth the date and manner of disposition, the number of shares
disposed  of  and  the price at which such shares were disposed of.  The Company
shall  be  entitled  to withhold from any compensation or other payments then or
thereafter  due  to the Optionee such amounts as may be necessary to satisfy any
withholding  requirements of Federal or state law or regulation and, further, to
collect  from the Optionee any additional amounts which may be required for such
purpose.  The Program Administrators may, in their discretion, require shares of
Common  Stock acquired by an Optionee upon exercise of an Incentive Stock Option
to  be held in an escrow arrangement for the purpose of enabling compliance with
the  provisions  of  this  Section  16.

<PAGE>
                                COASTAL BANCORP, INC.
                         1999 STOCK COMPENSATION PROGRAM


PLAN  II  -  COMPENSATORY  STOCK  OPTION  PLAN

     SECTION  1.  PURPOSE.  The  purpose  of  this  Coastal  Bancorp,  Inc.
                  -------
Compensatory Stock Option Plan ("Compensatory Plan") is to permit the Company to
grant  Options  to  purchase shares of its Common Stock to selected Officers and
full-time,  key  Employees  of  the  Company,  or  any  Subsidiary thereof.  The
Compensatory  Plan is designed to help attract and retain superior personnel for
positions  of  substantial  responsibility with the Company and its Subsidiaries
and  to  provide key Employees with an additional incentive to contribute to the
success  of  the Company.  Any Option granted pursuant to this Compensatory Plan
shall  be  clearly  and  specifically designated as not being an Incentive Stock
Option,  as  defined  in  Section 422(b) of the Code.  This Compensatory Plan is
Part  II of the Company's 1999 Stock Compensation Program.  Unless any provision
herein indicates to the contrary, this Compensatory Plan shall be subject to the
General  Provisions  of  the  Program.

     SECTION  2.  OPTION  TERMS  AND  CONDITIONS.  The  terms  and conditions of
                  ------------------------------
Options  granted under this Compensatory Plan may differ from one another as the
Program  Administrators  shall,  in  their  discretion, determine as long as all
Options  granted  under  the  Compensatory  Plan satisfy the requirements of the
Compensatory  Plan.

     SECTION  3.  DURATION  OF  OPTIONS.  Each  Option and all rights thereunder
                  ---------------------
granted pursuant to the terms of this Compensatory Plan shall expire on the date
determined  by  the  Program  Administrators,  but  in no event shall any Option
granted  under  the  Compensatory Plan expire later than ten years and one month
from the date on which the Option is granted.  In addition, each Option shall be
subject  to  early  termination  as  provided  in  the  Compensatory  Plan.

     SECTION  4.  PURCHASE  PRICE.  The  purchase  price  for  shares  acquired
                  ---------------
pursuant to the exercise, in whole or in part, of any Non-Qualified Option shall
be  established  by  the  Program Administrators at the time of grant, but in no
event  shall  be  less than the par value of the Common Stock at the time of the
grant  of  the  Option.

     SECTION 5.     EXERCISE OF OPTIONS.  Each Non-Qualified Option shall become
                    -------------------
vested and exercisable in one or more installments during its term and the right
to  exercise  may  be  cumulative  as  determined by the Program Administrators,
provided,  however,  that  in  the  case of any Non-Qualified Option exercisable
within  the  first  six  months  following  the date such Option is granted, the
shares of Common Stock received upon the exercise of such Option may not be sold
or  disposed  of  by the Optionee for the first six months following the date of
grant,  provided  further, however, that in the case of any Option granted prior
to  the  date  that  this  Program  is  approved  by  the  requisite vote of the
stockholders  of  the  Company,  the  shares  of  Common Stock received upon the
exercise  of  such Option may not be sold or disposed of by the Optionee for the
first  six  months  following  the  date  stockholder  approval is received.  In
determining  the  number of shares of Common Stock with respect to which Options
are  vested  and/or  exercisable,  fractional  shares  will be rounded up to the
nearest  whole  number if the fraction is 0.5 or higher, and down if it is less.
The  purchase  price of any shares purchased shall be paid in full in cash or by
certified or cashier's check payable to the order of the Company or by shares of
Common  Stock  (including shares acquired pursuant to the exercise of an Option)
or other property or by withholding some of the shares of Common Stock which are
being  purchased  upon  exercise  of  an  Option,  if  permitted  by the Program
Administrators,  or by a combination of cash, check or shares of Common Stock or
other property equal in Fair Market Value to the purchase price of the shares to
be  acquired  pursuant  to  the  Option,  at the time of exercise of the Option.

     SECTION  6.  ACCELERATION  OF  RIGHT  OF  EXERCISE  OF  INSTALLMENTS.
                  -------------------------------------------------------
Notwithstanding  the  first  sentence of Section 5 of this Compensatory Plan, if
the  Company  or  its  stockholders enter into an agreement to dispose of all or
substantially all of the assets or stock of the Company (or of Coastal Banc ssb)
by  means  of a sale, merger or other reorganization, liquidation, or otherwise,
any  Option granted pursuant to the terms of this Compensatory Plan shall become
immediately  exercisable  with  respect  to the full number of shares subject to
that  Option  during  the  period  commencing as of the date of the agreement to
dispose of all or substantially all of the assets or stock of the Company (or of
Coastal Banc ssb) and ending when that agreement is terminated, or the Option is
otherwise terminated in accordance with its provisions or the provisions of this
Compensatory  Plan,  whichever  occurs  first; provided, however, that no Option
shall  be  immediately  exercisable  under  this  Section  6  on  account of any
agreement  to  dispose of all or substantially all of the assets or stock of the
Company  by  means  of  a  sale,  merger or other reorganization, liquidation or
otherwise  where  the  stockholders  of  the  Company  immediately  before  the
consummation  of  the  transaction  will  own at least 50% of the total combined
voting  power  of all classes of stock entitled to vote of the surviving entity,
whether  the Company or some other entity, immediately after the consummation of
the  transaction.  In  the  event  the transaction contemplated by the agreement
referred  to  in  this  Section  6  is not consummated but rather is terminated,
cancelled  or  expires,  the  Options granted pursuant to this Compensatory Plan
shall  thereafter  be  treated as if that agreement had never been entered into.

     Notwithstanding  the first sentence of Section 5 of this Compensatory Plan,
in  the  event  of  a  change in control of the Company, or threatened change in
control  of  the  Company as determined by a vote of not less than a majority of
the  Whole  Board of Directors and a majority of the Continuing Directors of the
Company,  as  such terms are defined in the Company's Articles of Incorporation,
all  Non-Qualified Options granted prior to such change in control or threatened
change  in control shall become immediately exercisable.  The term "control" for
purposes  of  this  Section  shall  refer  to the acquisition (subsequent to the
approval  of  the  Program by the stockholders of the Company) of 10% or more of
the  voting  securities  of  the Company by any person or by persons acting as a
group  within  the  meaning  of  Section  13(d)  of  the Exchange Act; provided,
however,  that  for  purposes of this Compensatory Plan, no change in control or
threatened  change  in  control shall be deemed to have occurred if prior to the
acquisition of, or offer to acquire, 10% or more of the voting securities of the
Company,  the  Whole Board of Directors of the Company shall have adopted by not
less than a two-thirds vote a resolution specifically approving such acquisition
or  offer for the specific purpose of preventing the acceleration of the vesting
of  such  Options.  The  term "person" for purposes of this Section refers to an
individual  or  a  corporation,  partnership, trust, association, joint venture,
pool,  syndicate,  sole proprietorship, unincorporated organization or any other
form  of  entity  not  specifically  listed  herein.

     SECTION  7.  WRITTEN  NOTICE REQUIRED.  Any Option pursuant to the terms of
                  ------------------------
this  Compensatory  Plan shall be exercised when written notice of that exercise
has  been given to the Company at its principal office by the person entitled to
exercise  the  Option  and full payment for the shares with respect to which the
Option  is  exercised  has  been  received  by  the  Company.

     SECTION  8.  COMPLIANCE  WITH  SECURITIES LAWS.  Shares shall not be issued
                  ---------------------------------
with  respect  to  any  Option  granted  under  the Compensatory Plan unless the
exercise  of  that  Option  and the issuance and delivery of the shares pursuant
thereto  shall  comply  with  all  relevant provisions of state and federal law,
including, without limitation, the Securities Act of 1933, as amended, the rules
and  regulations  promulgated  thereunder,  and  the  requirements  of any stock
exchange  or national quotation system upon which the shares may then be listed,
and  shall  be  further  subject to the approval of counsel for the Company with
respect  to  such  compliance.  The  Program  Administrators may also require an
Optionee to whom  an Option has been granted to furnish evidence satisfactory to
the Company, including a written and signed representation letter and consent to
be  bound  by  any  transfer  restrictions  imposed by law, legend, condition or
otherwise,  that the shares are being purchased only for investment purposes and
without  any  present intention to sell or distribute the shares in violation of
any  state  or  federal  law,  rule or regulation.  Further, each Optionee shall
consent  to  the imposition of a legend on the shares of Common Stock subject to
his  or  her  Option  restricting their transferability as required by law or by
this  Section  8.

     SECTION  9.  EMPLOYMENT  OF  OPTIONEE.  Each  Optionee, if requested by the
                  ------------------------
Program  Administrators, must agree in writing as a condition of the granting of
his  or  her  Option,  to  remain in the employ of the Company or any Subsidiary
thereof  (or a corporation or a parent or Subsidiary of such corporation issuing
or  assuming a stock option in a transaction to which Section 424(a) of the Code
applies),  following  the  date  of  the  granting  of  that Option for a period
specified  by  the Program Administrators, which period shall in no event exceed
three  years.  Nothing  in  this  Compensatory  Plan  or  in  any Option granted
hereunder  shall  confer  upon any Optionee any right to continued employment by
the  Company  or  any  Subsidiary  thereof, or limit in any way the right of the
Company  or  any  Subsidiary at any time to terminate or alter the terms of that
employment.

     SECTION 10.  OPTION RIGHTS UPON TERMINATION OF EMPLOYMENT.  If any Optionee
                  --------------------------------------------
under  this  Compensatory  Plan  ceases  to  be  employed by the Company, or any
Subsidiary  (or  a  corporation  or  a  parent or Subsidiary of such corporation
issuing  or  assuming a stock option in a transaction to which Section 424(a) of
the  Code  applies),  for any reason other than Disability, death or Retirement,
his  or  her  Option  shall  immediately  terminate, provided, however, that the
Program  Administrators  may,  in  their  discretion,  allow  the  Option  to be
exercised,  to  the extent exercisable on the date of termination of employment,
at  any  time  within  a period of between three months and five years after the
date of termination of employment, unless either the Option or this Compensatory
Plan otherwise provides for earlier termination.  Should an employee be re-hired
within  the  mandatory  30  day  exercise  window,  they  will be allowed to not
exercise  their  previously  granted  options  at  their  discretion.

     SECTION  11.  OPTION  RIGHTS UPON DISABILITY OR RETIREMENT.  If an Optionee
                   --------------------------------------------
becomes  disabled  within  the  meaning  of  Section  22(e)(3) of the Code while
employed by the Company, or any Subsidiary thereof (or a corporation or a parent
or  Subsidiary  of  such  corporation  issuing  or  assuming a stock option in a
transaction  to  which  Section  424(a)  of  the  Code  applies) or ceases to be
employed  thereby  due  to  his Retirement, the Program Administrators, in their
discretion,  may  allow the Option to be exercised, to the extent exercisable on
the  date  of  termination  of employment, at any time within one year after the
date of termination of employment due to Disability or Retirement, unless either
the Option or this Compensatory Plan otherwise provides for earlier termination.

     SECTION  12.  OPTION  RIGHTS  UPON  DEATH OF OPTIONEE.  Except as otherwise
                   ---------------------------------------
limited  by the Program Administrators at the time of the grant of an Option, if
an Optionee dies while employed by the Company, or any Subsidiary thereof, (or a
corporation  or a parent or Subsidiary of such corporation issuing or assuming a
stock  option in a transaction to which Section 424(a) of the Code applies), his
or  her Option shall expire one year after the date of death unless by its terms
it  expires  sooner.  During  this one year or shorter period, the Option may be
exercised,  to  the  extent that it remains unexercised on the date of death, by
the  person or persons to whom the Optionee's rights under the Option shall pass
by  will or by the laws of descent and distribution, but only to the extent that
the  Optionee  is  entitled  to  exercise  the  Option  at  the  date  of death.

     SECTION  13.  OPTIONS  NOT  TRANSFERABLE.  Options  granted pursuant to the
                   --------------------------
terms of this Compensatory Plan may not be sold, pledged, hypothecated, assigned
or  transferred  in  any manner otherwise than by will or the laws of descent or
distribution  and  may  be  exercised during the lifetime of an Optionee only by
that  Optionee.

     SECTION  14.  ADJUSTMENTS  TO NUMBER AND PURCHASE PRICE OF OPTIONED SHARES.
                   ------------------------------------------------------------
All  Options  granted  pursuant  to the terms of this Compensatory Plan shall be
adjusted  in  a  manner prescribed by Article 6 of the General Provisions of the
Program.

<PAGE>
                                COASTAL BANCORP, INC.
                         1999 STOCK COMPENSATION PROGRAM

PLAN  III  -  STOCK  APPRECIATION  RIGHTS  PLAN

     SECTION  1.  PURPOSE.  The  purpose  of  this  Coastal  Bancorp, Inc. Stock
                  -------
Appreciation Rights Plan ("S.A.R. Plan") is to permit the Company to grant Stock
Appreciation  Rights  for its Common Stock to its full-time, key Employees.  The
S.A.R.  Plan  is  designed  to  help  attract  and retain superior personnel for
positions  of  substantial  responsibility  with  the Company and any Subsidiary
thereof  and to provide key Employees with an additional incentive to contribute
to  the  success  of  the  Company.  This S.A.R. Plan is Part III of the Coastal
Bancorp,  Inc.  1999  Stock  Compensation  Program.

     SECTION  2.  TERMS  AND  CONDITIONS.  The  Program  Administrators may, but
                  ----------------------
shall  not be obligated to, authorize, on such terms and conditions as they deem
appropriate  in each case, the Company to grant rights to Optionees to surrender
an exercisable Option granted under Plan I or Plan II or any portion thereof, in
consideration for the payment by the Company of an amount equal to the excess of
the  Fair  Market Value of the shares of Common Stock subject to such Option, or
any  portion  thereof,  surrendered,  over the exercise price of the Option with
respect  to  such  shares.  Such  payment,  at  the  discretion  of  the Program
Administrators,  may  be  made in shares of Common Stock valued at the then Fair
Market  Value  thereof,  or  in  cash  or partly in cash and partly in shares of
Common  Stock;  provided  that  with  respect  to  rights granted in tandem with
Incentive  Stock Options, the Program Administrators shall establish the form(s)
of  payment  allowed  the  Optionee  at  the  date  of  grant.  The  Program
Administrators shall not be authorized to make payment to any Optionee in shares
of  the  Company's Common Stock unless Section 83 of the Code would apply to the
Common  Stock  transferred to the Optionee.  The Program Administrators may, but
shall  not  be  obligated  to, also authorize naked Stock Appreciation Rights in
accordance  with  Section  9 hereof.  Notwithstanding the foregoing, the Company
may  not  permit  the  exercise  and  cancellation of a Stock Appreciation Right
issued  pursuant  to  this S.A.R. Plan until the Company has been subject to the
reporting  requirements  of  Section  13 of the Exchange Act, for a period of at
least  one  year  prior  to  the  exercise  and  cancellation  of any such Stock
Appreciation  Right.

     SECTION  3.  TIME LIMITATIONS.  Any election by an Optionee to exercise the
                  ----------------
Stock  Appreciation Rights provided in this S.A.R. Plan shall be made during the
period beginning on the third business day following the release for publication
of  quarterly  or  annual  financial  information  required  to  be prepared and
disseminated by the Company pursuant to the requirements of the Exchange Act and
ending on the twelfth business day following such date.  The required release of
information  shall be deemed to have been satisfied when the specified financial
data  appears  on  or  in a wire service, financial news service or newspaper of
general  circulation  or  is  otherwise  first  made  publicly  available.

     SECTION 4.  EXERCISE OF STOCK APPRECIATION RIGHTS:  EFFECT ON STOCK OPTIONS
                 ---------------------------------------------------------------
AND  VICE VERSA.  Upon the exercise of a Stock Appreciation Right, the number of
---------------
shares  of  Common  Stock  available  under the Option to which it relates shall
decrease  by  a  number  equal  to  the  number  of  shares  for which the Stock
Appreciation  Right  was exercised.  Upon the exercise of an Option, any related
Stock  Appreciation  Right shall terminate as to any number of shares subject to
the  right  that exceeds the total number of shares for which the Option remains
unexercised.


<PAGE>
     SECTION  5.  TIME  OF GRANT.  With respect to Options granted under Plan I,
                  --------------
Stock  Appreciation Rights must be granted concurrently with the Incentive Stock
Options  to  which  they  relate; with respect to Options granted under Plan II,
Stock  Appreciation Rights may be granted concurrently or at any time thereafter
prior  to  the  exercise  or  expiration  of  such  Non-Qualified  Options.

     SECTION 6.  NON-TRANSFERABLE.  The holder of a Stock Appreciation Right may
                 ----------------
not  transfer  or  assign the right otherwise than by will or in accordance with
the  laws  of  descent  and  distribution.  Furthermore,  in  the  event  of the
termination  of  his  or  her  service  with  the  Company  as an Officer and/or
Employee,  the  right may be exercised only within the period, if any, which the
Option  to  which  it  relates  may  be  exercised.

     SECTION  7.  TANDEM  INCENTIVE  STOCK  OPTION  -  STOCK APPRECIATION RIGHT.
                  -------------------------------------------------------------
Whenever  an  Incentive  Stock  Option authorized pursuant to Plan I and a Stock
Appreciation Right authorized hereunder are granted together and the exercise of
one  affects  the  right to exercise the other, the following requirements shall
apply:

     (a)     The  Stock  Appreciation  Right  will  expire  no  later  than  the
expiration  of  the  underlying  Incentive  Stock  Option;

     (b)     The Stock Appreciation Right may be for no more than the difference
between  the exercise price of the underlying Option and the market price of the
stock  subject to the underlying Option at the time the Stock Appreciation Right
is  exercised;

     (c)     The  Stock  Appreciation  Right  is  transferable  only  when  the
underlying Incentive Stock Option is transferable and under the same conditions;

     (d)     The  Stock  Appreciation  Right  may  be  exercised  only  when the
underlying  Incentive  Stock  Option  is  eligible  to  be  exercised;  and

     (e)     The  Stock Appreciation Right may be exercised only when the market
price of the stock subject to the Option exceeds the exercise price of the stock
subject  to  the  Option.

     SECTION  8.  TANDEM  STOCK  OPTION - LIMITED STOCK APPRECIATION RIGHT.  The
                  --------------------------------------------------------
Program  Administrators  may  provide  that  any tandem Stock Appreciation Right
granted  pursuant  to this Section 8 shall be a limited Stock Appreciation Right
("Limited  Stock  Appreciation  Right"),  in  which  event:

     (a)     The  Limited  Stock  Appreciation Right shall be exercisable during
the  period  beginning on the first day following the expiration of an Offer (as
defined  below)  and  ending  on  the  thirtieth  day  following  such  date;

     (b)     Neither  the  Option tandem to the Limited Stock Appreciation Right
nor any other Stock Appreciation Right tandem to such Option may be exercised at
any  time  that  the Limited Stock Appreciation Right may be exercised, provided
that  this  requirement shall not apply in the case of an Incentive Stock Option
tandem  to  a  Limited  Stock  Appreciation  Right if and to the extent that the
Program  Administrators  determine  that such requirement is not consistent with
applicable  statutory  provisions  regarding  Incentive  Stock  Options  and the
regulations  issued  thereunder;

     (c)     Upon  exercise  of  the  Limited Stock Appreciation Right, the Fair
Market Value of the shares to which the right relates shall be determined as the
highest  price  per share paid in any Offer that is in effect at any time during
the  period beginning on the sixtieth day prior to the date on which the Limited
Stock  Appreciation  Right  is  exercised  and  ending  on  such  exercise date;
provided,  however, with respect to a Limited Stock Appreciation Right tandem to
an  Incentive  Stock  Option,  the  Program  Administrators shall determine Fair
Market  Value of such shares in a different manner if and to the extent that the
Program  Administrators  deem  necessary or desirable to conform with applicable
statutory  provisions  regarding  Incentive  Stock  Options  and the regulations
issued  thereunder.

     The  term  "Offer" shall mean any tender offer or exchange offer for shares
of the Company, provided that the person making the offer acquires shares of the
Company's  capital  stock  pursuant  to  such  offer.

     SECTION 9.  NAKED STOCK APPRECIATION RIGHT.  The Program Administrators may
                 ------------------------------
provide  that  any  Stock  Appreciation Right granted pursuant to this Section 9
shall  be  a  naked  Stock  Appreciation  Right ("Naked Right"), in which event:

     (a)     Participants  shall  be  awarded Naked Rights for a period of up to
five  years  or  such shorter period which shall not be less than six months, as
may  be  determined  by  the Program Administrators.  Such designated period may
vary  as  among  participants  and as among awards to a participant.  Subject to
compliance  with  Section  3  hereof,  at the end of such designated period with
respect  to a participant, such participant shall receive an amount equal to the
appreciation  in  market  value  of  his  or  her  Naked Rights as determined in
subparagraph  (b)  of this Section 9 (the "Right Award").  The Right Award shall
be  payable  in  cash  or in shares of Common Stock, as may be determined by the
Program  Administrators.  A  participant  may  receive  as  many awards of Naked
Rights  at  various  times as may be determined to be appropriate by the Program
Administrators.

     (b)     For  purposes  of  determining  the  amount  of  a Right Award, the
Program  Administrators shall determine the market value of Naked Rights held by
such participant at the end of the designated period for which such Naked Rights
have  been  held ("Valuation Period") and subtract therefrom the market value of
the same Naked Rights on the date awarded to such participant.  The market value
of  one  Naked  Right  on  a  valuation  date shall be determined by the Program
Administrators  on the basis of such factors as they deem appropriate; and shall
be  determined without regard to any restriction other than a restriction which,
by  its  terms, will never lapse.  The Fair Market Value of shares of the Common
Stock  shall  be  the  Fair  Market  Value  as set forth in Article 15(i) of the
General  Provisions and shall be used to determine the market value of one Naked
Right.  The  market  value  of Naked Rights held by a participant on a valuation
date  shall be determined by multiplying the number of Naked Rights held by such
participant  by the market value of one Naked Right on such valuation date.  The
measurement  of  appreciation  shall  be  made  separately  with respect to each
separate  award  of  Naked  Rights.

     (c)     The  Naked  Rights  shall  be  used  solely  as  a  device  for the
measurement  and  determination  of  the  amount  to  be  paid  to  participants
hereunder.  The  Naked  Rights shall not constitute or be treated as property or
as  a trust fund of any kind.  All amounts at any time attributable to the Naked
Rights  shall  be  and  remain  the  sole  property  of  the  Company  and  the
participants'  rights  hereunder  are  limited  to the right to receive cash and
shares  of  Common  Stock  as  herein  provided.

     (d)     Notwithstanding  the  first  sentence  of  subparagraph (a) of this
Section  9, in the event the Company or its stockholders enter into an agreement
to  dispose of all or substantially all of the assets or stock of the Company or
of  Coastal  Banc  ssb  by  means  of  a  sale,  merger or other reorganization,
liquidation  or  otherwise, any Naked Right granted pursuant to subparagraph (a)
of  this  Section  9  shall  become  immediately  exercisable  during the period
commencing  as  of  the date of the agreement to dispose of all or substantially
all of the assets or stock of the Company or of Coastal Banc ssb and ending when
the  disposition of assets or stock contemplated by that agreement is terminated
or  the Naked Right is otherwise terminated in accordance with its provisions or
the  provisions  of this S.A.R. Plan, whichever occurs first; provided, however,
that no Naked Right shall be immediately exercisable under this subparagraph (d)
on account of any agreement to dispose of all or substantially all of the assets
or  stock  of  the  Company  by means of a sale, merger or other reorganization,
liquidation  or  otherwise  where  the  stockholders  of the Company immediately
before  the  consummation  of the transaction will own at least 50% of the total
combined  voting power of all classes of stock entitled to vote of the surviving
entity,  whether  the  Company  or  some  other  entity,  immediately  after the
consummation  of  the transaction.  In the event the transaction contemplated by
the  agreement  referred  to  in  this  subparagraph (d) is not consummated, but
rather is terminated, cancelled or expires, the Naked Rights granted pursuant to
subparagraph  (a)  of  this  Section  9  shall  thereafter be treated as if that
agreement  had  never  been  entered  into.

     Notwithstanding  the  first sentence of subparagraph (a) of this Section 9,
in  the  event  of  a  change  in control of the Company or threatened change in
control  of  the  Company as determined by a vote of not less than a majority of
the  Whole  Board of Directors and a majority of the Continuing Directors of the
Company,  as  such terms are defined in the Company's Articles of Incorporation,
all Naked Rights granted prior to such change in control or threatened change of
control  shall  become immediately exercisable.  The term "control" for purposes
of  this  Section  shall refer to the acquisition (subsequent to the approval of
the  Program  by  the  stockholders of the Company) of 10% or more of the voting
securities  of  the Company by any person or by persons acting as a group within
the  meaning  of Section 13(d) of the Exchange Act; provided, however, no change
in  control  or threatened change in control shall be deemed to have occurred if
prior  to  the  acquisition  of,  or offer to acquire, 10% or more of the voting
securities  of  the  Company,  the Whole Board of Directors of the Company shall
have  adopted  by  not  less  than  a  two-thirds vote a resolution specifically
approving  such  acquisition or offer for the specific purpose of preventing the
acceleration  of  the  vesting  of  such  Naked  Rights.  The  term "person" for
purposes  of  this  paragraph  refers  to  an  individual  or  a  corporation,
partnership,  trust,  association,  joint  venture,  pool,  syndicate,  sole
proprietorship,  unincorporated  organization  or  any  other form of entity not
specifically  listed  herein.

     (e)     Any  Naked  Rights  granted  pursuant  to  subparagraph (a) of this
Section 9 shall be exercised when written notice of that exercise has been given
to  the  Company  at its principal office by the person entitled to exercise the
Naked  Right.

     (f)     Shares  of  Common  Stock  shall  not be issued with respect to any
Naked Right granted under subparagraph (a) of this Section 9 unless the exercise
of  that  Naked  Right and the issuance and delivery of those shares pursuant to
that exercise shall comply with all relevant provisions of state and federal law
including,  if applicable, the Securities Act of 1933, as amended, the rules and
regulations  promulgated  thereunder, and the requirements of any stock exchange
or national quotation system upon which the shares may then be listed, and shall
be  further  subject  to the approval of counsel for the Company with respect to
such  compliance.  The  Program  Administrators  may also require an Employee to
whom  a  right has been granted under subparagraph (a) of this Section 9 ("Right
Holder")  to  furnish  evidence satisfactory to the Company, including a written
and  signed  representation  letter  and  consent  to  be  bound by any transfer
restriction  imposed by law, legend, condition or otherwise, that the shares are
being acquired without any present intention to sell or distribute the shares in
violation  of any state or federal law, rule or regulation.  Further, each Right
Holder shall consent to the imposition of a legend on any shares of Common Stock
so  acquired  restricting  their  transferability  as required by law or by this
subparagraph  (f).

     (g)     Each  Right Holder, if requested by the Program Administrators when
a  Naked Right is granted, must agree in writing as a condition of receiving his
or  her Naked Right, that he or she will remain in the employ of the Company, or
any  Subsidiary  of  the  Company (or a corporation or a parent or Subsidiary of
such  corporation  issuing  or  assuming  a  Naked  Right),  as the case may be,
following the date of the granting of that Naked Right for a period specified by
the  Program  Administrators, which period shall in no event exceed three years.
Nothing  in  this Section 9 or in any Naked Right granted hereunder shall confer
upon  any  Right Holder any right to continued employment by the Company, or any
Subsidiary  thereof,  or  limit  in  any  way  the  right  of the Company or any
Subsidiary  thereof  at  any  time  to  terminate  or  alter  the  terms of that
employment.

     (h)     If  a  Right  Holder  ceases  to be employed by the Company, or any
Subsidiary  thereof  (or  a  corporation  or  a  parent  or  Subsidiary  of such
corporation issuing or assuming a Naked Right), for any reason other than death,
Disability  or  Retirement,  his or her Naked Right shall immediately terminate;
provided,  however,  that  the  Program  Administrators may, at the time a Naked
Right is granted, in their discretion, allow such Naked Right to be exercised to
the  extent  exercisable  on  the  date of termination of employment at any time
within  three  months after the date of termination of employment, unless either
the  Naked  Right  or this Section 9 otherwise provides for earlier termination.

     (i)     If  a  Right  Holder becomes disabled within the meaning of Section
22(e)(3) of the Code while employed by the Company of any Subsidiary thereof (or
a  corporation or a parent or Subsidiary of such corporation issuing or assuming
a  Naked  Right)  or ceases to be employed thereby due to Retirement, his or her
Naked  Rights  may  be  exercised,  to  the  extent  exercisable  on the date of
termination  of  employment,  at  any  time  within  one  year after the date of
termination  of  employment  due  to Disability or Retirement, unless either the
Naked  Right  or  this  Section  9  otherwise  provides for earlier termination.

     (j)  Except  as otherwise limited by the Program Administrators at the time
of  the  grant  of  a  Naked Right, if a Right Holder dies while employed by the
Company or any Subsidiary thereof (or a corporation or a parent or Subsidiary of
such  corporation  issuing  or  assuming  a Naked Right), or within three months
after ceasing to be an Employee thereof, his or her Naked Right shall expire one
year  after  the date of death unless by its term it expires sooner. During this
one year or shorter period, the Naked Right may be exercised, to the extent that
it  remains  unexercised  on the date of death, by the person or persons to whom
the Right Holder's Naked Rights shall pass by will or by the laws of descent and
distribution,  but  only  to  the  extent  that  the Right Holder is entitled to
exercise  the  Naked  Right  at  the  date  of  death.

     (k)  Naked  Rights  granted pursuant to the terms of this Section 9 may not
be  sold, pledged, hypothecated, assigned or transferred in any manner otherwise
than  by will or the laws of descent or distribution and may be exercised during
the  lifetime  of  a  Right  Holder  only  by  that  Right  Holder.

     (l)  All Naked Rights granted pursuant to the terms of this Section 9 shall
be  adjusted  in the manner prescribed by Article 6 of the General Provisions of
this  Program.


<PAGE>
                                   COASTAL BANCORP, INC.
                         1999 STOCK COMPENSATION PROGRAM

PLAN  IV  -  PERFORMANCE  SHARE  PLAN

     SECTION 1.  PURPOSE.  The purpose of this Coastal Bancorp, Inc. Performance
                 --------
Share  Plan ("Performance Plan") is to promote the growth and general prosperity
of  the  Company  by  permitting the Company to grant Performance Shares to help
attract  and  retain  superior  personnel  for  positions  of  substantial
responsibility  with the Company and any Subsidiary and to provide key Employees
with  an additional incentive to contribute to the success of the Company.  This
Performance Plan is Part IV of the Coastal Bancorp, Inc. 1999 Stock Compensation
Program.

     SECTION  2.  TERMS  AND  CONDITIONS.  The  Program Administrators may grant
                  -----------------------
Performance  Shares  to  any  Employee  eligible  under Article 4 of the General
Provisions.  Each Performance Share grant confers upon the recipient thereof the
right  to  receive  a  specified number of shares of Common Stock of the Company
contingent  upon  the  achievement  of specified performance objectives within a
specified  period.  The  Program  Administrators  shall  specify the performance
objective  and the period of duration of the Performance Share grant at the time
that  such  Performance  Share is granted.  Any Performance Shares granted under
this  Plan  shall  constitute an unfunded promise to make future payments to the
affected  Employee upon the completion of specified conditions.  The grant of an
opportunity  to  receive  Performance  Shares  shall  not  entitle  the affected
Employee  to  any  rights  to  specific fund(s) or assets of the Company, or any
parent  or  Subsidiary  thereof.

     SECTION 3.  CASH IN LIEU OF STOCK.  In lieu of some or all of the shares of
                 ----------------------
Common  Stock  earned  by  achievement  of  the specified performance objectives
within  the  specified period, the Program Administrators may distribute cash in
an  amount  equal  to the Fair Market Value of the Common Stock at the time that
the  Employee  achieves  the  performance objective within the specified period.
Such  Fair  Market  Value  shall  be  determined by Article 15(i) of the General
Provisions, on the business day next preceding the date of payment.  The Program
Administrators  shall  be  authorized  to make payment in shares of Common Stock
only  if  Section  83 of the Code would apply to the transfer of Common Stock to
the  Employee.

     SECTION  4.  PERFORMANCE  OBJECTIVE  PERIOD.  The  duration  of  the period
                  -------------------------------
within  which  to  achieve the performance objectives is to be determined by the
Program  Administrators.  The period may not be less than one year nor more than
five  years  from  the  date  the  performance  share  is  granted.

     SECTION 5.  NON-TRANSFERABLE.  A participating Employee may not transfer or
                 -----------------
assign  a  performance  share.

     SECTION  6.  PERFORMANCE  SHARE  RIGHTS  UPON  DEATH  OR  TERMINATION  OF
                  ------------------------------------------------------------
EMPLOYMENT.  If  a  participating  Employee  dies or terminates service with the
         --
Company,  or  any Subsidiary thereof (or a corporation or a parent or Subsidiary
of  such corporation issuing or assuming a Performance Share in a transaction to
which  Section  424(a)  of  the  Code  applies,)  prior to the expiration of the
performance  objective  period,  any  Performance  Shares  granted to him or her
during  that  period  are  terminated.


                     END OF 1999 STOCK COMPENSATION PROGRAM


<PAGE>
                                  EXHIBIT 24.2

                                 CONSENT OF KPMG

<PAGE>



KPMG

700  Louisiana                  Telephone   713  319  2000
Houston,  Texas  77002          Fax   713  319  2041







The  Board  of  Directors:
Coastal  Bancorp,  Inc.


We  consent  to  incorporation  by  reference in the registration statement (No.
333-_____)  on Form S-8 of Coastal Bancorp, Inc. of our report dated January 19,
1999,  except  as  to  note 6, which is as of February 11, 1999, relating to the
consolidated  statements  of  financial  condition  of Coastal Bancorp, Inc. and
subsidiaries  as  of  December  31, 1998, and 1997, and the related consolidated
statements  of  operations,  comprehensive income, stockholders' equity and cash
flows  for  each  of the years in the three-year period ended December 31, 1998,
which  report  appears  in  the December 31, 1998, annual report on Form 10-K of
Coastal  Bancorp,  Inc.




/s/   KPMG  LLP

Houston,  Texas
June  17,  1999
[{"type": "S-8", "sequence": "1", "secsgml_size_bytes": 127373}]
{"company-data": {"conformed-name": "COASTAL BANCORP INC", "cik": "0000919805", "assigned-sic": "6036", "irs-number": "760428727", "state-of-incorporation": "TX", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-80877", "film-number": "99647912"}, "business-address": {"street1": "5718 WESTHEIMER", "street2": "SUITE 600", "city": "HOUSTON", "state": "TX", "zip": "77057", "phone": "7134355000"}, "mail-address": {"street1": "5718 WESTHEIMER", "street2": "SUITE 600", "city": "HOUSTON", "state": "TX", "zip": "77057"}, "former-company": [{"former-conformed-name": "COASTAL BANC SAVINGS ASSOCIATION", "date-changed": "19970110"}, {"former-conformed-name": "COASTAL BANCORP INC/TX/", "date-changed": "19940718"}]}
Registration No. 333-______________
                                                             Filed June 17, 1999

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                ________________

                                    FORM S-8

                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                                ________________

                              Coastal Bancorp, Inc.
                              ---------------------
             (Exact Name of Registrant as Specified in Its Charter)

                                      Texas
                                      -----
         (State or Other Jurisdiction of Incorporation or Organization)

                                   76-0428727
                                   ----------
                      (I.R.S. Employer Identification No.)

      Coastal Banc Plaza, 5718 Westheimer, Suite 600, Houston, Texas 77057
      --------------------------------------------------------------------
          (Address of Principal Executive Offices, including zip code)

              Coastal Bancorp, Inc. 1999 Stock Compensation Program
              -----------------------------------------------------
                            (Full Title of the Plan)

                               Catherine N. Wylie
                               ------------------
                Executive Vice President/Chief Financial Officer
                ------------------------------------------------
                               Coastal Banc Plaza
                              Coastal Bancorp, Inc.
                           5718 Westheimer, Suite 600
                              Houston, Texas 77057

                                   Copies to:
                                   ----------
                            Jeffrey A. Koeppel, Esq.
                      Elias, Matz, Tiernan & Herrick L.L.P.
                        734 15th Street, N.W., 12th Floor
                             Washington, D.C. 20005

                     (Name and Address of Agent For Service)
CALCULATION  OF  REGISTRATION  FEE
Proposed       Proposed
Title of           Maximum        Maximum           Amount of
Securities to be   Amount to be   Offering Price    Aggregate        Registration
Registered         Registered(l)  Per Share         Offering Price   Fee
-----------------  -------------  ----------------  ---------------  -------------

Common Stock,
 .01 par value        340,000(2)  $       16.00(3)  $  5,440,000.00  $    1,512.32
(1)     Together  with an indeterminate number of additional shares which may be
necessary  to  adjust the number of shares reserved for issuance pursuant to the
Coastal  Bancorp,  Inc.  ("Company"  or  "Registrant")  1999  Stock Compensation
Program  ("Program")  as  the result of a stock split, stock dividend or similar
adjustment  of  the  outstanding  Common  Stock  of  the  Company.

(2)     Represents the number of shares currently reserved for issuance pursuant
to  the  Program.

(3)     Estimated  solely  for  the purposes of calculating the registration fee
and  based in accordance with Rule 457(h) under the Securities Act of 1933.  The
Proposed Maximum Offering Price Per Share for the 340,000 shares for which stock
options  have  not been granted under the Program is equal to the average of the
high  and low sales price of the common stock of the Company on June 15, 1999 on
the  National  Association  of Securities Dealers Automated Quotation ("NASDAQ")
National  Market  System.

     THIS  REGISTRATION  STATEMENT SHALL BECOME EFFECTIVE AUTOMATICALLY UPON THE
DATE  OF FILING IN  ACCORDANCE  WITH  SECTION 8(A)  OF  THE  SECURITIES  ACT  OF
1933,  AS  AMENDED,  AND  17  C.F.R.    230.462.
PART  I

INFORMATION  REQUIRED  IN  SECTION  10(A)  PROSPECTUS

ITEM  1.     PLAN  INFORMATION.

     No  Plan information is included in this Registration Statement pursuant to
the  Note  Preceding  Item  I  in  Part  I  in  Form  S-8 and Rule 428 under the
Securities  Act  of  1933.

ITEM  2.     REGISTRANT  INFORMATION  AND  EMPLOYEE  PLAN  ANNUAL  INFORMATION.

     No  Registrant  information or employee plan annual information is included
in  this  Registration Statement Pursuant to the Note Preceding Item I in Part I
in  Form  S-8  and  Rule  428  under  the  Securities  Act  of  1933.
PART  11

INFORMATION  REQUIRED  IN  THE  REGISTRATION  STATEMENT

ITEM  3.          INCORPORATION  OF  DOCUMENTS  BY  REFERENCE.

     The  following  documents  filed  or  to  be  filed with the Securities and
Exchange  Commission  (the  "Commission")  are incorporated by reference in this
Registration  Statement:

     (a)     The  Annual  Report on Form 10-K for the Company for the year ended
December  31,  1998,  filed  with  the  Commission  on  March 23, 1999 (File No.
000-24526);

     (b)     All  reports  filed  by  the  Company pursuant to Sections 13(a) or
15(d)  of the Securities Exchange Act of 1934, as amended ("Exchange Act") since
December  31,  1998;

     (c)     The  description  of  the  Common  Stock  of  the Company under the
caption "Description of Holding Company Capital Stock" contained in the Form 8-B
(SEC  No.  0-24526)  as  filed  with  the  Commission  on  July  15,  1994.

     (d)     All  documents  filed  by  the  Company pursuant to Sections 13(a),
13(c),  14  or  15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which indicates that all securities offered
have  been  sold  or  which  deregisters  all  securities then remaining unsold.

     Any  statement  contained  in this Registration Statement, or in a document
incorporated  or  deemed to be incorporated by reference herein, shall be deemed
to  be modified or superseded for purposes of this Registration Statement to the
extent  that  a  statement  contained herein, or in any other subsequently filed
document  which  also  is  or  is deemed to be incorporated by reference herein,
modifies  or  supersedes  such  statement.  Any  such  statement  so modified or
superseded  shall  not  be  deemed,  except  as  so  modified  or superseded, to
constitute  a  part  of  this  Registration  Statement.

ITEM  4.     DESCRIPTION  OF  SECURITIES.

     Not applicable since the Company's Common Stock is registered under Section
12  of  the  Exchange  Act.

ITEM  5.     INTERESTS  OF  NAMED  EXPERTS  AND  COUNSEL.

     The  validity  of  the Company Stock offered hereby will be passed upon for
the  Company by Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C.  Certain
partners  in  such  firm  own  shares  of  the  Common  Stock  of  the  Company.
ITEM  6.     INDEMNIFICATION  OF  DIRECTORS  AND  OFFICERS.

     Coastal  Bancorp, Inc. is incorporated under the Texas Business Corporation
Act,  of  which  Section  2.02-1  provides  as  follows:

2.02-1     POWER  TO  INDEMNIFY  AND  TO  PURCHASE  INDEMNITY INSURANCE; DUTY TO
INDEMNIFY.

A.  In  this  article:

     (1)     "Corporation"  includes  any domestic or foreign predecessor entity
of  the  corporation in a merger, conversion, or other transaction in which some
or  all of the liabilities of the predecessor are transferred to the corporation
by  operation  of  law  and  in  any  other transaction in which the corporation
assumes  the  liabilities  of  the predecessor but does not specifically exclude
liabilities  that  are  the  subject  matter  of  this  article.

     (2)     "Director"  means  any  person  who  is  or  was  a director of the
corporation  and  any person who, while a director of the corporation, is or was
serving  at  the  request  of  the  corporation as a director, officer, partner,
venturer,  proprietor,  trustee,  employee,  agent,  or  similar  functionary of
another  foreign  or  domestic  corporation,  employee  benefit  plan,  other
enterprise,  or  other  entity.

     (3)     "Expenses"  include  court  costs  and  attorneys'  fees.

     (4)     "Official  capacity"  means

     (a)     when used with respect to a director, the office of director in the
corporation,  and

     (b)     when  used  with  respect  to  a  person other than a director, the
elective  or  appointive  office  in  the corporation held by the officer or the
employment  or agency relationship undertaken by the employee or agent in behalf
of  the  corporation,  but

     (c)     in  both  paragraphs  (a)  and (b) does not include service for any
other  foreign  or  domestic  corporation  or  employee  benefit  plan,  other
enterprise,  or  other  entity.

     (5)     "Proceeding"  means  any  threatened, pending, or completed action,
suit,  or  proceeding,  whether civil, criminal, administrative, arbitrative, or
investigative,  any  appeal  in  such  an  action,  suit, or proceeding, and any
inquiry or investigation that could lead to such an action, suit, or proceeding.
B.     A  corporation may indemnify a person who was, is, or is threatened to be
made  a  named  defendant or respondent in a proceeding because the person is or
was  a  director  only  if it is determined in accordance with Section F of this
article  that  the  person:

(1)     conducted  himself  in  good  faith,

(2)     reasonably  believed:

     (a)     in  the  case  of conduct in his official capacity as a director of
the  corporation,  that his conduct was in the corporation's best interests; and

     (b)     in  all  other  cases, that his conduct was at least not opposed to
the  corporation's  best  interests;  and

(3)     in  the case of any criminal proceeding, had  no  reasonable  cause  to
believe  his  conduct  was  unlawful.

C.     Except to the extent permitted  by  Section E of this article, a director
director  may not be indemnified under Section B of this article in respect of a
proceeding:

     (1)     in  which  the  person  is  found liable on the basis that personal
benefit was improperly received by him, whether or not the benefit resulted from
an  action  taken  in  the  person's  official  capacity;  or

(2)     in  which  the  person  is  found  liable  to  the  corporation.

D.     The  termination  of  a  proceeding  by  judgment,  order, settlement, or
conviction,  or  on a plea of nolo contendere or its equivalent is not of itself
determinative that the person did not meet the requirements set forth in Section
B  of  this  article.  A  person  shall  be  deemed to have been found liable in
respect  of  any claim, issue or matter only after the person shall have been so
adjudged  by  a  court of competent jurisdiction after exhaustion of all appeals
therefrom.

E.     A  person may be indemnified under Section  B  of  this  article  against
judgments,  penalties  (including excise and similar taxes), fines, settlements,
and  reasonable  expenses actually incurred by the person in connection with the
proceeding,  but  if  the  person is found liable to the corporation or is found
liable on the basis that personal benefit was improperly received by the person,
the  indemnification  (1) is limited to reasonable expenses actually incurred by
the  person  in  connection  with  the  proceeding  and (2) shall not be made in
respect  of  any proceeding in which the person shall have been found liable for
willful  or  intentional  misconduct  in  the  performance  of  his  duty to the
corporation.

F.     A  determination  of indemnification under Section B of this article must
be  made:

     (1)     by  a  majority vote of a quorum consisting of directors who at the
time  of  the  vote  are  not named defendants or respondents in the proceeding;

     (2)     if  such  a  quorum  cannot  be  obtained,  by a majority vote of a
committee  of  the  board  of  directors,  designated  to act in the matter by a
majority  vote  of all directors, consisting solely of two or more directors who
at  the  time  of  the  vote  are  not  named  defendants  or respondents in the
proceeding;

     (3)     by  special  legal  counsel selected by the board of directors or a
committee  of  the  board  by vote as set forth in Subsection (1) or (2) of this
section, or, if such a quorum cannot be obtained, and such a committee cannot be
established,  by  a  majority  vote  of  all  directors;  or

     (4)     by  the  shareholders  in  a  vote that excludes the shares held by
directors  who  are  named  defendants  or  respondents  in  the  proceeding.

G.     Authorization  of  indemnification  and  determination  as  to
reasonableness  of expenses must be made in the same manner as the determination
that  indemnification  is  permissible,  except  that  if the determination that
indemnification  is  permissible is made by special legal counsel, authorization
of  indemnification  and  determination as to reasonableness of expenses must be
made  in the manner specified by Subsection (3) of Section F of this article for
the  selection  of special legal counsel.  A provision contained in the articles
of  incorporation,  the bylaws, a resolution of shareholders or directors, or an
agreement  that makes mandatory the indemnification permitted under Section B of
this  article  shall be deemed to constitute authorization of indemnification in
the manner required by this section even though such provision may not have been
adopted  or  authorized  in  the  same  manner  as  the  determination  that
indemnification  is  permissible.

H.     A corporation shall indemnify  a  director  against  reasonable  expenses
incurred by him in connection with a proceeding in which he is a named defendant
or  respondent because he is or was a director if he has been wholly successful,
on  the  merits  or  otherwise,  in  the  defense  of  the  proceeding.

I.     If,  in a suit for  the  indemnification  required  by  Section H of this
article,  a  court  of  competent  jurisdiction  determines that the director is
entitled  to   indemnification  under   that  section,  the  court  shall  order
indemnification  and  shall  award  to  the  director  the  expenses incurred in
securing  the  indemnification.

J.     If,  upon  application  of  a  director,  a  court  of  competent
jurisdiction  determines, after giving any notice the court considers necessary,
that  the  director is fairly and reasonably entitled to indemnification in view
of  all  the  relevant circumstances, whether or not he has met the requirements
set  forth  in  Section  B  of  this  article  or  has  been found liable in the
circumstances  described  by  Section C of this article, the court may order the
indemnification  that  the  court determines is proper and equitable; but if the
person  is  found liable to the corporation or is found liable on the basis that
personal  benefit  was  improperly  received  by the person, the indemnification
shall  be  limited  to  reasonable  expenses  actually incurred by the person in
connection  with  the  proceeding.

K.     Reasonable  expenses  incurred  by  a  director  who  was, is, or is
threatened  to  be  made  a named defendant or respondent in a proceeding may be
paid  or  reimbursed  by the corporation, in advance of the final disposition of
the  proceeding  and  without  the  determination specified in Section F of this
article  or  the  authorization  or determination specified in Section G of this
article, after the corporation receives a written affirmation by the director of
his  good  faith  belief  that  he has met the standard of conduct necessary for
indemnification  under this article and a written undertaking by or on behalf of
the  director  to  repay  the  amount  paid  or  reimbursed  if it is ultimately
determined  that  he has not met that standard or if it is ultimately determined
that  indemnification  of  the  director  against  expenses  incurred  by him in
connection  with  that proceeding is prohibited by Section E of this article.  A
provision  contained  in the articles of incorporation, the bylaws, a resolution
of  shareholders  or directors, or an agreement that makes mandatory the payment
or  reimbursement  permitted  under  this  section shall be deemed to constitute
authorization  of  that  payment  or  reimbursement.

L.     The  written  undertaking required by Section K of this article must
be  an unlimited general obligation of the director but need not be secured.  It
may  be  accepted  without  reference  to  financial  ability to make repayment.

M.     A provision for a corporation to indemnify or to advance expenses to
a  director  who  was,  is,  or  is  threatened  to be made a named defendant or
respondent  in a proceeding, whether contained in the articles of incorporation,
the  bylaws,  a  resolution  of  shareholders  or  directors,  an  agreement, or
otherwise, except in accordance with Section R of this article, is valid only to
the  extent  it  is  consistent  with this article as limited by the articles of
incorporation,  if  such  a  limitation  exists.

N.     Notwithstanding  any  other provision of this article, a corporation
may  pay  or  reimburse  expenses  incurred by a director in connection with his
appearance as a witness or other participation in a proceeding at a time when he
is  not  a  named  defendant  or  respondent  in  the  proceeding.

O.     An  officer  of  the corporation shall be indemnified as, and to the
same extent, provided by Sections H, I, and J of this article for a director and
is entitled to seek indemnification under those sections to the same extent as a
director.  A  corporation  may  indemnify  and  advance  expenses to an officer,
employee,  or  agent of the corporation to the same extent that it may indemnify
and  advance  expenses  to  directors  under  this  article.

P.     A  corporation may indemnify and advance expenses to persons who are
not or were not officers, employees, or agents of the corporation but who are or
were  serving at the request of the corporation as a director, officer, partner,
venturer,  proprietor,  trustee,  employee,  agent,  or  similar  functionary of
another foreign or domestic corporation, employee benefit plan, other enterprise
or other entity to the same extent that it may indemnify and advance expenses to
directors  under  this  article.

Q.     A  corporation  may  indemnify  and  advance expenses to an officer,
employee,  agent,  or  person identified in Section P of this article and who is
not  a  director to such further extent, consistent with law, as may be provided
by  its  articles  of  incorporation,  bylaws, general or specific action of its
board  of  directors,  or  contract  or  as permitted or required by common law.

R.     A  corporation  may  purchase  and  maintain  insurance  or  another
arrangement on behalf of any person who is or was a director, officer, employee,
or  agent  of  the  corporation  or  who is or was serving at the request of the
corporation  as  a  director,  officer,  partner, venturer, proprietor, trustee,
employee,  agent,  or  similar  functionary  of  another  foreign  or  domestic
corporation,  employee  benefit  plan, other enterprise or other entity, against
any  liability  asserted  against  him and incurred by him in such a capacity or
arising out of his status as such a person, whether or not the corporation would
have  the  power to indemnify him against that liability under this article.  If
the  insurance  or  other  arrangement  is  with  a person or entity that is not
regularly engaged in the business of providing insurance coverage, the insurance
or  arrangement may provide for payment of a liability with respect to which the
corporation  would  not have the power to indemnify the person only if including
coverage  for  the additional liability has been approved by the shareholders of
the  corporation.  Without  limiting  the power of the corporation to procure or
maintain  any kind of insurance or other arrangement, a corporation may, for the
benefit  of persons indemnified by the corporation, (1) create a trust fund; (2)
establish  any  form  of  self-insurance; (3) secure its indemnity obligation by
grant  of a security interest or other lien on the assets of the corporation; or
(4)  establish  a  letter  of  credit,  guaranty,  or  surety  arrangement.  The
insurance  or  other  arrangement  may  be  procured, maintained, or established
within the corporation or with any insurer or other person deemed appropriate by
the  board  of directors regardless of whether all or part of the stock or other
securities  of  the  insurer  or  other person are owned in whole or part by the
corporation.  In the absence of fraud, the judgment of the board of directors as
to  the  terms  and  conditions  of  the  insurance or other arrangement and the
identity of the insurer or other person participating in an arrangement shall be
conclusive  and the insurance or arrangement shall not be voidable and shall not
subject  the  directors  approving the insurance or arrangement to liability, on
any  ground,  regardless  of whether directors participating in the approval are
beneficiaries  of  the  insurance  or  arrangement.

S.     Any  indemnification  of  or  advance  of  expenses to a director in
accordance  with  this  article shall be reported in writing to the shareholders
with  or before the notice or waiver of notice of the next shareholders' meeting
or  with  or  before  the next submission to shareholders of a consent to action
without  a  meeting pursuant to Section A, Article 9.10, of this Act and, in any
case,  within  the  12-month  period  immediately  following  the  date  of  the
indemnification  or  advance.

T.     For  purposes  of  this  article,  the corporation is deemed to have
requested  a  director  to  serve  as  a  trustee,  employee,  agent, or similar
functionary  of  an employee benefit plan whenever the performance by him of his
duties  to the corporation also imposes duties on or otherwise involves services
by  him  to the plan or participants or beneficiaries of the plan.  Excise taxes
assessed  on  a  director  with  respect to an employee benefit plan pursuant to
applicable law are deemed fines.  Action taken or omitted by him with respect to
an  employee  benefit  plan  in  the  performance  of  his  duties for a purpose
reasonably  believed  by  him  to  be  in  the  interest of the participants and
beneficiaries  of the plan is deemed to be for a purpose which is not opposed to
the  best  interests  of  the  corporation.

U.     The  articles  of  incorporation  of  a corporation may restrict the
circumstances  under which the corporation is required or permitted to indemnify
a  person  under  Section  H,  I,  J,  O,  P,  or  Q  of  this  article.
Article VIII of Coastal Bancorp, Inc.'s Articles of Incorporation provides as
                                    follows:

ARTICLE  VIII

INDEMNIFICATION,  ETC.  OF  OFFICERS,  DIRECTORS,  EMPLOYEES  AND
AGENTS

     A.     Limitation  of Liability.  No director shall be personally liable to
the Corporation or its stockholders for monetary damages for any act or omission
by  such  director as a director; provided that a director's liability shall not
be  eliminated  to  the  extent  provided  by  Section  7.06B.  of  the  Texas
Miscellaneous  Corporation  Laws  Act  or  any  successor provision thereto.  No
amendment  to or repeal of this Subsection (A) to Article VIII shall apply to or
have  any  effect  on  the liability or alleged liability of any director of the
Corporation  for  or  with  respect  to  any  acts or omissions of such director
occurring  prior  to  such  amendment.

     B.     Indemnification.  The Corporation shall indemnify any person who was
or  is  a party or is threatened to be a made a party to any threatened, pending
or  completed  action,  suit  or  proceeding,  whether  civil,  criminal,
administrative,  arbitrative  or  investigative, by reason of the fact that such
person  is  or  was a director, officer, employee or agent of the Corporation or
any  predecessor  of the Corporation, or is or was serving at the request of the
Corporation  or  any  predecessor  of  the  Corporation  as a director, officer,
employee  or  agent of another corporation, partnership, joint venture, trust or
other  enterprise,  against  liability  and  expenses (including court costs and
attorney's  fees),  judgments,  fines,  excise  taxes  and  amounts  paid  in
satisfaction,  settlement or compromise actually and reasonably incurred by such
person  in  connection  with  such action, suit or proceeding to the full extent
authorized  by  law.

     C.     Advancement  of  Expenses.  Reasonable  expenses  incurred  by  a
director,  officer, employee or agent of the Corporation in defending a civil or
criminal  action, suit or proceeding described in Article VIII.B.  shall be paid
by  the  Corporation in advance of the final disposition of such action, suit or
proceeding  as authorized by the Board of Directors only upon receipt of written
affirmation  by or on behalf of such person of his good faith belief that he has
met the standard of conduct necessary for indemnification under relevant law and
a  written undertaking to repay such amount if it shall ultimately be determined
that the person has not met that standard or if it is ultimately determined that
indemnification  of  the  person  against expenses incurred by him in connection
with  that  proceeding  is  prohibited  by  relevant  law.

     D.     Other  Rights  and  Remedies.  The  indemnification provided by this
Article  VIII  shall  not  be  deemed to exclude any other rights to which those
seeking  indemnification  or  advancement  of expenses may be entitled under the
Corporation's  Articles of Incorporation, any insurance or other agreement, vote
of  stockholders  or disinterested directors or otherwise, both as to actions in
their official capacity and as to actions in another capacity while holding such
office,  and  shall  continue  as  to  a person who has ceased to be a director,
officer,  employee  or  agent  and  shall  inure  to  the  benefit of the heirs,
executors  and  administrators  of such person; provided that no indemnification
shall  be  made  to  or  on behalf of an individual if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the  cause  of  action  as adjudicated and (i) the person is found liable on the
basis  that  personal benefit was improperly received by him; (ii) the person is
found liable to the Corporation; or (iii) the person is found liable for willful
or  intentional  misconduct  in  the performance of his duty to the Corporation;
provided,  however,  that persons found liable under clauses (i) and (ii) above,
may  still  be indemnified solely as to reasonable expenses actually incurred by
such  person  in  connection  with  the  proceeding.

     E.     Insurance.  Upon resolution passed by the Board, the Corporation may
purchase  and  maintain  insurance  on  behalf  of  any  person  who is or was a
director,  officer,  employee or agent of the Corporation, or was serving at the
request  of the Corporation as a director, officer, employee or agent of another
corporation,  partnership,  joint  venture, trust or another enterprise, against
any  liability  asserted against him or incurred by him in any such capacity, or
arising  out  of his status, whether or not the Corporation would have the power
to  indemnify him against such liability under the provisions of this Article or
the  Act.

     F.     Modification.  The  duties  of  the  Corporation to indemnify and to
advance expenses to a director or officer provided in this Article VIII shall be
in  the  nature  of a contract between the Corporation and each such director or
officer,  and no amendment or repeal of any provision of this Article VIII shall
alter, to the detriment of such director or officer, the right of such person to
the advance of expenses or indemnification related to a claim based on an act or
failure  to  act  which  took  place  prior  to  such  amendment  or  repeal.

     G.     Proceedings  Initiated  by Indemnified Persons.  Notwithstanding any
other  provision  of  this  Article  VIII, the Corporation shall not indemnify a
director,  officer,  employee  or agent for any liability incurred in an action,
suit  or  proceeding  initiated  by  (which  shall  not  be  deemed  to  include
counter-claims  or  affirmative defenses) or participated in as an intervenor or
amicus curiae by the person seeking indemnification unless such initiation of or
participation  in the action, suit or proceeding is authorized, either before or
after  its  commencement, by the affirmative vote of a majority of the directors
then  in  office.

        Article XI of Coastal Bancorp, Inc.'s Bylaws provides as follows:

ARTICLE  XI

PERSONAL  LIABILITY  OF  DIRECTORS;  INDEMNIFICATION

     (a)     A  director  of  the Corporation shall not be personally liable for
monetary damages for action taken, or any failure to take action, as a director,
to  the  extent  set forth in the Corporation's Articles of Incorporation, which
provisions  are  incorporated  herein  with  the same affect as if they were set
forth  herein.

     (b)     The  Corporation  shall  indemnify  any  person  who is a director,
agent,  officer, employee or agent of the Corporation to the extent set forth in
the  Corporation's  Articles of Incorporation, which provisions are incorporated
herein  with  the  same  affect  as  if  they  were  set  forth  herein.

ITEM  7.     EXEMPTION  FROM  REGISTRATION  CLAIMED.

     Not  applicable  since no restricted securities will be reoffered or resold
pursuant  to  this  Registration  Statement.
ITEM  8.     EXHIBITS.

     The  following  exhibits  are  filed with or incorporated by reference into
this  Registration Statement on Form S-8 (numbering corresponds to Exhibit Table
in  Item  601  of  Regulation  S-K):

No.     Exhibit
---     -------
4       Common  Stock  Certificate*
5       Opinion  of  Elias,  Matz,  Tiernan & Herrick L.L.P. as to the legality
        of the  Common  Stock
10      1999  Stock  Compensation  Program
24.1    Consent  of  Elias,  Matz.  Tiernan & Herrick L.L.P.  (contained in the
        opinion  included  as  Exhibit  5)
24.2    Consent  of  KPMG  LLP
25     Power  of  attorney  for  any  subsequent  amendments  is  located in the
       signature  pages  of  this  Registration  Statement

______________

     *Incorporated  by  reference  from  the Company's Registration Statement on
Form  8-B  (Commission  File No.  0-24526) filed with the Commission on July 15,
1994.

     **Incorporated  by  reference  from the Company's Registration Statement on
Form  S-I (Commission File No.  33-91206) filed with the Commission on April 14,
1995.

ITEM  9.     UNDERTAKINGS.

The  undersigned  Registrant  hereby  undertakes:

     1.     To  file, during any period in which offers or sales are being made,
a  post-effective  amendment  to  this Registration Statement (i) to include any
prospectus  required  by Section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect  in  the prospectus any facts or events arising after the effective date
of  the  Registration  Statement  (or  the  most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement, and (iii) to include
any material information with respect to the plan of distribution not previously
disclosed  in  the  Registration  Statement  or  any  material  change  in  such
information  in  the Registration Statement; provided, however, that clauses (i)
and  (ii)  do  not  apply  if  the  information  required  to  be  included in a
post-effective amendment by those clauses is contained in periodic reports filed
by  the  Registrant  pursuant to Section 13 or Section 15(d) of the Exchange Act
that  are  incorporated  by  reference  in  this  Registration  Statement.

     2.      That,  for  the  purpose of determining  any  liability  under  the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering  of such securities at that time shall be deemed to be the initial bona
fide  offering  thereof.

     3.     To  remove  from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the  offering.

     4.     That,  for  the  purposes  of  determining  any  liability under the
Securities  Act  of 1933, each filing of the Registrant's annual report pursuant
to  Section  13(a)  or Section 15(d) of the Exchange Act that is incorporated by
reference  in  this  Registration  Statement  shall  be  deemed  to  be  a  new
registration  statement  relating  to  the  securities  offered therein, and the
offering  of such securities at that time shall be deemed to be the initial bona
fide  offering  thereof.

     5.     Insofar  as  indemnification  for  liabilities  arising  under  the
Securities  Act  of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant  has  been  advised  that  in  the  opinion  of  the  Commission such
indemnification  is  against public policy as expressed in the Securities Act of
1933  and  is,  therefore,  unenforceable.  In  the  event  that  a  claim  for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
Registrant  of  expenses  incurred or paid by a director, officer or controlling
person  of  the  Registrant  in  the  successful  defense of any action, suit or
proceeding)  is  asserted  by  such  director,  officer or controlling person in
connection  with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit  to  a  court  of  appropriate  jurisdiction  the  question  whether such
indemnification  by  it  is against public policy as expressed in the Securities
Act  of  1933  and  will  be  governed  by the final adjudication of such issue.
SIGNATURES

     Pursuant  to the requirements of the Securities Act of 1933, the Registrant
certifies  that  it  has  reasonable grounds to believe that it meets all of the
requirements  for  filing  on  Form  S-8  and  has duly caused this Registration
Statement  to  be  signed  on  its  behalf  by  the  undersigned, thereunto duly
authorized,  in  the  City  of  Houston, State of Texas on the 18th day of June,
1999.

COASTAL  BANCORP,  INC.

By:     /s/  Manuel  J.  Mehos
        ----------------------
        Manuel  J.  Mehos
        Chairman  of  the  Board
        President  and  Chief  Executive  Officer

     Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities  and  on  the  dates  indicated.  Each person whose signature appears
below  hereby  makes,  constitutes and appoints Manuel J.  Mehos or Catherine N.
Wylie,  his  or  her  true and lawful attorney, with full power to sign for such
person  and  in  such  person's name and capacity indicated below, and with full
power  of  substitution  any  and all amendments to this registration statement,
hereby  ratifying  and confirming such person's signature as it may be signed by
said  attorney  to  any  and  all  amendments.

Signature                       Title                             Date
---------                       -----                             ----

/s/  Manuel J. Mehos
--------------------          Chairman of the Board, President    June 17, 1999
Manuel  J.  Mehos             and  Chief  Executive  Officer
                              (Principal  Executive  Officer)

/s/  Catherine  N.  Wylie
-------------------------     Senior Executive Vice President,     June 17, 1999
Catherine  N.  Wylie          Chief  Financial  Officer  and  Treasurer
                              (Principal  Financial  &  Accounting  Officer)

/s/  R.  Edwin  Allday
----------------------        Director                           June  17,  1999
R.  Edwin  Allday

/s/  D.  Fort  Flowers
----------------------        Director                           June  17,  1999
D.  Fort  Flowers

/s/  Dennis  S.  Frank
----------------------        Director                           June  17,  1999
Dennis  S.  Frank

Signature                       Title                             Date
---------                       -----                             ----

/s/  Paul  W.  Hobby
--------------------        Director                           June  17,  1999
Paul  W.  Hobby

/s/  Robert  E.  Johnson
------------------------     Director                           June  17,  1999
Robert  E.  Johnson

/s/  James  C.  Niver
---------------------        Director                           June  17,  1999
James  C.  Niver
EXHIBIT  INDEX

                                                                 Sequentially
                                                                   Numbered
                                                                     Page
     No.         Description                Method  of  Filing     Location
     ---         -----------                ------------------     --------
     5           Opinion of Elias, Matz,      Filed  herewith          17
                 Tiernan &  Herrick  L.L.P.

     10          1999  Stock  Compensation    Filed  herewith          18
                 Program

     24.1        Consent of Elias, Matz,     Included in Exhibit 5     --
                 Tiernan &  Herrick  L.L.P.

     24.2        Consent  of  KPMG  LLP      Filed herewith            41

     25          Power  of  Attorney         Located  in  the          --
                                             Signature Pages
EXHIBIT 5

                OPINION OF ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
Law  Offices
     ELIAS,  MATZ,  TIERNAN  &  HERRICK  L.L.P.
     12th  Floor
     734  15th  Street,  N.W.
     Washington,  D.C.  20005
Telephone:  (202) 347-0300
                                Facsimile:   (202) 347-2172

TIMOTHY B. MATZ                 JEFFREY D. HAAS
STEPHEN M. EGE                  KEVIN M. HOULIHAN
RAYMOND A. TIERNAN              KENNETH B. TABACH
W. MICHAEL HERRICK              PATRICIA J. WOHL
GERARD L. HAWKINS               FIORELLO J. VICENCIO*
NORMAN B. ANTIN                 DANIEL R. KLEINMAN*
JOHN P. SOUKENIK*               ANDREW ROSENSTEIN
GERALD F. HEUPEL, JR.           DAVID TEEPLES
JEFFREY A. KOEPPEL              CRISTIN ZEISLER*
DANIEL P. WEITZEL               ERIC M. MARION*
PHILIP ROSS BEVAN
HUGH T. WILKINSON               OF COUNSEL
                                ALLIN P. BAXTER
                                JACK I. ELIAS
                                SHERYL JONES ALU
 *NOT ADMITTED IN D.C.

                  June 17, 1999
                    VIA EDGAR
Board  of  Directors
Coastal  Bancorp,  Inc.
Coastal  Banc  Plaza
5718  Westheimer,  Suite  600
Houston,  Texas  77057

     Re:     Registration  Statement  on  Form  S-8
             340,000  Shares  of  Common  Stock

Gentlemen:

     We  are  special counsel to Coastal Bancorp, Inc., a Texas corporation (the
"Corporation"),  in  connection  with  the  preparation  and  filing  with  the
Securities  and  Exchange  Commission pursuant to the Securities Act of 1933, as
amended, of a Registration Statement on Form S-8 (the "Registration Statement"),
relating  to  the registration of up to 340,000 shares of common stock, $.01 par
value  per  share  ("Common Stock"), of the Corporation to be issued pursuant to
the  Corporation's  1999  Stock  Compensation  Program  (the "Program") upon the
exercise  of  stock options and/or stock appreciation rights and/or the grant of
Common  Stock  (together, the "Option Rights").  The Registration Statement also
registers  an  indeterminate  number of additional shares which may be necessary
under  the  Program to adjust the number of shares reserved thereby for issuance
as  the  result  of  a  stock split, stock dividend or similar adjustment of the
outstanding  Common  Stock  of  the Corporation.   We have been requested by the
Corporation  to  furnish  an  opinion  to  be  included  as  an  exhibit  to the
Registration  Statement.

For  this  purpose, we have reviewed the Registration Statement, the Articles of
Incorporation  and  the Bylaws of the Corporation, the Program, a specimen stock
certificate  evidencing  the  Common  Stock  of  the  Corporation and such other
corporate  records  and documents as we have deemed appropriate.  We are relying
upon  the  originals,  or  copies  certified  or  otherwise  identified  to  our
satisfaction,  of  the  corporate  records  of  the  Corporation  and such other
instruments,  certificates and representations of public officials, officers and
representatives of the Corporation as we have deemed relevant as a basis for the
opinions  expressed  herein.  In  addition, we have assumed, without independent
verification,  the  genuineness  of  all  signatures and the authenticity of all
documents  furnished  to  us  and  the  conformance in all respects of copies to
originals.  Furthermore,  we  have made such factual inquiries and reviewed such
laws  as  we  determined  to  be  relevant  for  this  opinion.

     For  purposes  of this opinion, we have also assumed that (i) the shares of
Common  Stock  issuable pursuant to Option Rights granted under the terms of the
Program  will continue to be validly authorized on the dates the Common Stock is
issued  pursuant  to  the Option Rights; (ii) on the dates the Option Rights are
exercised,  the  Option  Rights  granted  under  the  terms  of the Program will
constitute  valid,  legal  and  binding  obligations of the Corporation and will
(subject  to  applicable  bankruptcy, moratorium, insolvency, reorganization and
other  laws  and  legal  principles  affecting  the enforceability of creditors'
rights  generally) be enforceable as to the Corporation in accordance with their
terms;  (iii) the Option Rights are exercised in accordance with their terms and
the exercise price, if any, therefor is paid and the terms and conditions of the
grant  of  the Option Rights are satisfied in accordance with the terms thereof;
(iv)  no  change  occurs  in  applicable law or the pertinent facts; and (v) the
provisions  of  "blue  sky"  and other securities laws as may be applicable will
have  been  complied  with  to  the  extent  required.

     Based on the foregoing, and subject to the assumptions set forth herein, we
are  of  the opinion as of the date hereof that the shares of Common Stock to be
issued pursuant to the Program, when issued and sold pursuant to the Program and
upon  receipt  of  the  consideration  required thereby, will be legally issued,
fully  paid  and  non-assessable  shares  of  Common  Stock  of the Corporation.

     We  hereby  consent  to the reference to this firm under the caption "Legal
Opinion"  in  the Prospectus of the Program and to the filing of this opinion as
an  exhibit  to  the  Registration  Statement.

     Very  truly  yours,

     ELIAS,  MATZ,  TIERNAN  &  HERRICK  L.L.P.

     By:  /s/  Jeffrey  A.  Koeppel
          -------------------------
            Jeffrey  A.  Koeppel,  a  Partner
EXHIBIT 10

                         1999 STOCK COMPENSATION PROGRAM
COASTAL  BANCORP,  INC.

     1999  STOCK  COMPENSATION  PROGRAM

     1.     PURPOSE.  This Coastal Bancorp, Inc. 1999 Stock Compensation Program
            -------
("Program") is intended to secure for Coastal Bancorp, Inc. (the "Company"), any
Subsidiaries thereof and its stockholders the benefits arising from ownership of
the  Company's Common Stock, par value $.01 per share ("Common Stock"), by those
selected  Officers  and  other  key  Employees of the Company and any Subsidiary
thereof  who will be responsible for its future growth.  The Program is designed
to  help  attract  and  retain  superior  personnel for positions of substantial
responsibility  with the Company and to provide key Employees with an additional
incentive  to  contribute  to  the  success of the Company.  All Incentive Stock
Options  issued  under  the  Incentive  Plan  are  intended  to  comply with the
requirements of Section 422 of the Code, and the regulations thereunder, and all
provisions  under the Incentive Plan shall be read, interpreted and applied with
that  purpose  in  mind.  Capitalized  terms  are  defined  in Article 15 of the
General  Provisions  of  the  Stock  Compensation  Program.

     2.     ELEMENTS  OF  THE  PROGRAM.  In order to maintain flexibility in the
            --------------------------
award of stock benefits, the Program is comprised of four parts.  The first part
is  the  Incentive Stock Option Plan ("Incentive Plan").  The second part is the
Compensatory  Stock  Option  Plan  ("Compensatory Plan").  The third part is the
Stock  Appreciation  Rights  Plan  ("S.A.R.  Plan").  The  fourth  part  is  the
Performance  Share  Plan  ("Performance  Plan").  Copies  of the Incentive Plan,
Compensatory  Plan, S.A.R. Plan and Performance Plan are attached hereto as Part
I, Part II, Part III and Part IV, respectively, and are collectively referred to
herein  as  the  "Plans"  or  the  "Program."  The  grant  of  an  Option, Stock
Appreciation  Right  or  Performance  Share  under one of the Plans shall not be
construed  to  prohibit  the  grant  of  an  Option, Stock Appreciation Right or
Performance  Share  under  any  of  the  other  Plans.

     3.     APPLICABILITY  OF  GENERAL PROVISIONS.  Unless any Plan specifically
            -------------------------------------
indicates  to the contrary, all Plans shall be subject to the General Provisions
of  the  Stock  Compensation  Program  set  forth  below.

     4.     ADMINISTRATION  OF  THE  PLANS.  The  Plans  shall  be administered,
            ------------------------------
construed, governed and amended in accordance with the General Provisions of the
Stock  Compensation  Program  and  their  respective  terms.

GENERAL  PROVISIONS  OF  THE  STOCK  COMPENSATION  PROGRAM

     ARTICLE  1.  ADMINISTRATION.  The  Program  shall  be  administered  by  a
                  --------------
committee appointed by the Board of Directors of the Company and composed of not
less than three directors of the Company, none of whom is an Officer or Employee
of the Company or any Subsidiary thereof.  The Board of Directors may, from time
to  time,  remove  members from, or add members to this Committee, provided that
the  Committee  shall continue to consist of three or more members of the Board,
none of whom is an Officer or Employee of the Company or any Subsidiary thereof,
and  each  of  whom shall be a "disinterested person" within the meaning of Rule
16b-3  under  the  Exchange  Act.  The  Committee, when acting to administer the
Program,  is  referred to herein as the "Program Administrators."  Any action of
the  Program  Administrators  shall  be  taken  by  majority vote or the written
consent  of  a  majority  of the Program Administrators.  Subject to the express
provisions  and limitations of the Program, this Committee may adopt such rules,
regulations  and  procedures  as  it  deems  appropriate  for the conduct of its
affairs.  It  may  appoint  one  of  its members to be chairman, and any person,
whether  or  not a member of this Committee, to be its secretary or agent.  This
Committee  shall  report  its actions and decisions to the Board of Directors at
appropriate  times,  but  in  no event less than one time per calendar year.  No
Program  Administrator or member of the Board of Directors of the Company, shall
be liable for any action or determination made in good faith with respect to the
Program or to any Option, Stock Appreciation Right, or Performance Share granted
thereunder.  If a Program Administrator is a party or is threatened to be made a
party  to  any  threatened,  pending  or  completed  action, suit or proceeding,
whether  civil, criminal, administrative or investigative, by reason of anything
done  or  not  done  by him or her in such capacity under or with respect to the
Program,  the  Company shall, subject to the requirements of applicable laws and
regulations,  indemnify  such  member  against  all  liabilities  and  expenses
(including  attorneys'  fees),  judgments,  fines and amounts paid in settlement
actually  and  reasonably incurred by him or her in connection with such action,
suit  or  proceeding  if he or she acted in good faith and in a manner he or she
reasonably  believed  to  be in the best interests of the Company and any of its
Subsidiaries  and,  with  respect  to  any criminal action or proceeding, had no
reasonable  cause  to  believe  his  conduct  was  unlawful.

     ARTICLE  2.  AUTHORITY  OF  PROGRAM  ADMINISTRATORS.  Subject  to the other
                  --------------------------------------
provisions  of  this  Program,  and  with  a  view to effecting its purpose, the
Program  Administrators  shall have sole authority in their absolute discretion:
(a)  to construe and interpret the Program; (b) to define the terms used herein;
(c)  to  prescribe, amend and rescind rules, regulations and procedures relating
to the Program, including, without limitation, rules, regulations and procedures
which  (i)  deal  with  satisfaction of an Employee's tax withholding obligation
pursuant  to  Article  11  hereof,  (ii)  include arrangements to facilitate the
Employee's ability to borrow funds for payment of the exercise or purchase price
of  an  Award,  if  applicable,  from  securities brokers and dealers, and (iii)
include  arrangements  which  provide  for  the  payment  of some or all of such
exercise  or  purchase  price  by  delivery of previously-owned shares of Common
Stock or other property and/or by withholding some of the shares of Common Stock
which are being acquired; (d) to determine the Employees to whom Awards shall be
granted  under  the  Program; (e) to determine the time or times at which Awards
shall  be  granted  under  the  Program;  (f)  to determine the number of shares
subject  to  any  Option  or  Stock Appreciation Right under the Program and the
number  of  shares to be awarded as Performance Shares under the Program as well
as  the  option  exercise  price,  and the duration of each Award, and any other
terms  and  conditions  of Awards; (g) to terminate the Program; and (h) to make
any  other  determinations  necessary or advisable for the administration of the
Program and to do everything necessary or appropriate to administer the Program.
All  decisions,  determinations  and  interpretations  made  by  the  Program
Administrators shall be final, binding and conclusive on all participants in the
Program  and  on  their  legal  representatives,  heirs  and  beneficiaries.

     ARTICLE 3.  MAXIMUM NUMBER OF SHARES SUBJECT TO THE PROGRAM.  The aggregate
                 -----------------------------------------------
number  of  shares of Common Stock available to be issued pursuant to the Plans,
subject to adjustment as provided in Article 6 hereof, shall be equal to 340,000
shares  of the Company's Common Stock.  If any of the Options granted under this
Program  are surrendered before exercise (including surrender in connection with
the  exercise of a Stock Appreciation Right), expire or terminate for any reason
before they have been exercised in full, the unpurchased shares subject to those
surrendered,  expired  or  terminated  Options  shall again be available for the
purposes of the Program as if no Awards had been previously granted with respect
to  such shares.  If the performance objectives associated with the grant of any
Performance Share(s) are not achieved within the specified performance period or
if  the Performance Share grant terminates for any reason before the performance
objective  date  arrives,  the  shares  of  Common  Stock  associated  with such
Performance  Shares  shall  again  be available for the purposes of the Program.
The  shares  of  Common  Stock  issued  under  the Program may be authorized but
unissued  shares, treasury shares or shares purchased by the Company on the open
market  or  from  private  sources  for  use  under  the  Program.
ARTICLE  4.  ELIGIBILITY  AND  PARTICIPATION.  Only  regular  full-time
                  -------------------------------
Employees  of  the Company or any Subsidiary thereof, including Officers whether
or  not  directors  of  the Company, or of any Subsidiary, shall be eligible for
selection  by  the  Program  Administrators  to  participate  in  the  Program.
Directors  of  the  Company shall not be eligible to participate in the Program.

     ARTICLE  5.  EFFECTIVE  DATE AND TERM OF PROGRAM.  The Program shall become
                  -----------------------------------
effective  upon  its  adoption  by  the  Board  of  Directors of the Company and
subsequent  approval  of the Program by the affirmative vote of the holders of a
majority  of the shares entitled to vote thereon at a meeting of stockholders of
the  Company  and  represented  in person or by proxy at such meeting at which a
quorum is present, which vote shall be taken within 12 months of adoption of the
Program  by the Company's Board of Directors; provided, however, that Awards may
be  granted  under  this  Program prior to obtaining stockholder approval of the
Program,  except  that any such Awards shall be contingent upon such stockholder
approval  being  obtained  and may not be exercised prior to such approval.  The
Program  shall  continue  in  effect  for  a  term  of  ten  years unless sooner
terminated  under Article 2 or Article 7 of the General Provisions.  Termination
of  the  Program  shall not affect any Awards previously granted and such Awards
shall remain valid and in effect until they have been fully exercised or earned,
are  surrendered  or  by  their  terms  expire  or  are  forfeited.

     ARTICLE 6.  ADJUSTMENTS.  If the shares of Common Stock of the Company as a
                 -----------
whole are increased, decreased, changed into or exchanged for a different number
or  kind  of  shares  or  securities through merger, consolidation, combination,
exchange  of  shares,  other reorganization, recapitalization, reclassification,
stock  dividend,  stock  split  or  reverse  stock  split,  an  appropriate  and
proportionate  adjustment shall be made in the maximum number and kind of shares
as  to  which  Awards  may  be  granted  under  this  Program.  A  corresponding
proportionate  adjustment  of  the  exercise  price  of  any  Option  or  Stock
Appreciation  Right and of the number or kind of shares allocated to unexercised
Options,  Stock  Appreciation  Rights,  Performance  Shares or portions thereof,
which  shall have been granted prior to any such change, shall likewise be made.
In making any adjustment pursuant to this Article 6, any fractional shares shall
be  rounded in the discretion of the Program Administrators.  If, upon a merger,
consolidation,  reorganization, liquidation, recapitalization or the like of the
Company,  the  shares of the Company's Common Stock shall be exchanged for other
securities  of the Company or of another corporation, each recipient of an Award
shall  be  entitled,  subject  to  the  conditions herein stated, to purchase or
acquire  such  number of shares of Common Stock or amount of other securities of
the  Company  or  such  other corporation as were exchangeable for the number of
shares  of  Common  Stock  of  the  Company which such Optionees would have been
entitled  to  purchase  or  acquire  except  for  such  action,  and appropriate
adjustments shall be made to the per share exercise price of outstanding Options
and  Stock  Appreciation  Rights.

     ARTICLE  7.  TERMINATION  AND  AMENDMENT  OF  PROGRAM.  The  Program  shall
                  ----------------------------------------
terminate  no  later than ten years from the date such Program is adopted by the
Board  of  Directors  or  the date such Program is approved by the stockholders,
whichever  is  earlier.  No Awards shall be granted under the Program after that
date.  The Board of Directors may amend, suspend or terminate the Program or any
portion  thereof  at  any time, except that it may not amend the Program without
stockholder  approval where the absence of such approval would cause the Program
to  fail  to  comply  with Rule 16b-3 under the Exchange Act, Section 422 of the
Code,  the  requirements of any securities exchange or national quotation system
on  which  the  shares  of  Common Stock are then listed or traded, or any other
requirement  of  applicable  law  or  regulation.  Subject  to  the  limitation
contained in Article 8 of the General Provisions, the Program Administrators may
at  any  time  amend  or revise the terms of the Program, including the form and
substance  of  the  Option,  Stock  Appreciation  Right,  and  Performance Share
agreements  to  be  used hereunder; provided that no amendment or revision shall
(a)  increase  the  maximum  aggregate  number  of  shares  that  may  be  sold,
appreciated  or  distributed  pursuant  to Options, Stock Appreciation Rights or
Performance Shares granted under this Program, except as permitted under Article
6  of  the  General Provisions; (b) change the minimum purchase price for shares
under  Section  4  of Plans I and II, except as permitted under Article 6 of the
General  Provisions;  (c)  increase the maximum term established under the Plans
for any Option, Stock Appreciation Right or Performance Share; or (d) permit the
granting  of  an Option, Stock Appreciation Right or Performance Share to anyone
other  than  as  provided  in  Article  4  of  the  General  Provisions.

     ARTICLE  8.  PRIOR  RIGHTS  AND  OBLIGATIONS.  No  amendment, suspension or
                  -------------------------------
termination  of  the  Program  shall, without the consent of an Employee who has
received  an Award, alter or impair any of that Employee's rights or obligations
under any Award granted under the Program prior to such amendment, suspension or
termination.

     ARTICLE 9.  PRIVILEGES OF STOCK OWNERSHIP.  Notwithstanding the exercise of
                 -----------------------------
any  Options  or Stock Appreciation Rights granted pursuant to the terms of this
Program  or  the  achievement  of  any  performance  objective  specified in any
Performance  Share  granted  pursuant  to the terms of this Program, no Employee
shall  have  any  of the rights or privileges of a stockholder of the Company in
respect  of  any shares of stock issuable upon the exercise of his or her Option
or  achievement  of  his or her performance goal until certificates representing
the  shares  have  been issued and delivered.  No shares shall be required to be
issued  and  delivered  upon  exercise  of  any  Option  or  achievement  of any
performance goal as specified in a Performance Share unless and until all of the
requirements  of law and of all regulatory agencies having jurisdiction over the
issuance and delivery of the securities shall have been fully complied with.  No
adjustment  shall be made for dividends or any other distributions for which the
record  date  is  prior  to  the date on which such stock certificate is issued.

     ARTICLE  10.  RESERVATION  OF  SHARES OF COMMON STOCK.  The Company, during
                   ---------------------------------------
the  term  of  this  Program,  will at all times reserve and keep available such
number  of  shares  of  its  Common  Stock as shall be sufficient to satisfy the
requirements  of  the Program.  All Awards granted hereunder shall be subject to
all  applicable  federal  and  state  laws,  rules  and  regulations and to such
approval  by  any  governmental  or  regulatory  agency as may be required.  The
Company  will  from  time to time, as is necessary to accomplish the purposes of
this  Program,  seek  to obtain all necessary and appropriate approvals from any
governmental  authority  or  regulatory agency having jurisdiction any requisite
authority  in  order  to  issue  and sell shares of Common Stock hereunder.  The
inability  of  the  Company  to  obtain  from  any  regulatory  agency  having
jurisdiction  the  authority deemed by the Company's counsel to be necessary for
the  lawful issuance and sale of any shares of its stock hereunder shall relieve
the Company of any liability in respect of the non-issuance or sale of the stock
as  to  which  the  requisite  authority  shall  not  have  been  obtained.

     ARTICLE  11.  TAX WITHHOLDING.  The exercise of any Award granted under the
                   ---------------
Program  is  subject  to  the  condition  that  if at any time the Company shall
determine,  in its discretion, that the satisfaction of withholding tax or other
withholding liabilities under any state or federal law is necessary or desirable
as  a  condition of, or in any connection with, such exercise or the delivery or
purchase  of  shares  pursuant  thereto, then in such event, the exercise of the
Option,  Stock  Appreciation  Right  or Performance Share shall not be effective
unless  such  withholding  tax  or other withholding liabilities shall have been
satisfied  in a manner acceptable to the Company.  The Company may withhold from
any  cash  payment  made  under  this  Program  sufficient  amounts to cover any
applicable  withholding  and  employment  taxes,  and if the amount of such cash
payment  is  insufficient,  the  Company  may require the Optionee to pay to the
Company  the  amount  required  to  be withheld as a condition to delivering the
shares  acquired pursuant to an Award.  The Company also may withhold or collect
amounts  with  respect  to a disqualifying disposition of shares of Common Stock
acquired  pursuant  to  exercise  of  an  Incentive Stock Option, as provided in
Section  16  of the Incentive Stock Option Plan.  The Program Administrators are
authorized  to  adopt  rules,  regulations,  or procedures which provide for the
satisfaction of an Employee's tax withholding obligation by, among other things,
the retention of shares of Common Stock to which the Employee would otherwise be
entitled  pursuant  to  an  Award  and/or  by  the  Employee's  delivery  of
previously-owned  shares  of  Common  Stock  or  other  property.

     ARTICLE  12.  EMPLOYMENT.  Nothing  in  the Program or in any Option, Stock
                   ----------
Appreciation  Right,  or Performance Share award, shall confer upon any eligible
Employee  any  right  to  continued  employment by the Company or any Subsidiary
thereof, or limit in any way the right of the Company or any Subsidiary thereof,
at  any  time  to  terminate  or  alter  the  terms  of  that  employment.

     ARTICLE  13.  REVOCATION FOR MISCONDUCT.  The Program Administrators may by
                   -------------------------
resolution  immediately  revoke,  rescind  and  terminate any Option, or portion
thereof,  to  the extent not yet vested, or any Stock Appreciation Right, to the
extent not yet exercised, previously granted or awarded under this Program to an
Employee  who  is  discharged  from  the employ of the Company or any Subsidiary
thereof  for cause, which, for purposes hereof, shall mean termination for:  (i)
conviction  of  a  felony involving the misappropriation of the Company's or any
Subsidiaries  assets or a conviction of a felony which results in a substantial,
demonstrable  threat  to  the  Company's or any Subsidiaries reputation, or (ii)
gross  and  willful  failure  to perform a substantial portion of the Employee's
duties  and  responsibilities  as  an  Employee.

     ARTICLE 14.  RESTRICTIONS ON TRANSFER.  The Company may place a legend upon
                  ------------------------
any  certificate  representing  shares  acquired  pursuant  to  an Award granted
hereunder  noting  that  the  transfer  of  such  shares  may  be  restricted by
applicable  laws  and  regulations.

     ARTICLE  15.  DEFINITIONS.
                   -----------

          (a)  "Award"  means an Option, Stock Appreciation Right or Performance
Share  granted  pursuant  to  the  terms  of  this  Program.

          (b)  "Board"  means  the  Board  of  Directors  of  the  Company.

          (c)  "Code"  means  the  Internal  Revenue  Code  of 1986, as amended.

          (d)  "Committee"  means  a  Committee  of  three  or  more  directors
appointed  by  the Board pursuant to Article 1 of the General Provisions hereof,
none  of  whom shall be an Officer or Employee of the Company or any Subsidiary,
and  each  of  whom shall be a "disinterested person" within the meaning of Rule
16b-3  under  the  Exchange  Act.

          (e)  "Common  Stock"  means shares of the common stock, $.01 par value
per  share,  of  the  Company.

          (f)  "Disability"  means any disability which makes a person unable to
engage  in  any  substantial  gainful  activity  by  reason  of  any  medically
determinable physical or mental impairment as defined in Section 22(e)(3) of the
Code.

          (g)  "Employee"  means  any  person  who  is employed full time by the
Company  or  any  Subsidiary, or is an Officer of the Company or any Subsidiary,
but  not including directors who are not also Officers of, or otherwise employed
by,  the  Company  or  any  Subsidiary.

          (h)  "Exchange  Act"  means  the  Securities  Exchange Act of 1934, as
amended.

          (i)  "Fair  Market  Value" shall be equal to the fair market value per
share  of  the  Company's  Common  Stock  on  the date an Award is granted.  For
purposes  hereof,  the Fair Market Value of a share of Common Stock shall be the
closing  sale  price  of a share of Common Stock on the date in question (or, if
such  day  is  not  a  trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the composite
of  the  markets,  if  more than one) or national quotation system in which such
shares  are  then  traded,  or  if no such closing prices are reported, the mean
between  the  high  bid and low asked prices that day on the principal market or
national  quotation  system then in use, or if no such quotations are available,
the  price furnished by a professional securities dealer making a market in such
shares  selected  by  the  Committee.

          (j)  "Incentive  Stock  Option"  means  any  Option granted under this
Program  which  the Board intends (at the time it is granted) to be an Incentive
Stock  Option  within  the  meaning  of  Section  422  of  the  Code.

          (k)  "Non-Qualified  Option"  means any Option granted under this Plan
which  is  not  an  Incentive  Stock  Option.

          (l)  "Officer"  means an Employee whose position in the Company or any
Subsidiary  thereof  is that of a corporate officer, as determined by the Board.

          (m)  "Option"  means  a  right  granted under this Program to purchase
Common  Stock.

          (n)  "Optionee"  means  an  Employee  or  former  Employee  to whom an
Option,  Stock  Appreciation  Right,  or  Performance  Share, as appropriate, is
granted  under  the  Program.

          (o)  "Performance Shares" means a specified number of shares of Common
Stock  granted  to  an  Employee,  as  provided in the discretion of the Program
Administrators  in  accordance  with  Performance  Share  Plan.

               (p)  "Retirement"  means  a  termination  of  employment  which
constitutes  a "retirement" pursuant to the personnel policies of the Company or
any  Subsidiary  thereof  or under any applicable qualified pension benefit plan
maintained  by  the  Company  or  any  Subsidiary  thereof.

          (q)  "Stock  Appreciation  Right" means a right to surrender an Option
in  consideration  for  a payment by the Company in cash and/or Common Stock, as
provided  in the discretion of the Program Administrators in accordance with the
Stock  Appreciation  Rights  Plan.

          (r)  "Subsidiary"  or  "Subsidiaries"  means those subsidiaries of the
Company,  including  Coastal  Banc ssb, which meet the definition of "Subsidiary
corporations"  set  forth in Section 424(f) of the Code, at the time of granting
of  the  Award  in  question.

          (s)  "Termination  Date" means the date the employee is effectively no
longer  an  employee.  This  does  not  cover  time  paid  for  severance.

          (t)  Other  terms  are  defined as set forth in the General Provisions
and  the  respective  Plans.
ARTICLE 16.  STOCK OPTION AGREEMENT.  The proper Officers, on behalf of the
                  ----------------------
Company,  and  each  Optionee shall execute a Stock Option Agreement which shall
set  forth  the total number of shares of Common Stock to which it pertains, the
exercise  price,  whether  it  is  a  Non-Qualified Option or an Incentive Stock
Option,  and  such  other  terms, conditions, restrictions and privileges as the
Program  Administrators  in each instance shall deem appropriate.  Each Optionee
shall  receive  a  copy  of  his  or  her  executed  Stock  Option  Agreement.

     ARTICLE  17.  GOVERNING  LAW.  To the extent not superseded by federal law,
                   --------------
the provisions of the Program shall be governed by and interpreted in accordance
with  the  laws  of  the  State  of  Texas.
COASTAL BANCORP, INC.
                         1999 STOCK COMPENSATION PROGRAM

PLAN  I  -  INCENTIVE  STOCK  OPTION  PLAN

     SECTION  1.  PURPOSE.  The  purpose of this Coastal Bancorp, Inc. Incentive
                  -------
Stock  Option  Plan  ("Incentive  Plan")  is  to  promote the growth and general
prosperity of the Company by permitting the Company to grant Options to purchase
shares  of its Common Stock.  The Incentive Plan is designed to help attract and
retain  superior  personnel for positions of responsibility with the Company, or
of  any Subsidiary, and to provide key Employees with an additional incentive to
contribute  to  the  success  of  the Company.  The Company intends that Options
granted  pursuant  to the provisions of the Incentive Plan will qualify and will
be  identified as "incentive stock options" within the meaning of Section 422 of
the Code.  This Incentive Plan is Part I of the Coastal Bancorp, Inc. 1999 Stock
Compensation  Program.  Unless  any  provision herein indicates to the contrary,
this  Incentive  Plan shall be subject to the General Provisions of the Program.

     SECTION  2.  OPTION  TERMS  AND  CONDITIONS.  The  terms  and conditions of
                  ------------------------------
Options  granted  under  the  Incentive  Plan may differ from one another as the
Program  Administrators  shall,  in their sole discretion, determine, as long as
all  Options  granted  under  the Incentive Plan satisfy the requirements of the
Incentive  Plan.

     SECTION  3.  DURATION  OF  OPTIONS.  Each  Option and all rights thereunder
                  ---------------------
granted  pursuant to the terms of the Incentive Plan shall be exercisable at any
time  on  or after it vests and becomes exercisable and shall expire on the date
determined  by  the  Program  Administrators,  but  in no event shall any Option
granted  under  the  Incentive Plan expire later than ten years from the date on
which  the Option is granted, except that any Employee who owns more than 10% of
the  combined  voting  power  of  all classes of stock of the Company, or of any
Subsidiary thereof, must exercise any Options within five years from the date of
grant.  In  addition,  each  Option  shall  be  subject  to early termination as
provided  in  the  Incentive  Plan.

     SECTION  4.  PURCHASE  PRICE.  The  purchase  price  for  shares  acquired
                  ---------------
pursuant  to  the  exercise,  in whole or in part, of any Incentive Stock Option
shall  not be less than one hundred percent (100%) of the Fair Market Value of a
share  of  Common  Stock at the time of the grant of the Option; except that for
any  Employee who owns more than 10% of the combined voting power of all classes
of  stock  of the Company, or of any Subsidiary, the purchase price shall not be
less than one hundred and ten percent (110%) of the Fair Market Value of a share
of  Common  Stock.  All shares sold under the Incentive Plan shall be fully paid
and  non-assessable.

     SECTION  5.  MAXIMUM AMOUNT OF OPTIONS IN ANY CALENDAR YEAR.  The aggregate
                  ----------------------------------------------
Fair  Market  Value  (determined  as  of  the time the Option is granted) of the
Common  Stock  with respect to which Incentive Stock Options, as defined in Code
Section  422(b),  are  exercisable for the first time by any Employee during any
calendar  year  (under  the terms of this Plan and all such plans of the Company
and  any Subsidiary thereof) shall not exceed $100,000.  Any Option in excess of
the  foregoing limitations shall be pursuant to the Company's Compensatory Stock
Option  Plan  (Plan  II) and shall be clearly and specifically designated as not
being  an  Incentive  Stock  Option.
SECTION  6.  EXERCISE  OF  INCENTIVE  STOCK  OPTIONS.  Each Incentive Stock
                  ---------------------------------------
Option  shall  become  vested and exercisable in one or more installments during
its  term,  and  the  right  to  exercise may be cumulative as determined by the
Program  Administrators;  provided,  however,  that in the case of any Incentive
Stock  Options  exercisable  within  the first six months following the date the
Incentive  Stock Option is granted, the shares of Common Stock received upon the
exercise  of  such Option may not be sold or disposed of by the Optionee for the
first six months following the date of grant, provided further, however, that in
the  case  of  any  Incentive  Stock  Option  granted prior to the date that the
Program  is  approved  by the requisite vote of the stockholders of the Company,
the  shares of Common Stock received upon the exercise of such Option may not be
sold  or disposed of by the Optionee for the first six months following the date
stockholder approval is received.  In determining the number of shares of Common
Stock  with  respect  to  which  Incentive  Stock  Options  are  vested  and/or
exercisable, fractional shares will be rounded up to the nearest whole number if
the  fraction  is  0.5 or higher, and down if it is less.  The purchase price of
any  shares purchased shall be paid in full in cash or by certified or cashier's
check  payable  to  the  order  of  the  Company  or  by  shares of Common Stock
(including  shares  acquired  pursuant  to  the  exercise of an Option) or other
property,  or  by withholding some of the shares of Common Stock which are being
purchased  upon  exercise  of  an  Option,  if  permitted  by  the  Program
Administrators,  or by a combination of cash, check or shares of Common Stock or
other property equal in Fair Market Value to the purchase price of the shares to
be  acquired  pursuant  to  the  Option,  at the time of exercise of the Option.

     SECTION  7.  ACCELERATION  OF  RIGHT  OF  EXERCISE  OF  INSTALLMENTS.
                  -------------------------------------------------------
Notwithstanding  the  first sentence of Section 6 of this Incentive Plan, in the
event  the Company or its stockholders enter into an agreement to dispose of all
or  substantially  all of the assets or stock of the Company (or of Coastal Banc
ssb)  by  means  of  a  sale,  merger  or  other  reorganization, liquidation or
otherwise,  any Option granted pursuant to the terms of the Incentive Plan shall
become immediately exercisable with respect to the full number of shares subject
to  that  Option during the period commencing as of the date of the agreement to
dispose  of  all  or substantially all of the assets or stock of the Company and
ending when the disposition of assets or stock contemplated by that agreement is
terminated  or  the  Option  is  otherwise  terminated  in  accordance  with its
provisions  or  the  provisions  of this Incentive Plan, whichever occurs first;
provided,  however,  that  no Option shall be immediately exercisable under this
Section  7 on account of any agreement to dispose of all or substantially all of
the  assets or stock of the Company (or of Coastal Banc ssb) by means of a sale,
merger  or other reorganization, liquidation or otherwise where the stockholders
of  the  Company immediately before the consummation of the transaction will own
at least 50% of the total combined voting power of all classes of stock entitled
to  vote  of  the  surviving  entity,  whether the Company or some other entity,
immediately  after  the  consummation  of  the  transaction.  In  the  event the
transaction  contemplated  by the agreement referred to in this Section 7 is not
consummated, but rather is terminated, cancelled or expires, the Options granted
pursuant  to the Incentive Plan shall thereafter be treated as if that agreement
had  never  been  entered  into.

     Notwithstanding  the first sentence of Section 6 of this Incentive Plan, in
the  event of a change in control of the Company or threatened change in control
of  the Company as determined by a vote of not less than a majority of the Whole
Board of Directors and a majority of the Continuing Directors of the Company, as
such terms are defined in the Company's Articles of Incorporation, all Incentive
Stock  Options  granted  prior to such change in control or threatened change of
control  shall  become immediately exercisable.  The term "control" for purposes
of  this  Section  shall refer to the acquisition (subsequent to the approval of
the  Program  by  the  stockholders of the Company) of 10% or more of the voting
securities  of  the Company by any person or by persons acting as a group within
the  meaning  of  Section 13(d) of the Exchange Act; provided, however, that for
purposes  of  this  Incentive Plan, no change in control or threatened change in
control  shall  be  deemed  to  have occurred if prior to the acquisition of, or
offer to acquire, 10% or more of the voting securities of the Company, the Whole
Board  of  Directors  of  the  Company  shall  have  adopted  by not less than a
two-thirds  vote  a  resolution specifically approving such acquisition or offer
for  the  specific purpose of preventing the acceleration of the vesting of such
Options.  The term "person" for purposes of this Section refers to an individual
or  a  corporation,  partnership,  trust,  association,  joint  venture,  pool,
syndicate, sole proprietorship, unincorporated organization or any other form of
entity  not  specifically  listed  herein.

     SECTION  8.  WRITTEN  NOTICE  REQUIRED.  Any Option granted pursuant to the
                  -------------------------
terms  of  the  Incentive  Plan  shall  be exercised when written notice of that
exercise  has  been  given  to the Company at its principal office by the person
entitled  to exercise the Option and full payment for the shares with respect to
which  the  Option  is  exercised  has  been  received  by  the  Company.

     SECTION  9.  COMPLIANCE WITH SECURITIES LAWS.  Shares of Common Stock shall
                  -------------------------------
not be issued with respect to any Option granted under the Incentive Plan unless
the  exercise  of  that  Option  and  the  issuance and delivery of those shares
pursuant to that exercise shall comply with all relevant provisions of state and
federal  law  including,  without  limitation,  the  Securities  Act of 1933, as
amended,  the rules and regulations promulgated thereunder, and the requirements
of  any  stock  exchange  or national quotation system upon which the shares may
then  be listed, and shall be further subject to the approval of counsel for the
Company  with  respect  to such compliance.  The Program Administrators may also
require  an Optionee to whom an Option has been granted under the Incentive Plan
to  furnish evidence satisfactory to the Company, including a written and signed
representation  letter  and  consent  to  be  bound  by any transfer restriction
imposed  by  law,  legend,  condition  or  otherwise,  that the shares are being
purchased  only  for  investment  and  without  any present intention to sell or
distribute  the  shares  in  violation  of  any  state  or  federal law, rule or
regulation.  Further,  each Optionee shall consent to the imposition of a legend
on  the  shares  of  Common Stock subject to his or her Option restricting their
transferability  as  required  by  law  or  by  this  Section  9.

     SECTION  10.  EMPLOYMENT  OF  OPTIONEE.  Each Optionee, if requested by the
                   ------------------------
Program  Administrators  when  the Option is granted, must agree in writing as a
condition  of  receiving  his  or  her Option, that he or she will remain in the
employ  of  the  Company,  or  any  parent  or  Subsidiary  of the Company (or a
corporation  or a parent or Subsidiary of such corporation issuing or assuming a
stock  option  in a transaction to which Section 424(a) of the Code applies), as
the  case may be, following the date of the granting of that Option for a period
specified  by  the Program Administrators, which period shall in no event exceed
three  years.  Nothing  in  the  Plan  or  in any Option granted hereunder shall
confer  upon  any  Optionee any right to continued employment by the Company, or
any  Subsidiary  thereof,  or  limit  in any way the right of the Company or any
Subsidiary  thereof,  at  any  time  to  terminate  or  alter  the terms of that
employment.

     SECTION  11.  OPTION RIGHTS UPON TERMINATION OF EMPLOYMENT.  If an Optionee
                   --------------------------------------------
ceases  to  be  employed  by  the  Company,  or  any  Subsidiary  thereof  (or a
corporation  or a parent or Subsidiary of such corporation issuing or assuming a
stock  option in a transaction to which Section 424(a) of the Code applies), for
any  reason  other than death, Disability or Retirement, his or her Option shall
immediately  terminate.  Should  an employee be re-hired within the mandatory 30
day  exercise  window,  they  will  be  allowed to not exercise their previously
granted  options  at  their  discretion.

     SECTION  12.  OPTION  RIGHTS UPON DISABILITY OR RETIREMENT.  If an Optionee
                   --------------------------------------------
becomes  disabled  within  the  meaning  of  Section  22(e)(3) of the Code while
employed  by the Company or any Subsidiary thereof (or a corporation or a parent
or  Subsidiary  of  such  corporation  issuing  or  assuming a stock option in a
transaction  to  which  Section  424(a)  of  the  Code  applies) or ceases to be
employed  thereby  due  to  his  Retirement, the Option may be exercised, to the
extent  exercisable on the date of termination of employment, at any time within
one  year  after  the  date  of  termination  of employment due to Disability or
Retirement,  unless  either the Option or this Incentive Plan otherwise provides
for  earlier  termination.

     SECTION  13.  OPTION  RIGHTS  UPON  DEATH OF OPTIONEE.  Except as otherwise
                   ---------------------------------------
limited  by the Program Administrators at the time of the grant of an Option, if
an  Optionee  dies while employed by the Company or any Subsidiary thereof (or a
corporation  or  a  Subsidiary  of  such corporation issuing or assuming a stock
option  in a transaction to which Section 424(a) of the Code applies), or within
three  months  after  ceasing to be an Employee thereof, his or her Option shall
expire  one  year  after the date of death unless by its term it expires sooner.
During  this  one  year  or  shorter period, the Option may be exercised, to the
extent  that  it  remains  unexercised  on  the  date of death, by the person or
persons  to whom the Optionee's rights under the Option shall pass by will or by
the  laws  of descent and distribution, but only to the extent that the Optionee
is  entitled to exercise the Option at the date of death.  However, in order for
the  Option to continue to be treated as an Incentive Stock Option under Section
422  of  the Code, the Option must be exercised no later than three months after
the  date  of  termination  of  employment.

     SECTION  14.  OPTIONS  NOT  TRANSFERABLE.  Options  granted pursuant to the
                   --------------------------
terms of this Incentive Plan may not be sold, pledged, hypothecated, assigned or
transferred  in  any  manner  otherwise  than  by will or the laws of descent or
distribution  and  may  be  exercised during the lifetime of an Optionee only by
that  Optionee.

     SECTION  15.  ADJUSTMENTS  TO NUMBER AND PURCHASE PRICE OF OPTIONED SHARES.
                   ------------------------------------------------------------
All  Options  granted  pursuant  to  the  terms  of this Incentive Plan shall be
adjusted in the manner prescribed by Article 6 of the General Provisions of this
Program.

     SECTION 16.  NOTICE OF DISPOSITION; WITHHOLDING; ESCROW.  An Optionee shall
                  ------------------------------------------
immediately  notify  the Company in writing of any sale, transfer, assignment or
other disposition (or action constituting a disqualifying disposition within the
meaning  of  Section  421  of  the  Code) of any shares of Common Stock acquired
through  exercise of an Incentive Stock Option, within two years after the grant
of  such Incentive Stock Option or within one year after the acquisition of such
shares,  setting  forth the date and manner of disposition, the number of shares
disposed  of  and  the price at which such shares were disposed of.  The Company
shall  be  entitled  to withhold from any compensation or other payments then or
thereafter  due  to the Optionee such amounts as may be necessary to satisfy any
withholding  requirements of Federal or state law or regulation and, further, to
collect  from the Optionee any additional amounts which may be required for such
purpose.  The Program Administrators may, in their discretion, require shares of
Common  Stock acquired by an Optionee upon exercise of an Incentive Stock Option
to  be held in an escrow arrangement for the purpose of enabling compliance with
the  provisions  of  this  Section  16.
COASTAL BANCORP, INC.
                         1999 STOCK COMPENSATION PROGRAM

PLAN  II  -  COMPENSATORY  STOCK  OPTION  PLAN

     SECTION  1.  PURPOSE.  The  purpose  of  this  Coastal  Bancorp,  Inc.
                  -------
Compensatory Stock Option Plan ("Compensatory Plan") is to permit the Company to
grant  Options  to  purchase shares of its Common Stock to selected Officers and
full-time,  key  Employees  of  the  Company,  or  any  Subsidiary thereof.  The
Compensatory  Plan is designed to help attract and retain superior personnel for
positions  of  substantial  responsibility with the Company and its Subsidiaries
and  to  provide key Employees with an additional incentive to contribute to the
success  of  the Company.  Any Option granted pursuant to this Compensatory Plan
shall  be  clearly  and  specifically designated as not being an Incentive Stock
Option,  as  defined  in  Section 422(b) of the Code.  This Compensatory Plan is
Part  II of the Company's 1999 Stock Compensation Program.  Unless any provision
herein indicates to the contrary, this Compensatory Plan shall be subject to the
General  Provisions  of  the  Program.

     SECTION  2.  OPTION  TERMS  AND  CONDITIONS.  The  terms  and conditions of
                  ------------------------------
Options  granted under this Compensatory Plan may differ from one another as the
Program  Administrators  shall,  in  their  discretion, determine as long as all
Options  granted  under  the  Compensatory  Plan satisfy the requirements of the
Compensatory  Plan.

     SECTION  3.  DURATION  OF  OPTIONS.  Each  Option and all rights thereunder
                  ---------------------
granted pursuant to the terms of this Compensatory Plan shall expire on the date
determined  by  the  Program  Administrators,  but  in no event shall any Option
granted  under  the  Compensatory Plan expire later than ten years and one month
from the date on which the Option is granted.  In addition, each Option shall be
subject  to  early  termination  as  provided  in  the  Compensatory  Plan.

     SECTION  4.  PURCHASE  PRICE.  The  purchase  price  for  shares  acquired
                  ---------------
pursuant to the exercise, in whole or in part, of any Non-Qualified Option shall
be  established  by  the  Program Administrators at the time of grant, but in no
event  shall  be  less than the par value of the Common Stock at the time of the
grant  of  the  Option.

     SECTION 5.     EXERCISE OF OPTIONS.  Each Non-Qualified Option shall become
                    -------------------
vested and exercisable in one or more installments during its term and the right
to  exercise  may  be  cumulative  as  determined by the Program Administrators,
provided,  however,  that  in  the  case of any Non-Qualified Option exercisable
within  the  first  six  months  following  the date such Option is granted, the
shares of Common Stock received upon the exercise of such Option may not be sold
or  disposed  of  by the Optionee for the first six months following the date of
grant,  provided  further, however, that in the case of any Option granted prior
to  the  date  that  this  Program  is  approved  by  the  requisite vote of the
stockholders  of  the  Company,  the  shares  of  Common Stock received upon the
exercise  of  such Option may not be sold or disposed of by the Optionee for the
first  six  months  following  the  date  stockholder  approval is received.  In
determining  the  number of shares of Common Stock with respect to which Options
are  vested  and/or  exercisable,  fractional  shares  will be rounded up to the
nearest  whole  number if the fraction is 0.5 or higher, and down if it is less.
The  purchase  price of any shares purchased shall be paid in full in cash or by
certified or cashier's check payable to the order of the Company or by shares of
Common  Stock  (including shares acquired pursuant to the exercise of an Option)
or other property or by withholding some of the shares of Common Stock which are
being  purchased  upon  exercise  of  an  Option,  if  permitted  by the Program
Administrators,  or by a combination of cash, check or shares of Common Stock or
other property equal in Fair Market Value to the purchase price of the shares to
be  acquired  pursuant  to  the  Option,  at the time of exercise of the Option.

     SECTION  6.  ACCELERATION  OF  RIGHT  OF  EXERCISE  OF  INSTALLMENTS.
                  -------------------------------------------------------
Notwithstanding  the  first  sentence of Section 5 of this Compensatory Plan, if
the  Company  or  its  stockholders enter into an agreement to dispose of all or
substantially all of the assets or stock of the Company (or of Coastal Banc ssb)
by  means  of a sale, merger or other reorganization, liquidation, or otherwise,
any  Option granted pursuant to the terms of this Compensatory Plan shall become
immediately  exercisable  with  respect  to the full number of shares subject to
that  Option  during  the  period  commencing as of the date of the agreement to
dispose of all or substantially all of the assets or stock of the Company (or of
Coastal Banc ssb) and ending when that agreement is terminated, or the Option is
otherwise terminated in accordance with its provisions or the provisions of this
Compensatory  Plan,  whichever  occurs  first; provided, however, that no Option
shall  be  immediately  exercisable  under  this  Section  6  on  account of any
agreement  to  dispose of all or substantially all of the assets or stock of the
Company  by  means  of  a  sale,  merger or other reorganization, liquidation or
otherwise  where  the  stockholders  of  the  Company  immediately  before  the
consummation  of  the  transaction  will  own at least 50% of the total combined
voting  power  of all classes of stock entitled to vote of the surviving entity,
whether  the Company or some other entity, immediately after the consummation of
the  transaction.  In  the  event  the transaction contemplated by the agreement
referred  to  in  this  Section  6  is not consummated but rather is terminated,
cancelled  or  expires,  the  Options granted pursuant to this Compensatory Plan
shall  thereafter  be  treated as if that agreement had never been entered into.

     Notwithstanding  the first sentence of Section 5 of this Compensatory Plan,
in  the  event  of  a  change in control of the Company, or threatened change in
control  of  the  Company as determined by a vote of not less than a majority of
the  Whole  Board of Directors and a majority of the Continuing Directors of the
Company,  as  such terms are defined in the Company's Articles of Incorporation,
all  Non-Qualified Options granted prior to such change in control or threatened
change  in control shall become immediately exercisable.  The term "control" for
purposes  of  this  Section  shall  refer  to the acquisition (subsequent to the
approval  of  the  Program by the stockholders of the Company) of 10% or more of
the  voting  securities  of  the Company by any person or by persons acting as a
group  within  the  meaning  of  Section  13(d)  of  the Exchange Act; provided,
however,  that  for  purposes of this Compensatory Plan, no change in control or
threatened  change  in  control shall be deemed to have occurred if prior to the
acquisition of, or offer to acquire, 10% or more of the voting securities of the
Company,  the  Whole Board of Directors of the Company shall have adopted by not
less than a two-thirds vote a resolution specifically approving such acquisition
or  offer for the specific purpose of preventing the acceleration of the vesting
of  such  Options.  The  term "person" for purposes of this Section refers to an
individual  or  a  corporation,  partnership, trust, association, joint venture,
pool,  syndicate,  sole proprietorship, unincorporated organization or any other
form  of  entity  not  specifically  listed  herein.

     SECTION  7.  WRITTEN  NOTICE REQUIRED.  Any Option pursuant to the terms of
                  ------------------------
this  Compensatory  Plan shall be exercised when written notice of that exercise
has  been given to the Company at its principal office by the person entitled to
exercise  the  Option  and full payment for the shares with respect to which the
Option  is  exercised  has  been  received  by  the  Company.

     SECTION  8.  COMPLIANCE  WITH  SECURITIES LAWS.  Shares shall not be issued
                  ---------------------------------
with  respect  to  any  Option  granted  under  the Compensatory Plan unless the
exercise  of  that  Option  and the issuance and delivery of the shares pursuant
thereto  shall  comply  with  all  relevant provisions of state and federal law,
including, without limitation, the Securities Act of 1933, as amended, the rules
and  regulations  promulgated  thereunder,  and  the  requirements  of any stock
exchange  or national quotation system upon which the shares may then be listed,
and  shall  be  further  subject to the approval of counsel for the Company with
respect  to  such  compliance.  The  Program  Administrators may also require an
Optionee to whom  an Option has been granted to furnish evidence satisfactory to
the Company, including a written and signed representation letter and consent to
be  bound  by  any  transfer  restrictions  imposed by law, legend, condition or
otherwise,  that the shares are being purchased only for investment purposes and
without  any  present intention to sell or distribute the shares in violation of
any  state  or  federal  law,  rule or regulation.  Further, each Optionee shall
consent  to  the imposition of a legend on the shares of Common Stock subject to
his  or  her  Option  restricting their transferability as required by law or by
this  Section  8.

     SECTION  9.  EMPLOYMENT  OF  OPTIONEE.  Each  Optionee, if requested by the
                  ------------------------
Program  Administrators, must agree in writing as a condition of the granting of
his  or  her  Option,  to  remain in the employ of the Company or any Subsidiary
thereof  (or a corporation or a parent or Subsidiary of such corporation issuing
or  assuming a stock option in a transaction to which Section 424(a) of the Code
applies),  following  the  date  of  the  granting  of  that Option for a period
specified  by  the Program Administrators, which period shall in no event exceed
three  years.  Nothing  in  this  Compensatory  Plan  or  in  any Option granted
hereunder  shall  confer  upon any Optionee any right to continued employment by
the  Company  or  any  Subsidiary  thereof, or limit in any way the right of the
Company  or  any  Subsidiary at any time to terminate or alter the terms of that
employment.

     SECTION 10.  OPTION RIGHTS UPON TERMINATION OF EMPLOYMENT.  If any Optionee
                  --------------------------------------------
under  this  Compensatory  Plan  ceases  to  be  employed by the Company, or any
Subsidiary  (or  a  corporation  or  a  parent or Subsidiary of such corporation
issuing  or  assuming a stock option in a transaction to which Section 424(a) of
the  Code  applies),  for any reason other than Disability, death or Retirement,
his  or  her  Option  shall  immediately  terminate, provided, however, that the
Program  Administrators  may,  in  their  discretion,  allow  the  Option  to be
exercised,  to  the extent exercisable on the date of termination of employment,
at  any  time  within  a period of between three months and five years after the
date of termination of employment, unless either the Option or this Compensatory
Plan otherwise provides for earlier termination.  Should an employee be re-hired
within  the  mandatory  30  day  exercise  window,  they  will be allowed to not
exercise  their  previously  granted  options  at  their  discretion.

     SECTION  11.  OPTION  RIGHTS UPON DISABILITY OR RETIREMENT.  If an Optionee
                   --------------------------------------------
becomes  disabled  within  the  meaning  of  Section  22(e)(3) of the Code while
employed by the Company, or any Subsidiary thereof (or a corporation or a parent
or  Subsidiary  of  such  corporation  issuing  or  assuming a stock option in a
transaction  to  which  Section  424(a)  of  the  Code  applies) or ceases to be
employed  thereby  due  to  his Retirement, the Program Administrators, in their
discretion,  may  allow the Option to be exercised, to the extent exercisable on
the  date  of  termination  of employment, at any time within one year after the
date of termination of employment due to Disability or Retirement, unless either
the Option or this Compensatory Plan otherwise provides for earlier termination.

     SECTION  12.  OPTION  RIGHTS  UPON  DEATH OF OPTIONEE.  Except as otherwise
                   ---------------------------------------
limited  by the Program Administrators at the time of the grant of an Option, if
an Optionee dies while employed by the Company, or any Subsidiary thereof, (or a
corporation  or a parent or Subsidiary of such corporation issuing or assuming a
stock  option in a transaction to which Section 424(a) of the Code applies), his
or  her Option shall expire one year after the date of death unless by its terms
it  expires  sooner.  During  this one year or shorter period, the Option may be
exercised,  to  the  extent that it remains unexercised on the date of death, by
the  person or persons to whom the Optionee's rights under the Option shall pass
by  will or by the laws of descent and distribution, but only to the extent that
the  Optionee  is  entitled  to  exercise  the  Option  at  the  date  of death.

     SECTION  13.  OPTIONS  NOT  TRANSFERABLE.  Options  granted pursuant to the
                   --------------------------
terms of this Compensatory Plan may not be sold, pledged, hypothecated, assigned
or  transferred  in  any manner otherwise than by will or the laws of descent or
distribution  and  may  be  exercised during the lifetime of an Optionee only by
that  Optionee.

     SECTION  14.  ADJUSTMENTS  TO NUMBER AND PURCHASE PRICE OF OPTIONED SHARES.
                   ------------------------------------------------------------
All  Options  granted  pursuant  to the terms of this Compensatory Plan shall be
adjusted  in  a  manner prescribed by Article 6 of the General Provisions of the
Program.
COASTAL BANCORP, INC.
                         1999 STOCK COMPENSATION PROGRAM

PLAN  III  -  STOCK  APPRECIATION  RIGHTS  PLAN

     SECTION  1.  PURPOSE.  The  purpose  of  this  Coastal  Bancorp, Inc. Stock
                  -------
Appreciation Rights Plan ("S.A.R. Plan") is to permit the Company to grant Stock
Appreciation  Rights  for its Common Stock to its full-time, key Employees.  The
S.A.R.  Plan  is  designed  to  help  attract  and retain superior personnel for
positions  of  substantial  responsibility  with  the Company and any Subsidiary
thereof  and to provide key Employees with an additional incentive to contribute
to  the  success  of  the  Company.  This S.A.R. Plan is Part III of the Coastal
Bancorp,  Inc.  1999  Stock  Compensation  Program.

     SECTION  2.  TERMS  AND  CONDITIONS.  The  Program  Administrators may, but
                  ----------------------
shall  not be obligated to, authorize, on such terms and conditions as they deem
appropriate  in each case, the Company to grant rights to Optionees to surrender
an exercisable Option granted under Plan I or Plan II or any portion thereof, in
consideration for the payment by the Company of an amount equal to the excess of
the  Fair  Market Value of the shares of Common Stock subject to such Option, or
any  portion  thereof,  surrendered,  over the exercise price of the Option with
respect  to  such  shares.  Such  payment,  at  the  discretion  of  the Program
Administrators,  may  be  made in shares of Common Stock valued at the then Fair
Market  Value  thereof,  or  in  cash  or partly in cash and partly in shares of
Common  Stock;  provided  that  with  respect  to  rights granted in tandem with
Incentive  Stock Options, the Program Administrators shall establish the form(s)
of  payment  allowed  the  Optionee  at  the  date  of  grant.  The  Program
Administrators shall not be authorized to make payment to any Optionee in shares
of  the  Company's Common Stock unless Section 83 of the Code would apply to the
Common  Stock  transferred to the Optionee.  The Program Administrators may, but
shall  not  be  obligated  to, also authorize naked Stock Appreciation Rights in
accordance  with  Section  9 hereof.  Notwithstanding the foregoing, the Company
may  not  permit  the  exercise  and  cancellation of a Stock Appreciation Right
issued  pursuant  to  this S.A.R. Plan until the Company has been subject to the
reporting  requirements  of  Section  13 of the Exchange Act, for a period of at
least  one  year  prior  to  the  exercise  and  cancellation  of any such Stock
Appreciation  Right.

     SECTION  3.  TIME LIMITATIONS.  Any election by an Optionee to exercise the
                  ----------------
Stock  Appreciation Rights provided in this S.A.R. Plan shall be made during the
period beginning on the third business day following the release for publication
of  quarterly  or  annual  financial  information  required  to  be prepared and
disseminated by the Company pursuant to the requirements of the Exchange Act and
ending on the twelfth business day following such date.  The required release of
information  shall be deemed to have been satisfied when the specified financial
data  appears  on  or  in a wire service, financial news service or newspaper of
general  circulation  or  is  otherwise  first  made  publicly  available.

     SECTION 4.  EXERCISE OF STOCK APPRECIATION RIGHTS:  EFFECT ON STOCK OPTIONS
                 ---------------------------------------------------------------
AND  VICE VERSA.  Upon the exercise of a Stock Appreciation Right, the number of
---------------
shares  of  Common  Stock  available  under the Option to which it relates shall
decrease  by  a  number  equal  to  the  number  of  shares  for which the Stock
Appreciation  Right  was exercised.  Upon the exercise of an Option, any related
Stock  Appreciation  Right shall terminate as to any number of shares subject to
the  right  that exceeds the total number of shares for which the Option remains
unexercised.
SECTION  5.  TIME  OF GRANT.  With respect to Options granted under Plan I,
                  --------------
Stock  Appreciation Rights must be granted concurrently with the Incentive Stock
Options  to  which  they  relate; with respect to Options granted under Plan II,
Stock  Appreciation Rights may be granted concurrently or at any time thereafter
prior  to  the  exercise  or  expiration  of  such  Non-Qualified  Options.

     SECTION 6.  NON-TRANSFERABLE.  The holder of a Stock Appreciation Right may
                 ----------------
not  transfer  or  assign the right otherwise than by will or in accordance with
the  laws  of  descent  and  distribution.  Furthermore,  in  the  event  of the
termination  of  his  or  her  service  with  the  Company  as an Officer and/or
Employee,  the  right may be exercised only within the period, if any, which the
Option  to  which  it  relates  may  be  exercised.

     SECTION  7.  TANDEM  INCENTIVE  STOCK  OPTION  -  STOCK APPRECIATION RIGHT.
                  -------------------------------------------------------------
Whenever  an  Incentive  Stock  Option authorized pursuant to Plan I and a Stock
Appreciation Right authorized hereunder are granted together and the exercise of
one  affects  the  right to exercise the other, the following requirements shall
apply:

     (a)     The  Stock  Appreciation  Right  will  expire  no  later  than  the
expiration  of  the  underlying  Incentive  Stock  Option;

     (b)     The Stock Appreciation Right may be for no more than the difference
between  the exercise price of the underlying Option and the market price of the
stock  subject to the underlying Option at the time the Stock Appreciation Right
is  exercised;

     (c)     The  Stock  Appreciation  Right  is  transferable  only  when  the
underlying Incentive Stock Option is transferable and under the same conditions;

     (d)     The  Stock  Appreciation  Right  may  be  exercised  only  when the
underlying  Incentive  Stock  Option  is  eligible  to  be  exercised;  and

     (e)     The  Stock Appreciation Right may be exercised only when the market
price of the stock subject to the Option exceeds the exercise price of the stock
subject  to  the  Option.

     SECTION  8.  TANDEM  STOCK  OPTION - LIMITED STOCK APPRECIATION RIGHT.  The
                  --------------------------------------------------------
Program  Administrators  may  provide  that  any tandem Stock Appreciation Right
granted  pursuant  to this Section 8 shall be a limited Stock Appreciation Right
("Limited  Stock  Appreciation  Right"),  in  which  event:

     (a)     The  Limited  Stock  Appreciation Right shall be exercisable during
the  period  beginning on the first day following the expiration of an Offer (as
defined  below)  and  ending  on  the  thirtieth  day  following  such  date;

     (b)     Neither  the  Option tandem to the Limited Stock Appreciation Right
nor any other Stock Appreciation Right tandem to such Option may be exercised at
any  time  that  the Limited Stock Appreciation Right may be exercised, provided
that  this  requirement shall not apply in the case of an Incentive Stock Option
tandem  to  a  Limited  Stock  Appreciation  Right if and to the extent that the
Program  Administrators  determine  that such requirement is not consistent with
applicable  statutory  provisions  regarding  Incentive  Stock  Options  and the
regulations  issued  thereunder;

     (c)     Upon  exercise  of  the  Limited Stock Appreciation Right, the Fair
Market Value of the shares to which the right relates shall be determined as the
highest  price  per share paid in any Offer that is in effect at any time during
the  period beginning on the sixtieth day prior to the date on which the Limited
Stock  Appreciation  Right  is  exercised  and  ending  on  such  exercise date;
provided,  however, with respect to a Limited Stock Appreciation Right tandem to
an  Incentive  Stock  Option,  the  Program  Administrators shall determine Fair
Market  Value of such shares in a different manner if and to the extent that the
Program  Administrators  deem  necessary or desirable to conform with applicable
statutory  provisions  regarding  Incentive  Stock  Options  and the regulations
issued  thereunder.

     The  term  "Offer" shall mean any tender offer or exchange offer for shares
of the Company, provided that the person making the offer acquires shares of the
Company's  capital  stock  pursuant  to  such  offer.

     SECTION 9.  NAKED STOCK APPRECIATION RIGHT.  The Program Administrators may
                 ------------------------------
provide  that  any  Stock  Appreciation Right granted pursuant to this Section 9
shall  be  a  naked  Stock  Appreciation  Right ("Naked Right"), in which event:

     (a)     Participants  shall  be  awarded Naked Rights for a period of up to
five  years  or  such shorter period which shall not be less than six months, as
may  be  determined  by  the Program Administrators.  Such designated period may
vary  as  among  participants  and as among awards to a participant.  Subject to
compliance  with  Section  3  hereof,  at the end of such designated period with
respect  to a participant, such participant shall receive an amount equal to the
appreciation  in  market  value  of  his  or  her  Naked Rights as determined in
subparagraph  (b)  of this Section 9 (the "Right Award").  The Right Award shall
be  payable  in  cash  or in shares of Common Stock, as may be determined by the
Program  Administrators.  A  participant  may  receive  as  many awards of Naked
Rights  at  various  times as may be determined to be appropriate by the Program
Administrators.

     (b)     For  purposes  of  determining  the  amount  of  a Right Award, the
Program  Administrators shall determine the market value of Naked Rights held by
such participant at the end of the designated period for which such Naked Rights
have  been  held ("Valuation Period") and subtract therefrom the market value of
the same Naked Rights on the date awarded to such participant.  The market value
of  one  Naked  Right  on  a  valuation  date shall be determined by the Program
Administrators  on the basis of such factors as they deem appropriate; and shall
be  determined without regard to any restriction other than a restriction which,
by  its  terms, will never lapse.  The Fair Market Value of shares of the Common
Stock  shall  be  the  Fair  Market  Value  as set forth in Article 15(i) of the
General  Provisions and shall be used to determine the market value of one Naked
Right.  The  market  value  of Naked Rights held by a participant on a valuation
date  shall be determined by multiplying the number of Naked Rights held by such
participant  by the market value of one Naked Right on such valuation date.  The
measurement  of  appreciation  shall  be  made  separately  with respect to each
separate  award  of  Naked  Rights.

     (c)     The  Naked  Rights  shall  be  used  solely  as  a  device  for the
measurement  and  determination  of  the  amount  to  be  paid  to  participants
hereunder.  The  Naked  Rights shall not constitute or be treated as property or
as  a trust fund of any kind.  All amounts at any time attributable to the Naked
Rights  shall  be  and  remain  the  sole  property  of  the  Company  and  the
participants'  rights  hereunder  are  limited  to the right to receive cash and
shares  of  Common  Stock  as  herein  provided.

     (d)     Notwithstanding  the  first  sentence  of  subparagraph (a) of this
Section  9, in the event the Company or its stockholders enter into an agreement
to  dispose of all or substantially all of the assets or stock of the Company or
of  Coastal  Banc  ssb  by  means  of  a  sale,  merger or other reorganization,
liquidation  or  otherwise, any Naked Right granted pursuant to subparagraph (a)
of  this  Section  9  shall  become  immediately  exercisable  during the period
commencing  as  of  the date of the agreement to dispose of all or substantially
all of the assets or stock of the Company or of Coastal Banc ssb and ending when
the  disposition of assets or stock contemplated by that agreement is terminated
or  the Naked Right is otherwise terminated in accordance with its provisions or
the  provisions  of this S.A.R. Plan, whichever occurs first; provided, however,
that no Naked Right shall be immediately exercisable under this subparagraph (d)
on account of any agreement to dispose of all or substantially all of the assets
or  stock  of  the  Company  by means of a sale, merger or other reorganization,
liquidation  or  otherwise  where  the  stockholders  of the Company immediately
before  the  consummation  of the transaction will own at least 50% of the total
combined  voting power of all classes of stock entitled to vote of the surviving
entity,  whether  the  Company  or  some  other  entity,  immediately  after the
consummation  of  the transaction.  In the event the transaction contemplated by
the  agreement  referred  to  in  this  subparagraph (d) is not consummated, but
rather is terminated, cancelled or expires, the Naked Rights granted pursuant to
subparagraph  (a)  of  this  Section  9  shall  thereafter be treated as if that
agreement  had  never  been  entered  into.

     Notwithstanding  the  first sentence of subparagraph (a) of this Section 9,
in  the  event  of  a  change  in control of the Company or threatened change in
control  of  the  Company as determined by a vote of not less than a majority of
the  Whole  Board of Directors and a majority of the Continuing Directors of the
Company,  as  such terms are defined in the Company's Articles of Incorporation,
all Naked Rights granted prior to such change in control or threatened change of
control  shall  become immediately exercisable.  The term "control" for purposes
of  this  Section  shall refer to the acquisition (subsequent to the approval of
the  Program  by  the  stockholders of the Company) of 10% or more of the voting
securities  of  the Company by any person or by persons acting as a group within
the  meaning  of Section 13(d) of the Exchange Act; provided, however, no change
in  control  or threatened change in control shall be deemed to have occurred if
prior  to  the  acquisition  of,  or offer to acquire, 10% or more of the voting
securities  of  the  Company,  the Whole Board of Directors of the Company shall
have  adopted  by  not  less  than  a  two-thirds vote a resolution specifically
approving  such  acquisition or offer for the specific purpose of preventing the
acceleration  of  the  vesting  of  such  Naked  Rights.  The  term "person" for
purposes  of  this  paragraph  refers  to  an  individual  or  a  corporation,
partnership,  trust,  association,  joint  venture,  pool,  syndicate,  sole
proprietorship,  unincorporated  organization  or  any  other form of entity not
specifically  listed  herein.

     (e)     Any  Naked  Rights  granted  pursuant  to  subparagraph (a) of this
Section 9 shall be exercised when written notice of that exercise has been given
to  the  Company  at its principal office by the person entitled to exercise the
Naked  Right.

     (f)     Shares  of  Common  Stock  shall  not be issued with respect to any
Naked Right granted under subparagraph (a) of this Section 9 unless the exercise
of  that  Naked  Right and the issuance and delivery of those shares pursuant to
that exercise shall comply with all relevant provisions of state and federal law
including,  if applicable, the Securities Act of 1933, as amended, the rules and
regulations  promulgated  thereunder, and the requirements of any stock exchange
or national quotation system upon which the shares may then be listed, and shall
be  further  subject  to the approval of counsel for the Company with respect to
such  compliance.  The  Program  Administrators  may also require an Employee to
whom  a  right has been granted under subparagraph (a) of this Section 9 ("Right
Holder")  to  furnish  evidence satisfactory to the Company, including a written
and  signed  representation  letter  and  consent  to  be  bound by any transfer
restriction  imposed by law, legend, condition or otherwise, that the shares are
being acquired without any present intention to sell or distribute the shares in
violation  of any state or federal law, rule or regulation.  Further, each Right
Holder shall consent to the imposition of a legend on any shares of Common Stock
so  acquired  restricting  their  transferability  as required by law or by this
subparagraph  (f).

     (g)     Each  Right Holder, if requested by the Program Administrators when
a  Naked Right is granted, must agree in writing as a condition of receiving his
or  her Naked Right, that he or she will remain in the employ of the Company, or
any  Subsidiary  of  the  Company (or a corporation or a parent or Subsidiary of
such  corporation  issuing  or  assuming  a  Naked  Right),  as the case may be,
following the date of the granting of that Naked Right for a period specified by
the  Program  Administrators, which period shall in no event exceed three years.
Nothing  in  this Section 9 or in any Naked Right granted hereunder shall confer
upon  any  Right Holder any right to continued employment by the Company, or any
Subsidiary  thereof,  or  limit  in  any  way  the  right  of the Company or any
Subsidiary  thereof  at  any  time  to  terminate  or  alter  the  terms of that
employment.

     (h)     If  a  Right  Holder  ceases  to be employed by the Company, or any
Subsidiary  thereof  (or  a  corporation  or  a  parent  or  Subsidiary  of such
corporation issuing or assuming a Naked Right), for any reason other than death,
Disability  or  Retirement,  his or her Naked Right shall immediately terminate;
provided,  however,  that  the  Program  Administrators may, at the time a Naked
Right is granted, in their discretion, allow such Naked Right to be exercised to
the  extent  exercisable  on  the  date of termination of employment at any time
within  three  months after the date of termination of employment, unless either
the  Naked  Right  or this Section 9 otherwise provides for earlier termination.

     (i)     If  a  Right  Holder becomes disabled within the meaning of Section
22(e)(3) of the Code while employed by the Company of any Subsidiary thereof (or
a  corporation or a parent or Subsidiary of such corporation issuing or assuming
a  Naked  Right)  or ceases to be employed thereby due to Retirement, his or her
Naked  Rights  may  be  exercised,  to  the  extent  exercisable  on the date of
termination  of  employment,  at  any  time  within  one  year after the date of
termination  of  employment  due  to Disability or Retirement, unless either the
Naked  Right  or  this  Section  9  otherwise  provides for earlier termination.

     (j)  Except  as otherwise limited by the Program Administrators at the time
of  the  grant  of  a  Naked Right, if a Right Holder dies while employed by the
Company or any Subsidiary thereof (or a corporation or a parent or Subsidiary of
such  corporation  issuing  or  assuming  a Naked Right), or within three months
after ceasing to be an Employee thereof, his or her Naked Right shall expire one
year  after  the date of death unless by its term it expires sooner. During this
one year or shorter period, the Naked Right may be exercised, to the extent that
it  remains  unexercised  on the date of death, by the person or persons to whom
the Right Holder's Naked Rights shall pass by will or by the laws of descent and
distribution,  but  only  to  the  extent  that  the Right Holder is entitled to
exercise  the  Naked  Right  at  the  date  of  death.

     (k)  Naked  Rights  granted pursuant to the terms of this Section 9 may not
be  sold, pledged, hypothecated, assigned or transferred in any manner otherwise
than  by will or the laws of descent or distribution and may be exercised during
the  lifetime  of  a  Right  Holder  only  by  that  Right  Holder.

     (l)  All Naked Rights granted pursuant to the terms of this Section 9 shall
be  adjusted  in the manner prescribed by Article 6 of the General Provisions of
this  Program.
COASTAL BANCORP, INC.
                         1999 STOCK COMPENSATION PROGRAM

PLAN  IV  -  PERFORMANCE  SHARE  PLAN

     SECTION 1.  PURPOSE.  The purpose of this Coastal Bancorp, Inc. Performance
                 --------
Share  Plan ("Performance Plan") is to promote the growth and general prosperity
of  the  Company  by  permitting the Company to grant Performance Shares to help
attract  and  retain  superior  personnel  for  positions  of  substantial
responsibility  with the Company and any Subsidiary and to provide key Employees
with  an additional incentive to contribute to the success of the Company.  This
Performance Plan is Part IV of the Coastal Bancorp, Inc. 1999 Stock Compensation
Program.

     SECTION  2.  TERMS  AND  CONDITIONS.  The  Program Administrators may grant
                  -----------------------
Performance  Shares  to  any  Employee  eligible  under Article 4 of the General
Provisions.  Each Performance Share grant confers upon the recipient thereof the
right  to  receive  a  specified number of shares of Common Stock of the Company
contingent  upon  the  achievement  of specified performance objectives within a
specified  period.  The  Program  Administrators  shall  specify the performance
objective  and the period of duration of the Performance Share grant at the time
that  such  Performance  Share is granted.  Any Performance Shares granted under
this  Plan  shall  constitute an unfunded promise to make future payments to the
affected  Employee upon the completion of specified conditions.  The grant of an
opportunity  to  receive  Performance  Shares  shall  not  entitle  the affected
Employee  to  any  rights  to  specific fund(s) or assets of the Company, or any
parent  or  Subsidiary  thereof.

     SECTION 3.  CASH IN LIEU OF STOCK.  In lieu of some or all of the shares of
                 ----------------------
Common  Stock  earned  by  achievement  of  the specified performance objectives
within  the  specified period, the Program Administrators may distribute cash in
an  amount  equal  to the Fair Market Value of the Common Stock at the time that
the  Employee  achieves  the  performance objective within the specified period.
Such  Fair  Market  Value  shall  be  determined by Article 15(i) of the General
Provisions, on the business day next preceding the date of payment.  The Program
Administrators  shall  be  authorized  to make payment in shares of Common Stock
only  if  Section  83 of the Code would apply to the transfer of Common Stock to
the  Employee.

     SECTION  4.  PERFORMANCE  OBJECTIVE  PERIOD.  The  duration  of  the period
                  -------------------------------
within  which  to  achieve the performance objectives is to be determined by the
Program  Administrators.  The period may not be less than one year nor more than
five  years  from  the  date  the  performance  share  is  granted.

     SECTION 5.  NON-TRANSFERABLE.  A participating Employee may not transfer or
                 -----------------
assign  a  performance  share.

     SECTION  6.  PERFORMANCE  SHARE  RIGHTS  UPON  DEATH  OR  TERMINATION  OF
                  ------------------------------------------------------------
EMPLOYMENT.  If  a  participating  Employee  dies or terminates service with the
         --
Company,  or  any Subsidiary thereof (or a corporation or a parent or Subsidiary
of  such corporation issuing or assuming a Performance Share in a transaction to
which  Section  424(a)  of  the  Code  applies,)  prior to the expiration of the
performance  objective  period,  any  Performance  Shares  granted to him or her
during  that  period  are  terminated.

                     END OF 1999 STOCK COMPENSATION PROGRAM
EXHIBIT 24.2

                                 CONSENT OF KPMG
KPMG

700  Louisiana                  Telephone   713  319  2000
Houston,  Texas  77002          Fax   713  319  2041

The  Board  of  Directors:
Coastal  Bancorp,  Inc.

We  consent  to  incorporation  by  reference in the registration statement (No.
333-_____)  on Form S-8 of Coastal Bancorp, Inc. of our report dated January 19,
1999,  except  as  to  note 6, which is as of February 11, 1999, relating to the
consolidated  statements  of  financial  condition  of Coastal Bancorp, Inc. and
subsidiaries  as  of  December  31, 1998, and 1997, and the related consolidated
statements  of  operations,  comprehensive income, stockholders' equity and cash
flows  for  each  of the years in the three-year period ended December 31, 1998,
which  report  appears  in  the December 31, 1998, annual report on Form 10-K of
Coastal  Bancorp,  Inc.

/s/   KPMG  LLP

Houston,  Texas
June  17,  1999