SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C.  20549

                                    FORM 8-K



                                 CURRENT REPORT


                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


      DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):  SEPTEMBER 24, 2002


                              COASTAL BANCORP, INC.
               (Exact name of registrant as specified in charter)






                                                    
         TEXAS                         0-24526               76-0428727
- ----------------------------   -----------------------   --------------------
(State or other jurisdiction   (Commission File Number)     (IRS Employer
     of incorporation)                                    Identification No.)




5718 WESTHEIMER, SUITE 600, HOUSTON, TEXAS                              77057
- ------------------------------------------                      -------------
(Address of principal executive offices)                           (Zip Code)


Registrant's telephone number including area code:(713) 435-5000

(Former name or former address, if changed since last report):NOT  APPLICABLE


Page  2  of  3

ITEM.  5.     OTHER  EVENTS.

     HOUSTON,  Texas (September 24, 2002) - Coastal Bancorp, Inc. (NASDAQ: CBSA)
and  its  subsidiary  Coastal  Banc  ssb, today announced that it has executed a
definitive  agreement to sell five Central Texas branches (Llano, Burnet, Mason,
Kingsland  and  Marble  Falls,  Texas)  to  First  State  Bank  Central  Texas.

     Consummation of the proposed transaction is expected to occur by the end of
the  fourth  quarter  of  2002,  pending  regulatory  approvals  and  subject to
customary conditions.  The sale includes deposit accounts of approximately $80.8
million,  as  well  as four owned and one leased branch facility.   The deposits
are being purchased at a 6.25% premium. Coastal will continue to operate its two
branch  locations  in  Austin,  Texas  (7200  Mopac  and 1114 Lost Creek Blvd.).
Customers  will  be notified as soon as possible to assure minimal disruption as
the  ownership  change  occurs.

     At  June  30, 2002, Coastal had total assets of approximately $2.5 billion,
deposits  of  approximately  $1.7 billion, preferred stock (Series A) of Coastal
Banc  ssb of approximately $28.8 million, Series A Cumulative Preferred Stock of
$27.5  million  and common stockholders' equity of approximately $119.4 million.

     Coastal  Bancorp,  Inc.  owns, through its wholly-owned subsidiary, Coastal
Banc Holding Company, Inc., 100 percent of the voting stock of Coastal Banc ssb,
a  Texas-chartered  FDIC  insured,  state savings bank headquartered in Houston.
Coastal  Banc  ssb currently operates 49 branch offices in metropolitan Houston,
Austin,  Corpus Christi, the Rio Grande Valley and small cities in the southeast
quadrant  of  Texas.  You can visit our website at www.coastalbanc.com (which is
not  part  of  this  release).

     "Safe  Harbor" Statement under the Private Securities Litigation Reform Act
of  1995:  The  statements  contained  in  this release which are not historical
facts  contain  forward looking statements with respect to plans, projections or
future performance of the Company, the occurrence of which involve certain risks
and  uncertainties.  Additional  information concerning factors that could cause
actual results to materially differ from those in the forward looking statements
is  contained  in  Coastal  Bancorp  Inc.'s  Securities  and Exchange Commission
filings.  Investors  are  cautioned that any such forward looking statements are
not guarantees of future performance and that actual results or developments may
differ  materially  from  those  projected  in  the  forward looking statements.
Furthermore,  Coastal  does not intend (and is not obligated) to update publicly
any  forward-looking  statement.





                                   SIGNATURES


     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  hereunto  duly  authorized.


Date:  September  24,  2002          COASTAL  BANCORP,  INC.


                                   /s/  Catherine  N.  Wylie
                                 ---------------------------
                                   By:  Catherine  N.  Wylie
                         Senior  Executive  Vice  President/
                                   Chief  Financial  Officer