Form  8-K
Page  3  of  3

                       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):  DECEMBER 17, 2002


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

                        TEXAS     0-24526     76-0428727
                        -----     -------     ----------
               (State or other jurisdiction          (IRS Employer
     of incorporation)     (Commission File Number)     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


Form  8-K
Page  2  of  3

ITEM.  5.     OTHER  EVENTS.

     HOUSTON,  Texas  (December 17, 2002) - Coastal Bancorp, Inc. (NASDAQ: CBSA)
and  its  subsidiary Coastal Banc ssb, today announced that it has completed the
sale  of  its  five  Central Texas branches (Llano, Burnet, Mason, Kingsland and
Marble  Falls,  Texas)  to  First  State  Bank  Central  Texas.

     The  sale included deposit accounts of approximately $75.3 million, as well
as four owned and one leased branch facility.   The deposits were 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.).

     At  September  30,  2002,  Coastal  had  total assets of approximately $2.6
billion,  deposits  of approximately $1.6 billion, Series A Cumulative Preferred
Stock  of  $27.5 million and common stockholders' equity of approximately $120.1
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 43 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:  December  17,  2002          COASTAL  BANCORP,  INC.





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