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):  JULY 31, 2003


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

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



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




ITEM  5.  OTHER  EVENTS  AND  REQUIRED  FD  DISCLOSURE.

     HOUSTON  (July  31,  2003) - Coastal Bancorp, Inc. (NASDAQ: CBSA) announced
today that on July 24, 2003, its Board of Directors voted to increase the second
quarter  of  2003 common stock dividend by 25% over the previous quarter's.  The
$0.15  cash  dividend will be paid on June 15, 2003 to shareholders of record as
of August 15, 2003.  Future dividend payments will be determined by the Board of
Directors  based  on  the  company's results of operations, financial condition,
general  economic  conditions  and  other  factors.
     At  June  30, 2003, Coastal had total assets of approximately $2.5 billion,
deposits  of  approximately $1.6 billion, Series A Cumulative Preferred Stock of
$27.5  million  and common stockholders' equity of approximately $130.8 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  operates  44 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 Coastal, 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.


ITEM  7.   FINANCIAL  STATEMENTS,  PRO  FORMA  FINANCIAL  INFORMATION AND
           --------------------------------------------------------------
           EXHIBITS.
           --------

          (c)     The  following  exhibit  is  filed  herewith:

Exhibit  No.                                   Description
- ------------                                   -----------

99.1                                   Press  Release  dated  July  31,  2003.





                                   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:  July  31,  2003          COASTAL  BANCORP,  INC.


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






















                              COASTAL BANCORP, INC.




                                  EXHIBIT 99.1


               PRESS RELEASE OF THE REGISTRANT DATED JULY 31, 2003





                                                                    NEWS RELEASE
     FOR  IMMEDIATE  RELEASE

     HOUSTON  (July  31,  2003) - Coastal Bancorp, Inc. (NASDAQ: CBSA) announced
today that on July 24, 2003, its Board of Directors voted to increase the second
quarter  of  2003 common stock dividend by 25% over the previous quarter's.  The
$0.15  cash  dividend will be paid on June 15, 2003 to shareholders of record as
of August 15, 2003.  Future dividend payments will be determined by the Board of
Directors  based  on  the  company's results of operations, financial condition,
general  economic  conditions  and  other  factors.
     At  June  30, 2003, Coastal had total assets of approximately $2.5 billion,
deposits  of  approximately $1.6 billion, Series A Cumulative Preferred Stock of
$27.5  million  and common stockholders' equity of approximately $130.8 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  operates  44 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 Coastal, 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.
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