Coastal Bancorp, Inc. is engaged primarily in the business of serving as the parent holding company for Coastal Banc ssb (the Bank). The Bank is a Texas-chartered, federally insured state savings bank and operates through 43 branch offices in metropolitan Houston, Austin, Corpus Christi, the Rio Grande Valley and small cities in the southeast quadrant of Texas. The Bank maximizes profitability through the generation of net interest income and fee income. To meet this objective, it has implemented a strategy of building its core deposit base while deploying its funds in assets, which provide a return with acceptable credit risk. In November 1996, in order to minimize state taxes, the Companys corporate structure was reorganized by forming Coastal Banc Holding Company, Inc. (HoCo) as a holding company. HoCo became a wholly owned subsidiary of the Company and the Bank became a subsidiary of HoCo.