UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] Soliciting Material Pursuant to
[_] Confidential, For Use of the SS.240.14a-11(c) or SS.240.14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials

COASTAL FINANCIAL CORPORATION
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:

________________________________________________________________________________

3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):

________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:

________________________________________________________________________________
5) Total fee paid:

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[_] Fee paid previously with preliminary materials:

________________________________________________________________________________
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

1) Amount previously paid:

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2) Form, Schedule or Registration Statement No.:

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3) Filing Party:

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4) Date Filed:

________________________________________________________________________________

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COASTAL FINANCIAL CORPORATION
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DECEMBER 15, 2000

Dear Shareholder:

You are cordially invited to attend the annual meeting of Shareholders
of Coastal Financial Corporation. The meeting will be held at the Myrtle Beach
Martinique, 7100 N. Ocean Boulevard, Myrtle Beach, South Carolina, on Wednesday
January 24, 2001 at 2:00 p.m., Eastern Standard Time.

The notice of Annual Meeting and Proxy Statement appearing on the
following pages describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the Corporation.
Directors and Officers of the Corporation, as well as a representative of KPMG
LLP, the Corporation's independent auditors, will be present to respond to
appropriate questions of Shareholders.

It is important that your shares are represented at this meeting,
whether or not you attend the meeting in person and regardless of the number of
shares you own. To make sure your shares are represented, we urge you to
complete and mail the enclosed proxy card. If you attend the meeting, you may
vote in person even if you have previously mailed a proxy card.

We look forward to seeing you at the meeting.

Sincerely,

/s/ Michael C. Gerald

Michael C. Gerald
President and
Chief Executive Officer

COASTAL FINANCIAL CORPORATION
2619 OAK STREET
MYRTLE BEACH, SOUTH CAROLINA 29577
(843) 205-2000

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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The annual meeting of shareholders of Coastal Financial Corporation
("Corporation") will be held at the Myrtle Beach Martinique, 7100 N. Ocean
Boulevard, Myrtle Beach, South Carolina on Wednesday, January 24, 2001, at 2:00
p.m., Eastern Standard Time, for the following purposes:

1. To elect two directors of the Corporation;

2. To transact any other business that may properly come before the
meeting.

NOTE: The Board of Directors is not aware of any other business to come
before the meeting.

Shareholders of record at the close of business on November 30, 2000
are entitled to receive notice of the meeting and to vote at the meeting and any
adjournment or postponement of the meeting.

Please complete and sign the enclosed form of proxy, which is solicited
by the Board of Directors, and mail it promptly in the enclosed envelope. The
proxy will not be used if you attend the meeting and vote in person.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Susan J. Cooke

Susan J. Cooke
Secretary

Myrtle Beach, South Carolina
December 15, 2000

IMPORTANT: The prompt return of proxies will save the Company the expense of
further requests for proxies in order to ensure a quorum. A self-addressed
envelope is enclosed for your convenience. No postage is required if mailed in
the United States.

PROXY STATEMENT
OF
COASTAL FINANCIAL CORPORATION

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ANNUAL MEETING OF SHAREHOLDERS
January 24, 2001

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This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Coastal Financial Corporation ("Coastal
Financial" or "Corporation") to be used at the Annual Meeting of Shareholders of
the Corporation. The Corporation is the holding company for Coastal Federal
Savings Bank. The annual meeting will be held at the Myrtle Beach Martinique,
7100 N. Ocean Boulevard, Myrtle Beach, South Carolina, on Wednesday January 24,
2001 at 2:00 p.m., Eastern Standard Time. This Proxy Statement and the enclosed
proxy card are being first mailed to Shareholders on or about December 15, 2000.

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VOTING AND PROXY PROCEDURE

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Who Can Vote at the Meeting

You are entitled to vote your Coastal Financial Corporation common
stock if the records of the Corporation showed that you held your shares as of
the close of business on November 30, 2000. As of the close of business on that
date, a total of 7,267,018 shares of Coastal Financial Corporation common stock
were outstanding. Each share of common stock has one vote. As provided in the
Corporation's Articles of Incorporation, recorded holders of the Corporation's
common stock who beneficially own, either directly or indirectly, in excess of
10% of the Company's outstanding shares are not entitled to any vote with
respect to the shares held in excess of the 10% limit.

Attending the Meeting

If you are a beneficial owner of Coastal Financial common stock held by
a broker, bank or other nominee (i.e., in "street name"), you will need proof of
ownership to be admitted to the meeting. A recent brokerage statement or letter
from a bank or broker are examples of proof of ownership. If you want to vote
your shares of Coastal Financial common stock held in street name in person at
the meeting, you will have to get a written proxy in your name from the broker,
bank or other nominee which holds your shares.

Vote Required

The Annual Meeting will be held if a majority of the outstanding shares
of common stock entitled to vote is represented at the meeting. If you return
valid proxy instructions or attend the meeting in person, your shares will be
counted for purposes of determining whether there is a quorum, even if you
abstain form voting. Broker non-votes also will be counted for purposes of
determining the existence of a quorum. A broker non-vote occurs when a broker,
bank or other nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting power
with respect to that item and has not received voting instructions from the
beneficial owner.

In voting on the election of directors, you may vote in favor of all
nominees, withhold votes as to all nominees, or withhold votes as to specific
nominees. There is no cumulative voting for the election of directors. Directors
must be elected by a plurality of the votes cast at the annual meeting. This
means that the nominees receiving the greatest number of votes will be elected.
Votes that are withheld and broker non-votes will have no effect on the outcome
of the election.

Voting by Proxy

This Proxy Statement is being sent to you by the Board of Directors of
Coastal Financial for the purpose of requesting that you allow your shares of
Coastal Financial common stock to be represented at the annual meeting by the
persons named in the enclosed proxy card. All shares of Coastal Financial common
stock represented at the meeting by properly executed proxies will be voted in
accordance with the instructions indicated on the proxy card. If you sign and
return a proxy card without giving voting instructions, your shares will be
voted as recommended by the Corporation's Board of Directors.

If any matters not described in this proxy statement are properly
presented at the annual meeting, the persons named in the proxy card will use
their own judgment to determine how to vote your shares. This includes a motion
to adjourn or postpone the meeting in order to solicit additional proxies. If
the Annual Meeting is postponed or adjourned, your Coastal Financial common
stock may be voted by the persons named in the proxy card on the new meeting
date as well, unless you have revoked your proxy. The Corporation does not know
of any other matters to be presented at the meeting.

You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either advise the Secretary of the
Corporation in writing before your shares have been voted at the annual meeting,
deliver a later dated proxy, or attend the meeting and vote your shares in
person. Attendance at the annual meeting will not in itself constitute
revocation of your proxy.

If your Coastal Financial common stock is held in street name, you will
receive instructions from your broker, bank or other nominee that you must
follow in order to have your shares voted. Your broker may allow you to deliver
your voting instructions via the telephone or the Internet.

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STOCK OWNERSHIP

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The following table provides information as of November 30, 2000 with
respect to persons known to the Corporation to be the beneficial owners of more
than 5% of the Company's outstanding common stock. A person may be considered to
beneficially own any share of common stock over which he or she has, directly or
indirectly, sole or share voting or investing power.

Number of Percent of
Name and Address Shares Owned Common Stock
Outstanding

Sea Mist Associates Corporation 400,395 5.51

The following table provides information about the shares of Coastal
Financial Corporation common stock that may be considered to be owned by each
director or nominee for director of the Company and by all directors and
executive officers of the Company as a group as of November 30, 2000. Unless
otherwise indicated, each of the named individuals has sole voting power and
sole investment power with respect to the shares shown.

Number of Shares
Number of That May Be Acquired Percent of
Shares Owned Within 60 Days By Common Stock
(Excluding Options)(1) Exercising Options Outstanding(2)
------------------ ------------------ ---------------
Named Executive Officers (3)

Michael C. Gerald, President, Chief 83,683 70,977 2.11
Executive Officer and Director

Jimmy R. Graham, Executive Vice
President 76,042 45,105 1.66

Jerry L. Rexroad, Executive Vice
President and Chief Financial 27,749(4) 77,816 1.44
Officer

Steven J. Sherry, Executive Vice
President 49 5,251 0.08

Phillip G. Stalvey, Executive Vice
President 42,066 39,585 1.12

Directors of the Corporation
(Excluding Named Executive Officers)

James C. Benton 313,902(5) 7,533 4.42

G. David Bishop 239,456(6) 7,533 3.40

James T. Clemmons 175,650(7) 5,764 2.50

James P. Creel 382,762(8) 10,098 5.41

James H. Dusenbury 36,740(9) 10,098 0.65

Frank A. Thompson, II 5,897(10) -0- 0.08

All Executive Officers and
Directors as a Group (11 persons) 1,358,735 279,760 22.05

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(1) Pursuant to Rule 13d-3 under the Exchange Act, a person is deemed to be the
beneficial owner, for purposes of this table, of any shares of the
Corporation's Common Stock if he or she has voting and/or investment power
with respect to such security or has a right to acquire, through the
exercise of outstanding options or otherwise, beneficial ownership at any
time within 60 days from November 30, 2000. The table includes certain
shares owned by spouses, other immediate family members in trust, shares
held in retirement accounts or funds for the benefit of the named
individuals, and other forms of ownership, over which shares the named
persons possess voting and/or investment power.

(2) Based on 7,267,018 shares of Common Stock of the Corporation outstanding
and entitled to vote at the Meeting, plus the number of shares that may be
acquired within 60 days by each individual (or group of individuals) by
exercising options.

(3) Under SEC regulation, the term "named executive officer" is defined to
include the chief executive officer regardless of compensation level, and
the four most highly compensated executive officers, other than the chief
executive officer, whose total annual salary and bonus for the last
completed fiscal year exceeded $100,000.

(4) Includes 11,833 shares owned by Jerry L. Rexroad; 1,756 shares owned by
Jerry L. Rexroad - IRA; 101 shares owned jointly by Jerry L. Rexroad &
Robin E. Rexroad; 10,567 shares owned by Robin E. Rexroad; 3,492 shares in
the Coastal Financial Corporation's 401-K Plan for Jerry L. Rexroad.

(5) Includes 293,561 shares owned by RCEE, Inc. of which Mr. Benton is
President; 20,317 shares owned by Mr. Benton; 24 shares owned by Emma Ann
Lawton Benton.

(6) Includes 19,867 shares owned by G. David Bishop; 165,966 shares owned by G.
J. Bishop Trust, G. David Bishop, Trustee; 53,623 shares owned by Mary Ann
Bishop.

(7) Includes 108,441 shares owned by J. T. Clemmons; 65,495 shares owned by
Helen W. Clemmons; 1,570 shares owned by J. T. Clemmons - IRA; 144 shares
owned by Helen W. Clemmons - IRA.

(8) Includes 285,488 shares owned by Creel Outdoor Advertising, Inc.; 62,097
shares owned by Creel Outdoor Advertising, Inc. Profit Sharing Plan; 5,264
shares owned by C. Alicia Creel; 14,998 shares owned by Carolyn W. Creel;
452 shares owned by Carolyn W. Creel & James P. Creel; 452 shares owned by
Carolyn W. Creel & C. Alicia Creel; 3,364 shares owned by Carolyn W. Creel,
James P. Creel, Jr. & Alicia Creel Bame; 4,909 shares owned by James P.
Creel; 333 shares owned by Alicia Creel Bame & Carolyn W. Creel; 5,404
shares owned by Sun Graphics, Inc., Carolyn W. Creel, President.

(9) Includes 99 shares owned by James H. Dusenbury; 23,166 shares owned by
James H. Dusenbury - IRA; 11,772 shares owned by Brenda J. Dusenbury - IRA;
1,802 shares owned by Brenda J. Dusenbury & Heather K. Welch.

(10) Includes 1,072 shares owned by Frank A. Thompson, II; 3,200 shares owned by
Frank A. Thompson, II - SEP; 675 shares owned by Frank A. Thompson - IRA;
950 shares owned by Sharon Thompson - IRA.

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PROPOSAL 1 - ELECTION OF DIRECTORS

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The Corporation's Board of Directors consists of seven members. Six of
them are independent directors and one is a member of management. The Board is
divided into three classes with three-year staggered terms, with approximately
one-third of the directors elected each year. Two directors will be elected at
the annual meeting to serve for a three-year term, or until their respective
successors have been elected and qualified. The nominees are Michael C. Gerald
and James H. Dusenbury, both of whom are currently directors of the Corporation
and Coastal Federal Savings Bank.

It is intended that the proxies solicited by the Board of Directors
will be voted for the election of the nominees named above. If any nominee is
unable to serve, the persons named in the proxy card would vote your shares to
approve the election of any substitute proposed by the Board of Directors.
Alternatively, the Board of Directors may adopt a resolution to reduce the size
of the Board. At this time, the Board of Directors knows of no reason why any
nominee might be unable to serve.

The Board of Directors recommends a vote "FOR" the election of all of the
nominees.

Information regarding the nominees and the directors continuing in
office is provided below. Unless otherwise stated, each individual has held his
current occupation for the last five years. The age indicated in each
individual's biography is as of September 30, 2000. The indicated period for
service as a director includes service as a director of Coastal Federal Savings
Bank.

Nominees for Election as Directors

The directors standing for election are:

Michael C. Gerald. Mr. Gerald is the President and Chief Executive
Officer of the Corporation and Coastal Federal Savings Bank. Age 51.
Director since 1986.

James H. Dusenbury. Mr. Dusenbury is retired attorney/Dusenbury Law
Firm. Age 65. Mr. Dusenbury has been associated with the Bank since
1965 serving in the capacity of general counsel and Advisory Director.
Director since 1996.

Directors Continuing in Office

The following directors have terms ending in 2002

James C. Benton. Mr. Benton is President of C. L. Benton & Sons, Inc.
Age 68. Director since 1979.

James P. Creel. Mr. Creel is President of Creel Corporation. Age 61.
Director since 1990.

The following directors have terms ending in 2003.

James T. Clemmons. Mr. Clemmons is retired President of Coastal Federal
Savings Bank. Age 62. Director since 1979.

Frank A. Thompson, II. Mr. Thompson is President of Peoples
Underwriters, Inc. Age 43. Director since 1999.

G. David Bishop. Mr. Bishop is President of Waccamaw Community
Foundation. Age 47. Director since 1991.

Meetings and Committees of the Board of Directors

The Boards of Directors of the Corporation and Coastal Federal Savings
Bank conduct their business through meetings of the Boards and through their
committees. During the fiscal year ended September 30, 2000, the Board of
Directors of the Corporation held eleven (11) meetings and Board of Directors of
Coastal Federal Savings Bank held twenty-eight (28) meetings. No director of the
Corporation or Coastal Federal Savings Bank attended fewer than 75% of the total
meetings of the Boards and committees on which such Board member served during
this period.

The Executive Committee of the Board of Directors, consisting of
Directors Benton, Clemmons, Creel and Gerald, meets as necessary between
meetings of the full Board of Directors. The Executive Committee met three times
during the fiscal year ended September 30, 2000.

The Board of Directors of the Company has an Audit Committee,
consisting of Directors Bishop, Clemmons, Creel, Dusenbury and Thompson, which
is responsible for developing and monitoring the Company's audit program.

The Audit Committee selects the Corporation's outside auditors and
meets with them to discuss the results of the annual audit and any related
matters. The Audit Committee also receives and reviews the reports and findings
and other information presented to them by Coastal Federal Savings Bank's
officers regarding financial reporting policies and practices. The Audit
Committee met five (5) times during the fiscal year ended September 30, 2000.

The Board of Directors of the Corporation acts as a nominating
committee for selecting the nominees for election as directors. The Board of
Directors met once in its capacity as the nominating committee during the year
ended September 30, 2000. The Corporation's Bylaws provide for Shareholder
nomination of directors. See "Stockholder Proposals and Nominations".

Directors' Compensation

Members of the Board of Directors of Coastal Federal receive a fee of
$12,000 annually, except for the Chairman of the Board, who receives $19,500
annually. Members of the Board of Directors of Coastal Financial receive $2,500
annually. Honorary Directors of Coastal Financial Corporation receive $1,000
annually. Directors who are members of the Bank's Executive Committee, which
meets on an as-needed basis, are not compensated. Non-Associate directors who
are members of the Bank's Loan Committee receive $50 per committee meeting.
Total fees paid to Directors of Coastal Financial Corporation and its
subsidiaries during the fiscal year ended September 30, 2000 were $150,550.

2000 Stock Option Plan. At the 2000 Annual Meeting, the Corporation's
Shareholders approved the 2000 Stock Option Plan . All Directors participate in
the 2000 Stock Option Plan. On February 2, 2000, each Director received stock
options to purchase 2,310 shares of the Corporation's common stock at an
exercise price of $10.91, the market value of common stock on that date.

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EXECUTIVE COMPENSATION

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Summary Compensation Table

The following information is furnished for the Chief Executive Officer
and the four other most highly compensated executive officers ("Named Executive
Officer").

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SUMMARY COMPENSATION TABLE (1)
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Annual Compensation
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Long-Term
Compensation
----------------------------------
Awards
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Securities All Other
Year Salary Bonus Other Annual Underlying Compensation
Name and ($)(1)(2) ($)(3) Compensation Options/ ($)(5)
Principal ($)(4) (#)
Position
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Michael C. Gerald, 2000 200,000 145,500 18,700 12,452 7,500
President, Chief 1999 185,000 135,899 17,000 17,191 8,202
Executive Officer 1998 165,000 121,275 16,100 17,555 7,719
& Director

Jimmy R. Graham, 2000 115,500 82,740 - 9,325 7,500
Executive Vice 1999 110,000 79,550 100 10,000 9,011
President 1998 90,000 66,900 100 14,222 7,369

Jerry L. Rexroad, 2000 156,000 106,230 4,950 9,325 8,700
Executive Vice 1999 145,600 100,198 5,250 12,667 10,234
President & Chief 1998 140,000 105,400 4,100 14,222 7,701
Financial Officer

Steven J. Sherry,
Executive Vice 2000 127,000 86,660 - 9,325 4,654
President 1999 120,000 85,350 - 7,500 17,759
1998 120,000 25,000 - - -
Phillip G. Stalvey,
Executive Vice 2000 140,000 96,950 1,600 9,325 7,500
President 1999 131,250 91,875 1,850 12,667 9,321
1998 125,000 95,875 2,600 14,222 8,138
===================================================================================================

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(1) All compensation, including fringe benefits, are paid by the Bank.
(2) Does not include amounts payable pursuant to an employment agreement in
event of a "change in control" of the Corporation. See "Employment
Agreements."
(3) Reflects bonuses awarded for the fiscal year which were paid in subsequent
fiscal year.
(4) Reflects directors' fees received during the fiscal year for service on the
Board of Directors of the Corporation and/or its Subsidiaries. Does not
include perquisites which did not exceed, in the aggregate, the lesser of
$50,000 or 10% of salary and bonus.
(5) Includes employer contributions to the 401K Profit Sharing Plan & Trust of
Coastal Financial Corporation. Also includes amounts paid for unused
vacation in accordance with the Corporation's Compensation plan to all
Associates and $14,145.00 reimbursement for moving expenses for Steve
Sherry in 1999.

Option Grants Table

The following table sets forth the qualified stock options granted under the
2000 Stock Option and Incentive Plan to the individuals named in the Summary
Compensation Table during the fiscal year ended September 30, 2000. Also listed
are the hypothetical gains or "options spreads" that would exist for the
respective options. These gains are based on assumed rates of annual compound
stock price appreciation of 5% and 10% from the date the options were granted
over the full option term.

==================================================================================================================
INDIVIDUAL GRANTS
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Potential Realizable Value
at Assumed Annual Rates
Number of Percentage of of Stock Price Appreciation
Securities Total For Option Term (2)
Underlying Options/
Options/ Granted to Exercise or ------------- ----------------
Granted (1) Associates Base Price
In Fiscal Per Share Expiration
Name (#) Year ($/Sh) Date 5% ($) 10% ($)
- ---------------------- --------------- -------------- -------------- -------------- ------------- ----------------

Michael C. Gerald 10,136 6.27% 11.36 2009 72,414 183,511
1,732 1.08% 10.91 2010 11,883 30,115
2,310 1.43% 10.91 2010 15,849 40,165

Jimmy R. Graham 8,950 5.54% 11.36 2009 63,940 162,039
1,732 1.08% 10.91 2010 11,883 30,115

Jerry L. Rexroad 8,950 5.54% 11.36 2009 63,940 162,039
1,732 1.08% 10.91 2010 11,883 30,115

Phillip G. Stalvey 8,950 5.54% 11.36 2009 63,940 162,039
1,732 1.08% 10.91 2010 11,883 30,115

Steven J. Sherry 8,950 5.54% 11.36 2009 63,940 162,039
1,732 1.08% 10.91 2010 11,883 30,115
==================================================================================================================

(1) Shares granted have been adjusted for the 5% stock dividend effective
December 1, 1999 and the 10% stock dividend effective March 28, 2000.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises depend on the future performance
of Coastal Financial's Common Stock. There can be no assurance that the
amounts reflected in this table will be achieved.

Option Exercise Table

The following table shows stock option exercises by the individuals named in the
Summary Compensation Table during the fiscal year ended September 30, 2000. In
addition, this table includes the number of shares covered by both exercisable
and non-exercisable options as of September 30, 2000. Also reported are the
values for "in-the-money" options, which represent the positive spread between
the exercise price of any such existing options and the year-end price of
Coastal Financial Corporation Common Stock.

====================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
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Dollar Value of
Number of Unexercised
Unexercised In-the-Money
Number of Options at Options at
Shares FY-End FY-End
Acquired Dollar
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
- ------------------------- --------------- ------------------- ----------------------- ------------------------------

Michael C. Gerald -0- -0- 61,585/43,404 58,642/-0-

Jimmy R. Graham -0- -0- 34,522/36,212 29,320/-0-

Jerry L. Rexroad 3,570 $21,510 66,617/38,676 114,367/-0-

Phillip G. Stalvey 4,000 $17,579 30,738/38,676 21,277/-0-

Steven J. Sherry -0- -0- 3,462/15,882 -0-/-0-

========================= =============== =================== ======================= ==============================

Employment Agreement

Coastal Federal entered into an employment agreement with Mr. Gerald
upon the completion of the Bank's conversion from mutual to stock form.
Effective September 30, 2000 such employment agreement has an initial term of
three years and provides for an annual base salary of $212,000 subject to annual
adjustment by the Board of Directors. Additionally, on each anniversary of the
commencement date of the agreement, the term of such agreement is extended for
an additional year unless a notice is received from either the Bank or Mr.
Gerald and subject to the review and approval of the Board of Directors. The
agreement also provides for severance payments if employment is terminated
following a change of control. These payments, which will be made promptly after
any change of control, will be equal to 2.99 times the average annual
compensation paid to Mr. Gerald during the five years immediately preceding the
change in control.

Coastal Federal entered into an employment agreement with Mr. Rexroad
effective March 21, 1995. Effective September 30, 2000 such employment agreement
has an initial term of three years and provides for an annual base salary of
$166,920 subject to annual adjustment by the Board of Directors. Additionally,
on each anniversary of the commencement date of the agreement, the term of such
agreement is extended for an additional year unless a notice is received from
either the Bank or Mr. Rexroad and subject to the review and approval of the
Board of Directors. The agreement also provides for severance payments if
employment is terminated following a change of control. These payments, which
will be made promptly after any change of control, will be equal to 2.99 times
the average annual compensation paid to Mr. Rexroad during the five years
immediately preceding the change in control.

Coastal Federal entered into an employment agreement with Mr. Stalvey
effective October 21, 1997. Effective September 30, 2000, such employment
agreement has an initial term of three years and provides for an annual base
salary of $151,200 subject to annual adjustment by the Board of Directors.
Additionally, on each anniversary of the commencement date of the agreement, the
term of such agreement is extended for an additional year unless a notice is
received from either the Bank or Mr. Stalvey and subject to the review and
approval of the Board of Directors. The agreement also provides for severance
payments if employment is terminated following a change of control. These
payments, which will be made promptly after any change of control, will be equal
to 2.99 times the average annual compensation paid to Mr. Stalvey during the
five years immediately preceding the change in control.

Coastal Federal entered into an employment agreement with Mr. Graham
effective October 27, 1998. Effective September 30, 2000, such employment
agreement has an initial term of one year and provides for an annual base salary
of $122,430. Additionally, on each anniversary of the commencement date of the
agreement, the term of such agreement is extended for an additional year unless
a notice is received from either the Bank or Mr. Graham and subject to the
review and approval of the Board of Directors. The agreement also provides for
severance payments if employment is terminated following a change of control.
These payments, which will be made promptly after any change of control, will be
equal to 1.00 times the average annual compensation paid to Mr. Graham during
the five years immediately preceding the change in control.

Coastal Federal entered into an employment agreement with Mr. Sherry
effective October 27, 1998. Such employment agreement has an initial term of one
year and provides for an annual base salary of $133,350. Additionally, on each
anniversary of the commencement date of the agreement, the term of such
agreement is extended for an additional year unless a notice is received from
either the Bank or Mr. Sherry and subject to the review and approval of the
Board of Directors. The agreement also provides for severance payments if
employment is terminated following a change of control. These payments, which
will be made promptly after any change of control, will be equal to 1.00 times
the average annual compensation paid to Mr. Sherry during the five years
immediately preceding the change in control.

The term "control" is defined in the agreement described above as,
among other things, any time during the period of employment when a change of
control is deemed to have occurred under regulations of the Office of Thrift
Supervision ("OTS") or a change in the composition of more than a majority of
the Board of Directors of the Corporation. Based upon the compensation levels of
Messrs. Gerald, Rexroad, Stalvey, Graham and Sherry, the aggregate payment which
would have been payable under the terms of the agreement had a change in control
occurred on September 30, 2000 was approximately $866,457, $693,188, $596,744,
$166,088 and $114,202, respectively.

Notwithstanding anything to the contrary set forth in any of the
Corporation's previous filings under the Securities Act of 1933, as amended, or
the 1934 Act that might incorporate future filings, including this Proxy
Statement, in whole or in part, the following Report of the Compensation and
Benefits Committee and Performance Graph shall not be incorporated by reference
into any such filings.

Report of the Compensation and Benefits Committee. The Compensation and Benefits
Committee of the Board of Directors of the Corporation is responsible for
establishing, implementing and monitoring all compensation policies of the
Corporation and its primary operating subsidiary, Coastal Federal. The Committee
is also responsible for evaluating the performance of the Chief Executive
Officer of the Corporation and recommending appropriate compensation levels. The
Chief Executive Officer evaluates the performance of executive officers of the
Corporation and recommends individual compensation levels to the Compensation
and Benefits Committee.

The Compensation and Benefits Committee believes that a compensation
plan for executive officers should take into account management skills,
long-term performance results and Shareholder returns. Compensation policies
must be maintained to promote: 1) the attraction and retention of highly
qualified executives; 2) motivation of executives that is related to the
performance of the individual and the Corporation; 3) current and long-term
performance; and 4) a financial interest in the success of the Corporation
similar to the interest of its Shareholders.

The Corporation's current compensation plan involves a combination of
salary and bonus to reward short-term performance and grants of stock options to
encourage long-term performance. The salary levels of the executive officers are
designed to be competitive within the financial services industry. Compensation
surveys are utilized to determine appropriate salary adjustments. A 401(k) plan,
in which all executive officers and Associates of Coastal Financial may
participate, has been designed to align their interests with those of the
Shareholders of the Corporation. Matching contributions to the 401(k) plan are
paid based upon the attainment of established levels of Return on Average
Shareholders' Equity ("Return on Equity"). The Corporation's Executive Bonus
Plan provides for the payment of a bonus on a graduated scale if the
Corporation's consolidated Return on Average Equity equals or exceeds 14.0%,
excluding any non-recurring items as determined by the Corporation's Board of
Directors. The Corporation's Return on Equity in fiscal 2000 was 19.50%. This
compares to a Return on Equity in fiscal 1999 of 19.36%. The Executive Bonus
Plan escalates upon the attainment of higher levels of Return on Equity. Stock
options are the Corporation's primary long-term compensation program designed to
reward executive performance consistent with performance that benefits
Shareholders. Awards of stock options are intended to provide executives with
increased motivation and incentive to exert their best efforts on behalf of the
Corporation by enlarging their personal stake in its success through the
opportunity to increase their stock ownership in the Corporation. Options issued
to executives are at a price equal to the closing price of the Corporation's
stock on the date of grant in order to ensure that any value derived from the
grant is realized by Shareholders generally. The amount of options granted to an
Executive Officer is based upon the Corporation's performance, the officer's
performance and relative responsibilities within the Corporation. Options
generally vest over a period of five years.

During the fiscal year ended September 30, 2000, the base compensation
of Michael C. Gerald, President and Chief Executive Officer of the Corporation
was $200,000. For fiscal 2001 Mr. Gerald's base compensation was increased to
$212,000.

Based upon the factors discussed above, the Compensation and Benefits
Committee continues to believe that Mr. Gerald's compensation package as Chief
Executive Officer and President of the Corporation appropriately reflects the
Company's short term and long term performance goals.

The Compensation and James C. Benton J. T. Clemmons
Benefits Committee James P. Creel

Compensation Committee Interlocks and Insider Participation. There are
no interlocks or insider participation with respect to the Compensation and
Benefits Committee of the Board of Directors of the Corporation.

Performance Graph. The following graph compares the Corporation's cumulative
Shareholder return on its Common Stock with the return on the Nasdaq Composite
Index and a peer group, the Nasdaq Bank Index. All cumulative returns assume the
investment of $100.00 in each of the Corporation's Shares, the Nasdaq Bank Index
and the Nasdaq Composite Index on September 30, 1995.

[PERFORMANCE GRAPH APPEARS HERE]

9/30/95 9/30/96 9/30/97 9/30/98 9/30/99 9/30/00

Corporation 100.00 157.06 252.75 250.85 206.84 132.45
Nasdaq Bank Index 100.00 127.65 212.64 210.94 242.58 240.95
Nasdaq Composite Index 100.00 118.68 162.92 165.50 270.38 358.96

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's executive officers and directors, and persons who own more than
10% of any registered class of the Company's equity securities, to file reports
of ownership and changes in ownership with the SEC. Executive officers,
directors and greater than 10% stockholders are required by regulation to
furnish the Corporation with copies of all Section 16(a) reports they file.

Based solely on its review of the copies of the reports it has received
and written representation provided to the Corporation from the individuals
required to file the reports, the Corporation believes that each of the
Corporation's executive officers and directors has complied with applicable
reporting requirements for transactions in Coastal Financial Corporation common
stock during the fiscal year ended September 30, 2000.

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TRANSACTIONS WITH MANAGEMENT

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Federal regulations require that all loans or extensions of credit to
executive officers and directors of insured financial institutions must be made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons,
except for loans made pursuant to programs generally available to all employees,
and must not involve more than the normal risk of repayment or present other
unfavorable features. Coastal Federal Savings Bank is therefore prohibited from
making any new loans or extensions of credit to executive officers and directors
at different rates or terms than those offered to the general public, except for
loans made pursuant to programs generally available to all employees, and has
adopted a policy to this effect. In addition, loans made to a director or
executive officer in an amount that, when aggregated with the amount of all
other loans to such person and his or her related interests, are in excess of
the greater of $25,000 or 5% of the institution's capital and surplus (up to a
maximum of $500,000) must be approved in advance by a majority of the
disinterested members of the Board of Directors.

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AUDIT COMMITTEE REPORT

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The Audit Committee of the Board of Directors is responsible for
providing independent, objective oversight of Coastal Financial's independent
auditors, accounting functions and internal controls. The Audit Committee is
composed of five directors, each of whom is independent under the National
Association of Securities Dealers' listing standards. The Audit Committee acts
under a written charter adopted by the Board of Directors, a copy of which is
attached to this proxy statement as Appendix A.

The Audit Committee reviewed and discussed the annual financial
statements with management and the independent accountants. As part of this
process, management represented to the Audit Committee that the financial
statements were prepared in accordance with generally accepted accounting
principles. The Audit Committee also received and reviewed written disclosures
and a letter from the accountants concerning their independence as required
under applicable standards for auditors of public companies. The Audit Committee
discussed with the accountants the contents of such materials, the accountant's
independence and the additional matters required under Statement on Auditing
Standards No. 61. Based on such review and discussion, the Audit Committee
recommended that the Board of Directors include the audited consolidated
financial statements in Coastal Financial's Annual Report on Form 10-K for the
year ended September 30, 2000 for filing with the Securities and Exchange
Commission.

Members of the Audit Committee:

G. David Bishop
J.T. Clemmons
James P. Creel
James H. Dusenbury - Chairman
Frank A. Thompson II

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MISCELLANEOUS

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The Corporation will pay the cost of this proxy solicitation. The
Corporation will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Coastal Financial Corporation common stock. In
addition to soliciting proxies by mail, directors, officers and regular
employees of the Corporation may solicit proxies personally or by telephone.
None of these persons will receive additional compensation for these activities.

The Company's Annual Report to Shareholders has been mailed to
shareholders of record as of the close of business on November 30, 2000. Any
shareholder who has not received a copy of the Annual Report may obtain a copy
by writing to the Secretary of the Corporation. The Annual Report is not to be
treated as part of the proxy solicitation material or as having been
incorporated herein by reference.

A copy of the Corporation's Form 10-K, without exhibits, for the fiscal
year ended September 30, 2000, as filed with the Securities and Exchange
Commission, will be furnished without charge to Shareholders of record as of the
close of business on November 30, 2000 upon written request to Corporate
Secretary, Coastal Financial Corporation, Myrtle Beach, South Carolina.

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SHAREHOLDER PROPOSALS AND NOMINATIONS

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Proposals that Shareholders seek to have included in the proxy
statement for the Corporation's next annual meeting must be received by the
Corporation no later than August 10, 2001. Any such proposals will be subject to
the requirements of the proxy rules adopted by the Securities and Exchange
Commission.

The Company's Bylaws provide that in order for a Shareholder to make
nominations for the election of directors or proposals for business to be
brought before the annual meeting, a shareholder must deliver notice of such
nominations and/or proposals to the Secretary not less than 30 nor more than 60
days prior to the date of the annual meeting; provided that if less than 40
days' notice of the annual meeting is given to shareholders, such notice must be
delivered not later than the close of the tenth day following the day on which
notice of the annual meeting was mailed to Shareholders. A copy of the Bylaws
may be obtained from the Corporation.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Susan J. Cooke

Susan J. Cooke
Secretary

Myrtle Beach, South Carolina
December 15, 2000

APPENDIX A

COASTAL FINANCIAL CORPORATION
AUDIT COMMITTEE CHARTER
ADOPTED BY THE BOARD OF DIRECTORS ON MAY 24, 2000
AS AMENDED DECEMBER 12, 2000

I. Audit Committee Purpose

The Audit Committee is appointed by the Board of Directors to assist in
fulfilling its oversight responsibilities. The Audit Committee's primary
responsibilities are to:

o Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.

o Monitor the independence and performance of the Company's independent
auditors and the internal auditing function.

o Provide an avenue of communication among the independent auditors,
Leadership, the Internal Audit Function, and the Board of Directors.

o Review an annual plan prepared by the Internal Audit Function to
review the risk areas of the Company and monitor Leadership's
competency in controlling such risks.

The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and has direct access to
the independent auditors, the Internal Audit Function, and anyone else in
the organization. The Audit Committee has the ability to retain, at the
Company's expense, special legal, accounting, or other consultants or
experts it deems necessary in the performance of its responsibilities.

II. Audit Committee Composition and Meetings

Audit Committee members shall meet the most current requirements of the
National Association of Securities Dealers (NASD) Exchange.

Audit Committee members, and the Audit Committee Chairperson, shall be
appointed by the Board on the recommendation of the Nominating Committee.

The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. A quorum of the Audit Committee shall be declared
when a majority of its appointed members are in attendance. The Audit
Committee Chairperson shall approve an agenda, which shall be consistent
with this charter, in advance of each meeting. The Committee shall meet
privately in executive session at least annually with the Chief Executive
Officer (CEO) and the Chief Financial Officer (CFO), the independent
auditors, and as a Committee to discuss any matters that the Committee or
each of these groups believe should be discussed. The Committee shall meet
privately with those primarily responsible for the Internal Audit Function
at each meeting. The Committee may ask members of Leadership or others to
attend meetings and provide pertinent information as necessary.

COASTAL FINANCIAL CORPORATION
AUDIT COMMITTEE CHARTER
ADOPTED BY THE BOARD OF DIRECTORS ON MAY 24, 2000
AS AMENDED DECEMBER 12, 2000

III. Responsibilities

Audit Committee Review Procedures

1. The Audit Committee shall review and assess the adequacy of this Charter at
least annually. The charter shall be submitted to the Board of Directors
for approval and the document shall be published in the Company's annual
proxy statement at least every three years in accordance with SEC
regulations.

2. The Audit Committee shall review the Company's annual audited financial
statements prior to filing or distribution. The review should include
discussion with the CEO, CFO and independent auditors of significant issues
regarding accounting principles, practices, and judgments.

3. At least annually, the Audit Committee shall, in consultation with the CEO,
CFO, the independent auditors, and those primarily responsible for the
Internal Audit Function:

o Consider the integrity of the Company's financial reporting processes
and controls.

o Discuss significant financial risk exposures and the steps Leadership
has taken to monitor, control, and report such exposures.

o Review significant concerns of the independent auditors and those
primarily responsible for the Internal Audit Function, together with
Leadership's responses, including the status of previous
recommendations.

o Discuss any significant changes to the Company's accounting principles
and any items required to be communicated by the independent auditors
in accordance with SAS 61. Items to be communicated include:

|_| The auditor's responsibility under Generally Accepted Auditing
Standards;
|_| Significant accounting policies;
|_| Leadership judgments and accounting estimates;
|_| Other information in documents containing audited financial
statements;
|_| Disagreements with Leadership;
|_| Consultation with other accountants by Leadership.

Independent Auditors

4. The independent auditors are ultimately accountable to the Audit Committee
and the Board of Directors. The Audit Committee shall review the
independence and performance of the independent auditors and annually
recommend to the Board of Directors the appointment of the independent
auditors or approve any discharge of auditors when circumstances warrant.

COASTAL FINANCIAL CORPORATION
AUDIT COMMITTEE CHARTER
ADOPTED BY THE BOARD OF DIRECTORS ON MAY 24, 2000
AS AMENDED DECEMBER 12, 2000

5. The Audit Committee shall annually review and recommend the fees and other
significant compensation to be paid to the independent auditors.

6. The Audit Committee shall review and approve requests for management
consulting engagements to be performed by the independent auditor's firm
and be advised of any other study undertaken at the request of Leadership
that is beyond the scope of the audit engagement letter, when fees for such
an engagement exceed $50,000.

7. On an annual basis, the Audit Committee shall review and discuss with the
independent auditors all relationships they have with the Company that
could impair the auditors' independence.

8. The Audit Committee shall review the independent auditor's audit plan and
discuss the audit scope, qualifications of the independent auditor's
staffing for the engagement, reliance upon Leadership and internal audit,
and the general audit approach. The Committee should review the independent
auditor's audit plan to see that it is sufficiently detailed and covers any
significant areas of concern that the Audit Committee may have.

9. The Audit Committee will engage the independent auditors to conduct limited
quarterly reviews of interim financial information and the auditors will
report the results of their review to the Committee, or at least the
Committee Chairperson.

10. Prior to releasing the Company's annual report to Shareholders, the Audit
Committee shall:

o Discuss the results of the audit with the independent auditors and
inquire about changes to the audit plan, restrictions on scope of
activities, and observations of control weaknesses.

o Discuss with the CEO, CFO, those primarily responsible for the
Internal Audit Function and the independent auditors the quality of
the accounting principles and underlying estimates used in the
preparation of the Company's financial statements.

o Discuss with the independent auditors the clarity of the financial
disclosure practices used or proposed by the Company.

o Inquire as to the independent auditor's views about whether
Leadership's choices of accounting principles appear reasonable from
the perspective of income, asset and liability recognition, and
whether those principles are common practices or are minority
practices.

o Discuss any important conclusions concerning the year-end audit well
in advance of the public release of the annual audited financial
statements.

Internal Audit Function

11. Annually review the budget and the annual audit plan of the Internal Audit
Function.

12. Periodically review changes in the budget and the annual audit plan, and
the activities, organizational structure and qualifications of those
primarily responsible for the Internal Audit Function.

13. Those primarily responsible for the Internal Audit Function shall
communicate regularly with the CEO, but have a direct reporting
responsibility to the Audit Committee Chairperson.

COASTAL FINANCIAL CORPORATION
AUDIT COMMITTEE CHARTER
ADOPTED BY THE BOARD OF DIRECTORS ON MAY 24, 2000
AS AMENDED DECEMBER 12, 2000

14. Review the appointment, performance, compensation, and replacement of those
primarily responsible for the Internal Audit Function.

15. Review reports presented by those primarily responsible for the Internal
Audit Function, together with Leadership's response and follow-up to these
reports.

16. Receive periodic regulatory compliance reports from those primarily
responsible for the Internal Audit Function on the Company's compliance
with all applicable laws, rules and regulations.

17. Receive an annual report from those primarily responsible for the Internal
Audit Function on the implementation, administration, and effectiveness of
the Company's security program, in compliance with the Bank Protection Act.

18. Receive reports of Suspicious Activity Reports filed by the Company. Report
this information to the Board of Directors at the next regularly scheduled
meeting of the Board.

Other Audit Committee Responsibilities

19. Annually prepare a report to Shareholders as required by the Securities and
Exchange Commission. The report should be included in the Company's annual
proxy statement, and should indicate that the Committee has accomplished
the following:

o Reviewed and discussed the audited financial statements with
Leadership;

o Discussed with the independent auditors the matters required to be
discussed by SAS 61; and

o Received certain disclosures from the independent auditors regarding
their independence as required by the Independence Standards Board
(ISB).

o Discussed with the independent auditors their independence; and

o Based on the review and discussion of the audited financial statements
with Leadership and the independent auditors, has recommended to the
full Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K.

20. Maintain minutes of meetings and submit a report to the full Board at a
regularly scheduled meeting of the full Board.

21. Perform any other activities consistent with this Charter, the Company's
by-laws, and governing law as the Committee or the Board deems necessary or
appropriate.

While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements are complete, accurate and
in accordance with generally accepted accounting principles. This is the
responsibility of Leadership and the independent auditor. Nor is it the duty of
the Audit Committee to conduct investigations, to resolve disagreements, if any,
between Leadership and the independent auditor or to assure compliance with laws
and regulations.

REVOCABLE PROXY
COASTAL FINANCIAL CORPORATION

X PLEASE MARK VOTES
AS IN THIS EXAMPLE

ANNUAL MEETING OF SHAREHOLDERS
JANUARY 24, 2001

The undersigned hereby appoints the official proxy committee, consisting of
all of the members of the Board of Directors of Coastal Financial Corporation,
Myrtle Beach, South Carolina, with full powers of substitution to act as
attorneys and proxies for the undersigned, to vote all shares of Common Stock of
Coastal Financial Corporation which the undersigned is entitled to vote at the
Annual Meeting of Shareholders, to be held at the Myrtle Beach Martinique, 7100
N. Ocean Boulevard, Myrtle Beach, South Carolina, on Wednesday, January 24,
2001, at 2:00 p.m., Eastern Time, and at any and all adjournments thereof, as
indicated to the right:

------------------------------------
Please be sure to sign below and Date
date this Proxy in the box provided.
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- --------------------------------------------------------------------------------
Shareholder sign above Co-holder (if any) sign above

1. The election as directors of all nominees listed (except as marked to the
contrary below):

For a Three Year Term: Michael C. Gerald, James H. Dusenbury

INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.

- --------------------------------------------------------------------------------

2. In their discretion, such other matters that may properly come before the
Meeting or any adjournments thereof.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSAL.

THIS PROXY, PROPERLY SIGNED AND DATED, WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL STATED. IF
ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD
OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING. THIS
PROXY ALSO CONFERS DISCRETIONARY AUTHORITY ON THE OFFICIAL PROXY COMMITTEE TO
VOTE WITH RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEE IS
UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE, AND MATTERS INCIDENT TO THE
CONDUCT OF THE 2001 ANNUAL MEETING.

=> Detach above card, sign, date and mail in postage paid envelope provided. =>

COASTAL FINANCIAL CORPORATION

- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.

Should the undersigned be present and elect to vote at the Annual Meeting
or at any adjournment thereof and after notification to the Secretary of the
Corporation at the Meeting of the Shareholder's decision to terminate this
proxy, then the power of said attorneys and proxies shall be deemed terminated
and of no further force and effect.
The above signed acknowledges receipt from the Corporation prior to the
execution of this proxy, of a notice of the Meeting, a proxy statement dated
December 15, 2000 and the 2000 Annual Report to Shareholders.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, only one signature is required, but each
holder should sign, if possible.

PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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