SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

[ X ] Filed by the registrant

[ ] Filed by a party other than the registrant

Check the appropriate box:

[ ] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))

[ ] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12

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

-------------------------------------
COASTAL FINANCIAL CORPORATION

December 20, 1999

Dear Shareholder:

You are cordially invited to attend the 2000 Annual Meeting of
Shareholders of Coastal Financial Corporation to be held at the Myrtle Beach
Martinique, 7100 N. Ocean Boulevard, Myrtle Beach, South Carolina, on Monday,
January 24, 2000, at 2:00 p.m., Eastern Standard Time.

The attached Notice of Annual Meeting of Shareholders and Proxy
Statement 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 any questions
Shareholders may have.

To ensure proper representation of your shares at the meeting, please
fill in, sign, date and return the enclosed proxy card in the enclosed
postage-prepaid envelope as soon as possible, even if you currently plan to
attend the meeting. This will not prevent you from voting in person, but will
assure that your vote is counted if you are unable to attend 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 29577-3129
(843) 448-5151

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 24, 2000
- --------------------------------------------------------------------------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
("Meeting") of Coastal Financial Corporation ("Corporation") will be held at the
Myrtle Beach Martinique, 7100 N. Ocean Boulevard, Myrtle Beach, South Carolina,
on Monday, January 24, 2000, at 2:00 p.m., Eastern Standard Time.

A Proxy Card and a Proxy Statement for the Meeting are enclosed.

The Meeting is for the purpose of considering and acting upon:

1. The election of three directors of the Corporation;

2. The ratification of the Coastal Financial Corporation
2000 Stock Option Plan; and

3. Such other matters as may properly come before the
Meeting or any adjournments thereof.

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

Any action may be taken on the foregoing proposal at the Meeting on
the date specified above, or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned. Pursuant to the Bylaws, the Board of
Directors has fixed the close of business on November 30, 1999 as the record
date for the determination of the Shareholders entitled to notice of and to vote
at the Meeting and any adjournments thereof.

You are requested to fill in, sign and date the enclosed form of Proxy
which is solicited by the Board of Directors and to 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
-----------------
Michael C. Gerald
SECRETARY

Myrtle Beach, South Carolina
December 20, 1999

IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE 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
2619 Oak Street
Myrtle Beach, South Carolina 29577-3129
(843) 448-5151

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ANNUAL MEETING OF SHAREHOLDERS
January 24, 2000

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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 the "Corporation") to be used at the Annual Meeting of
Shareholders of the Corporation ("Meeting"). The Meeting will be held at the
Myrtle Beach Martinique, 7100 N. Ocean Boulevard, Myrtle Beach, South Carolina,
on Monday, January 24, 2000, at 2:00 p.m., Eastern Standard Time. The
accompanying Notice of Annual Meeting of Shareholders and this Proxy Statement
are being first mailed to Shareholders on or about December 20, 1999.

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REVOCATION OF PROXIES
- --------------------------------------------------------------------------------

Shareholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice delivered in person or mailed to the Secretary of the Corporation at 2619
Oak Street, Myrtle Beach, South Carolina 29577-3129, or by filing a later dated
proxy prior to a vote being taken on the proposals at the Meeting. A proxy will
not be voted if a Shareholder attends the Meeting and votes in person. Proxies
solicited by the Board of Directors of Coastal Financial will be voted in
accordance with the directions given therein. Where no instructions are
indicated, properly executed and dated proxies will be voted in favor of the
nominees for directors set forth herein and in favor of the Coastal Financial
Corporation 2000 Stock Option Plan.

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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
- --------------------------------------------------------------------------------

Shareholders of record as of the close of business on November 30,
1999, are entitled to one vote for each share of common stock ("Common Stock")
of the Corporation then held. As of November 30, 1999, the Corporation had
6,433,193 shares of Common Stock issued and outstanding.

The presence, in person or by proxy, of at least a majority of the
total number of outstanding shares of Common Stock entitled to vote is necessary
to constitute a quorum at the Meeting. The three directors to be elected at the
Meeting will be elected by a plurality of the votes cast by the shareholders
present in person or by proxy and entitled to vote. Shareholders are not
permitted to cumulate their votes for the election of Directors. Votes may be
cast for or withheld from each nominee. Votes that are withheld will have no
effect on the outcome of the election because directors will be elected by a
plurality of votes cast. In voting on the ratification of the Coastal Financial
Corporation 2000 Stock Option Plan, Shareholders may vote in favor of the
proposal, vote against the proposal or abstain from voting. This matter will be
decided by the affirmative vote of a majority of the votes cast at the Meeting.
Therefore, abstentions and broker non-votes will have no effect on the voting.

Persons and groups who beneficially own in excess of 5% of the
Corporation's Common Stock are required to file certain reports with the
Securities and Exchange Commission ("SEC") regarding such ownership pursuant to
the Securities and Exchange Act of 1934, as amended ("1934 Act"). Based upon
such reports, the following table sets forth, as of November 30, 1999, certain
information as to those persons who were beneficial owners of more than 5% of
the outstanding shares of Common Stock. Management knows of no persons other
than those set forth below who owned more than 5% of the outstanding shares of
Common Stock beneficially owned by each director of the Corporation, the "named
executive officers" of the Corporation, and all executive officers and directors
of the Corporation as a group.

Amount and Nature Percent of
of Beneficial Common Stock
Beneficial Owner Ownership (1) Outstanding (2)
- ---------------- ------------- ---------------

Beneficial Owners of More Than 5%
(Excluding Directors of the Corporation)

Sea Mist Associates Corporation 345,579 (3) 5.37

Named Executive Officers (4)

Michael C. Gerald, President, Chief
Executive Officer and Director 175,723 2.73
Jimmy R. Graham, Executive Vice President 97,706 1.52
Jerry L. Rexroad, Executive Vice President
and Chief Financial Officer 68,790 (5) 1.06
Steven J. Sherry, Executive Vice President 2,409 0.04
Phillip G. Stalvey, Executive Vice President 61,935 0.96

Directors of the Corporation
(Excluding Named Executive Officers)

G. David Bishop 178,052 (6) 2.76
James T. Clemmons 158,811 (7) 2.47
James H. Dusenbury 47,924 0.74
James C. Benton 278,302 (8) 4.32
James P. Creel 341,367 (9) 5.30
Frank A. Thompson, II 950 0.01

All Executive Officers and
Directors as a
Group (11 persons) 1,411,969 (10) 21.94

- --------------------------
(1) Under 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, 1999. 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. Shares do not include 5%
stock dividend declared on November 10, 1999, record date of December 1,
1999, and payable December 15, 1999.

(2) Based on 6,433,193 shares of Common Stock of the Company 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) Includes 2,773 shares owned by Neil Ammons, owner.

(4) 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
(5) Includes 8,591 shares owned by Jerry L. Rexroad; 1,521 shares owned by
Jerry L. Rexroad - IRA; 86 shares owned jointly by Jerry L. Rexroad & Robin
E. Rexroad, 9,151 shares owned by Robin E. Rexroad; 125 shares in the
Coastal Financial Corporation's 401-K Plan for Jerry L. Rexroad and 49,316
incentive stock options exercisable within 60 days of November 30, 1999.
(6) Includes 18,061 shares owned by G. David Bishop; 104,718 shares for Bishop
Investment Company; 48,749 shares owned by Mary Ann Bishop and 6,524
non-incentive stock options exercisable within 60 days of November 30,
1999.
(7) Includes 96,036 shares owned by J.T. Clemmons; 57,784 shares owned by Helen
W. Clemmons; and 4,991 non-incentive stock options exercisable within 60
days of November 30, 1999.
(8) Includes 254,166 shares owned by RCEE, Inc. of which Mr. Benton is
President; 17,591 shares owned by Mr. Benton; 21 shares owned by Emma Ann
Lawton Benton and 6,524 non-incentive stock options exercisable with 60
days of November 30, 1999.
(9) Includes 251,505 shares owned by Creel Outdoor Advertising, Inc.; 52,853
shares owned by Creel Outdoor Advertising, Inc. Profit Sharing Plan; 2,914
owned jointly by Carolyn W. Creel & James P. Creel, Jr. & Alicia Creel
Bame, 392 shares owned jointly by Carolyn W. Creel & C. Alicia Creel, 392
shares owned jointly by Carolyn W. Creel & James P. Creel, 12,987 shares
owned by Carolyn W. Creel; 4,677 shares owned by Sun Graphics, Inc.,
Carolyn W. Creel, President; 289 shares owned jointly by Alicia Creel Bame
& Carolyn W. Creel, 6,613 shares owned by James P. Creel and 8,745
non-incentive stock options exercisable within 60 days of November 30,
1999.
(10) Includes 188,886 shares subject to stock options exercisable within 60 days
from November 30, 1999, (Mr. Gerald 47,774 shares; Mr. Graham 27,117
shares; Mr. Rexroad 49,316 shares; Mr. Stalvey 27,650 shares; Mr. Sherry
1,500 shares; Mr. Bishop 6,524 shares; Mr. Clemmons 4,991 shares; Mr.
Benton 6,524 shares; Mr. Creel 8,745 shares; Mr. Dusenbury 8,745 shares).

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PROPOSAL 1 - ELECTION OF DIRECTORS
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The Corporation's Board of Directors is composed of seven members. The
Board of Directors of Coastal Federal Savings Bank ("Coastal Federal" or the
"Bank"), the Corporation's wholly owned subsidiary, also has the same seven
members.

The Corporation's Certificate of Incorporation provides that directors
are to be elected for terms of three years with approximately one-third elected
annually. Three directors will be elected at the Meeting to serve for a
three-year period, or until their respective successors have been elected and
qualified. The Nominating Committee has nominated for election as directors, G.
David Bishop, J. T. Clemmons and Frank A. Thompson, II, each to serve for a
three-year term. Mr. Bishop and Mr. Clemmons are currently members of the Board.
Mr. Thompson was appointed to the Board of Directors in November 1999 to replace
Samuel A. Smart who died on November 8, 1999.

If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Board of
Directors may recommend or the Board of Directors may amend the Bylaws and
reduce the size of the Board. At this time, the Board knows of no reason why any
nominee might be unavailable to serve.

The Board of Directors recommends a vote "FOR" all of the nominees
for directors of the Corporation.

The following table sets forth certain information regarding the
nominees for election as directors and the directors who will continue in office
after the Meeting. There are no family relationships among or between the
directors listed below. Year First Elected Year

Year First Elected Year
Principal or Appointed Term
Name Age Occupation Director Expires
(1) (2) (3) (4)
---- --- ----------- ------------------ -------
Board Nominees
--------------

G. David Bishop 46 CEO-WCI Management Group, Inc. 1991 2003
Real Estate Development

James T. Clemmons 60 Retired/President - Coastal Federal 1979 2003

Frank A. Thompson, II 42 President - Peoples Underwriters, Inc 1999 2003
Insurance

Directors Continuing in Office
------------------------------
James C. Benton 67 President - C. L. Benton & Sons, Inc. 1979 2002
Heavy Grading, Hauling, Pile Driving
Construction Company

James P. Creel 60 President - Creel Corporation 1990 2002
Operational Management Company
in the accommodations and golf industry

James H. Dusenbury 64 Attorney - Dusenbury Law Firm 1996 2001

Michael C. Gerald 50 President and Chief Executive Officer 1986 2001

- ----------
(1) As of September 30, 1999.
(2) The listed individuals have held these occupations or positions for at
least the last five years.
(3) Assuming re-election at the Meeting for Mr. Bishop and Mr. Clemmons and
election for Mr. Thompson.

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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------

The Board of Directors of the Corporation conducts its business through
meetings of the Board and through its committees. During the fiscal year ended
September 30, 1999, the Board of Directors of the Corporation held twelve
meetings. Coastal Federal has its own Board of Directors which conducts its
business through its own committees. During the fiscal year ended September 30,
1999, the Board of Directors for Coastal Federal held thirty-five meetings. No
director of the Corporation or Coastal Federal attended fewer than 75% of the
total meetings of the Board and committee meetings on which such Board member
served during this period for either the Corporation or Coastal Federal.

Presently, Coastal Financial's Board of Directors has three standing
committees: Executive, Audit, and Compensation and Benefits Committee. The
following describes the duties, responsibilities and current membership of these
committees.

The Corporation's Executive Committee meets when called by management
and is empowered to act for the Board of Directors between regular Board
meetings. The Executive Committee met four times in 1999. Its current members
are Messrs. Benton, Clemmons (Chairman), Creel, and Gerald.

The Corporation's Audit Committee has the primary function of
evaluating audit and compliance performance, handling relations with the
Corporation's independent auditors and establishing policies and procedures
relating to internal auditing functions and controls. Directors Dusenbury,
Chairman, Springs and Creel serve on the committee with Directors Benton and
Bishop as alternates.

The Corporation's Audit Committee met one time during the 1999 fiscal year and
the Bank's Audit Committee met four times during the 1999 fiscal year.

The Corporation's Compensation and Benefits Committee meets as called
by management to review personnel policies and salary and benefit programs.
During 1999 the Compensation and Benefits Committee had one meeting. The members
of the Compensation and Benefits Committee are Messrs. Benton, Clemmons and
Creel.

Article II, Section 14 of the Corporation's Bylaws provides that the
Board of Directors shall act as a nominating committee for selecting the
nominees for election as directors. Such section of the Bylaws also provides as
follows: "No nominations for directors except those made by the nominating
committee shall be voted upon at the annual meeting unless other nominations by
Shareholders are made in writing and delivered to the Secretary of the
Corporation in accordance with the provisions of the Corporation's Certificate
of Incorporation." The Board of Directors of the Corporation held one meeting in
its capacity as the nominating committee during the fiscal year ended September
30, 1999.

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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. 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, 1999 were $148,750.

1996 Directors Performance Plan. At the 1996 Annual Meeting, the
Corporation's Shareholders approved the 1996 Directors Performance Plan (the
"Plan"). All Directors participate in the Plan. Shares are allocated based upon
the Company's return on equity. For the fiscal year, ended September 30, 1998,
the Company's return on equity was 19.52%. 3,191 shares were granted to each
Director on January 25, 1999.

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EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------

Summary Compensation Table

The following Summary Compensation Table sets forth certain information
concerning compensation to all executive officers whose total annual salary and
bonus for 1999 exceeded $100,000.

SUMMARY COMPENSATION TABLE (1)

Annual Compensation
Long-Term
Compensation
Awards
Securities All Other
Name and Year Salary Bonus Other Annual Underlying Compensation
Principal ($)(1)(2) ($)(3) Compensation Options/ ($)(5)
Position ($)(4) (#)
-------- ---- ------- ------- ------ ------ -----

Michael C. Gerald 1999 185,000 135,899 17,000 17,191 8,202
President, Chief 1998 165,000 121,275 16,100 17,555 7,719
Executive Officer 1997 150,000 101,250 13,600 12,079 8,619
&Director

Jerry L. Rexroad, 1999 145,600 100,198 5,250 12,667 10,234
Executive Vice 1998 140,000 105,400 4,100 14,222 7,701
President & Chief 1997 125,000 86,750 4,200 10,413 9,092
Financial Officer

Phillip G. Stalvey, 1999 131,250 91,875 1,850 12,667 9,321
Executive Vice 1998 125,000 95,875 2,600 14,222 8,138
President 1997 95,000 69,350 2,000 10,413 7,731

Jimmy R. Graham, 1999 110,000 79,550 100 10,000 9,011
Executive Vice 1998 90,000 66,900 100 14,222 7,369
President 1997 85,000 63,550 200 10,413 7,988

Steven J. Sherry 1999 120,000 85,350 - 7,500 17,759
Executive Vice 1998 120,000 25,000 - - -
President 1997 - - - - -
-

- --------------
(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.
6

Option Grants Table

The following table sets forth the incentive stock options granted under the
1990 Stock Option and Incentive Plan to the individuals named in the Summary
Compensation Table during the fiscal year ended September 30, 1999. 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
Percentage of Potential Realizable Value
Number of Total at Assumed Annual Rates
Securities Options/ of Stock Price Appreciation
Underlying For Option Term (1)
Options/ Granted to
Associates Exercise or
Granted In Fiscal Base Price Expiration
Per Share
Name (#) Year ($/Sh) Date 5% ($) 10% ($)
---- ------ ----- ----- ---- ------- -------

Michael C. Gerald 14,000 12.75% 18.00 2008 158,481 401,623

Jimmy R. Graham 10,000 9.11% 18.00 2008 113,201 286,873

Jerry L. Rexroad 12,667 11.54% 18.00 2008 143,391 363,382

Phillip G. Stalvey 12,667 11.54% 18.00 2008 143,391 363,382

Steven J. Sherry 7,500 6.83% 24.75 2008 116,738 295,838

- ------------
(1) 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 and stock market conditions. 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, 1999. In
addition, this table includes the number of shares covered by both exercisable
and non-exercisable options as of September 30, 1999. 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
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 107,165 1,899,663 45,736/32,893 181,790/61,157

Jimmy R. Graham 34,593 599,800 25,079/26,914 96,745/41,259

Jerry L. Rexroad 7,279 71,481 47,278/37,953 273,783/112,853

Phillip G. Stalvey 7,022 63,218 25,612/29,048 96,745/41,259

Steven J. Sherry -0- -0- 1,500/6,000 -0-/-0-

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

Pension Plan Table

The following table indicates the annual retirement benefit that would
be payable under the Retirement Plan (as discussed herein) upon retirement at
age 65 to a participant electing to receive his or her retirement benefit in the
standard form of benefit, assuming various specified levels of Retirement Plan
compensation and various specified years of credited service.

PENSION PLAN TABLE

Highest Five Year 10 Years 20 Years 30 Years 40 Years
Average Benefit Benefit Benefit Benefit
Compensation Service Service Service Service
------------ ------- ------- ------- -------

$ 50,000 $ 7,500 $ 15,000 $ 22,500 $ 30,000

100,000 15,000 30,000 45,000 60,000

150,000 22,500 45,000 67,500 90,000

200,000 30,000 60,000 90,000 120,000

250,000 37,500 75,000 112,500 130,000 *

* For calendar year 2000, the maximum retirement benefit permitted under
the Internal Revenue Code of 1986, as amended ("Code") will be $130,000.
This amount is subject to future adjustment by the Internal Revenue
Service.

The Revenue Reconciliation Act of 1993 reduced the amount of an
Associate's compensation that may be taken into account for qualified retirement
plan purposes. For the 2000 plan year a qualified retirement plan can only take
into account $170,000 of compensation.

The Bank maintains a noncontributory defined benefit pension plan for
the benefit of all Associates who have completed at least one year of service
and attained age 21. Benefits under the plan are based on length of service and
salary, which is defined to include a participant's total taxable compensation
as reported to the Internal Revenue Service on Form W-2. Participants are 100%
percent vested in their accrued benefits after five years of service.

At the normal retirement age under the plan, age 65, a participant
would receive an annual benefit equal to 1.5% times the participant's years of
credited service times the average of the participant's highest five years'
compensation. The normal form of benefit under the plan is a monthly annuity
payable for the life of the participant with a death benefit payable at the
participant's death. Optional forms of benefit include a lump sum payment and
various alternative annuity payments. The plan also provides for proportionately
reduced benefits in the event of a participant's early retirement prior to
attaining age 65. Benefits under the plan are not subject to reduction from
Social Security or other offset amounts. At September 30, 1999, Messrs. Gerald,
Stalvey, Graham, Rexroad and Sherry had 24 years 7 months, 16 years 9 months, 21
years 6 months, 3 years 5 months, and no years 4 months, respectively, of
credited service under the Plan.

Employment Agreements

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, 1999, such employment agreement has an initial term of
three years and provides for an annual base salary of $200,000 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, 1999, such employment
agreement has an initial term of three years and provides for an annual base
salary of $156,000 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. 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. Such employment agreement has an initial term of
three years and provides for an annual base salary of $140,000 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.
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. Such employment agreement has an initial term of one
year and provides for an annual base salary of $115,500. 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 $127,000. 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, 1999 was approximately $753,000, $558,000, $513,000,
$146,000 and $210,000 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 15.0%.
excluding any non-recurring items as determined by the Corporation's Board of
Directors. The Corporation's Return on Equity in fiscal 1999 was 19.36%. This
compares to a Return on Equity in fiscal 1998 of 19.52%. 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, 1999, the base compensation
of Michael C. Gerald, President and Chief Executive Officer of the Corporation
was $185,000. For fiscal 2000 Mr. Gerald's base compensation was increased to
$200,000.

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's Bank Index. Total return assumes
the reinvestment of all dividends.

[GRAPHIC-GRAPH PLOTTED TO POINTS LISTED BELOW]

9/30/1994 9/30/1995 9/30/1996 9/30/1997 9/30/1998 9/30/1999
--------- --------- --------- --------- --------- ---------

Corporation 100.00 100.41 157.71 253.80 251.89 207.70
NASDAQ Bank Index 100.00 126.13 161.00 268.20 266.06 283.40
NASDAQ Composite Index 100.00 138.07 163.84 224.97 228.77 371.52

PROPOSAL II -- RATIFICATION OF 2000 STOCK OPTION PLAN

General

On November 24, 1999, the Board of Directors of the Company adopted,
subject to stockholder approval, the Coastal Financial Corporation 2000 Stock
Option Plan ("Plan").

The Company currently maintains the 1990 Stock Option Plan which
provided for the grant of 525,000 options to directors and Associates of the
Company and its affiliates. The granting of stock options has been an effective
way for the Company to reward its current directors and Associates and attract
and retain key personnel who provide services to the Company and its affiliates.
The Company wishes to continue its stock option program, however, the 1990 Stock
Option Plan has only a limited number of shares of Common Stock remaining for
future stock option grants. Therefore, the Board of Directors has adopted the
Plan, subject to stockholder approval, to continue the Company's program of
rewarding and motivating directors and Associates of the Company with stock
options.

The following summary is a brief description of the material features
of the Plan. This summary is qualified in its entirety by reference to the Plan,
a copy of which is attached as Exhibit A.

Summary of the Plan

Type of Stock Option Grants. The Plan provides for the grant of
incentive stock options ("ISOs"), within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended ("Code"), and Non-Qualified Stock
Options ("NQSOs"), which do not satisfy the requirements for ISO treatment.

Administration. The Plan is administered by a committee of the
Company's Board of Directors. Subject to the terms of the Plan and resolutions
of the Board, the committee interprets the Plan and is authorized to make all
determinations and decisions thereunder. The committee also determines the
participants to whom stock options will be granted, the type and amount of stock
options that will be granted and the terms and conditions applicable to such
grants.

Participants. All directors and Associates of the Company and its
subsidiaries are eligible to participate in the Plan.

Number of Shares of Common Stock Available. On the date the Board of
Directors adopted the Plan, the Company reserved 525,000 shares of Common Stock
(subject to adjustment as provided for in the Plan) for issuance under the Plan
in connection with the exercise of options. Shares of Common Stock to be issued
under the Plan may be either authorized but unissued shares, or reacquired
shares held by the Company in its treasury. Any shares subject to an award which
expires or is terminated unexercised will again be available for issuance under
the Plan.

Stock Option Grants. The exercise price of each ISO or NQSO will not be
less than the fair market value of a Common Stock on the date the ISO or NQSO is
granted. The aggregate fair market value of the shares for which ISOs granted to
any employee under the Plan or any other stock option plans of the Company may
be exercisable for the first time by such employee during any calendar year
(under all stock option plans of the Company and its subsidiaries) may not
exceed $100,000.

Options may be exercised in whole or in part. The exercise price of an
option may be paid in Common Stock, by the surrender of all or part of the
option being exercised, cash or a cash
equivalent acceptable to the Company.

Under the Plan, the Board may permit participants to transfer options
to eligible transferees (as such eligibility is determined by the Board). Each
option may be exercised during the holder's lifetime, and after death only by
the holder's beneficiary or, absent a beneficiary, by the estate or by a person
who acquired the right to exercise the option by will or the laws of descent and
distribution. Options may become exercisable in full at the time of grant or at
such other times and in such installments as the Board determines or as may be
specified in the Plan. Options may be exercised during periods before and after
the participant terminates employment, as the case may be, to the extent
authorized by the Board or specified in the Plan. However, no option may be
exercised after the tenth anniversary of the date the option was granted. The
Board may, at any time and without additional consideration, accelerate the date
on which an option becomes exercisable.

Effect of a Change in Control. In the event of a change in control (as
defined in the Plan) of the Company, each outstanding stock option grant will
become fully vested and immediately exercisable. In addition, in the event of a
change in control, the Plan provides for the cash settlement of any outstanding
stock option if provision is not made for the assumption of the options in
connection with the change in control.

Term of the Plan. The Plan was effective on November 24, 1999, subject
to approval by the stockholders of the Company. The Plan will expire on the
tenth anniversary of the effective date, unless terminated sooner by the Board.

Amendment of the Plan. The Plan allows the Board to amend the Plan
without stockholder approval unless such approval is required to comply with a
tax law or regulatory requirement.

Certain Federal Income Tax Consequences. The following brief
description of the tax consequences of stock option grants under the Plan is
based on federal income tax laws currently in effect and does not purport to be
a complete description of such federal income tax consequences.

There are no federal income tax consequences either to the optionee or
to the Company upon the grant of an ISO or an NQSO. On the exercise of an ISO
during employment or within three months thereafter, the optionee will not
recognize any income and the Company will not be entitled to a deduction,
although the excess of the fair market value of the shares on the date of
exercise over the option price is included in the optionee's alternative minimum
taxable income, which may give rise to alternative minimum tax liability for the
optionee. Generally, if the optionee disposes of shares acquired upon exercise
of an ISO within two years of the date of grant or one year of the date of
exercise, the optionee will recognize ordinary income, and Company will be
entitled to a deduction, equal to the excess of the fair market value of the
shares on the date of exercise over the option price (limited generally to the
gain on the sale). The balance of any gain or loss will be treated as a capital
gain or loss to the optionee. If the shares are disposed of after the two year
and one year periods mentioned above, the Company will not be entitled to any
deduction, and the entire gain or loss for the optionee will be treated as a
capital gain or loss.

On exercise of an NQSO, the excess of the date-of-exercise fair market
value of the shares acquired over the option price will generally be taxable to
the optionee as ordinary income and deductible by the Company, provided the
Company properly withholds taxes in respect of the exercise. This disposition of
shares acquired upon the exercise of a NQSO will generally result in a capital
gain or loss for the optionee, but will have no tax consequences for the
Company.

New Plan Benefits

While it is anticipated that awards under the Plan will be made
following the Annual Meeting, the Board has made no specific determination
regarding the size or terms of awards.

Board of Directors Recommendation

The Board of Directors recommends a vote "FOR" the adoption of the Plan
attached as Exhibit A.

- --------------------------------------------------------------------------------
TRANSACTIONS WITH MANAGEMENT
- --------------------------------------------------------------------------------

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 under programs generally available to all employees, and
must not involve more than the normal risk of repayment or present other
unfavorable features. Coastal Federal, therefore, is 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. At September 30, 1999, Coastal
Federal had $3,798,000 outstanding in loans to executive officers and directors.

Director James H. Dusenbury is a partner in the law firm of Dusenbury
Law Firm located in Myrtle Beach, South Carolina. Mr. Dusenbury serves as the
Bank's General Counsel. During the year ended September 30, 1999, Dusenbury Law
Firm received approximately $21,563 in legal fees for legal services rendered to
the Bank.

- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------

The Board of Directors of the Corporation is not aware of any business
to come before the Meeting other than those matters described in this Proxy
Statement. However, if any other matters should properly come before the
Meeting, it is intended that proxies in the accompanying form will be voted in
respect thereof in accordance with the judgment of the person or persons voting
the proxies.

The cost of solicitation of proxies will be borne by the Corporation. In
addition to solicitations by mail, directors, officers and Associates of the
Corporation may solicit proxies personally or by telephone without additional
compensation.

- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------

The Corporation's 1999 Annual Report to Shareholders,
including consolidated financial statements, has been mailed to all Shareholders
of record as of the close of business on November 30, 1998. Any Shareholder who
has not received a copy of such Annual Report may obtain a copy by writing to
the Secretary of the Corporation. Such Annual Report is not to be treated as
part of the proxy solicitation material or as having been incorporated herein by
reference.

- --------------------------------------------------------------------------------
SHAREHOLDERS PROPOSALS
- --------------------------------------------------------------------------------

In order to be eligible for inclusion in the Corporation's proxy
materials for next year's Annual Meeting of Shareholders, which is tentatively
scheduled for January 22, 2001, any Shareholder proposal to take action at such
meeting must be received at the Corporation's main office at 2619 Oak Street,
Myrtle Beach, South Carolina, no later than August 11, 2000. If next years
annual meeting is held on a date more than 30 calendar days from January 24,
2001, a stockholder proposal must be received by a reasonable time before the
proxy solicitation for such annual meeting is made. Any such proposals shall be
subject to the requirements of the proxy solicitation rules adopted under the
1934 Act, as amended. Article II, Section 15 further provides that any new
business to be taken up at the annual meeting shall be stated in writing and
filed with the Secretary of the Corporation in accordance with the provisions of
the Corporation's Certificate of Incorporation. Article XI of the Certificate of
Incorporation provides that notice of a Shareholder's intent to make a
nomination or present new business at the meeting ("Shareholder notice") must be
given not less than thirty days nor more than sixty days prior to any such
meeting; provided however, that if less than thirty-one days' notice of the
meeting is given to Shareholders by the Corporation, a Shareholder's notice
shall be delivered or mailed, as prescribed, to the Secretary of the Corporation
not later than the close of the tenth day following the day on which notice is
mailed to Shareholders. If properly made, such nominations shall be considered
by Shareholders at such meeting.

BY ORDER OF THE BOARD OF DIRECTORS

SUSAN J. COOKE
--------------
/s/SUSAN J. COOKE
SECRETARY

Myrtle Beach, South Carolina
December 20, 1999

- --------------------------------------------------------------------------------
FORM 10-K
A COPY OF THE FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
WILL BE FURNISHED WITHOUT CHARGE TO SHAREHOLDERS AS OF THE RECORD DATE UPON
WRITTEN REQUEST TO SUSAN J. COOKE, SECRETARY, COASTAL FINANCIAL CORPORATION,
2619 OAK STREET, MYRTLE BEACH, SOUTH CAROLINA 29577-3129.
- --------------------------------------------------------------------------------

Exhibit A

COASTAL FINANCIAL CORPORATION

2000 STOCK OPTION PLAN

1. Purpose of the Plan

The Coastal Financial Corporation 2000 Stock Option Plan (the "Plan") is
intended to provide additional incentive to certain directors and
Associates of Coastal Financial Corporation (the "Company"), a Delaware
corporation, and its subsidiaries or other affiliates (including Coastal
Federal Savings Bank), by encouraging them to acquire shares of common
stock of the Company (the "Stock") through options to purchase Stock
granted pursuant to the Plan ("Options"), thereby increasing each
participant's proprietary interest in the business of the Company and
providing them with an increased personal interest in the continued success
and progress of the Company, the result of which will promote both the
interests of the Company and its Shareholders. For purposes of the Plan,
"Associate" shall mean an employee of the Company or its subsidiaries or
other affiliates.

Options granted under the Plan will be either options intended to
qualify as incentive stock options ("ISOs") within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), or non-qualified
options ("NQOs"). Each director or Associate granted an Option (an "Optionee")
shall enter into an agreement with the Company (the "Option Agreement") setting
forth the terms and conditions of the Option, as determined in accordance with
this Plan.

2. Administration of Plan

This Plan shall be administered by a committee of the Board of
Directors of the Company (the "Committee"), to be composed of two (2) or more
members of the Board of Directors of the Company who shall be appointed from
time to time by the Board of Directors. The Committee shall have the sole and
absolute power:

a. subject to the provisions of the Plan, to determine the terms and
conditions of all Options; to construe and interpret the Plan and
Options granted under it; to determine the time or times an Option may
be exercised, the number of shares as to which an Option may be
exercised at any one time, and when an Option may terminate; to
establish, amend and revoke rules and regulations relating to the Plan
and its administration; and to correct any defect, supply any omission,
or reconcile any inconsistency in the Plan, or in any Option Agreement,
in a manner and to the extent it shall deem necessary, all of which
determinations and interpretations made by the Committee shall be
conclusive and binding on all Optionees, any other holders of Options
and on their legal representatives and beneficiaries;

b. to determine all questions of policy and expediency that may arise
in the administration of the Plan and generally exercise such powers
and perform such

acts as are deemed necessary or expedient to promote the best interests
of the Company; and

c. except to the extent prohibited by, or impermissible in order to
obtain treatment desired by the Committee under, applicable law or
rule, to allocate or delegate all or any portion of its powers and
responsibilities to any one or more of its members or to any person(s)
selected by it, subject to revocation or modification by the Committee
of such allocation or delegation.

3. Shares Subject to the Plan

Subject to the provisions of paragraph 13 below, the Stock which may be
issued pursuant to Options granted under the Plan shall not exceed in the
aggregate Five Hundred Thousand (525,000) shares. If any Options granted under
the Plan terminate, expire or are surrendered without having been exercised in
full, the number of shares of Stock not purchased under such Options shall be
available again for the purpose of the Plan.

4. Persons Eligible for Options

a. All directors and Associates of the Company shall be eligible to
receive Options under the Plan. The Committee shall determine the persons to
whom Options shall be granted, the time or times such Options shall be granted,
the type of Option to be granted, the number of shares to be subject to each
Option and the times when each Option may be exercised. An Optionee, if he or
she is otherwise eligible, may be granted additional Options. An Associate may
be granted ISOs or NQOs or both under the Plan. Directors may only be granted
NQOs under the Plan.

b. With respect to the granting of ISOs only, no Option granted to an
Associate shall be treated as an ISO if the aggregate Fair Market Value Per
Share (as defined below), determined by the Committee at the time an ISO is
granted, of the Stock with respect to which the ISO and previously granted ISOs
are exercisable for the first time by such employee during any calendar year
(under all such plans of the Company) exceeds $100,000.00 or such other amount
as may be specified in Section 422(d) of the Code. To the extent that any
Options granted to an Associate fails to comply with the limitations set forth
in this subparagraph, such Options shall be treated as NQOs.

5. Purchase Price

The purchase price of each share of Stock covered by each ISO or NQO
shall not be less than one hundred percent (100%) of the Fair Market Value Per
Share (as defined below) of the Stock on the date the ISO or NQO is granted;
provided, however, if when an ISO is granted the Optionee receiving the ISO owns
or will be considered to own by reason of Section 424(d) of the Code more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company, the purchase price of the Stock covered by such ISO shall not be
less than one hundred and ten percent (110%) of the Fair Market Value Per Share
of the Stock on the date the ISO is granted.

For purposes of the Plan, "Fair Market Value Per Share" of the Stock
shall mean the following on any date on which a determination is necessary under
the Plan: (i) if the Stock is not publicly traded, the amount determined by the
Committee in good faith; (ii) if the Stock is traded only otherwise than on a
securities exchange and is not reported on The Nasdaq National Market
("Nasdaq"), the closing quoted selling price of the Stock as quoted in "pink
sheets" published by the National Daily Quotation Bureau; (iii) if the Stock is
traded only otherwise than on a securities exchange and is reported on Nasdaq,
the closing Nasdaq reported sales price of the Stock, as reported in the Wall
Street Journal; or (iv) if the Stock is admitted to trading on a securities
exchange, the closing quoted selling price of the Stock, as reported in the Wall
Street Journal.

6. Duration of Options

a. Non-Qualified Options

Termination of Employment or Service (General). Unless
otherwise determined by the Committee, upon the termination of an
Optionee's employment or other service for any reason other than
retirement, disability or death, or Termination for Cause, the Optionee
may exercise only those NQOs that were immediately exercisable by the
Optionee at the date of such termination and only for a period of three
(3) months following the date of such termination.

Termination of Employment or Service (Retirement). Unless
otherwise determined by the Committee, in the event of an Optionee's
retirement (as defined in the Optionee's Award Agreement), the Optionee
may exercise only those NQOs that were immediately exercisable by the
Optionee at the date of retirement and only for a period of one (1)
year following the date of retirement.

Termination of Employment or Service (Disability or Death).
Unless otherwise determined by the Committee, in the event of the
termination of an Optionee's employment or other service due to
disability or death, all NQOs held by such Optionee shall immediately
become exercisable and remain exercisable for a period two (2) years
following the date of such termination. Following termination by reason
of the Optionee's disability or death, such NQOs shall be exercisable
by the Optionee or his legal representative or beneficiaries. For
purposes of this Plan, "disability" shall have the meaning set forth in
Section 22(e)(3) of the Code.

Termination of Employment or Service (Termination for Cause).
In the event of an Optionee's Termination for Cause, all rights with
respect to the Optionee's NQOs, whether or not exercisable, shall
expire immediately upon the effective date of such Termination for
Cause. For purposes of this Plan, "Termination for Cause" shall include
termination because of an Optionee's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations or similar
infractions).

b. Incentive Stock Options

Termination of Employment or Service (General). Unless
otherwise determined by the Committee, upon the termination of an
Optionee's employment or other service for any reason other than
retirement, disability or death, or Termination for Cause, the Optionee
may exercise only those ISOs that were immediately exercisable by the
Optionee at the date of such termination and only for a period of three
(3) months following the date of such termination.

Termination of Employment (Retirement). Unless otherwise
determined by the Committee, in the event of an Optionee's retirement
(as defined in the Optionee's Award Agreement), the Participant may
exercise only those ISOs that were immediately exercisable by the
Optionee at the date of retirement and only for a period of one (1)
year following the date of termination of employment. Any Option
originally designated as an ISO shall be treated as an NQO to the
extent the Optionee exercises such Option more than three (3) months
following the Date of the Optionee's cessation of employment.

Termination of Employment (Disability or Death). Unless
otherwise determined by the Committee, in the event of the termination
of an Optionee's employment or other service due to disability or
death, all ISOs held by such Optionee shall immediately become
exercisable and remain exercisable for a period of one (1) year
following the date of such termination. Following termination by reason
of the Optionee's disability or death, such ISOs shall be exercisable
by the Optionee or his legal representative or beneficiaries.

Termination of Employment (Termination for Cause). In the
event of an Optionee's Termination for Cause, all rights under such
Optionee's ISOs, whether or not exercisable, shall expire immediately
upon the effective date of such Termination for Cause.

7. Exercise of Options

An Option may be exercisable in installments or otherwise upon such
terms as the Committee shall determine when the Option is granted. As a
condition of the exercise, in whole or in part, of any Option, the Committee may
require the Optionee to pay, in addition to the purchase price of the Stock
covered by the Option, an amount equal to any Federal, state, and local taxes
that may be required to be withheld in connection with the exercise of such
Option. Notwithstanding the foregoing, the Committee may authorize the Company's
officers to establish procedures for the satisfaction of an Optionee's
withholding tax liability incurred upon exercise of an Option by enabling the
Optionee to authorize the Company to retain from the total number of shares to
be issued pursuant to such Option exercise that number of shares (based on the
then Fair Market Value Per Share as determined by the Committee) that will
satisfy the withholding tax due.

8. Method of Exercise

a. When the right to purchase shares accrues, Options may be exercised
by giving written notice to the Company stating the number of shares for which
the Option is being exercised, accompanied by payment in full by cash, or its
equivalent, acceptable to the Company, of the purchase price for the shares
being purchased and, if applicable, any Federal, state or local taxes required
to be withheld in accordance with the provisions of paragraph 7 above. Such
additional or different procedures or requirements for the exercise of Options
may be established from time to time by or as directed by the Committee.

b. In the Committee's discretion, payment of the purchase price for the
shares may be made in whole or in part with other shares of Stock of the Company
which are free and clear of all liens and encumbrances. The value of the shares
of Stock tendered in payment for the shares being purchased shall be the Fair
Market Value Per Share on the date of the Optionee's notice of exercise.

c. Notwithstanding the foregoing, the Company shall have the right to
postpone the time of delivery of the shares for such period as may be required
for the Company, with reasonable diligence, to comply with any applicable
listing requirements of any national securities exchange or Nasdaq or any
Federal, state, local or foreign law. If the Optionee, or other person entitled
to exercise the Option, fails to timely accept delivery of and pay for the
shares specified in such notice, the Committee shall have the right to terminate
the Option with respect to such shares.

9. Transferability of Options

Except as otherwise provided by this paragraph 9, no Option granted
under the Plan shall be assignable or transferable by the Optionee, either
voluntarily or by operation of law, other than by will or the laws of descent
and distribution, and, during the lifetime of the Optionee, shall be exercisable
only by the Optionee. The Committee shall have discretionary authority to permit
the transfer of any NQO to members of an Optionee's immediate family, including
trusts for the benefit of such family members and partnerships in which such
family members are the only partners; provided, however, that a transferred NQO
may be exercised by the transferee on any date only to the extent that the
Optionee would have been entitled to exercise the NQO on such date had the NQO
not been transferred. Any transferred NQO shall remain subject to the terms and
conditions of the Optionee's Option Agreement.

10. Continuance of Employment

Nothing contained in the Plan or in any Option granted under the Plan
shall confer upon any Optionee any rights with respect to the continuation of
employment by the Company or interfere in any way with the right of the Company
(subject to the terms of any separate employment agreement to the contrary) at
any time to terminate such employment or to increase or decrease the
compensation of the Optionee from the rate in existence at the time of the
granting of any Option.

11. Restrictions on Shares

If the Company shall be advised by counsel that certain requirements
under the Federal or state securities laws must be met before Stock may be
issued under this Plan, the Company shall notify all persons who have been
issued Options, and the Company shall have no liability for failure to issue
Stock under any exercise of Options because of delay while such requirements are
being met or the inability of the Company to comply with such requirements.

12. Privilege of Stock Ownership

No person entitled to exercise any Option granted under the Plan shall
have the rights or privileges of a Shareholder of the Company for any shares of
Stock issuable upon exercise of such Option until such person has become the
holder of record of such shares. No adjustment shall be made for dividends or
other rights for which the record date is prior to the date on which such person
becomes the holder of record, except as provided in paragraph 13 below.

13. Adjustment

a. If the number of outstanding shares of Stock are increased or
decreased, or such shares are exchanged for a different number or kind of shares
or securities of the Company through reorganization, merger, recapitalization,
reclassification, stock dividend, stock split, reverse stock split, combination
of shares, or other similar transaction, the aggregate number of shares of Stock
subject to the Plan as provided in paragraph 3 above, the maximum number of
shares under Options that may be granted to an Optionee during any calendar year
specified in paragraph 4(a) above, and the shares subject to issued and
outstanding Options under the Plan shall be proportionately adjusted without
further action by the Committee. Any such adjustment in an outstanding Option
shall be made without change in the aggregate purchase price applicable to the
unexercised portion of the Option but with an appropriate adjustment in the
price for each share or other unit of any security covered by the Option. In the
event that any dividend or other distribution (whether in the form of cash,
shares of Stock, other securities, or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of shares of Stock or other
securities of the Company, issuance of warrants or other rights to purchase
shares of Stock or other securities of the Company, or other similar transaction
or event affects the shares of Stock or other securities or property then
covered by Options such that an adjustment other than as provided in the
foregoing portion of this subparagraph (a) is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan and Options granted thereunder, then, an equitable
adjustment shall be authorized hereunder to (i) the number and kind of shares of
stock (or other securities or property) which thereafter may be made the subject
of Options, (ii) the number and kind of shares of stock (or other securities or
property) subject to outstanding Options, (iii) the purchase price with respect
to any outstanding Options, or, if deemed appropriate, make provision for a cash
payment to the holders of outstanding Options, and (iv) the aggregate number of
shares of Stock or number and kind of other securities or property

subject to the Plan and the maximum number of shares or other securities or
property under Options that may be granted to an Optionee during any calendar
year specified in paragraph 4(a) above. No fractional shares of Stock shall be
issued under the Plan or in connection with any such adjustment.

b. Notwithstanding subparagraph (a) of this paragraph 13, upon a Change
in Control of the Company (as defined below), all then outstanding Options shall
become one hundred (100) percent vested and exercisable as of the effective date
of the Change in Control. If, in connection with or as a consequence of a Change
in Control, the Company is merged into or consolidated with another corporation,
if the Company becomes a subsidiary of another corporation or if the Company
sells or otherwise disposes of substantially all of its assets to another
corporation, then unless provisions are made in connection with such
transactions for the continuance of the Plan and/or the assumption or
substitution of then outstanding Options with new options covering the stock of
the successor corporation, or parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices, such Options shall
be canceled as of the effective date of the merger, consolidation, or sale and
the Participant shall be paid in cash an amount equal to the difference between
the Fair Market Value of the Stock subject to the Options on the effective date
of such corporate event and the exercise price of the Options. Notwithstanding
anything in this paragraph or any Option Agreement to the contrary, in the event
that the consummation of a transaction constituting a Change in Control is
contingent on using pooling of interests accounting methodology, the Board may,
in its discretion, take any action necessary with respect to outstanding Options
to preserve the use of pooling of interests accounting.

c. For purposes of this Plan, a "Change in Control" shall mean an event
deemed to occur if and when (a) an offeror other than the Company purchases
shares of the stock of the Company pursuant to a tender or exchange offer for
such shares, (b) any person (as such term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act) is or becomes the beneficial owner, directly or indirectly,
of securities of the Company representing twenty-five percent (25%) or more of
the combined voting power of the Company's then outstanding securities, (c) the
membership of the board of directors of the Company changes as the result of a
contested election, such that individuals who were directors at the beginning of
any twenty-four (24) month period (whether commencing before or after the date
of adoption of this Plan) do not constitute a majority of the Board at the end
of such period, or (d) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Company or similar transaction occurs
or is effectuated in which the Company is not the resulting entity; provided,
however, that such an event listed above will be deemed to have occurred or to
have been effectuated upon the receipt of all required federal regulatory
approvals not including the lapse of any statutory waiting periods.

14. Amendment and Termination of Plan

a. The Board of Directors of the Company, may, from time to time,
suspend or terminate the Plan or amend or revise the terms of the Plan; provided
that if and to the extent required by applicable law or rule, any such amendment
to the Plan shall be subject to approval by a majority of votes cast at a
meeting of Shareholders at which a

quorum representing a majority of the Stock is present in person or by proxy or
such other vote as may be required by such law or rule.

b. Except as otherwise provided in the Plan, no amendment, suspension
or termination of this Plan shall, without the consent of the Optionee,
adversely affect the rights of such Optionee under any Option previously granted
to such Optionee under the Plan.

15. Effective Date of Plan

The Plan shall become effective upon approval by the Board, subject to
Shareholder approval within twelve (12) months of the effective date.

16. Term of Plan

This Plan shall terminate on November 24, 2009 and no Option shall be
granted pursuant to the Plan after November 24, 2009

REVOCABLE PROXY
COASTAL FINANCIAL CORPORATION

[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

ANNUAL MEETING OF SHAREHOLDERS
JANUARY 24, 2000

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 Monday, January 24, 2000,
at 2:00 p.m., Eastern Time, and at any and all adjournments thereof, as
indicated to the right:

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

For a Three Year Term: G. David Bishop, James T. Clemmons,
Frank A. Thompson II

With- For All
[ ] For [ ] hold [ ] Except

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. The ratification of the Coastal Financial Corporation 2000 Stock Option Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. 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 PROPOSALS.

THIS PROXY, PROPERLY SIGNED AND DATED, WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSALS 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 2000 ANNUAL MEETING.

Please be sure to sign below and
date this Proxy in the box provided.

_________________________________________
Date

_________________________________________
Stockholder sign above

_________________________________________
Co-holder (if any) sign above

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 20, 1999 and the 1999 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