SecProbe.io

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MAIL STOP 05-11

October 7, 2004

Mr. Cary M. Grossman
Co-Chief Executive Officer
Coastal Bancshares Acquisition Corp.
9821 Katy Freeway, Suite 500
Houston, TX 77024

      Re:	Coastal Bancshares Acquisition Corp.
		Registration Statement on Form S-1
		File No. 333-118294
      Amendment No. 1 Filed September 27, 2004

Dear Mr. Grossman:

      We have reviewed your amended filing and have the following
comments.  Where indicated, we think you should revise your
document
in response to these comments.  If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary.  Please be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may or may not
raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

General
1. We note that you intend to furnish the following: (1) a copy of
the no objection letter from the NASD indicating that the NASD has
no
additional concerns regarding compensation to be paid the
underwriters prior to the effectiveness of the company`s
registration
statement and (2) confirmation that any outstanding state
regulatory
agency comments have been resolved and that the company has
received
clearance from all states where it has applied to have the units
registered for sale.

Prospectus Summary
2. The discussion under Industry Overview through the bottom of
page
one, as well as the identical information on page 21, remains
promotional and speculative in nature and inappropriate in our
view
in a disclosure document.
Risk Factors, page 7
3. Clarify in both the heading and in the narrative to risk factor
10
that certain of your officers and directors, or their affiliates,
are
already affiliated with blank check companies.  In this regard, we
are referring both to Mr. Grossman`s affiliation with Sand Hill
and
to Mr. Sangalis and his private equity firm`s affiliation with
Millstream.  Include similar disclosure regarding the latter in
the
revised Management section on page 42.

Closing Statements

      As appropriate, please amend your registration statement in
response to these comments.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.

      We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement.  Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration.  Please provide this
request at least two business days in advance of the requested
effective date.

      You may contact Babette Cooper at (202) 824-5069 or Maureen
Bauer at (202) 942-1824 if you have questions regarding the
financial
statements and related matters.  Please contact William Bennett at
(202) 942-0135 with any other questions.

      Sincerely,

      John Reynolds, Assistant Director
      Office of Emerging Growth Companies

cc:	Ronald J. Frappier, Esq.
	Fax: (214) 855-4300
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