Maryland filed a $45 million lawsuit today against former directors of First Maryland Savings and Loan Association, alleging that they enriched themselves in an "an uncontrolled lending spree" that caused the thrift's insolvency.

The suit alleges that former First Maryland chairman Julian M. Seidel and members of the Silver Spring-based thrift's board of directors invested the thrift's funds in risky commercial ventures, engaged in insider loans and took extravagant fees and salaries for themselves.

First Maryland officials are also alleged to have misled state regulators fraudulently about the financial condition of First Maryland, concealing the existence of millions of dollars in delinquent loans.

The suit was filed in Montgomery County Circuit Court by the Maryland Deposit Insurance Fund, the state agency appointed as conservator of First Maryland when the state seized control of the thrift in November. First Maryland's 35,000 customers have not had access to their $291 million in deposits since then, but the state is negotiating with a Baltimore thrift interested in acquiring First Maryland.

The suits asks for $20 million in compensatory damages and at least $25 million in punitive damages.

MDIF alleges that beginning in 1981, First Maryland officials pursued a course of explosive growth for the institution, running it like "an aggressive real estate investment firm" rather than a savings and loan company. By April 1985, First Maryland's reported assets were $392 million, 12 times what they were in 1981. "Despite this apparent 'growth,' " said the suit, "the association's net worth plunged, and by October 1985, was estimated to be negative $22.6 million."

MDIF contends that eight loans of $77 million each exceeded First Maryland's net worth.

Despite the size of the thrift's reported assets, said the suit, First Maryland had no formal operating budget and its books were "a disaster," kept that way deliberately "to overstate income and evade regulatory prohibitions."

Delinquent loans were hidden from the state Division of Savings and Loan Associations and from First Maryland's insurer, the now-defunct Maryland Savings-Share Insurance Corp. (MSSIC). The savings and loan division and MSSIC, relying on information provided by First Maryland, "postponed taking regulatory action sooner which might have prevented further deterioration of First Maryland's condition," said the suit.

Even with the concealment of some information, the state and MSSIC at that time had uncovered "countless" violations of their regulations, including loans without sufficient collateral, large loans made to unqualified borrowers and a ratio of commercial to residential mortgages that far exceeded regulations.

Despite repeated warnings about those and other operating deficiencies, said MDIF, the board "took no action and stood by while First Maryland hurtled toward insolvency."

By April 1985, according to MDIF, $131 million of the thrift's loans and mortgages were delinquent or had other problems.

"This figure is all the more startling," said the suit, "given that the association did not include more than $17 million in delinquent loans on its reports to MSSIC, at the express direction of defendants Seidel and former senior vice president James R. Porter.

John Kotelly, an attorney representing Seidel, Porter and several other board members, refused to comment on the suit today.

The First Maryland board also approved loans to directors and officers of the thrift and to entities in which they had an interest, often at low interest rates and without sufficient collateral, according to the court papers.

MDIF said an illegal loan of $1.7 million was made to Liberty Towers, for example, a limited partnership in which Seidel and board member Edward A. Dacy had an interest.

In addition to insider loans, MDIF charges that Seidel and the other board members voted themselves extravagant salaries and fees for consulting work. In 1981, when Seidel, already chairman of First Maryland, became president as well, the board voted to give each of its unsalaried members more than $17,500 worth of First Maryland stock.

Board members, who received a $300 fee for each meeting in 1981, were receiving salaries of $2,000 a month by 1985, said MDIF.

In May 1985, the board approved an annual salary of $200,000 for Seidel, plus a $50,000 bonus, "a level which would have been deemed outrageous even in a healthy institution," according to MDIF. Earlier that year, the board approved a $300,000 line of credit for Seidel without the necessary approval of the state's Division of Savings and Loan Associations, according to the suit.

Some directors and senior managers received excessive perquisites, according to MDIF, including cars, low-cost mortgage loans, lines of credit and high travel expense reimbursements.

"Seidel treated the association as his own personal fiefdom," said MDIF.