A Maine thrift company last week repaid nearly $10 million of debt to the Federal Deposit Insurance Corp., five years after the failure of an affiliate bank in Connecticut.

The payment by Westbrook-based First Coastal Corp., and subsidiary Coastal Savings Bank, resolves a three-year-old government claim that nearly threatened the thrift's survival.

Under the 1989 thrift bailout law, the FDIC had imposed a so-called cross-guaranty assessment on First Coastal to recoup losses to the Bank Insurance Fund from the closure of Suffield Bank in 1991. Suffield was owned by the same holding company.

In an effort to stave off a seizure of the thrift, Coastal officials in early 1995 negotiated a unique settlement with FDIC officials. The agency agreed to release its claim in exchange for a two-year note for the $9 million plus interest, scheduled to come due Jan. 31, 1997.

"It's been a long haul," said Gregory T. Caswell, president and chief executive of First Coastal. "It's my understanding that the FDIC is quite pleased with the fact that we've been successful in paying off the obligation six months ahead of time."

"Much of the credit for settling this claim goes to Coastal Savings Bank and First Coastal for their concerted efforts to raise the capital for this payment," said Gail Patelunas, acting director of resolutions for the FDIC, in a press release.

The unique arrangement between the FDIC and First Coastal marks the first time in 11 cross-guaranty cases that the agency has accepted an IOU in place of payment. Typically the agency seizesa bank that cannot pay a claim.

First Coastal's success increases the chance that the agency might try the tactic again if circumstances were right, although officials stressed that each case is different.

"The final goal is to maximize the returns to the Bank Insurance Fund and minimize the losses," said an FDIC official. "We make the decision based on what will achieve that goal."

"It makes tremendous sense both for the FDIC and for a bank in that situation," Mr. Caswell said. "I think the recovery which has resulted from its cross-guaranty settlement is much more significant than if it had seized the bank or taken some other step. It's hard to imagine that they would have received anywhere near this amount."

During the past few months, First Coastal raised about $10.4 million from a public offering, a dividend from Coastal Savings Bank, and a loan from four mutual savings banks. After repaying the note to the FDIC, the company was left with $500,000 in extra cash, Mr. Caswell said.

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