GARDINER — A federal banking regulator has ordered Savings Bank of Maine to increase its cash holdings by Sept. 30. Otherwise, the 32-branch institution must plan to sell its assets or arrange to be taken over by another bank.

Savings Bank of Maine President Arthur Markos said he’s confident the bank can boost its capital holdings by the deadline imposed by the federal Office of Thrift Supervision.

The “prompt corrective action” directive against Gardiner-based Savings Bank of Maine follows a cease-and-desist order the bank received in August 2009. That order imposed tighter lending restrictions and required the bank to restructure internally. The Office of Thrift Supervision issued an amended cease-and-desist order on March 12, the same day it issued the corrective action directive.

Regulators can issue prompt corrective action directives to address a range of concerns at a bank, said Gretchen Jones, an attorney with Skelton, Taintor & Abbott in Auburn who specializes in financial institutions and financial services.

“Some of them are more serious than others,” she said. “They don’t all mean that the institution is on the verge of collapse or disaster.”

Even in the case of a collapse, the Federal Deposit Insurance Corp. would insure up to $250,000 in deposits for each account holder through 2013.

Markos said Savings Bank of Maine has posted a profit in recent months and is adding business.

“We initially had some outflows of deposits,” Markos said. “Obviously, we were concerned about that. That’s not only stabilized, we’re going in the opposite direction now.”

Still, the bank is having difficulty covering loan losses, Markos said, the result of a weak economy that has hampered many debtors’ ability to repay loans.

The bank recorded $82.1 million in loans that are unlikely to be repaid at the end of 2009, up from $18.5 million a year earlier, according to Office of Thrift Supervision data.

“It hurts to be where we are,” Markos said. “The result of where we are is from trying to help customers who are having a hard time right now with this economy.”

Savings Bank of Maine posted $892.5 million in assets as of Dec. 31, 2009, according to the Office of Thrift Supervision. A year earlier, the bank held $974.6 million in assets.

The regulator is requiring the bank to double a key capital-to-assets ratio, to 10.76 percent, by the end of September.

Markos declined to discuss the bank’s plan for raising capital.

The prompt corrective action directive against Savings Bank of Maine is one of 10 nationally issued so far in 2010.