Ohana Pacific Bank has entered into a consent agreement with the Federal Deposit Insurance Corp. and the state Division of Financial Institutions for alleged unsafe banking practices.

In a filing made public on Friday, the FDIC and state regulators said Ohana Pacific, one of the state's smallest and newest financial institutions, operated with inadequate loan valuation reserves, has a large quantity of problem loans and engaged in unsatisfactory lending and collection practices.

The bank also lacks adequate capital in relation to the bank's asset quality, the FDIC and the state said.

"They've been identified as a bank that needs to take action to shore up some areas of their operations," said Dominic Griffin, commissioner of the Hawaii Division of Financial Institutions.

Ohana Pacific agreed to the enforcement action without admitting or denying regulators' allegations. In a news release, the bank said it agreed to strengthen its capital and improve its asset quality and maintain adequate liquidity levels.

"Ohana Pacific Bank has started to work toward full compliance with the enforcement action and has already developed and initiated a number of programs to this end," the company said.

"Ohana Pacific Bank will continue to provide its customers with a full range of deposit and loan products. All customer deposits remain fully insured to the highest levels established by the FDIC."

Ohana Pacific, which caters to local Korean-American customers, opened in June 2006, or near the peak of Hawai'i's economic boom.

But the company has struggled amid the recent global financial meltdown and the slowdown in the local real estate market.

Ohana Pacific operates with a single branch and lists assets of about $75 million, deposits of $66 million and loans of about $67 million. The company has 22 employees.