Pacific Century Financial Corp.’s struggle with deteriorating credit quality, which has already prompted an early retirement plan for its chief executive officer, has grown severe enough to spur direct action by its regulator.

The $14 billion-asset Honolulu banking company said Thursday that it has agreed to a memorandum of understanding with its regulator, requiring it to get approval before engaging in activities that affect its capitalization, such as paying dividends, incurring debt, or buying back stock. The company is regulated by the Federal Deposit Insurance Corp.

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