Colonial Co-Operative Bank, a small community bank in Gardner, agreed to a rare consent order with state and federal regulators this month to “restore the bank to a satisfactory financial condition” with adequate capital and earnings.

The bank also agreed to retain qualified managers, including a chief executive, and develop plans to improve the bank’s operations as part of the Aug. 7 agreement with the Federal Deposit Insurance Corp. and the Massachusetts Division of Banks.

The Central Massachusetts bank said it is still searching for a permanent chief executive after the previous chief executive stepped down by mutual agreement late last year.

Joseph Guercio, senior vice president and acting chief executive, said the bank was hit hard by the collapse of the housing market, which affected its loan portfolio. “The bank got caught up in that and suffered accordingly,” Guercio said.

Guercio said the bank has since taken steps to improve its finances, but “it has taken time” to repair.

The bank has about two dozen employees and $72 million in assets.