John H. Pearson Jr., former CEO of the only Massachusetts bank to fail in the last 16 years, has been ordered by the FDIC to stay out of banking and pay a $225,000 fine.

Pearson, who ran Lowell-based Butler Bank, is subject of an FDIC consent agreement by which he is "prohibited from further participation" in banking and ordered to pay the fine as atonement for alleged unsafe and unsound banking practices, breaches of fiduciary duty and other violations of law. Under the agreement, Pearson is not required to admit any wrongdoing.

The FDIC released the prohibition order late last week.

Pearson resigned in 2008.

At the time of Butler’s failure last spring, state regulators said the bank was "critically undercapitalized" after investing aggressively in the recession-bound commercial real estate market. The state’s efforts to help the bank failed.

Upon its failure, four-branch Butler was seized by the Division of Banks, and turned over to the FDIC, which arranged its sale to Bridgeport, Conn.-based Peoples United Bank.

Before Butler, the most recent Massachusetts bank to fail was Ludlow Savings Bank in 1994.