Massachusetts regulators have taken over Lowell’s Bulter Bank and turned it over to federal officials, who immediately sold it to a Connecticut bank.

Commissioner of Banks Steven L. Antonakes said Friday that Butler Bank is the first Massachusetts bank to fail during the current economic crisis.

Antonakes said Butler was "critically undercapitalized" after investing aggressively in the commercial real estate. Efforts to help the Lowell-based bank failed, forcing state regulators to close it and the Federal Deposit Insurance Corp. to arrange a sale to People’s United Bank of Bridgeport, Conn.

 Butler customers will not experience any loss and should expect little or no disruption of service.

Authorities say this is an isolated incident and the health of the Massachusetts banking industry remains healthy.

The last bank to fail was Ludlow Savings Bank, in October 1994.