Risky coastal developments helped spell the end for Cooperative Bankshares.

The Wilmington bank, which failed in June, didn't closely scrutinize borrowers and didn't follow through when examiners suggested changes, the Charlotte Observer reports, citing a regulatory review released today.

The Federal Deposit Insurance Corp., which released the report, also took some of the blame for Cooperative's failure. Though its examiners began raising questions as early as 2004, asking whether the bank's internal audit team was understaffed, the FDIC acknowledged that firmer action on its part “may have been prudent.”

Cooperative was the second N.C.-based bank to fail in the current crisis. The other, Cape Fear Bank, was also based in Wilmington and also hurt by its concentration in coastal development.

Cooperative, founded in 1898, had about two dozen branches stretching from the Outer Banks to Myrtle Beach.