The boat was recovered from the sea off Colwyn Bay by the Marine Accident Investigation Branch (MAIB).
An investigation report into the accident released by the MAIB on Thursday said it was likely the crew was trapped on board when the vessel suddenly capsized.
The report said: “It is almost certain that Nicola Faith capsized because it was loaded with holds and pots to the point of being unstable, and suddenly capsized without warning.”
The MAIB found the vessel to be ‘usually operated in an unsafe manner’, although the captain, Mr McGrath, had experienced at least two near-capsize events when the boat was previously heavily laden.
The report also revealed that a mandatory Emergency Position Indicating Radio Beacon (EPIRB) was not installed on the vessel and the crew did not wear personal flotation devices consistently.
Chief Marine Casualty Inspector Andrew Moll said: ‘Nicola Faith had been changed and the change had not been approved.
“Nevertheless, the vessel could have been operated safely with care.
“On the day of the accident, the crew was moving their traps to a new area and also transporting a full day’s catch.
“The combined weight of the catch and the fishing gear stacked on deck was far more than the boat was designed to carry. It capsized and all three crew members were lost in this accident.
“Fishermen will always be tempted to land a big catch, but moving fishing gear around at the same time can be overwhelming.
“As fuel prices soar, the temptation to haul more and make fewer trips makes economic sense, but when it comes to stability, the results can be catastrophic.”
A safety leaflet was distributed to the fishing industry following the report, and recommendations were made to the Maritime and Coastguard Agency to revise the Code of Practice guidelines for the safety of small fishing vessels.