The tree is in stress, and the bugs and such are a sign of that stress, that's when they arrive.
How was the tree planted? If it is too deep (I see the flare, so I'm guessing that isn't the problem) or if the roots weren't untangled and spread out when you planted (taking it out of a pot or balled and burlap isn't enough - soak the roots, spread them out, help the tree get established) are common problems. Other issues might be too much or too little water, poor drainage, or, if a chemical product such as a "weed and feed" (which is not an organic choice, and the package says don't use near trees) has been used in the area. If there is residue from previous treatment on the property, then zeolite products might help (go poke around in the
Library of Organic Information).
The crack in the bark doesn't look good. Look up "Sick Tree Treatment" and do that for the tree and around in the area, and hope that the bark will heal and the problem will go away. If the bark and cambium crack all around the tree it is effectively girdled, and will die. The tree hasn't been in the ground for so long that it can't be replanted if necessary. Look up tree planting also. I replanted a weeping yaupon for my next door neighbor a year after a landscaper put it in for her. It was still wobbly in the hole, so was pretty easy to remove and reset in the soil properly. It's doing great now. As long as there's life (in that tree), there's hope!