The number of undercapitalized U.S. banks and thrifts continued to decline in the second quarter of 2017. Also, the Federal Deposit Insurance Corp.'s "problem institutions" were at their lowest level since March 31, 2008.

In this analysis, S&P Global Market Intelligence classifies a company as undercapitalized if it falls below the prompt corrective active thresholds effective Jan. 1, 2015: a total risk-based capital ratio less than 8%, a Tier 1 capital ratio less than 6%, a CET1 ratio less than 4.5%, or a leverage ratio less than 4%.

Under this approach, 17 banks were undercapitalized at June 30, 2017, down from 21 last quarter. As of Aug. 22, all of these companies remain active. Two new banks entered the list: Argonia, Kan.-based Farmers and Merchants State Bank of Argonia and Bend, Ore.-based High Desert Bank. On the other hand, three companies dropped off the list from last time: Loganville, Ga.-based Legacy State Bank, Spartanburg, S.C.-based First South Bank and Danville, Va.-based First State Bank, which changed its name to Movement Bank earlier this month.

The number of "problem institutions," as disclosed by the FDIC in its quarterly banking profile, fell to 105, down from 112 last quarter and 147 in the year-ago quarter.

Banks report regulatory capital information on the call report schedule RC-R, which can be accessed under the Regulatory Financials section of a company's briefing book page on the SNL website or with the Excel add-in tool. Users also can click here to watch a recorded training on performing a CAMELS analysis. Click here to watch a recorded training on the new reporting requirements and disclosures related to regulatory capital under the final Basel III rules.