The undercapitalized bank trend for U.S. banks and thrifts has plateaued during the last eight quarters, ranging from 10 to 14. In the previous eight quarters, the range was 17 to 36.

Twelve banks were undercapitalized as of Sept. 30. Since then, four of them have become historical. Three of the undercapitalized banks failed in the fourth quarter: Newark, N.J.-based City National Bank of New Jersey; Maumee, Ohio-based Resolute Bank; and Louisa, Ky.-based Louisa Community Bank. Additionally, Markesan, Wis.-based Markesan State Bank was acquired by Horicon, Wis.-based Sword Financial Corp.

Of the eight remaining undercapitalized banks, two have announced sales. Duluth, Ga.-based Gwinnett Community Bank agreed to sell to Raleigh, N.C.-based First Citizens BancShares Inc. in September and Fort Walton Beach, Fla.-based First City Bank of Florida announced a deal with an investor group in February.

The Federal Deposit Insurance Corp. maintains a confidential list of banks it classifies as "problem" institutions. At Sept. 30, the "problem" list totaled 55 companies, one fewer than at June 30 and 16 fewer compared to the year-ago quarter. The total assets of those "problem" banks were $48.78 billion.

To be considered undercapitalized, a company must be below at least one of four regulatory capital ratios: 8% for its total risk-based capital ratio, 6% for its Tier 1 capital ratio, 4.5% for the common equity Tier 1 ratio, or 4% for the leverage ratio.