Bank failures drain FDIC insurance

Nearly 100 banks have failed so far this year, pushing the Federal Deposit Insurance Corp.'s insurance fund into the red for only the second time since its founding in 1933.

As the worsening commercial real estate debacle continues to ravage the balance sheets of thousands of mostly small and medium-sized banks, analysts expect hundreds more could fail before the problem abates.

This year's 99 bank failures have already cost the FDIC more than $25 billion. That's on top of the nearly $20 billion in costs absorbed by the federal agency from the 25 banks that failed last year.

The recession has so devastated the FDIC's deposit insurance fund that the agency has had to take the unprecedented step of requiring banks to prepay $45 billion of insurance premiums by the end of this year in order to replenish the FDIC's coffers. The premiums would cover the fourth quarter of this year and all of 2010, 2011 and 2012.