This Week's Busted Banks

We're up to 99 seized banks in 2009 with about 11 weeks to go in the year. Time for another 20 or so, it seems.

Regulators shut down San Joaquin Bank in California on Friday, marking the 99th failure this year of a federally insured bank.

The Federal Deposit Insurance Corp. was appointed receiver of San Joaquin Bank, based in Bakersfield, Calif. It had $775 million in assets and $631 million in deposits as of Sept. 29.

The FDIC said the bank's deposits will be assumed by Citizens Business Bank, based in Ontario, Calif. Its five branches will reopen Monday as branches of Citizens Business Bank.

San Joaquin Bank's failure is expected to cost the FDIC's insurance fund $103 million.

Depositors' money is not in danger. The FDIC is backed by the government, and deposits are guaranteed up to $250,000 per account. But the deposit insurance fund has fallen into the red. The FDIC board recently proposed to have U.S. banks prepay about $45 billion of their insurance premiums - three years' worth.

That plan isn't a long-term remedy for the depleted fund. But it would spare ailing banks the immediate cost of an alternative idea: paying an emergency fee for the second time this year. And the FDIC still has billions in loss reserves apart from the insurance fund.

The 99 bank failures this year compare with 25 last year and three in 2007. It's the highest number in a year since 1992 during the savings-and-loan crisis, when 120 institutions collapsed. Closures peaked during that crisis in 1989, when 534 banks were shuttered.

The most severe financial crisis since the 1930s has hit banks large and small. With unemployment rising, consumer spending slack and businesses shuttered, experts say up to 400 more banks could fail in the next couple of years.

The death watch of the local community bank continues. Too Big To Fail has only benefited the banks that are Too Big To Fail.

What happens when the only banks left are TBTF banks?