It's been a mixed bag for small banks recently. Overall, they seem to be a healthier group than their large bank peers. As Breakingviews points out, they have more capital, make more on their assets and have fewer problem loans than big banks.

But the majority of the failed banks this year have been small banks, and it appears right now that the largest banks are in recovery mode. Many small banks are as well, but the commercial real estate meltdown may wreak havoc on many in 2010. We've noted the expected effect on the top banks, but lots of little banks plowed into this arena as well.

None of this is new. We've been discussing it for a while now, but everything may well hit the fan in 2010--at a time when the FDIC insurance fund will be strained.

For more:
- here's the article

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