Celebrate small banks

They are doing very well, reports Washington Monthly. Key points:

Easily overlooked amid the crisis of big banks today, small-scale financial institutions are, for the most part, holding steady—and sometimes even better than steady. According to FDIC data, the failure rate among big banks (those with assets of $1 billion or more) is seven times greater than among small banks. Moreover, banks with less than $1 billion in assets—what are typically called community banks—are outperforming larger banks on most key measures, such as return on assets, charge-offs for bad loans, and net profit margin.

How will these banks be affected as the giants are bailed out? Wouldn't we be better off with thousands of strong small banks than a handful of powerhouses? An analogy to chain mail comes to mind.