No doubt. But isn't a big part of that in 2009 because local banks were encouraged to take bigger risks than they normally would have? I mean, if they didn't have mortgages to bundle for Wall Street, would their more conservative policies have helped them to survive?
Possibly, but not certainly. Small banks fail for a variety of reasons, not in the least because of their inability to absorb a single larger loss.
Traditionally the 'credit union' is the bank form with the lowest rate of failure.
This is an interesting list of failed banks:
http://www.fdic.gov/bank/individual/failed/banklist.html
Especially if you look at the years and the number of failures in those years.
2009 definitely does not look good, more than 100 in one year.