According to a recent article on CNN money, the number of delinquent commercial loans has risen from 8.02% in April 2010 to 9.65% in April 2011. On a percentage scale, that is a 20.3% increase in delinquencies.
So when you are a small bank and a large amount of your revenue is generated from these type of loans, that spells some real trouble. Many of these local banks to not have the deep pockets that the large institutions have, and they are much more susceptible to default.
Sadly, these banks tend to be the best banks out there in terms of customer service, products and pricing. I am a member of just such a bank in my local area, and some of the things they that have done for me were totally unheard of with the national chains.