Silver State isn’t another casualty of the subprime flameout. The bank made its biggest bets not on home mortgages, but on loans to developers across Nevada and Arizona. Its demise highlights an aspect of the financial crisis that’s been overshadowed by the crash of Wall Street and its megabanks: How small banks are suffering from a wave of defaults on construction and development loans that could cause dozens more to succumb in the year ahead…

Cassidy has estimated that 200 to 300 more banks are in danger of being closed.

In service of its down-home story, the Times lets the narrative cloud its news judgment. As Barry Ritholtz points out, the Times really buries the lede here:

At DeMotte, Mr. Goetz is bracing for a steep increase in a crucial overhead cost: the bill from the Federal Deposit Insurance Corporation, which is basically an insurance fund underwritten by banks.

Last year, DeMotte paid $42,000 into the fund. This year, because of failures in other parts of the country and particularly among national banks, that sum will rise to $500,000 or more.

Those are the third-to-last and second-to-last paragraphs, respectively. Say what?

This is the nut of the piece here:

But to the deep chagrin of Mr. Ewing and others at the conference, the public, politicians and the media have made little distinction between the stress-tested behemoths and the 7,630 community banks across the country — the vast majority of which have watched the crisis like bystanders at a 10-car pileup.

And that’s right. The behemoth banks and investment banks are the culprits (along with the mortgage companies) in this mess. There’s no question in my mind that we need to have an industry that needs to look a lot more like the community banks than the Citigroups and Bank of America’s.

But that’s another miss by the Times. It doesn’t get into the “too big to fail” problem. These guys are small enough to fail and so they’re incentivized to act more conservatively.

Could have been a really good story. Emphasis on the “could have been.”

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.