If you're looking for a loan in today's trying economy, it's a good time to be living in West Virginia.

National headlines have painted an ugly picture of the banking industry over the past two years, partly because of the large number of failures and foreclosures.

West Virginia's chartered and regulated financial institutions offer consumers a glimmer of hope because they have managed to sidestep the pitfalls responsible for bank failures nationwide.

According to data collected by the Federal Deposit Insurance Corp., 193 banks failed nationally between October 2000 and December 2009. The majority of those failures are recent -- 86 percent of them occurred between January 2008 and December 2009.

West Virginia was home to only one of those failed institutions.

Ameribank, a federal savings institution headquartered in Northfork, closed its doors in September 2008. It was not regulated by the West Virginia Division of Banking.

A bank is classified as failing when it is at serious risk of running out of cash to meet its obligations. The FDIC then takes control of the institution and seeks a buyer or sells off assets to recoup money to pay depositors and creditors.

Failing banks aren't the only problem. Nearly 22 percent of commercial institutions nationwide reported being unprofitable in the FDIC's March 2009 performance summary.

In West Virginia, only 3 percent of commercial banks reported being unprofitable during the same period.

While West Virginia's banks have undoubtedly been fortunate, Division of Banking Commissioner Sally Cline said the strength of the state's financial institutions was the result of more than just luck.

"We didn't really have a housing bubble, so our lenders didn't get involved in subprime lending and make loans to people with credit issues and prior bankruptcies," she said.

As commissioner, Cline is responsible for managing the Division of Banking and supervising all licensed financial companies within the state. Gov. Joe Manchin appointed her to the post in 2008.

In addition to lenders making good judgment calls on loans and adhering to smart risk management practices, Cline said she believes maintaining relationships helped the state stay above the curve.

"Our banks remain well-capitalized and have a solid handle on loan problems and issues," Cline said. "They maintain a good relationship with their customers and aren't out to get them like many bigger financial companies in the country who are more concerned with money than the customer's needs."

While lending stays strong and deposits remain secure, the housing market shows a slightly different trend.

The West Virginia Division of Banking reported that mortgage foreclosures in 2008 increased 12 percent over 2007.

Nearly 2,300 foreclosures occurred in 2007. This increased by nearly 300 in 2008.

The problem seems to be contained to the Eastern Panhandle. Specifically, Berkeley County has taken a sizeable hit. Officials reported 244 foreclosures there in 2007 and 519 the next year. In comparison, Monongalia County, an area experiencing an uptick in economic growth, had 28 foreclosures in 2007 and 42 in 2008.

Cline the problem in the Eastern Panhandle is partially caused by its proximity to a metropolitan area and the high number of borrowers who buy properties for resale.

"There are a lot of borrowers over there who couldn't afford housing that were jumping in while real estate was moving. They were buying properties to turn around and sell. The real estate market just wasn't conducive to that."

While many people remain cautious about the financial condition of the country, Cline said she wants to reassure consumers that West Virginia's banks are going strong -- and expects them to get even better in the near future.

"Banks remain relatively strong considering the economy. Bank performance will start to improve in the next 12 to 24 months," Cline said. "2010 will probably be a mediocre year, but don't expect bank failures. Most banks are in good condition due to their capital conditions.

"Things are starting to stabilize, and that's good."