Weststar Financial Services (WFSC) 8-K Reports Exceptional Growth and Solid Third Quarter Earnings

Exhibit 99.1

FOR RELEASE: October 24, 2008

WESTSTAR FINANCIAL SERVICES CORPORATION

REPORTS EXCEPTIONAL GROWTH AND SOLID THIRD QUARTER EARNINGS

ASHEVILLE, NORTH CAROLINA - Weststar Financial Services Corporation (OTC BB: “WFSC”) reported record consolidated assets of $193.1 million at September 30, 2008 – a 13% increase over September 30, 2007.  Total loans on September 30, 2008 were $157.7 million – an increase of 21% over from the level reported a year earlier.  Deposits reflected 14% growth to $166.5 million at September 30, 2008 compared to the prior year, and shareholders’ equity increased 9% over September 30, 2007 to $15.8 million at September 30, 2008.

Consolidated net income totaled $349 thousand for the three months ended September 30, 2008 compared to $533 thousand for the comparable period in 2007 – a decrease of 35%.  On a diluted per share basis, earnings for the three-month periods of 2008 and 2007 were $.15 vs. $.23 – a decrease of 35%.  For the nine-month periods ended September 30, 2008, net income totaled $1,020 thousand compared to $1,558 thousand for the comparable period in 2007 – a decrease of 35%.  On a diluted per share basis, earnings for the nine-month periods ended September 20, 2008 and 2007, respectively, were $.45 and $.68 – a decrease of 34%.  The decrease in earnings was primarily attributable to a compression in the Company’s net interest margin following Federal Open Market Committee interest rate cut initiatives, increased operating expenses to support overall growth in loans and deposits and an increased provision for loan losses to support loan growth.  Asset quality remained strong and demonstrated continued improvement with nonperforming loans to total assets of .04%, .11% and .06% at September 30, 2008, December 31, 2007 and September 30, 2007, respectively.

Return on assets was .75% compared to 1.27%, and return on equity was 8.74% compared to 15.03% for the three-month periods ended September 30, 2008 and 2007, respectively.  For the nine-month periods ended September 30, 2008 and 2007, respectively, return on assets was .76% compared to 1.27%, and return on equity was 8.64% compared to 15.21%.

“Despite the turmoil and uncertainty in the financial markets, the fundamentals and overall safety and soundness of our bank remain strong, and we believe we are well positioned to meet the needs of our customers during these challenging times.  We will continue to manage the bank with sound and cautious policies that have served us well for over a decade, and have earned us a 5-Star Rating from BauerFinancial, Inc.,” stated G. Gordon Greenwood, President & Chief Executive Officer.

Weststar Financial Services Corporation is the parent company of The Bank of Asheville.  Weststar Financial Services Corporation owns 100% interest in Weststar Financial Services Corporation I, a statutory trust.  The Bank operates five full-service banking offices in Buncombe County, North Carolina – Downtown Asheville, Candler, Leicester, South Asheville and Reynolds.

This news release contains forward-looking statements.  Such statements are subject to certain factors that may cause the company’s results to vary from those expected.  These factors include changing economic and financial market conditions, competition, ability to execute our business plan, items already mentioned in this press release, and other factors described in our filings with the Securities and Exchange Commission.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s judgment only as of the date hereof.  The company undertakes no obligation to publicly revise these forward-looking statements to reflect events and circumstances that arise after the date hereof.

* * * * *

For Further Information, please contact: Randall C. Hall

Executive Vice President and Secretary

Chief Financial Officer

Voice (828) 232-2904; Fax (828) 350-3904

e-mail rhall@bankofasheville.com

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Weststar Financial Services Corporation & Subsidiary
Selected Financial Data
	Three Months Ended									Nine Months Ended
	September 30,									September 30,
	2008			2007			% change			2008			2007			% change
Consolidated earning summary:
Interest income	$	3,080,208		$	3,314,963			-7.1	%	$	9,055,999		$	9,615,558			-5.8	%
Interest expense		1,180,997			1,363,045			-13.4	%		3,713,421			3,939,856			-5.8	%
Net interest income		1,899,211			1,951,918			-2.7	%		5,342,578			5,675,702			-5.9	%
Provision for loan losses		320,635			137,395			133.4	%		508,760			224,970			126.2	%
Net interest income after
provision for loan losses		1,578,576			1,814,523			-13.0	%		4,833,818			5,450,732			-11.3	%
Other income		425,618			386,784			10.0	%		1,216,501			1,131,267			7.5	%
Other expenses		1,478,381			1,368,193			8.1	%		4,511,361			4,141,710			8.9	%
Income before taxes		525,813			833,114			-36.9	%		1,538,958			2,440,289			-36.9	%
Income taxes		176,809			300,186			-41.1	%		519,334			882,758			-41.2	%
Net income	$	349,004		$	532,928			-34.5	%	$	1,019,624		$	1,557,531			-34.5	%
Earnings per share - Basic	$	0.16		$	0.25			-36.0	%	$	0.48		$	0.74			-35.1	%
Earnings per share - Diluted		0.15			0.23			-34.8	%		0.45			0.68			-33.8	%
Average Shares - Basic		2,122,147			2,113,485			0.4	%		2,120,195			2,109,468			0.5	%
Average Shares - Diluted		2,273,388			2,287,007			-0.6	%		2,278,072			2,287,968			-0.4	%
Consolidated balance sheet data:
Total Assets										$	193,073,062		$	170,393,834			13.3	%
Total Deposits											166,519,486			145,911,704			14.1	%
Loans (gross)											157,724,566			129,952,653			21.4	%
Investments											23,681,294			27,050,604			-12.5	%
Shareholders' Equity											15,783,148			14,519,658			8.7	%
Consolidated average balance sheet data:
Total Assets	$	185,946,806		$	166,531,452			11.7	%	$	179,776,991		$	163,707,504			9.8	%
Total Deposits		159,510,362			142,455,579			12.0	%		153,671,327			139,180,204			10.4	%
Loans (gross)		152,497,479			125,301,745			21.7	%		143,687,632			125,363,750			14.6	%
Investments		24,553,284			26,531,300			-7.5	%		25,640,902			26,499,974			-3.2	%
Shareholders' Equity		15,892,539			14,071,165			12.9	%		15,763,655			13,695,211			15.1	%
Consolidated performance ratios:
Return on average assets*		0.75	%		1.27	%					0.76	%		1.27	%
Return on average equity*		8.74	%		15.03	%					8.64	%		15.21	%
Capital to Assets		8.55	%		8.45	%					8.77	%		8.37	%
Consolidated asset quality data and ratios:
Nonaccruing loans										$	82,693		$	96,968			-14.7	%
Accruing loans 90 days past due											-			-			-
Nonperforming loans											82,693			96,968			-14.7	%
Foreclosed properties											227,407			87,787			159.0	%
Nonperforming assets											310,100			184,755			67.8	%
Allowance for loan losses											2,355,244			1,968,455			19.7	%
Loans charged off											283,174			167,192			69.4	%
Recoveries of loans charged off											39,533			26,597			48.6	%
Net loan charge-offs											243,641			140,595			73.3	%
Net charge-offs to average loans*											0.23	%		0.15	%		53.4	%
Nonperforming loans to total assets											0.04	%		0.06	%		-29.7	%
Allowance coverage of nonperforming loans											2848.18	%		2030.00	%		40.3	%
Allowance for loan losses to gross loans											1.49	%		1.51	%		-1.6	%
*Annualized based on number of days in the period.

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Weststar Financial Services Corporation & Subsidiary
Supplemental Quarterly Financial Data
	Quarters Ended
	Sept 30,			Jun 30,			Mar 31,			Dec 31,			Sept 30,
	2008			2008			2008			2007			2007
Consolidated earning summary:
Interest income	$	3,080,208		$	2,895,378		$	3,080,413		$	3,285,876		$	3,314,963
Interest expense		1,180,997			1,185,292			1,347,132			1,355,650			1,363,045
Net interest income		1,899,211			1,710,086			1,733,281			1,930,226			1,951,918
Provision for loan losses		320,635			150,680			37,445			181,755			137,395
Net interest income after provision for loan losses		1,578,576			1,559,406			1,695,836			1,748,471			1,814,523
Other income		425,618			415,849			375,034			397,499			386,784
Other expenses		1,478,381			1,563,388			1,469,592			1,411,526			1,368,193
Income before taxes		525,813			411,867			601,278			734,444			833,114
Income taxes		176,809			129,384			213,141			245,969			300,186
Net income	$	349,004		$	282,483		$	388,137		$	488,475		$	532,928
Earnings per share - Basic	$	0.16		$	0.13		$	0.18		$	0.23		$	0.25
Earnings per share - Diluted		0.15			0.12			0.17			0.21			0.23
Average Shares - Basic		2,122,147			2,119,461			2,118,956			2,117,973			2,113,485
Average Shares - Diluted		2,273,388			2,279,884			2,279,551			2,283,290			2,287,007
Consolidated balance sheet data:
Total Assets	$	193,073,062		$	182,923,687		$	180,968,119		$	174,257,998		$	170,393,834
Total Deposits		166,519,486			155,212,188			155,155,491			149,191,016			145,911,704
Loans (gross)		157,724,566			148,338,170			137,192,577			135,734,224			129,952,653
Investments		23,681,294			25,076,449			26,494,464			26,113,294			27,050,604
Shareholders' Equity		15,783,148			15,782,299			15,793,519			15,179,239			14,519,658
Consolidated average balance sheet data:
Total Assets	$	185,946,806		$	178,016,532		$	175,340,851		$	171,465,008		$	166,531,452
Total Deposits		159,510,362			151,838,703			149,617,026			146,633,893			142,455,579
Loans (gross)		152,497,479			141,392,197			137,076,409			133,456,205			125,301,745
Investments		24,553,284			26,011,589			26,369,785			26,579,297			26,531,300
Shareholders' Equity		15,892,539			15,920,103			15,476,307			14,893,132			14,071,165
Consolidated performance ratios:
Return on average assets*		0.75	%		0.64	%		0.89	%		1.13	%		1.27	%
Return on average equity*		8.74	%		7.14	%		10.09	%		13.01	%		15.03	%
Capital to Assets		8.55	%		8.94	%		8.83	%		8.69	%		8.45	%
Consolidated asset quality data and ratios:
Nonaccruing loans	$	82,693		$	187,157		$	189,126		$	195,683		$	96,968
Accruing loans 90 days past due		-			-			-			-			-
Nonperforming loans		82,693			187,157			189,126			195,683			96,968
Foreclosed properties		227,407			51,006			87,787			87,787			87,787
Nonperforming assets		310,100			238,163			276,913			283,470			184,755
Allowance for loan losses		2,355,244			2,252,385			2,110,658			2,090,125			1,968,455
Loans charged off		236,362			16,910			29,902			89,549			108,174
Recoveries of loans charged off		18,587			7,956			12,990			29,464			9,735
Net loan charge-offs		217,775			8,954			16,912			60,085			98,439
Net charge-offs to average loans*		0.57	%		0.03	%		0.05	%		0.18	%		0.31	%
Nonperforming loans to total assets		0.04	%		0.10	%		0.10	%		0.11	%		0.06	%
Allowance coverage of nonperforming loans		2848.18	%		1203.47	%		1116.01	%		1068.12	%		2030.00	%
Allowance for loan losses to gross loans		1.49	%		1.52	%		1.54	%		1.54	%		1.51	%
* Annualized based on number of days in the period.

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