Weststar Financial Services (WFSC) 8-K Reports Record Breaking $200 Million In Assets and Solid Fourth Quarter Earnings

Exhibit 99.1

FOR RELEASE: January 30, 2009

WESTSTAR FINANCIAL SERVICES CORPORATION

REPORTS RECORD BREAKING $200 MILLION IN ASSETS AND SOLID FOURTH QUARTER EARNINGS

ASHEVILLE, NORTH CAROLINA - Weststar Financial Services Corporation (OTC BB: “WFSC”) reported record consolidated assets of $202.9 million on December 31, 2008 – a 16% increase over December 31, 2007.  Total loans on December 31, 2008 were $171.2 million – an increase of 26% from the level reported a year earlier.  Deposits reflected 15% growth to $170.8 million at December 31, 2008 compared to the prior year, and shareholders’ equity increased 9% from December 31, 2007 to $16.5 million at December 31, 2008.

Consolidated net income totaled $281 thousand for the three months ended December 31, 2008 compared to $488 thousand for the comparable period in 2007 – a decrease of 42%.  On a diluted per share basis, earnings for the three-month periods of 2008 and 2007 were $.12 vs. $.21 – a decrease of 43%.  For the twelve-month periods ended December 31, 2008, net income totaled $1,301 thousand compared to $2,046 thousand for the comparable period in 2007 – a decrease of 36%.  On a diluted per share basis, earnings for the twelve-month periods ended December 31, 2008 and 2007, respectively, were $.57 and $.89 – a decrease of 36%.  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 with nonperforming loans to total assets of .13% and .11% at December 31, 2008 and 2007, respectively.

Return on assets was .57% compared to 1.13%, and return on equity was 6.94% compared to 13.01% for the three-month periods ended December 31, 2008 and 2007, respectively.  For the twelve-month periods ended December 31, 2008 and 2007, respectively, return on assets was .71% compared to 1.24%, and return on equity was 8.20% compared to 14.62%.

 “2008 was a year ruled by negative economic indicators and widespread fear.  Despite the turmoil and uncertainty in the financial markets, the fundamentals and overall safety and soundness of our bank remain strong.  Throughout this economic downturn, we have continued to make loans to assist our commercial and retail customers with the same sound and cautious policies that have served us well for over a decade, and have continued to earn 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									Twelve Months Ended
	December 31,									December 31,
	2008			2007			% change			2008			2007			% change
Consolidated earning summary:
Interest income	$	3,171,825		$	3,285,876			-3.5	%	$	12,227,824		$	12,901,434			-5.2	%
Interest expense		1,270,829			1,355,650			-6.3	%		4,984,250			5,295,506			-5.9	%
Net interest income		1,900,996			1,930,226			-1.5	%		7,243,574			7,605,928			-4.8	%
Provision for loan losses		202,525			181,755			11.4	%		711,285			406,725			74.9	%
Net interest income after
provision for loan losses		1,698,471			1,748,471			-2.9	%		6,532,289			7,199,203			-9.3	%
Other income		407,609			397,499			2.5	%		1,624,110			1,528,766			6.2	%
Other expenses		1,620,863			1,411,526			14.8	%		6,132,224			5,553,236			10.4	%
Income before taxes		485,217			734,444			-33.9	%		2,024,175			3,174,733			-36.2	%
Income taxes		203,529			245,969			-17.3	%		722,863			1,128,727			-36.0	%
Net income	$	281,688		$	488,475			-42.3	%	$	1,301,312		$	2,046,006			-36.4	%
Earnings per share - Basic	$	0.13		$	0.23			-43.5	%	$	0.61		$	0.97			-37.1	%
Earnings per share - Diluted		0.12			0.21			-42.9	%		0.57			0.89			-36.0	%
Average Shares - Basic		2,124,622			2,117,973			0.3	%		2,121,308			2,111,612			0.5	%
Average Shares - Diluted		2,253,846			2,283,290			-1.3	%		2,271,977			2,286,662			-0.6	%
Consolidated balance sheet data:
Total Assets										$	202,858,972		$	174,257,998			16.4	%
Total Deposits											170,814,106			149,191,016			14.5	%
Loans (gross)											171,239,692			135,734,224			26.2	%
Investments											23,778,449			26,113,294			-8.9	%
Shareholders' Equity											16,510,571			15,179,239			8.8	%
Consolidated average balance sheet data:
Total Assets	$	197,854,734		$	171,465,008			15.4	%	$	184,321,441		$	165,663,527			11.3	%
Total Deposits		170,545,425			146,633,893			16.3	%		157,913,218			141,059,696			12.0	%
Loans (gross)		165,675,893			133,456,205			24.1	%		149,214,736			127,403,492			17.1	%
Investments		23,695,793			26,579,297			-10.9	%		25,151,968			26,519,393			-5.2	%
Shareholders' Equity		16,149,305			14,893,132			8.4	%		15,860,596			13,997,104			13.3	%
Consolidated performance ratios:
Return on average assets*		0.57	%		1.13	%					0.71	%		1.24	%
Return on average equity*		6.94	%		13.01	%					8.20	%		14.62	%
Capital to Assets		8.16	%		8.69	%					8.60	%		8.45	%
Consolidated asset quality data and ratios:
Nonaccruing loans										$	268,053		$	195,683			37.0	%
Accruing loans 90 days past due											-			-			-
Nonperforming loans											268,053			195,683			37.0	%
Foreclosed properties											205,006			87,787			133.5	%
Nonperforming assets											473,059			283,470			66.9	%
Allowance for loan losses											2,529,981			2,090,125			21.0	%
Loans charged off											319,933			256,741			24.6	%
Recoveries of loans charged off											48,504			56,061			-13.5	%
Net loan charge-offs											271,429			200,680			35.3	%
Net charge-offs to average loans*											0.18	%		0.16	%		12.5	%
Nonperforming loans to total assets											0.13	%		0.11	%		18.2	%
Allowance coverage of nonperforming loans											943.84	%		1068.12	%		-11.6	%
Allowance for loan losses to gross loans											1.48	%		1.54	%		-3.9	%

*Annualized based on number of days in the period.

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Weststar Financial Services Corporation & Subsidiary
Supplemental Quarterly Financial Data
				Quarters Ended
	Dec 31,			Sept 30,			Jun 30,			Mar 31,			Dec 31,
	2008			2008			2008			2008			2007
Consolidated earning summary:
Interest income	$	3,171,825		$	3,080,208		$	2,895,378		$	3,080,413		$	3,285,876
Interest expense		1,270,829			1,180,997			1,185,292			1,347,132			1,355,650
Net interest income		1,900,996			1,899,211			1,710,086			1,733,281			1,930,226
Provision for loan losses		202,525			320,635			150,680			37,445			181,755
Net interest income after provision for loan losses		1,698,471			1,578,576			1,559,406			1,695,836			1,748,471
Other income		407,609			425,618			415,849			375,034			397,499
Other expenses		1,620,863			1,478,381			1,563,388			1,469,592			1,411,526
Income before taxes		485,217			525,813			411,867			601,278			734,444
Income taxes		203,529			176,809			129,384			213,141			245,969
Net income	$	281,688		$	349,004		$	282,483		$	388,137		$	488,475
Earnings per share - Basic	$	0.13		$	0.16		$	0.13		$	0.18		$	0.23
Earnings per share - Diluted		0.12			0.15			0.12			0.17			0.21
Average Shares - Basic		2,124,622			2,122,147			2,119,461			2,118,956			2,117,973
Average Shares - Diluted		2,253,846			2,273,388			2,279,884			2,279,551			2,283,290
Consolidated balance sheet data:
Total Assets	$	202,858,972		$	193,073,062		$	182,923,687		$	180,968,119		$	174,257,998
Total Deposits		170,814,106			166,519,486			155,212,188			155,155,491			149,191,016
Loans (gross)		171,239,692			157,724,566			148,338,170			137,192,577			135,734,224
Investments		23,778,449			23,681,294			25,076,449			26,494,464			26,113,294
Shareholders' Equity		16,510,571			15,783,148			15,782,299			15,793,519			15,179,239
Consolidated average balance sheet data:
Total Assets	$	197,854,734		$	185,946,806		$	178,016,532		$	175,340,851		$	171,465,008
Total Deposits		170,545,425			159,510,362			151,838,703			149,617,026			146,633,893
Loans (gross)		165,675,893			152,497,479			141,392,197			137,076,409			133,456,205
Investments		23,695,793			24,553,284			26,011,589			26,369,785			26,579,297
Shareholders' Equity		16,149,305			15,892,539			15,920,103			15,476,307			14,893,132
Consolidated performance ratios:
Return on average assets*		0.57	%		0.75	%		0.64	%		0.89	%		1.13	%
Return on average equity*		6.94	%		8.74	%		7.14	%		10.09	%		13.01	%
Capital to Assets		8.16	%		8.55	%		8.94	%		8.83	%		8.69	%
Consolidated asset quality data and ratios:
Nonaccruing loans	$	268,053		$	82,693		$	187,157		$	189,126		$	195,683
Accruing loans 90 days past due		-			-			-			-			-
Nonperforming loans		268,053			82,693			187,157			189,126			195,683
Foreclosed properties		205,006			227,407			51,006			87,787			87,787
Nonperforming assets		473,059			310,100			238,163			276,913			283,470
Allowance for loan losses		2,529,981			2,355,244			2,252,385			2,110,658			2,090,125
Loans charged off		36,759			236,362			16,910			29,902			89,549
Recoveries of loans charged off		8,971			18,587			7,956			12,990			29,464
Net loan charge-offs		27,788			217,775			8,954			16,912			60,085
Net charge-offs to average loans*		0.07	%		0.57	%		0.03	%		0.05	%		0.18	%
Nonperforming loans to total assets		0.13	%		0.04	%		0.10	%		0.10	%		0.11	%
Allowance coverage of nonperforming loans		943.84	%		2848.18	%		1203.47	%		1116.01	%		1068.12	%
Allowance for loan losses to gross loans		1.48	%		1.49	%		1.52	%		1.54	%		1.54	%

*Annualized based on number of days in the period.

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