Weststar Financial Services (WFSC) 8-K Results of Operations and Financial Condition

Exhibit 99.1

FOR RELEASE: July 24, 2009                                         

WESTSTAR FINANCIAL SERVICES CORPORATION

SECOND QUARTER EARNINGS INCREASE 54%

ASHEVILLE, NORTH CAROLINA - Weststar Financial Services Corporation (OTC BB: “WFSC”) reported record consolidated net income totaled $434 thousand for the three months ended June 30, 2009 compared to $282 thousand for the comparable period in 2008 – an increase of 54%.  On a diluted per share basis, earnings for the three-month periods of 2009 and 2008 increased 58% from $.12 per share to $.19.  For the six-month periods ended June 30, 2009, net income remained flat at $658 thousand.  On a diluted per share basis, earnings for the six-month periods ended June 30, 2009 and 2008, respectively, were $.29 and $.29.  The increased performance in earnings was primarily attributable to improved net interest income resulting from growth in net earning assets and lower liability cost.

Consolidated assets on June 30, 2009, increased 22% over June 30, 2008 to a record level of $223.5 million.  Total loans on June 30, 2009 were $180.6 million – an increase of 22% from the level reported a year earlier.  Deposits reflected 26% growth to $195.4 million at June 30, 2009 compared to the prior year, and shareholders’ equity increased 10% from June 30, 2008 to $17.4 million at June 30, 2009.

Return on assets was .80% compared to .64%, and return on equity was 10.02% compared to 7.14% for the three-month periods ended June 30, 2009 and 2008, respectively.  For the six-month periods ended June 30, 2009 and 2008, respectively, return on assets was .62% compared to .76%, and return on equity was 7.75% compared to 8.59%.

“We are pleased with our steady growth and improved earnings through the second quarter given the economic conditions our economy has faced.  During this period, the Federal Deposit Insurance Corporation in an effort to strengthen the insurance fund, increased premiums, and had a special assessment for all banks in the second quarter of 2009.  The result of this action by the FDIC was that our premiums went from $49,000 to $246,000 for the six months ended June 30, 2009.  Given this large and unbudgeted expense item, we are pleased with our performance and proud to be one of the few banks earning a BauerFinancial 5-Star rating”, said G. Gordon Greenwood, President and 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									Six Months Ended
	June 30,									June 30,
	2009			2008			% change			2009			2008			% change
Consolidated earning summary:
Interest income	$	3,236,606		$	2,895,378			11.8	%	$	6,300,268		$	5,975,791			5.4	%
Interest expense		1,153,254			1,185,292			-2.7	%		2,346,327			2,532,424			-7.4	%
Net interest income		2,083,352			1,710,086			21.8	%		3,953,941			3,443,367			14.8	%
Provision for loan losses		221,310			150,680			46.9	%		475,890			188,125			153.0	%
Net interest income after
provision for loan losses		1,862,042			1,559,406			19.4	%		3,478,051			3,255,242			6.8	%
Other income		464,591			415,849			11.7	%		872,798			790,883			10.4	%
Other expenses		1,688,876			1,563,388			8.0	%		3,384,764			3,032,980			11.6	%
Income before taxes		637,757			411,867			54.9	%		966,085			1,013,145			-4.6	%
Income taxes		203,888			129,384			57.6	%		308,273			342,525			-10.0	%
Net income	$	433,869		$	282,483			53.6	%	$	657,812		$	670,620			-1.9	%
Earnings per share - Basic	$	0.20		$	0.13			53.9	%	$	0.31		$	0.32			-3.1	%
Earnings per share - Diluted		0.19			0.12			58.3	%		0.29			0.29			0.0	%
Average Shares - Basic		2,146,132			2,119,461			1.3	%		2,140,937			2,119,209			1.0	%
Average Shares - Diluted		2,257,363			2,279,884			-1.0	%		2,241,744			2,279,723			-1.7	%
Consolidated balance sheet data:
Total Assets										$	223,524,119		$	182,923,687			22.2	%
Total Deposits											195,449,346			155,212,188			25.9	%
Loans (gross)											180,614,075			148,338,170			21.8	%
Investments											22,998,342			25,076,449			-8.3	%
Shareholders' Equity											17,401,159			15,782,299			10.3	%
Consolidated average balance sheet data:
Total Assets	$	217,599,672		$	178,016,532			22.2	%	$	212,405,828		$	176,669,664			20.2	%
Total Deposits		189,745,214			151,838,703			25.0	%		183,766,075			150,721,313			21.9	%
Loans (gross)		177,779,049			141,392,197			25.7	%		175,484,914			139,234,303			26.0	%
Investments		23,142,396			26,011,589			-11.0	%		23,385,482			26,190,687			-10.7	%
Shareholders' Equity		17,374,418			15,920,103			9.1	%		17,117,109			15,698,508			9.0	%
Consolidated performance ratios:
Return on average assets*		0.80	%		0.64	%					0.62	%		0.76	%
Return on average equity*		10.02	%		7.14	%					7.75	%		8.59	%
Capital to Assets		7.98	%		8.94	%					8.06	%		8.89	%
Consolidated asset quality data and ratios:
Nonaccruing and restructured loans										$	3,020,257		$	187,157			1513.8	%
Accruing loans 90 days past due											-			-			0.0	%
Nonperforming loans											3,020,257			187,157			1513.8	%
Foreclosed properties											243,006			51,006			376.4	%
Nonperforming assets											3,263,263			238,163			1270.2	%
Allowance for loan losses											2,847,508			2,252,385			26.4	%
Loans charged off											178,996			46,811			282.4	%
Recoveries of loans charged off											20,633			20,946			-1.5	%
Net loan charge-offs											158,363			25,865			512.3	%
Net charge-offs to average loans*											0.18	%		0.04	%		350.0	%
Nonperforming loans to total assets											1.35	%		0.10	%		1250.0	%
Allowance coverage of nonperforming loans											94.28	%		1203.47	%		-92.2	%
Allowance for loan losses to gross loans											1.58	%		1.52	%		4.0	%
*Annualized based on number of days in the period.

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Weststar Financial Services Corporation & Subsidiary
Supplemental Quarterly Financial Data
	Quarters Ended
	Jun 30,			Mar 31,			Dec 31,			Sept 30,			Jun 30,
	2009			2009			2008			2008			2008
Consolidated earning summary:
Interest income	$	3,236,606		$	3,063,662		$	3,171,825		$	3,080,208		$	2,895,378
Interest expense		1,153,254			1,193,073			1,270,829			1,180,997			1,185,292
Net interest income		2,083,352			1,870,589			1,900,996			1,899,211			1,710,086
Provision for loan losses		221,310			254,580			202,525			320,635			150,680
Net interest income after provision for loan losses		1,862,042			1,616,009			1,698,471			1,578,576			1,559,406
Other income		464,591			408,207			407,609			425,618			415,849
Other expenses		1,688,876			1,695,888			1,620,863			1,478,381			1,563,388
Income before taxes		637,757			328,328			485,217			525,813			411,867
Income taxes		203,888			104,385			203,529			176,809			129,384
Net income	$	433,869		$	223,943		$	281,688		$	349,004		$	282,483
Earnings per share - Basic	$	0.20		$	0.10		$	0.13		$	0.16		$	0.13
Earnings per share - Diluted		0.19			0.10			0.12			0.15			0.12
Average Shares - Basic		2,146,132			2,136,837			2,124,622			2,122,147			2,119,461
Average Shares - Diluted		2,257,363			2,251,225			2,253,846			2,273,388			2,279,884
Consolidated balance sheet data:
Total Assets	$	223,524,119		$	214,202,340		$	202,858,972		$	193,073,062		$	182,923,687
Total Deposits		195,449,346			186,453,881			170,814,106			166,519,486			155,212,188
Loans (gross)		180,614,075			175,006,653			171,239,692			157,724,566			148,338,170
Investments		22,998,342			23,518,059			23,778,449			23,681,294			25,076,449
Shareholders' Equity		17,401,159			16,971,583			16,510,571			15,783,148			15,782,299
Consolidated average balance sheet data:
Total Assets	$	217,599,672		$	207,155,031		$	197,854,734		$	185,946,806		$	178,016,532
Total Deposits		189,745,214			177,720,929			170,545,425			159,510,362			151,838,703
Loans (gross)		177,779,049			173,165,289			165,675,893			152,497,479			141,392,197
Investments		23,142,396			23,631,269			23,695,793			24,553,284			26,011,589
Shareholders' Equity		17,374,418			16,856,942			16,149,305			15,892,539			15,920,103
Consolidated performance ratios:
Return on average assets*		0.80	%		0.42	%		0.57	%		0.75	%		0.64	%
Return on average equity*		10.02	%		5.23	%		6.94	%		8.74	%		7.14	%
Capital to Assets		7.98	%		7.98	%		8.16	%		8.55	%		8.94	%
Consolidated asset quality data and ratios:
Nonaccruing and restructured loans	$	3,020,257		$	1,782,322		$	316,102		$	82,693		$	187,157
Accruing loans 90 days past due		-			-			-			-			-
Nonperforming loans		3,020,257			1,782,322			316,102			82,693			187,157
Foreclosed properties		243,006			205,006			205,006			227,407			51,006
Nonperforming assets		3,263,263			1,987,328			521,108			310,100			238,163
Allowance for loan losses		2,847,508			2,677,865			2,529,981			2,355,244			2,252,385
Loans charged off		61,303			117,693			36,759			236,362			16,909
Recoveries of loans charged off		9,636			10,997			8,971			18,587			7,956
Net loan charge-offs		51,667			106,696			27,788			217,775			8,953
Net charge-offs to average loans*		0.12	%		0.25	%		0.07	%		0.57	%		0.03	%
Nonperforming loans to total assets		1.35	%		0.83	%		0.16	%		0.04	%		0.10	%
Allowance coverage of nonperforming loans		94.28	%		150.25	%		800.37	%		2848.18	%		1203.47	%
Allowance for loan losses to gross loans		1.58	%		1.53	%		1.48	%		1.49	%		1.52	%
* Annualized based on number of days in the period.

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