UNITED STATES SECURITITES AND EXCHANGE COMMISSION
                             Washington, D.C. 29549

                                   FORM 10-QSB

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURTIES
     EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 2002

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from                       to
                              -----------------------  -------------------------

                        Commission File Number: 000-30515

                     Weststar Financial Services Corporation
             (Exact name of registrant as specified in its charter)

        North Carolina                                            56-2181423
(State or other jurisdiction of                                 (IRS Employer
 incorporation or organization)                              Identification No.)


                      79 Woodfin Place, Asheville NC 28801
                    (Address of principal executive offices)

                                  828.252.1735
              (Registrant's telephone number, including area code)
------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X]  No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Common stock,  $1.00 par value - 870,521  shares  outstanding  as of November 8,
2002

                                                                               1
<PAGE>


INDEX                                                                      Page

Part I - FINANCIAL INFORMATION

Item 1 - Financial Statements:
         Consolidated Balance Sheets
           September 30, 2002 and December 31, 2001                          3

         Consolidated Statements of Income
           Three and Nine Months Ended September 30, 2002 and 2001           4

         Consolidated Statements of Comprehensive Income
           Three and Nine Months Ended September 30, 2002 and 2001           5

         Consolidated Statement of Changes in Shareholders' Equity
           Nine Months Ended September 30, 2002                              6

         Consolidated Statements of Cash Flows
           Nine Months Ended September 30, 2002 and 2001                     7

         Notes to Consolidated Financial Statements                          8

Item 2 - Management's Discussion and Analysis
           Financial Condition and Results of Operations                     10

Item 3 - Controls and procedures                                             16

Part II - OTHER INFORMATION

Exhibit Index                                                                17

Signatures                                                                   18








                                                                               2
<PAGE>

<TABLE>
<CAPTION>
WESTSTAR FINANCIAL SERVICES CORPORATION & SUBSIDIARY
  CONSOLIDATED BALANCE SHEETS                                                         (unaudited)
                                                                            September 30,      December 31,
                                                                                2002               2001
                                                                                ----               ----
<S>                                                                         <C>                <C>
ASSETS:
Cash and cash equivalents:
  Cash and due from banks                                                   $  2,850,293       $  3,805,590
  Interest-bearing deposits                                                       36,868             36,115
  Federal funds sold                                                           9,713,000          1,585,000
                                                                            ------------       ------------
      Total cash and cash equivalents                                         12,600,161          5,426,705
                                                                            ------------       ------------
Investment securities -
  Available for sale, at fair value (amortized cost of
  $10,369,181 and $6,793,328, respectively)                                   10,438,355          6,859,668
                                                                            ------------       ------------
Loans                                                                         65,467,993         65,230,982
Allowance for loan losses                                                       (991,960)          (978,467)
                                                                            ------------       ------------
Net loans                                                                     64,476,033         64,252,515
Premises and equipment, net                                                    2,054,884          2,195,191
Accrued interest receivable                                                      405,539            470,592
Federal Home Loan Bank stock, at cost                                            229,800            229,800
Deferred income taxes                                                            262,226            246,510
Foreclosed properties                                                            634,979            752,539
Other assets                                                                     261,888            218,645
                                                                            ------------       ------------
TOTAL                                                                       $ 91,363,865       $ 80,652,165
                                                                            ============       ============

LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
  Demand                                                                    $ 15,005,488       $ 14,243,137
  NOW accounts                                                                 6,901,540          8,435,579
  Money market accounts                                                       24,902,162         16,296,256
  Savings                                                                      1,840,187          1,158,818
  Time deposits of $100,000 or more                                            6,055,706         10,066,980
  Other time deposits                                                         27,494,969         21,931,581
                                                                            ------------       ------------
        Total deposits                                                        82,200,052         72,132,351
Accrued interest payable                                                         147,890           197,2209
Other liabilities                                                                525,316            340,397
                                                                                               ------------
                                                                            ------------       ------------
      Total liabilities                                                       82,873,258         72,669,968
                                                                            ------------       ------------


SHAREHOLDERS' EQUITY:
Preferred stock; authorized $1,000,000; issued and outstanding - none                 --                 --
Common stock, $1 par value, authorized - 9,000,000
    shares; issued and outstanding - 870,521 and 869,721, respectively           870,521            869,721
Additional paid-in capital                                                     7,120,187          7,114,771
Retained earnings (accumulated deficit)                                          457,440            (43,014)
Accumulated other comprehensive income                                            42,459             40,719
                                                                            ------------       ------------
      Total shareholders' equity                                               8,490,607          7,982,197
                                                                            ------------       ------------
                                                                            ------------       ------------
TOTAL                                                                       $ 91,363,865       $ 80,652,165
                                                                            ============       ============
</TABLE>

See notes to consolidated financial statements.

                                                                               3

<PAGE>



<TABLE>
<CAPTION>

Weststar Financial Services Corporation & Subsidiary                Three Months                   Nine Months
Consolidated Statements of Income (unaudited)                    Ended September 30,           Ended September 30,
                                                               2002            2001            2002            2001
                                                               ----            ----            ----            ----
<S>                                                         <C>             <C>             <C>             <C>
INTEREST INCOME:
Interest and fees on loans                                  $1,292,625      $1,354,704      $3,794,478      $4,393,551
Federal funds sold                                              48,397          45,463          82,486         125,312
Interest-bearing deposits with other banks                       2,097           7,086          14,083          11,369
Investments:
  U.S Treasuries                                                    --           4,082              --          27,997
  U.S. Government agencies                                      67,823          57,308         192,298         121,816
  Municipal securities                                           4,847           3,868           9,592              --
  Corporate dividends                                            3,008              --           9,886          11,974
                                                            ----------      ----------      ----------      ----------
       Total interest income                                 1,418,797       1,472,511       4,102,823       4,692,019
                                                            ----------      ----------      ----------      ----------
INTEREST EXPENSE:
Time deposits of $100,000 or more                               56,380         141,219         208,197         401,324
Other time and savings deposits                                414,422         542,988       1,120,919       1,763,600
Federal funds purchased                                             --              72          14,888             616
Other interest expense                                           1,444             687           4,331           2,093
                                                            ----------      ----------      ----------      ----------
     Total interest expense                                    472,246         684,966       1,348,335       2,167,633
                                                            ----------      ----------      ----------      ----------
NET INTEREST INCOME                                            946,551         787,545       2,754,488       2,524,386
PROVISION FOR LOAN LOSSES                                      246,000         105,000         537,950         322,770
                                                            ----------      ----------      ----------      ----------
NET INTEREST INCOME AFTER PROVISION
 FOR LOAN LOSSES                                               700,551         682,545       2,216,538       2,201,616
                                                            ----------      ----------      ----------      ----------
OTHER INCOME:
Service charges on deposit accounts                            305,253         209,256         910,190         526,472
Other service fees and commissions                             119,647          90,486         312,216         227,743
Securities gains                                                    --              --          30,889              --
Other                                                            7,206           6,384          21,991          15,265
                                                            ----------      ----------      ----------      ----------
       Total other income                                      432,106         306,126       1,275,286         769,480
                                                            ----------      ----------      ----------      ----------
OTHER EXPENSES:
Salaries and wages                                             340,765         282,176         955,823         876,416
Employee benefits                                               63.710          49,561         170,744         191,943
Occupancy expense, net                                          49,270          36,214         133,692         119,848
Equipment rentals, depreciation and
  Maintenance                                                   54,672          64,048         190,804         196,901
Supplies                                                        50,779          46,204         153,734         126,577
Professional fees                                              188,051         168,133         604,519         441,133
Marketing                                                       34,636          28,701          98,365         127,318
Non-recurring expenses                                              --              --         240,750              --
Other                                                           66,151          81,122         136,589         143,552
                                                            ----------      ----------      ----------      ----------
        Total other expenses                                   848,034         756,159       2,685,020       2,223,688
                                                            ----------      ----------      ----------      ----------
INCOME BEFORE INCOME TAXES                                     284,623         232,512         806,804         747,408
INCOME TAX PROVISION                                           116,215          98,942         306,350         312,931
NET INCOME                                                  $  168,408      $  133,570      $  500,454      $  434,477
                                                            ==========      ==========      ==========      ==========
PER SHARE AMOUNTS:
  Basic                                                     $      .19      $      .15      $      .58      $      .52
                                                            ==========      ==========      ==========      ==========
  Diluted                                                   $      .19      $      .15      $      .56      $      .52
                                                            ==========      ==========      ==========      ==========

</TABLE>

See notes to consolidated financial statements.

                                                                               4

<PAGE>



WESTSTAR FINANCIAL SERVICES CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

<TABLE>
<CAPTION>
                                                               Three Months                   Nine Months
                                                            Ended September 30,           Ended September 30,
                                                           2002            2001           2002            2001
                                                           ----            ----           ----            ----

<S>                                                     <C>             <C>             <C>             <C>
NET INCOME                                              $ 168,408       $ 133,570       $ 500,454       $ 434,477
OTHER COMPREHENSIVE INCOME BEFORE TAX:
    Unrealized holding gains on available for sale
     Securities                                            43,218          74,008          33,724         102,040
    Reclassification adjustment for (gains) losses             --              --         (30,889)             --
                                                        ---------       ---------       ---------       ---------
    Other comprehensive income before tax                  43,218          74,008           2,835         102,040
INCOME TAX EXPENSE RELATED TO
ITEMS OF OTHER COMPREHENSIVE
INCOME                                                    (16,691)        (28,582)         (1,095)        (39,408)
                                                        ---------       ---------       ---------       ---------
OTHER COMPREHENSIVE INCOME, NET OF                                                                            TAX
                                                           26,527          45,426           1,740          62,632
                                                        ---------       ---------       ---------       ---------
COMPREHENSIVE INCOME                                    $ 194,935       $ 178,996       $ 502,194       $ 497,109
                                                        =========       =========       =========       =========
</TABLE>

See notes to consolidated financial statements.

                                                                               5
<PAGE>

WESTSTAR FINANCIAL SERVICES CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 (unaudited)

<TABLE>
<CAPTION>
                                                                                                              Accumulated
                                            Common Stock             Additional                         Other            Total
                                        ---------------------          Paid-In       Accumulated     Comprehensive    Shareholders'
                                        Shares         Amount          Capital         Deficit          Income          Equity
<S>                                     <C>          <C>             <C>             <C>              <C>             <C>
Balance December 31, 2001               869,721      $  869,721      $7,114,771      $  (43,014)      $   40,719      $7,982,197

Net Income                                                                              500,454                          500,454

Other comprehensive income, net of tax:

  Unrealized gains on securities:
  Unrealized holding gains on
   available for sale securities,
net of
   reclassification adjustment                                                                             1,740           1,740
and tax
   effect
 Issuance of common stock                   800             800           5,416                                            6,216

                                        ----------------------------------------------------------------------------------------
Balance September 30, 2002              870,521      $  870,521      $7,120,187      $  457,440       $   42,459      $8,490,607
                                        ========================================================================================

</TABLE>


See notes to consolidated financial statements.

                                                                               6

<PAGE>


<TABLE>
<CAPTION>

Weststar Financial Services Corporation & Subsidiary
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30,                                                 2002               2001
<S>                                                                                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                          $    500,454       $    434,477
Adjustments to reconcile net income to net cash used by operating activities:
  Depreciation                                                                           206,945            212,030
  Provision for loan loss                                                                537,950            322,770
  Premium amortization and discount accretion, net                                         4,214             (4,039)
  (Increase) decrease in accrued interest receivable                                      65,308            (63,004)
  Increase (decrease) in accrued interest payable                                        (49,330)             5,094
  Increase (decrease) in other assets                                                     36,286           (204,671)
  Increase (decrease) in other liabilities                                               (19,563)            13,342
  Net loss on sales of foreclosed properties                                              27,510                 --
  Loss on sales of premises and equipment                                                  4,190                 --
  Gains on sale on securities                                                            (30,889)                --
  Deferred income tax provision (benefit)                                                (16,810)           162,003
  Permanent write-down of other asset                                                      3,470                 --
  Permanent write-down of investment security                                             67,000                 --
                                                                                    ------------       ------------
    Net cash used by operating activities                                              1,336,735            878,002
                                                                                    ------------       ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Federal Home Loan Bank stock                                                      --             (4,800)
Purchases of securities available for sale                                            (8,904,665)        (4,784,508)
Maturities of securities available for sale                                            4,100,000          2,025,000
Net increase in loans                                                                   (947,405)        (3,195,156)
Proceeds from sales of securities                                                      1,309,715                 --
Proceeds from sales of foreclosed properties                                             275,987                 --
Additions to premises and equipment                                                      (70,828)           (21,163)
                                                                                    ------------       ------------
    Net cash provided by (used in) investing activities                               (4,237,196)        (5,980,627)
                                                                                    ------------       ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in demand deposits, NOW accounts, and savings accounts         8,515,587          7,126,928
Net increase in certificates of deposits                                               1,552,114          4,931,470
Issuance of common stock                                                                   6,216          1,221,910
Common stock subscriptions                                                                    --           (328,396)
                                                                                    ------------       ------------
    Net cash provided by financing activities                                         10,073,917         12,951,912
                                                                                    ------------       ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                              7,173,456          7,849,287
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                       5,426,705          5,043,809
                                                                                    ------------       ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                          $ 12,600,161       $ 12,893,096
                                                                                    ============       ============
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
  Interest                                                                          $  1,397,665       $  2,205,923
  Income taxes                                                                      $    332,578       $    107,545
  Securities purchased, not yet settled                                             $    204,227       $    261,388
Transfer from investments to other assets                                           $     83,000       $         --
Transfer from loans to foreclosed properties                                        $    185,937       $         --

</TABLE>

See notes to consolidated financial statements.

                                                                               7

<PAGE>


WESTSTAR FINANCIAL SERVICES CORPORTION & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.   Weststar Financial  Services  Corporation (the "Company") is a bank holding
     company  with one  subsidiary,  The Bank of  Asheville,  a state  chartered
     commercial bank  incorporated in North Carolina on October 29, 1997. Common
     shares of The Bank of Asheville  were  exchanged  for common  shares of the
     Company on April 29, 2000.

     In the opinion of management, the accompanying financial statements contain
     all  adjustments  necessary to present  fairly the  consolidated  financial
     position of the Company as of September 30, 2002 and December 31, 2001, and
     the  consolidated  results of their operations for the three and nine month
     periods ended September 30, 2002 and 2001 and their cash flows for the nine
     month periods ended September 30, 2002 and 2001.

The  accounting  policies  followed  are set forth in Note 1 to the 2001  Annual
     Report  to  Shareholders  (Form  10-KSB)  on file with the  Securities  and
     Exchange Commission.

2.   Loans at September 30, 2002 and December 31, 2001 classified by type are as
     follows:

                                                 September 30,      December 31,
                                                      2002             2001
     Real Estate:
       Construction                              $ 11,386,785     $ 11,139,588
       Mortgage                                    34,795,337       35,189,010
     Commercial, financial and agricultural        16,989,421       16,512,498
     Consumer                                       2,433,661        2,553,710
                                                 ------------     ------------
     Subtotal                                      65,605,204       65,394,806
     Net deferred loan origination fees              (137,211)        (163,824)
                                                 ------------     ------------
     Total                                       $ 65,467,993     $ 65,230,982
                                                 ============     ============

3.   In the  normal  course  of  business  there  are  various  commitments  and
     contingent  liabilities such as commitments to extend credit, which are not
     reflected  on the  financial  statements.  The  unused  portion of lines to
     extend credit were  $11,935,393  and  $19,280,406 at September 30, 2002 and
     December 31, 2001, respectively.

4.   Basic  earnings per share have been  computed  using the  weighted  average
     number of shares of common stock outstanding of 870,521 and 869,721 for the
     quarters ended  September 30, 2002 and 2001,  respectively  and 870,149 and
     832,303  for the nine month  periods  ended  September  30,  2002 and 2001,
     respectively.  Diluted  earnings per share have been computed  using common
     stock and common stock  equivalents of 896,261 and 869,721 for the quarters
     ended  September 30, 2002 and 2001,  respectively,  and 889,066 and 832,303
     for the nine month periods ended September 30, 2002 and 2001, respectively.
     Shares have been adjusted to reflect the effect of an 11-for-10 stock split
     paid November 2001 in the form of a 10% stock dividend.

The Company's capital to risk weighted assets at September 30, 2002 and December
31, 2001 totaled 14.06% and 13.79%,  respectively.  Current federal  regulations
require  that the  Company  maintain  a minimum  ratio of total  capital to risk
weighted assets of 8%, with at least 4% being in the form of Tier 1 capital,  as
defined in the  regulations.  In addition,  the Company must maintain a leverage
ratio of 4%. As of  September  30, 2002 and December  31,  2001,  the  Company's
capital exceeded the current capital requirements.


                                                                               8


<PAGE>


Weststar Financial Services Corporation & Subsidiary
Management's Discussion and Analysis

CHANGES IN FINANCIAL CONDITION
SEPTEMBER 30, 2002 COMPARED TO DECEMBER 31, 2001

During the period from  December  31, 2001 to September  30, 2002,  total assets
increased $10,711,700 or 13%. This increase, reflected primarily in the cash and
cash  equivalents,  loans and  investment  securities,  was funded  primarily by
deposit growth and retained earnings.

Securities,   federal  funds  sold  and  interest-bearing  balances  with  other
financial  institutions  at September 30, 2002 totaled  $20,188,223  compared to
$8,480,783  at December 31, 2001.  Securities  available  for sale  increased by
$3,375,853,  excluding  unrealized  gains.  A change of $250,000  in  securities
originated  from  the  default  of an  investment.  The  Bank  had  purchased  a
certificate  of  deposit  from an FDIC  insured  institution  in the  amount  of
$250,000.  Subsequently,  the  institution  fell into FDIC  receivership,  which
resulted in the receipt of and FDIC insurance check in the amount of $100,000, a
permanent write down of $67,000, and a transfer from investments to other assets
in the amount of $83,000.  During the third  quarter,  the Company began writing
down the remaining balance as the likelihood of collections  diminishes.  During
1999,  the Company  gained  access to the Federal  Home Loan Bank  system.  This
access grants the Company additional sources of funds for lending and liquidity.
An initial  equity  investment  of $58,100  was  required  to gain access to the
Federal Home Loan Bank's resources.  Investments in Federal Home Loan Bank stock
to date total $229,800.

The  loan  portfolio  constituted  71%  of the  Company's  total  assets.  Loans
increased  $237,011 from December 31, 2001 to September 30, 2002.  Slow economic
growth in addition to management's  desire to improve  liquidity and manage loan
growth  commiserate with deposit growth resulted in the modest increase in loans
outstanding.  Management places a strong emphasis on loan quality.  At September
30, 2002,  there were no loans that (i)  represented  or resulted from trends or
uncertainties  which management  reasonably  expects to materially impact future
operating results, liquidity, or capital resources, or (ii) represented material
credits  about  which  management  was  aware of any  information  which  caused
management to have serious  doubts as to the ability of such borrowers to comply
with the loan repayment terms.

The  recorded  investment  in  loans  that  are  considered  to be  impaired  in
accordance  with  criteria  set  forth  in  Statement  of  Financial  Accounting
Standards  No. 114 of the  Financial  Accounting  Standards  Board was $872,212,
$1,199,226,  and $605,006 at September 30, 2002 and 2001, and December 31, 2001,
respectively.  The average  recorded  balance of impaired  loans during 2002 and
2001 was not significantly  different from the balance at September 30, 2002 and
2001, and December 31, 2001, respectively. The related allowance for loan losses
determined  in accordance  with SFAS No. 114 for impaired  loans was $91,139 and
$64,036 and $68,353 at  September  30, 2002 and 2001,  and  December  31,  2001,
respectively.  For the  nine-month  periods  ended  September 30, 2002 and 2001,
Weststar recognized interest income from impaired loans of approximately $23,619
and $74,732.

Loans are considered impaired when based on current information,  it is probable
that the Company  will be unable to collect all  amounts  due  according  to the
contractual terms of the loan agreement,  including interest payments.  Impaired
loans are  carried  at the lower of the  recorded  investment  in the loan,  the
estimated  present value of the total expected future cash flows,  discounted at
the loan's  effective rate or the fair value of the  collateral,  if the loan is
collateral dependent.

                                                                               9


<PAGE>


The allowance  for loan losses at September 30, 2002 and 2001,  and December 31,
2001 was 1.52%, 1.34% and 1.50%, respectively, of gross loans outstanding.

The  following  table  contains an analysis for the  allowance  for loan losses,
including  the  amount of  charge-offs  and  recoveries  by loan  type,  for the
nine-months  ended September 30, 2002 and 2001, and for the years ended December
31, 2001 and 2000.

Summary of Allowance for Loan Losses

<TABLE>
<CAPTION>
                                                     For the nine months              For the years ended
                                                     ended September 30,                  December 31,
                                                   2002             2001             2001             2000
                                                   ----             ----             ----             ----
<S>                                             <C>              <C>              <C>              <C>
Balance, beginning of period                    $ 978,467        $ 871,706        $ 871,706        $ 528,808
  Charge-offs:
    Real estate: Mortgage                        (152,810)         (75,275)         (90,275)              --
    Consumer                                     (116,207)         (26,713)         (27,238)              --
    Commercial, financial and agricultural       (287,578)        (273,087)        (373,087)        (112,062)
                                                ---------        ---------        ---------        ---------
Total charge-offs                                (556,595)        (375,075)        (490,600)        (112,062)
Recoveries
  Real estate: Mortgage                               913               --               --               --
  Commercial, financial and agricultural           16,639           27,116           45,270               --
  Consumer                                         14,586            1,672            1,671               --
                                                ---------        ---------        ---------        ---------
Total recoveries                                   32,138           28,788           46,941               --
                                                ---------        ---------        ---------        ---------
Net (charge-offs) recoveries                     (524,457)        (346,287)        (443,659)        (112,062)
                                                ---------        ---------        ---------        ---------
Provision charged to operations                   537,950          322,770          550,420          454,960
                                                ---------        ---------        ---------        ---------
Balance, end of period                          $ 991,960        $ 848,189        $ 978,467        $ 871,706
                                                =========        =========        =========        =========

Percentage of net charge-offs to
  average loans                                       .79%             .55%             .70%             .23%
Percentage of allowance to
  period-end loans                                   1.52%            1.34%            1.50%            1.45%

</TABLE>

The following  table allocates the allowance for loan losses by loan category at
the dates  indicated.  The  allocation  of the allowance to each category is not
necessarily  indicative  of future  losses and does not  restrict the use of the
allowance to absorb losses in any category.

<TABLE>
<CAPTION>
                                 September 30, 2002            December 31, 2001
                              Amount of    Percent of      Amount of     Percent of
                              Allowance    Total Loans     Allowance     Total Loans

<S>                            <C>                 <C>      <C>                 <C>
TYPE OF LOAN:
Real estate                    $655,799            70%      $645,743            71%
Commercial, financial and
  industrial loans              290,700            26%       280,653            25%
Consumer                         20,387             4%        19,381             4%
Unallocated                      25,074            --         32,690            --
                               --------      --------       --------      --------
Total allowance                $991,960           100%      $978,467           100%
                               ========      ========       ========      ========
</TABLE>

The  Company  does not have any  significant  loan  concentrations.  During  the
period, loan quality and terms remained  relatively  unchanged and therefore had
no significant  impact on the allowance.  Growth in the allowance has been based
upon  our  formula  allowance.  Due  to the  overall  consistency  of  the  loan
portfolio, there has been no reallocation of the allowance among different parts
of the portfolio.

During  2000,  2001 and 2002,  there were no changes  in  estimation  methods or
assumptions that affected our methodology for assessing the  appropriateness  of
the formula and specific

                                       10

<PAGE>

allowance for credit losses.  Changes in estimates and assumptions regarding the
effect of economic and business conditions on borrowers affect the assessment of
the allowance.

Deposits increased  $10,067,701 during the nine months ended September 30, 2002.
The growth was found in demand, savings, money market demand and certificates of
deposit accounts. Growth stemmed from continued market penetration,  competitive
interest rates and the addition of new products/services.

The  Company's  capital at September 30, 2002 to risk  weighted  assets  totaled
14.06%.  Current  regulations  require a minimum  ratio of total capital to risk
weighted assets of 8%, with at least 4% being in the form of Tier 1 capital,  as
defined in the  regulation.  As of September  30, 2002,  the  Company's  capital
exceeded the current regulatory capital requirements.

RESULTS OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2002 AND 2001

Net interest  income,  the principal  source of the Company's  earnings,  is the
amount of income  generated by earning  assets  (primarily  loans and investment
securities)  less the total  interest  cost of the funds  obtained to carry them
(primarily  deposits  and other  borrowings).  The volume,  rate and mix of both
earning assets and related funding sources determine net interest income.

COMPARATIVE THREE MONTHS

Net interest  income for the quarter ended  September 30, 2002 totaled  $946,551
compared to $787,545 in 2001.  This  increase is  attributable  to growth in net
earning  assets and improved net interest  margins.  The  Company's net interest
margin was approximately 4.2% and 4.0% for the quarters ended September 30, 2002
and 2001, respectively.

Weststar  recorded a provision  for loan losses of $246,000 and $105,000 for the
quarters ended September 30, 2002 and 2001, respectively. The provision for loan
losses is  charged  to  operations  to bring  the  allowance  to a level  deemed
appropriate by management based on the factors  discussed under "Asset Quality."
The provision for credit losses was sufficient to increase the loan loss reserve
from  1.34%  of  gross  loans  outstanding  at  September  30,  2001 to 1.52% at
September 30, 2002.  The increase was due to growth in the loan  portfolio,  and
non-performing loans at a level of 1.74% of gross loans outstanding at September
30, 2002.

Non-interest  income  for the  September  30,  2002  and 2001  quarters  totaled
$432,106  and  $306,126,  respectively.  The  growth in  service  charge  income
increased  commensurate  with  average  growth in  transaction  related  deposit
accounts,  the  deployment  of new  and  enhanced  products  and  services,  and
increased  income from the origination of mortgage  loans.  Mortgage loan income
increase  from  $53,684  in  2001  to  $90,116  in  2002  as a  result  customer
refinancing and home purchases.  Non-interest  expense totaled $848,034 compared
to $756,159 in 2001.  Non-interest  expense  increased  primarily as a result of
Company wide asset growth, the costs of servicing a larger loan and deposit base
of customers and the deployment of new technologies.  Additional increased costs
related  directly to insurance,  supplies,  audit, tax and legal fees as well as
sundry items.  Income before income tax provision  totaled $284,623 and $232,512
for the quarters  ended  September 30, 2002 and 2001,  respectively.  Income tax
provision totaled $116,215 and $98,942 for the quarters ended September 30, 2002
and 2001,  respectively.  Net  income  totaled  $168,408  and  $133,570  for the
quarters ended September 30, 2002 and 2001, respectively.

Other comprehensive  income, net of tax, totaled $26,527 and $45,426 in 2002 and
2001,  respectively.  Comprehensive income, which is the change in shareholders'
equity excluding transactions with shareholders',  totaled $194,935 and $178,996
for the quarters ended September 30, 2002 and 2001, respectively.


                                                                            11

<PAGE>


COMPARATIVE NINE MONTHS

Net interest income for the nine-month  periods ended September 30, 2002 totaled
$2,754,488  compared to $2,524,386 in 2001.  This  increase is  attributable  to
growth  in  net  earning   assets.   The  Company's  net  interest   margin  was
approximately  4.3% and 4.4% for the quarters ended September 30, 2002 and 2001,
respectively.

Weststar  recorded a provision  for loan losses of $537,950 and $322,770 for the
nine  month  periods  ended  September  30,  2002 and  2001,  respectively.  The
provision  for loan losses is charged to  operations to bring the allowance to a
level deemed  appropriate  by management  based on the factors  discussed  under
"Asset Quality."

Non-interest  income for the  September  30,  2002 and 2001  nine-month  periods
totaled  $1,275,286  and $769,480,  respectively.  The growth in service  charge
income increased commensurate with average growth in transaction related deposit
accounts,  the  deployment  of new  and  enhanced  products  and  services,  and
increased  income from the origination of mortgage  loans.  Mortgage loan income
increase  from  $126,654  in 2001 to  $202,947  in  2002  as a  result  customer
refinancing  and home  purchases.  Securities  gains from the sale of securities
totaled  $30,889  compared  to  none  in  2001.   Non-interest  expense  totaled
$2,685,020  compared  to  $2,223,688  in 2001.  Non-interest  expense  increased
primarily  as a result of Company  wide asset  growth,  the costs of servicing a
larger loan and deposit base of customers,  the  deployment of new  technologies
and  non-recurring  expenses of $240,750 arising from a legal settlement and the
permanent  write-down  of an investment  security.  Additional  increased  costs
related  directly to insurance,  supplies,  audit, tax and legal fees as well as
sundry items.  Income before income tax provision  totaled $806,804 and $747,408
for the  nine-month  periods ended  September  30, 2002 and 2001,  respectively.
Income tax provision  totaled  $306,350 and $312,931 for the nine-month  periods
ended September 30, 2002 and 2001, respectively. Net income totaled $500,454 and
$434,477  for  the  nine-month  periods  ended  September  30,  2002  and  2001,
respectively.

Other  comprehensive  income, net of tax, totaled $1,740 and $62,632 in 2002 and
2001,  respectively.  Comprehensive income, which is the change in shareholders'
equity excluding transactions with shareholders',  totaled $502,194 and $497,109
for the nine months ended September 30, 2002 and 2001, respectively.

                           ASSET/LIABILITY MANAGEMENT

The Company's  asset/liability  management,  or interest  rate risk  management,
program is focused  primarily on evaluating and managing the  composition of its
assets and  liabilities  in view of various  interest  rate  scenarios.  Factors
beyond the Company's control, such as market interest rates and competition, may
also have an impact on the Company's interest income and interest expense.

In the  absence  of other  factors,  the  yield or  return  associated  with the
Company's  earning  assets  generally  will increase  from existing  levels when
interest rates rise over an extended  period of time and,  conversely,  interest
income will decrease when interest rates decline.  In general,  interest expense
will  increase  when  interest  rates rise over an extended  period of time and,
conversely, interest expense will decrease when interest rates decline.

Interest  Rate Gap  Analysis.  As a part of its  interest  rate risk  management
policy,  the Company  calculates  an interest  rate "gap."  Interest  rate "gap"
analysis is a common,  though  imperfect,  measure of interest rate risk,  which
measures   the  relative   dollar   amounts  of   interest-earning

                                                                              12
<PAGE>


assets and  interest-bearing  liabilities  which reprice  within a specific time
period, either through maturity or rate adjustment.  The "gap" is the difference
between  the  amounts  of such  assets  and  liabilities  that  are  subject  to
repricing.  A  "positive"  gap for a given  period  means  that  the  amount  of
interest-earning  assets  maturing  or  otherwise  repricing  within that period
exceeds  the  amount  of  interest-bearing  liabilities  maturing  or  otherwise
repricing  within the same period.  Accordingly,  in a declining  interest  rate
environment,  an  institution  with a positive gap would  generally be expected,
absent the effects of other  factors,  to  experience a decrease in the yield on
its assets  greater  than the  decrease in the cost of its  liabilities  and its
income  should  be  negatively  affected.  Conversely,  the cost of funds for an
institution  with a positive gap would  generally  be expected to increase  more
slowly than the yield on its assets in a rising interest rate  environment,  and
such  institution's  net  interest  income  generally  would be  expected  to be
positively  affected  by  rising  interest  rates.  Changes  in  interest  rates
generally have the opposite effect on an institution with a "negative gap."

The  following  table sets  forth the  amounts  of  interest-earning  assets and
interest-bearing  liabilities  outstanding  at  September  30,  2002,  which are
projected to reprice or mature in each of the future time periods shown.  Except
as stated below,  the amounts of assets and  liabilities  shown which reprice or
mature  within a  particular  period  were  determined  in  accordance  with the
contractual terms of the assets or liabilities.  Loans with adjustable rates are
shown  as  being  due at the end of the  next  upcoming  adjustment  period.  In
addition,  the  table  reflects  scheduled  principal  payments,  which  will be
received throughout the lives of the loans. The interest rate sensitivity of the
Company's  assets and liabilities  illustrated in the following table would vary
substantially if different assumptions were used or if actual experience differs
from that indicated by such assumptions.

<TABLE>
<CAPTION>

                                                               TERMS TO REPRICING AT SEPTEMBER 30, 2002
                                     1-90 Days       91-180 Days     181-365 Days     Total One Year   Non-Sensitive   T     otal
<S>                                <C>              <C>              <C>               <C>              <C>             <C>
Interest-earning assets:
Interest bearing deposits          $     36,868               --               --      $     36,868               --    $     36,868
Federal funds sold                    9,713,000               --               --         9,713,000               --       9,713,000
Investment securities                 4,625,000     $  3,500,000     $    500,000         8,625,000     $  1,744,181      10,369,181

Federal Home Loan Bank stock
                                             --               --               --                --          229,800         229,800
Loans                                45,997,862        4,790,847        3,004,127        53,792,836       10,694,237      64,487,073
Total interest-earning assets        60,372,730        8,290,847        3,504,127        72,167,704       12,668,218      84,835,922

Interest-bearing liabilities
Time deposits                         8,955,833        6,290,851       17,506,319        32,753,003          797,672      33,550,675
All other deposits                   33,643,889               --               --        33,643,889               --      33,643,889
Total interest-bearing               42,599,722        6,290,851       17,506,319        66,396,892          797,672      67,194,564
liabilities

Interest sensitivity gap           $ 17,773,008     $  1,999,996     ($14,002,192)     $  5,770,812     $ 11,870,546    $ 17,641,358
Cumulative interest sensitivity
Gap                                $ 17,773,008     $ 19,773,004     $  5,770,812
Interest-earning assets as a
Percent of interest sensitive
Liabilities                               141.7%           131.8%            20.0%            108.7%

</TABLE>

     Non-accrual loans have been excluded.
     Weststar  has   established  an  acceptable   range  of  80%  to  120%  for
     interest-earning assets as a percent of interest sensitive liabilities.



<PAGE>


                                                                           13
                                  ASSET QUALITY

Management  considers  Weststar's asset quality to be of primary importance.  We
maintain an allowance  for loan losses,  to absorb  losses  inherent in the loan
portfolio.  The loan  portfolio  is  analyzed  monthly in an effort to  identify
potential  problems before they actually occur. The allowance for loan losses is
evaluated on a regular basis by management using a methodology that segments the
loan   portfolio   by  types.   Weststar's   methodology   for   assessing   the
appropriateness  of the allowance for loan losses  consists of two key elements,
which are the formula allowance and specific allowance.

The formula  allowance is  calculated  by applying  loss factors to  outstanding
loans and certain  unused  commitments,  in each case based on the internal risk
grade of such loans,  pools of loans and commitments.  Changes in risk grades of
both  performing  and  nonperforming  loans  affect  the  amount of the  formula
allowance.  Loss  factors  are based in part on  limited  experience  and may be
adjusted for  significant  factors that, in  management's  judgment,  affect the
collectibility  of the  portfolio as of the  evaluation  date.  Loss factors are
developed in the following way.

     - Problem  graded loan loss  factors are derived  from a  methodology  that
utilizes  published  experience  of peer  community  banks  and  the  historical
experiences encountered by Weststar's management and senior lending officers.

     - Pass  graded  loan loss  factors  are  based on the  average  annual  net
charge-off rate over a period we believe is reflective of a business cycle.

     - Pooled loan loss factors  (not  individually  graded  loans) are based on
expected  net  charge-offs  for one  year.  Pooled  loans  are  loans  that  are
homogeneous in nature, such as consumer installment loans.

     -  Specific  allowances  are  established  in cases  where  management  has
identified  significant  conditions  or  circumstances  related to a credit that
management  believes  indicate the probability  that a loss has been incurred in
excess  of  the  formula  allowance.  This  amount  is  determined  either  by a
discounted cash flow method or the fair value of the collateral.

The allowance for loan losses is a significant estimate that can and does change
based  upon  management's  process  in  analyzing  the  loan  portfolio  and  on
management's  assumptions about specific  borrowers and applicable  economic and
environmental  conditions.  Specific  reserves  are  affected by the  underlying
quality of the collateral  securing the loans.  General reserves reflect changes
in market  conditions,  similar  types of loans or loans among a similar  group,
changes in regulations and laws, among other factors.

Actual  charge-offs  are  compared to the  allowance  and  adjustments  are made
accordingly.  By basing the past graded loan loss  factors on  charge-off  rates
over a period  reflective of a business  cycle,  the  methodology is designed to
take our recent loss  experience  into  account.  Pooled  loan loss  factors are
adjusted monthly based upon the level of net charge-offs  expected by management
in the next twelve months.  Furthermore,  our methodology permits adjustments to
any loss factor used in the  computation  of the formula  allowance in the event
that,  in  management's   judgment,   significant  factors,   which  affect  the
collectibility  of the portfolio as of the evaluation date, are not reflected in
the loss factors.  By assessing the probable  estimated  losses  inherent in the
loan portfolio on a monthly basis,  we are able to adjust  specific and inherent
loss estimates based upon the most recent information that has become available.

                                                                              14

<PAGE>

                                CAPITAL RESOURCES

Banks and bank holding companies, as regulated institutions,  must meet required
levels of capital.  The Federal Deposit Insurance  Corporation  ("FDIC") and the
Federal Reserve,  the primary  regulators of The Bank of Asheville and Weststar,
respectively,  have adopted  minimum  capital  regulations  or  guidelines  that
categorize  components  and the level of risk  associated  with various types of
assets.  Financial  institutions  are  expected  to  maintain a level of capital
commensurate  with the risk profile  assigned to its assets in  accordance  with
these  guidelines.  As shown in the  following  table,  Weststar and The Bank of
Asheville both maintained  capital levels exceeding the minimum levels for "well
capitalized" banks and bank holding companies.


                               REGULATORY CAPITAL
<TABLE>
<CAPTION>
                                                                                                       To Be Well
                                                                                                   Capitalized Under
                                                                              For Capital          Prompt Corrective
                                                  Actual                   Adequacy Purposes       Action Provisions
                                                  Amount      Ratio       Amount        Ratio      Amount      Ratio
                                                  ------      -----       ------        -----      ------      -----
                                                                         (Dollars in Thousands)
<S>                                               <C>         <C>         <C>           <C>        <C>         <C>
As of September 30, 2002
Total Capital (to Risk Weighted Assets)
  Consolidated                                    $9,275      14.06%      $5,279        8.00%      $6,599      10.00%
  Bank                                            $9,180      13.92%      $5,278        8.00%      $6,597      10.00%

Tier 1 Capital (to Risk Weighted Assets)
  Consolidated                                    $8,448      12.80%      $2,639        4.00%      $3,959       6.00%
  Bank                                            $8,353      12.66%      $2,639        4.00%      $3,958       6.00%

Tier 1 Capital (to Average Assets)
  Consolidated                                    $8,448       9.28%      $3,641        4.00%      $4,552       5.00%
  Bank                                            $8,353       9.18%      $3,641        4.00%      $4,551       5.00%

</TABLE>

                                                                              15
<PAGE>


                                    LIQUIDITY

Maintaining  adequate liquidity while managing interest rate risk is the primary
goal of Weststar's  asset and liability  management  strategy.  Liquidity is the
ability  to fund the  needs  of the  Company's  borrowers  and  depositors,  pay
operating expenses, and meet regulatory liquidity requirements. Loan repayments,
deposit  growth,  federal funds  purchased and borrowings  from the Federal Home
Loan  Bank are  presently  the main  sources  of the  Company's  liquidity.  The
Company's primary uses of liquidity are to fund loans and to make investments.

As of September 30, 2002,  liquid assets (cash due from banks,  interest-earning
bank deposits and federal funds sold) were  approximately  $12.6 million,  which
represents 13.8% of total assets and 15.3% of total deposits. Supplementing this
liquidity,  Weststar has available lines of credit from  correspondent  banks of
approximately $14.0 million. At September 30, 2002,  outstanding  commitments to
extend  credit and  available  lines of credit  were $11.9  million.  Management
believes  that the  combined  aggregate  liquidity  position  of the  Company is
sufficient  to  meet  the  funding  requirements  of  loan  demand  and  deposit
maturities and withdrawals in the near term.

Certificates  of deposit  represented  approximately  40.8% of Weststar's  total
deposits at September 30, 2002. The Company's  growth strategy  includes efforts
focused on increasing the relative volume of transaction  deposit  accounts,  as
the branch  network  is  expanded,  making it more  convenient  for our  banking
customers.  Certificates of deposit of $100,000 or more  represented 7.4% of the
Company's  total  deposits at September 30, 2002.  These  deposits are generally
considered   rate   sensitive,   but  management   believes  most  of  them  are
relationship-oriented.  While the Company will need to pay competitive  rates to
retain these deposits at maturity,  there are other subjective factors that will
determine the Company's continued retention of these deposits.


                              INVESTMENT ACTIVITIES

At  September  30, 2002,  Weststar's  investments  consisted of U.S.  Government
agency  securities and North Carolina  municipal bonds.  The  investments,  with
aggregate amortized cost of $10.4 million,  are classified as available for sale
and are  presented in the  financial  statements  at their market value of $10.4
million at September 30, 2002.  These  securities have tax equivalent  yields of
3.7% and 6.2%,  respectively,  with an aggregate remaining term of approximately
34.7 months.  The  Company's  investment in stock of the Federal Home Loan Bank,
which is required of every  member and is  redeemable  only by the Federal  Home
Loan Bank, was $229,800 with a yield of 5.3% at September 30, 2002.  Because the
investment  is  redeemable  only by the  Federal  Home Loan  Bank,  it is listed
separately rather than a component of the Company's investment portfolio.


                     IMPACT OF INFLATION AND CHANGING PRICES

A financial institution has assets and liabilities that are distinctly different
from those of a company  with  substantial  investments  in plant and  inventory
because the major  portion of its assets is monetary in nature.  As a result,  a
bank's performance may be significantly influenced by changes in interest rates.
Although the banking industry is more affected by changes in interest rates than
by  inflation in the prices of goods and  services,  inflation is a factor which
may influence interest rates.  However,  the frequency and magnitude of interest
rate  fluctuations  do not  necessarily  coincide  with  changes in the  general
inflation  rate.  Inflation  does affect  operating  expenses in that  personnel
expenses,  cost of supplies and outside  services  tend to increase  more during
periods of high inflation.

                                                                              16
<PAGE>


CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report,  the Company carried out an
evaluation  under the  supervision and with the  participation  of the Company's
management,  including the Company's Chief Executive Officer and Chief Financial
Officer,  of the  effectiveness  of the design and  operation  of the  Company's
disclosure  controls and  procedures  pursuant to  Securities  Exchange Act Rule
13a-14.  Based  upon that  evaluation,  the Chief  Executive  Officer  and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures  are  effective  in  timely  alerting  them to  material  information
relating to the Company  required to be included in the  Company's  periodic SEC
Filings. There were no significant changes in the Company's internal controls or
in other factors that could  significantly  affect these controls  subsequent to
the date of their evaluation.

                                                                              17

<PAGE>


Part II - OTHER INFORMATION

ITEM 6  - EXHIBITS AND REPORTS ON FORM 8-K

A.) Exhibits
    99.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

B.) Reports on Form 8-K None

    Items 1, 2, 3,4, 5, 7, 8 and 9 are inapplicable and are omitted.


                                                                              18
<PAGE>


SIGNATURES


Under the requirements of the Securities Exchange Act of 1934, the Bank has duly
caused this report to be signed on its behalf by the undersigned  thereunto duly
authorized.



                                    Weststar Financial Services Corporation


Date:   November 8, 2002            By:   /s/ Randall C. Hall
                                          --------------------------------------
                                          Randall C. Hall.
                                          President and Chief Executive Officer
                                          Executive Vice President and
                                          Chief Financial and
                                          Principal Accounting Officer

                                                                              19

<PAGE>


CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Randall C. Hall, certify that:

     1.   I have  reviewed  this  quarterly  report on Form  10-QSB of  Weststar
          Financial Services Corporation;

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement  of material  fact or omit to state a material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act 13a-14 and 15-d-14)  for the  registrant  and
          have:

          a.   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b.   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c.   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The registrant' other certifying  officer and I have disclosed,  based
          upon our most recent evaluation,  to the registrant's auditors and the
          audit committee of the registrant's board of directors:

          a.   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b.   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:   November 8, 2002    By: /s/ Randall C. Hall
                                ------------------------------------------------
                                Randall C. Hall
                                President and Chief Executive Officer
                                Executive Vice President and
                                Chief Financial and Principal Accounting Officer

                                                                              20

<PAGE>

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


I, G. Gordon Greenwood, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Weststar  Financial
     Services Corporation;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of material  fact or omit to state a material  fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act 13a-14 and 15-d-14) for the registrant and have:

     a.   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c.   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant' other certifying  officer and I have disclosed,  based upon
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of the registrant's board of directors:

     a.   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:   November 8, 2002            By:  /s/ G. Gordon Greenwood
                                         ---------------------------------------
                                         G. Gordon Greenwood
                                         President and Chief Executive Officer
                                         President & Chief Executive Officer

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