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 June 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                   (IRS Employer Identification No.)
 of incorporation or organization)

                      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 August 7, 2002.


                                        1

<PAGE>


INDEX                                                                     Page

Part I - FINANCIAL INFORMATION

Financial Statements:
         Consolidated Balance Sheets
           June 30, 2002 and December 31, 2001                            3

         Consolidated Statements of Income
           Three and Six Months Ended June 30, 2002 and 2001              4

         Consolidated Statements of Comprehensive Income
           Three and Six Months Ended June 30, 2002 and 2001              5

         Consolidated Statement of Changes in Shareholders' Equity
           Six Months Ended June 30, 2002                                 6

         Consolidated Statements of Cash Flows
           Six Months Ended June 30, 2002 and 2001                        7

         Notes to Consolidated Financial Statements                       8

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

Part II - OTHER INFORMATION

Exhibit Index                                                             18

Signatures                                                                19

                                      2

<PAGE>



<TABLE>
<CAPTION>

WESTSTAR FINANCIAL SERVICES CORPORATION & SUBSIDIARY
CONSOLIDATED BALANCE SHEETS               (unaudited)
                                                                           June 30,            December 31,
                                                                            2002                  2001
                                                                       ----------------      ---------------
<S>                                                                     <C>                     <C>

ASSETS:
Cash and cash equivalents:
  Cash and due from banks                                                 $  3,394,563           $  3,805,590
  Interest-bearing deposits                                                     33,733                 36,115
  Federal funds sold                                                        10,254,000              1,585,000
                                                                          ------------           ------------
      Total cash and cash equivalents                                       13,682,296              5,426,705
                                                                          ------------           ------------
Investment securities -
  Available for sale, at fair value (amortized cost of
  $6,654,537 and $6,793,328, respectively)                                   6,680,493              6,859,668
                                                                          ------------           ------------
Loans                                                                       65,591,331             65,230,982
Allowance for loan losses                                                     (985,593)              (978,467)
                                                                          ------------           ------------
Net loans                                                                   64,605,738             64,252,515
Premises and equipment, net                                                  2,076,190              2,195,191
Accrued interest receivable                                                    467,557                470,592
Federal Home Loan Bank stock, at cost                                          229,800                229,800
Deferred income taxes                                                          272,670                246,510
Foreclosed properties                                                          639,695                752,539
Other assets                                                                   298,021                218,645
                                                                          ------------           ------------
TOTAL                                                                     $ 88,952,460           $ 80,652,165
                                                                          ============           ============

LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
  Demand                                                                  $ 13,093,435           $ 14,243,137
  NOW accounts                                                               6,066,020              8,435,579
  Money market accounts                                                     19,213,271             16,296,256
  Savings                                                                    1,714,768              1,158,818
  Time deposits of $100,000 or more                                          7,275,414             10,066,980
  Other time deposits                                                       31,337,151             21,931,581
                                                                          ------------           ------------
        Total deposits                                                      78,700,059             72,132,351
Accrued interest payable                                                       175,303               197,2209
Other liabilities                                                            1,781,426                340,397
                                                                                                 ------------
                                                                          ------------           ------------
      Total liabilities                                                     80,656,788             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)                                        289,032                (43,014)
Accumulated other comprehensive income                                          15,932                 40,719
                                                                          ------------           ------------
      Total shareholders' equity                                             8,295,672              7,982,197
                                                                          ------------           ------------
TOTAL                                                                     $ 88,952,460           $ 80,652,165
                                                                          ============           ============
</TABLE>


See notes to consolidated financial statements.


<PAGE>
                                       3


<TABLE>
<CAPTION>


Weststar Financial Services Corporation & Subsidiary             Three Months                          Six Months
Consolidated Statements of Income (unaudited)                    Ended June 30,                      Ended June 30,
                                                               2002            2001                2002            2001
                                                          ---------------  -------------       -------------   -------------
INTEREST INCOME:
<S>                                                     <C>              <C>                 <C>            <C>
Interest and fees on loans                              $      1,238,180 $    1,470,326      $    2,501,853 $     3,038,847
Federal funds sold                                                32,087         42,146              34,089          79,849
Interest-bearing deposits with other banks                         5,830            727              11,986           4,283
Investments:
  U.S Treasuries                                                      --         12,054                  --          23,915
  U.S. Government agencies                                        56,902         44,559             124,475          64,508
  Municipal securities                                             2,483          4,025               4,745              --
  Corporate dividends                                              3,258             --               6,878           8,106
                                                          ---------------  -------------       -------------   -------------
       Total interest income                                   1,338,740      1,573,837           2,684,026       3,219,508
                                                          ---------------  -------------       -------------   -------------
INTEREST EXPENSE:
Time deposits of $100,000 or more                                 67,391        144,157             151,817         260,105
Other time and savings deposits                                  382,286        586,795             706,497       1,220,612
Federal funds purchased                                               --             --              14,888             544
Other interest expense                                             1,443            687               2,887           1,406
                                                          ---------------  -------------       -------------   -------------
     Total interest expense                                      451,120        731,639             876,089       1,482,667
                                                          ---------------  -------------       -------------   -------------
NET INTEREST INCOME                                              887,620        842,198           1,807,937       1,736,841
PROVISION FOR LOAN LOSSES                                         89,300        103,700             291,950         217,770
                                                          ---------------  -------------       -------------   -------------
NET INTEREST INCOME AFTER PROVISION
 FOR LOAN LOSSES                                                 798,320        738,498           1,515,987       1,519,071
                                                          ---------------  -------------       -------------   -------------
OTHER INCOME:
Service charges on deposit accounts                              322,134        190,136             604,937         317,216
Other service fees and commissions                                95,369         80,904             192,569         137,257
Securities gains                                                  30,889             --             30,889               --
Other                                                              6,869          5,753              14,785           8,881
                                                          ---------------  -------------       -------------   -------------
       Total other income                                        455,261        276,793             843,180         463,354
                                                          ---------------  -------------       -------------   -------------
OTHER EXPENSES:
Salaries and wages                                               299,332        295,854             615,058         594,240
Employee benefits                                                 51,290         58,779             107,034         142,382
Occupancy expense, net                                            44,919         42,176              84,422          83,634
Equipment rentals, depreciation and
  Maintenance                                                     67,723         65,565             136,132         132,853
Supplies                                                          59,547         41,772             102,955          80,373
Professional fees                                                221,624        149,644             416,468         273,000
Marketing                                                         41,978         52,009              63,729          98,617
Non-recurring expenses                                           173,750             --             240,750              --
Other                                                             36,354         37,533              70,438          62,430
                                                          ---------------  -------------       -------------   -------------
        Total other expenses                                     996,517        743,332           1,836,986       1,467,529
                                                          ---------------  -------------       -------------   -------------
INCOME BEFORE INCOME TAXES                                       257,064        271,959             522,181         514,896
INCOME TAX PROVISION                                              87,270        113,978             190,135         213,989
                                                          ---------------  -------------       -------------   -------------
NET INCOME                                              $        169,794 $      157,981      $      332,046 $       300,907

PER SHARE AMOUNTS:
  Basic                                                              .20            .18                 .38             .37
  Diluted                                               $            .19 $          .18      $          .38 $           .37
                                                          ===============  =============       =============   =============
</TABLE>


See notes to consolidated financial statements.

<PAGE>
                                       4

<TABLE>
<CAPTION>


WESTSTAR FINANCIAL SERVICES CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
                                                                    Three Months             Six  Months
                                                                    Ended June 30,          Ended June 30,
                                                                  2002         2001        2002         2001

<S>                                                          <C>            <C>           <C>         <C>
NET INCOME                                                   $    169,794   $ 157,981     $ 332,046   $ 300,907
OTHER COMPREHENSIVE INCOME (LOSS) BEFORE TAX:
    Unrealized holding gains (losses) on available
     for sale securities                                           36,812      17,944       (9,495)     28, 032
    Reclassification adjustment for (gains) losses               (30,889)         --       (30,889)          --
                                                             ------------   ------------ ------------ ---------
    Other comprehensive income (loss) before tax                    5,923      17,944      (40,384)      28,032
INCOME TAX EXPENSE (BENEFIT) RELATED
TO ITEMS OF OTHER COMPREHENSIVE
INCOME (LOSS)                                                     (2,287)     (6,930)        15,597    (10,826)
                                                             ------------   ------------ ------------ ---------
OTHER COMPREHENSIVE INCOME (LOSS),
NET OF TAX                                                         3,636      11,014      (24,787)      17,206
                                                             ------------   ------------ ------------ ---------
COMPREHENSIVE INCOME                                         $    173,430   $ 168,995     $ 307,259   $ 318,113
                                                             ------------   ------------ ------------ ---------
</TABLE>



See notes to consolidated financial statements.

                                        5
<PAGE>



<TABLE>
<CAPTION>

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

                                                                                       Accumulated
                                                          Additional                      Other           Total
                                       Common Stock        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                                                                 332,046                       332,046

Other comprehensive income, net of
   tax:

  Unrealized gains on securities:
  Unrealized holding gains on
   available for sale securities,
net of
   reclassification adjustment                                                           (24,787)        (24,787)
and tax
   effect
 Issuance of common stock                800         800        5,416                                      6,216


                                   ------------------------------------------------------------------------------
Balance June 30, 2002                870,521    $870,521   $7,120,187     $289,032      $15,932       $8,295,672
                                   ==============================================================================
</TABLE>


See notes to consolidated financial statements.

                                       6

<PAGE>


<TABLE>
<CAPTION>

Weststar Financial Services Corporation & Subsidiary
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,                                                            2002             2001

<S>                                                                                 <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                         $    332,046      $    300,907
Adjustments to reconcile net income to net cash used by operating activities:
  Depreciation                                                                          145,235           140,613
  Provision for loan loss                                                               291,950           217,770
  Premium amortization and discount accretion, net                                        2,288            (4,003)
  (Increase) decrease in accrued interest receivable                                      3,035           (15,111)
  Increase (decrease) in accrued interest payable                                       (21,917)           73,173
  Increase in other assets                                                               (6,400)         (204,665)
  Increase (decrease) in other liabilities                                              (58,971)           12,127
  Net loss on sales of foreclosed properties                                              8,149                --
  Loss on sales of premises and equipment                                                 1,588                --
  Gains on sale on securities                                                           (30,889)
  Deferred income tax provision (benefit)                                                  (540)          162,003
  Permanent write-down of investment security                                            67,000                --
                                                                                   ------------      ------------
    Net cash used by operating activities                                               732,574           682,814
                                                                                   ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Federal Home Loan Bank stock                                                     --            (4,800)
Purchases of securities available for sale                                           (2,392,322)       (4,281,539)
Maturities of securities available for sale                                           2,600,000         1,275,000
Net increase in loans                                                                  (770,177)       (3,391,067)
Proceeds from sales of securities                                                     1,309,715                --
Proceeds from sales of foreclosed properties                                            229,699                --
Additions to premises and equipment                                                     (27,822)           (9,591)
                                                                                   ------------      ------------
    Net cash provided by (used in) investing activities                                 949,093        (6,411,997)
                                                                                   ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in demand deposits, NOW accounts, and savings accounts          (46,296)        3,011,153
Net increase in certificates of deposits                                              6,614,004         5,846,393
Issuance of common stock                                                                  6,216         1,221,910
Common stock subscriptions                                                                   --          (328,396)
                                                                                   ------------      ------------
    Net cash provided by financing activities                                         6,573,924         9,751,060
                                                                                                     ------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                             8,255,591         4,021,877
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                      5,426,705         5,043,809
                                                                                   ------------      ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                         $ 13,682,296      $  9,065,686
                                                                                   ============      ============

SUPPLEMENTAL DISCLOSURES:
  Cash paid during the period for:
    Interest                                                                       $    898,006      $  1,458,936
    Income taxes                                                                   $    211,848      $      2,545
    Transfer from investments to other assets                                      $     83,000      $         --
    Transfer from loans to foreclosed properties                                   $    125,003      $         --
   Securities purchased, not yet settled                                           $  1,500,000      $         --

</TABLE>


See notes to consolidated financial statements


<PAGE>
                                       7


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 June 30, 2002 and December 31, 2001,  and the
     consolidated  results  of their  operations  for the  three  and six  month
     periods ended June 30, 2002 and 2001 and their cash flows for the six month
     periods ended June 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 June 30,  2002 and  December  31, 2001  classified  by type are as
     follows:

<TABLE>
<CAPTION>
                                                         June 30,         December 31,
                                                           2002              2001
         <S>                                           <C>               <C>
         Real Estate:
           Construction                                $10,715,913       $11,139,588
           Mortgage                                     34,832,272        35,189,010
         Commercial, financial and agricultural         17,521,556        16,512,498
         Consumer                                        2,678,464         2,553,710
                                                       -----------       -----------
         Subtotal                                       65,748,205        65,394,806
         Net deferred loan origination fees              (156,874)         (163,824)
                                                       -----------       -----------
         Total                                         $65,591,331       $65,230,982
                                                       ===========       ===========

</TABLE>


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  $12,978,328  and  $19,280,406  at June  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 870,196 and 869,721 for the
     quarters ended June 30, 2002 and 2001, respectively and 869,960 and 813,328
     for the six month  periods  ended  June 30,  2002 and  2001,  respectively.
     Diluted earnings per share have been computed using common stock and common
     stock  equivalents  of 885,487 and 869,721 for the quarters  ended June 30,
     2002 and 2001,  respectively,  and  883,361  and  813,328 for the six month
     periods  ended  June 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.

5.   The Company's capital to risk weighted assets at June 30, 2002 and December
     31,  2001  totaled  13.79%  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 June 30, 2002 and December 31,
     2001, the Company's capital exceeded the current capital requirements.

6.   June 2001,  June 2001,  the  Financial  Accounting  Standards  Board issued
     Statement  of

                                       8
<PAGE>



     Financial Accounting Standards ("SFAS") No. 141, Business  Combinations and
     SFAS No. 142, Goodwill and Other Intangible  Assets.  SFAS No. 141 requires
     that  all  business  combinations  entered  into  after  June  30,  2001 be
     accounted  for under the purchase  method.  SFAS No. 142 requires  that all
     intangible   assets,   including   goodwill   that  results  from  business
     combinations, be periodically (at least annually) evaluated for impairment,
     with any resulting  impairment loss being charged against  earnings.  Also,
     under  SFAS No.  142,  goodwill  resulting  from any  business  combination
     accounted  for  according  to SFAS No. 141 will not be  amortized,  and the
     amortization  of goodwill  related to business  combinations  entered  into
     prior to June 30, 2001 will be  discontinued  effective,  for the  Company,
     January 1, 2002.  The adoption of the  provisions  of SFAS No. 141 and SFAS
     142  effective  January  1, 2002 did not  affect  the  Company's  financial
     statements.

     In  June  2001,  the  Securities  and  Exchange   Commission  issued  Staff
     Accounting  Bulleting  ("SAB")  No.  102,  "Selected  Loan  Loss  Allowance
     Methodology and  Documentation  Issues." SAB No. 102 sets forth  guidelines
     for  determining  the  allowance for loan losses under  generally  accepted
     accounting  principles.  In addition, SAB No. 102 sets forth guidelines for
     documentation  by  registrants in support of the allowance for loan losses.
     The Company adopted SAB No. 102 on October 1, 2001. The Company  prepares a
     detailed  loan  classification  and applies an estimated  loss  calculation
     methodology,  which is the basis for the determination of the allowance for
     loan  losses.  This  methodology  and related  documentation  thereof,  has
     historically  been in place.  The Company  believes the adoption of SAB No.
     102 will not have an impact on its consolidated financial statements.

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
     Impairment or Disposal of Long-Lived  Assets."  This  statement  supersedes
     SFAS No. 121,  "Accounting for the Impairment of Long-Lived  Assets and for
     Long-Lived  Assets to be Disposed of." SFAS No. 144 retains the fundamental
     provision  of SFAS  No.  121 for (a)  recognition  and  measurement  of the
     impairment of long-lived  assets to be held and used and (b) measurement of
     long-lived  assets to be disposed of by sale. SFAS No. 144 is effective for
     fiscal years beginning after December 15, 2001. Management does not believe
     the adoption of SFAS No. 144 will have a material  effect on the  Company's
     financial position and results of operations.

                                        9

<PAGE>



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

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

During  the  period  from  December  31,  2001 to June 30,  2002,  total  assets
increased $8,300,295 or 10%. This increase,  reflected primarily in the cash and
cash  equivalents and loans, was funded primarily by deposit growth and retained
earnings.

Securities,   federal  funds  sold  and  interest-bearing  balances  with  other
financial  institutions  at  June  30,  2002  totaled  $16,968,226  compared  to
$8,480,783  at December 31, 2001.  Securities  available  for sale  decreased by
$138,791,  excluding  unrealized  gains.  A decrease 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.  Based upon figures released by the FDIC regarding the
collection  of  uninsured  deposits,  the  Company  fully  expects to recoup the
remaining  balance of $83,000.  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  74%  of the  Company's  total  assets.  Loans
increased $360,349 from December 31, 2001 to June 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 loan growth.
Management  places a strong  emphasis on loan quality.  At June 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 $1,269,695,
$1,281,089,  and  $605,006 at June 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 June 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 $130,520 and
$90,667  and  $68,353  at June  30,  2002  and  2001,  and  December  31,  2001,
respectively.  For the six-month periods ended June 30, 2002 and 2001,  Weststar
recognized  interest  income from impaired  loans of  approximately  $24,273 and
$41,742.

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.

The allowance  for loan losses at June 30, 2002 and 2001,  and December 31, 2001
was 1.50%, 1.45% and 1.50%, respectively, of gross loans outstanding.

                                       10

<PAGE>



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
six-months  ended June 30, 2002 and 2001,  and for the years ended  December 31,
2001 and 2000.

Summary of Allowance for Loan Losses
<TABLE>
<CAPTION>

                                                           For the six months         For the years ended
                                                             ended June 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                                 (25,000)      (30,000)      (90,275)           --
    Consumer                                              (70,644)      (23,522)      (27,238)           --
    Commercial, financial and agricultural               (214,796)     (126,636)     (373,087)     (112,062)
                                                         ---------      --------     ---------     ---------
Total charge-offs                                        (310,440)     (180,158)     (490,600)     (112,062)
Recoveries
  Real estate: Mortgage                                     7,472            --            --
  Commercial, financial and agricultural                   15,976            --        45,270            --
  Consumer                                                  9,640         1,671         1,671            --
Total recoveries                                           25,616         9,143        46,941            --
                                                         ---------      --------     ---------     ---------
Net (charge-offs) recoveries                             (284,824)     (171,015)     (443,659)     (112,062)
                                                         ---------      --------     ---------     ---------
Provision charged to operations                           291,950       217,770       550,420       454,960
                                                          --------      --------     ---------     ---------
Balance, end of period                                   $985,593      $918,461      $978,467      $871,706
                                                         =========     =========     =========     =========
Percentage of net charge-offs to
  average loans                                               .28%          .35%          .70%          .23%
Percentage of allowance to
  period-end loans                                           1.50%         1.45%         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>
                                                   June 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                                 $695,967             69%             $645,743             71%
Commercial, financial and
  industrial loans                           245,326             27%              280,653             25%
Consumer                                      18,291              4%               19,381              4%
Unallocated                                   26,009              --               32,690              --
                                            --------            ----             --------            ----
Total allowance                             $985,593            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  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.

                                       11

<PAGE>

Deposits  increased  $6,567,708  during the six months ended June 30, 2002.  The
growth was found in 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 June 30, 2002 to risk weighted  assets totaled 13.79%.
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 June 30, 2002,  the  Company's  capital  exceeded the
current regulatory capital requirements.

RESULTS OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED JUNE 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  June 30,  2002  totaled  $887,620
compared to $842,198 in 2001.  This  increase is  attributable  to growth in net
earning  assets.  The Company's net interest margin was  approximately  4.1% and
4.3% for the quarters ended June 30, 2002 and 2001, respectively.

Weststar  recorded a provision  for loan losses of $89,300 and  $103,700 for the
quarters  ended June 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  1.45% of gross  loans  outstanding  at June 30,  2001 to 1.50% at June 30,
2002. The increase was due to growth in the loan  portfolio,  and an increase in
non-performing  loans from 1.19% to 2.95% of gross loans outstanding at June 30,
2001 and 2002, respectively.

Non-interest income for the June 30, 2002 and 2001 quarters totaled $455,261 and
$276,793,   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 $48,796 in
2001 to $55,503 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  $996,517  compared  to  $743,332 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 a
non-recurring  expense of $173,750 arising from a legal  settlement.  Additional
increased costs related  directly to insurance,  supplies,  audit, tax and legal
fees as well as  sundry  items.  Income  before  income  tax  provision  totaled
$257,064  and  $271,959  for  the  quarters   ended  June  30,  2002  and  2001,
respectively. Income tax provision totaled $87,270 and $113,978 for the quarters
ended June 30, 2002 and 2001,  respectively.  Net income  totaled  $169,794  and
$157,981 for the quarters ended June 30, 2002 and 2001, respectively.

Other  comprehensive  income, net of tax, totaled $3,636 and $11,014 in 2002 and
2001,  respectively.  Comprehensive income, which is the change in shareholders'
equity excluding transactions with shareholders',  totaled $173,430 and $168,995
for the quarters ended June 30, 2002 and 2001, respectively.

                                       12

<PAGE>



COMPARATIVE SIX MONTHS

Net  interest  income for the  six-month  periods  ended June 30,  2002  totaled
$1,807,937  compared to $1,736,841 in 2001.  This  increase is  attributable  to
growth  in  net  earning   assets.   The  Company's  net  interest   margin  was
approximately  4.3% and 4.6% for the  quarters  ended  June 30,  2002 and  2001,
respectively.

Weststar  recorded a provision  for loan losses of $291,950 and $217,770 for the
six month periods ended June 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 June 30, 2002 and 2001  six-month  periods  totaled
$843,180  and  $463,354,  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  $72,967  in  2001 to  $112,831  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
$1,836,986  compared  to  $1,467,529  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 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 $522,181 and $514,896 for the six-month periods ended June 30,
2002 and 2001, respectively.  Income tax provision totaled $522,181 and $514,896
for the six-month periods ended June 30, 2002 and 2001, respectively. Net income
totaled $332,046 and $300,907 for the six-month  periods ended June 30, 2002 and
2001, respectively.

Other comprehensive  income (loss), net of tax, totaled ($24,787) and $17,206 in
2002 and  2001,  respectively.  Comprehensive  income,  which is the  change  in
shareholders' equity excluding transactions with shareholders', totaled $307,259
and $318,113 for the six months ended June 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   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

                                       13

<PAGE>



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 June 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 JUNE 30, 2002
                                   1-90 Days       91-180 Days      181-365 Days      Total One Year   Non-Sensitive   Total
<S>                                 <C>             <C>             <C>                <C>              <C>             <C>
Interest-earning assets:
Interest bearing deposits           $    33,733              --               --       $    33,733               --     $    33,733
Federal funds sold                   10,254,000              --               --        10,254,000               --      10,254,000
Investment securities                 1,500,000     $ 2,625,000               --         4,125,000      $ 2,529,537       6,654,537

Federal Home Loan Bank stock                 --              --               --                --          229,800         229,800
Loans                                44,777,178       2,391,923      $ 4,918,393        52,087,494       11,094,824      63,182,318
Total interest-earning assets        56,564,911       5,016,923        4,918,393        66,500,227       13,854,161      80,354,388

Interest-bearing liabilities
Time deposits                        26,861,250       3,610,412        7,579,393        38,051,055          561,510      38,612,565
All other deposits                   26,994,059              --               --        26,994,059               --      26,994,059
Total interest-bearing               53,855,309       3,610,412        7,579,393        65,045,114          561,510      65,606,624
liabilities

Interest sensitivity gap            $ 2,709,602     $ 1,406,511      ($2,661,000)      $ 1,455,113      $13,292,651     $14,747,764
Cumulative interest sensitivity
Gap                                 $ 2,709,602     $ 4,116,113      $ 1,455,113
Interest-earning assets as a
Percent of interest sensitive
liabilities                               105.0%          139.0%            64.9%            102.2%

</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.

                                 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


<PAGE>
                                       14


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.




                                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

                                       15
<PAGE>



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.
<TABLE>
<CAPTION>

                                            REGULATORY CAPITAL

                                                                                                    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 June 30, 2002
Total Capital (to Risk Weighted Assets)
  Consolidated                                 $9,108        13.79%    $5,285        8.00%    $6,606        10.00%
  Bank                                         $9,011        13.65%    $5,283        8.00%    $6,604        10.00%

Tier 1 Capital (to Risk Weighted Assets)
  Consolidated                                 $8,280        12.53%    $2,643        4.00%    $3,964         6.00%
  Bank                                         $8,184        12.39%    $2,641        4.00%    $3,962         6.00%

Tier 1 Capital (to Average Assets)
  Consolidated                                 $8,280         9.67%    $3,427        4.00%    $4,283         5.00%
  Bank                                         $8,184         9.55%    $3,426        4.00%    $4,283         5.00%

</TABLE>


                                       16
<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 June 30, 2002, liquid assets (cash due from banks,  interest-earning  bank
deposits  and  federal  funds  sold) were  approximately  $13.7  million,  which
represents 15.4% of total assets and 17.4% of total deposits. Supplementing this
liquidity,  Weststar has available lines of credit from  correspondent  banks of
approximately $13.8 million. At June 30, 2002, outstanding commitments to extend
credit and available  lines of credit were $13.0  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  49.1% of Weststar's  total
deposits at June 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 9.2% of the
Company's  total  deposits  at June  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 June 30, 2002,  Weststar's  investments  consisted of U.S.  Government agency
securities,  North Carolina  municipal bonds and  certificates  of deposit.  The
investments,  with aggregate  amortized cost of $6.7 million,  are classified as
available for sale and are presented in the financial statements at their market
value of $6.7 million at June 30, 2002.  These  securities  have tax  equivalent
yields of 4.2%, 6.2% and 4.6%, respectively, with an aggregate remaining term of
approximately 32.7 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 5.25% at June 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.

                                       17

<PAGE>



Part II - OTHER INFORMATION

ITEM 4 - Submission of Matters to a Vote of Security Holders

Proposal 1: To elect three  members of the Board of  Directors  for a three-year
term until the Annual Meeting of  Shareholders  in 2005.  Votes for each nominee
were as follows:

Name                                For              Withheld
----                                ---              --------
Max O. Cogburn, Sr.                 764,109          1,683
Carol L. King                       759,830          5,962
David N. Wilcox                     764,472          1,320

The following directors continue in office after the meeting:

William E. Anderson,  M. David  Cogburn,  G. Gordon  Greenwood,  Darryl J. Hart,
Stephen L. Pignatiello, Kent W. Salisbury, and Laura A. Webb.

Proposal  2: To ratify the  appointment  of  Deloitte & Touche LLP as the Bank's
independent accountants for the year ending December 31, 2002.

                                    For         Against     Withheld
                                    ---         -------     --------
                                    763,515     1,397       880

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

A.)  Exhibits
             None

B.)  Reports on Form 8-K The  Company  filed a current  report on Form 8-K dated
     April 17, 2002 announcing the termination of the firm Deloitte & Touche LLP
     as the Company's  independent  auditors and  appointing the firm Dixon Odom
     PLLC as the  Company's  independent  auditors  for the fiscal  year  ending
     December 31, 2002.

     Items 1, 2, 3, 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:   August 7, 2002                   By:   /s/ Randall C. Hall
                                               ----------------------------
                                               Randall C. Hall.
                                               Executive Vice President and
                                               Chief Financial and
                                               Principal Accounting Officer


CERTIFICATION


The undersigned  hereby  certifies  that, to his knowledge,  (i) the Form 10-QSB
filed by Weststar Financial Services  Corporation (the "Issuer") for the quarter
ended June 30, 2002,  fully complies with the  requirements  of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, and (ii) the information contained
in  that  report  fairly  presents,  in all  material  respects,  the  financial
condition  and  results  of  operations  of the  Issuer on the dates and for the
periods presented therein.


                                        Weststar Financial Services Corporation


Date:   August 7, 2002                  By:  /s/ Randall C. Hall
                                             ---------------------------------
                                             Randall C. Hall
                                             Executive Vice President and
                                             Chief Financial and
                                             Principal Accounting Officer


Date:   August 7, 2002                  By:  /s/ G. Gordon Greenwood
                                             ---------------------------------
                                             G. Gordon Greenwood
                                             President & Chief Executive Officer