SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                        ANNUAL REPORT UNDER SECTION 13 OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                     FOR FISCAL YEAR ENDED DECEMBER 31, 2001

                        Commission File Number: 000-30515


                     WESTSTAR FINANCIAL SERVICES CORPORATION
             (Exact Name of Registrant as specified in its charter)

                                 NORTH CAROLINA
                            (State of Incorporation)

                                   56-2181423
                                   ----------
                      (I.R.S. Employer Identification No.)

                                79 Woodfin Place
                         Asheville, North Carolina 28801
                         -------------------------------
                          (Address of Principal Office)

                                 (828) 252-1735
                                 ---------------
              (Registrant's telephone number, including area code)

               Securities registered pursuant to Section 12(g) of
                                    the Act:

                          COMMON STOCK, $1.00 PAR VALUE

Check whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ _ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]

The Registrant's revenues for the year ended December 31, 2001 were $7,322,376.

The aggregate market value of the voting stock held by non-affiliates of the
Registrant at December 31, 2001 was approximately $7,175,198.

The number of shares of the Registrant's Common Stock outstanding on December
31, 2001 was 869,721.

                      Documents Incorporated by Reference:

         1. Proxy Statement for the 2002 Annual Meeting of Shareholders
                               (Parts II and III).

        Transitional Small Business Disclosure Format Yes [ _ ] No [ X ]



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                                         FORM 10-KSB CROSS-REFERENCE INDEX




                                                     Form
PART I                                               10-KSB   Proxy Statement
------                                               ------   ---------------

Item 1 - Business                                    3
Item 2 - Properties                                  7
Item 3 - Legal Proceedings                           7
Item 4 -  Submission of Matters to a Vote
           of Security Holders                       7

PART II

Item 5 - Market Price and Dividends on the
           Registrant's Common Equity and
           Other Shareholder Matters                 8
Item 6 - Management's Discussion & Analysis                        13
Item 7 - Financial Statements                                      F-1
Item 8 - Changes in and Disagreements with
           Accountants on Financial Disclosure       9

PART III

Item 9 - Directors, Executive Officers, Promoters
           and Control Persons                                     4 & 8
Item 10 - Executive Compensation                                   8
Item 11 - Security Ownership of Certain Beneficial
           Owners and Management                                   3
Item 12 - Certain relationships and Related
            Transactions                                           10
Item 13 - Exhibits and Reports on Form 8-K           9




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                                     PART I

ITEM 1:  BUSINESS

General

Weststar Financial Services Corporation (the "Registrant" or the "Company") is a
bank holding company formed in April 2000 to own all of the common stock of The
Bank of Asheville (the "Bank"), a North Carolina-chartered bank that opened for
business as a community bank in Asheville, Buncombe County, North Carolina in
December 1997. At this time, Weststar does not engage in any business activities
on its own. It only owns The Bank of Asheville, which engages in the commercial
banking business.

Primary Market Area

The Registrant's market area consists of Asheville, Buncombe County, North
Carolina and surrounding areas. Buncombe County is part of the Asheville Ranally
Metropolitian area. Asheville is the county seat and the industrial center of
Buncombe County with a population of approximately 68,000. In addition,
Asheville is the commercial hub for several other prosperous towns in Buncombe
County, including Arden, Biltmore Forest, Black Mountain, Montreat, Skyland,
Weaverville and Woodfin. The total population of Buncombe County is 190,200.

Competition

Commercial banking in North Carolina is extremely competitive in large part due
to statewide branching. Registrant competes in its market areas with some of the
largest banking organizations in the state and the country and other financial
institutions, such as federally and state-chartered savings and loan
institutions and credit unions, as well as consumer finance companies, mortgage
companies and other lenders engaged in the business of extending credit. Many of
Registrant's competitors have broader geographic markets and higher lending
limits than Registrant and are also able to provide more services and make
greater use of media advertising. In Buncombe County as of June 30, 2001 there
were 53 offices of 11 different commercial banks (including the largest banks in
North Carolina) and 28 offices of 16 savings institutions and credit unions, as
well as offices of various other entities engaged in the extension of credit. As
of June 30, 2001, Registrant accounted for 2.76% of total deposits held by
commercial banks and savings banks in Buncombe County.

The enactment of legislation authorizing interstate banking has caused great
increases in the size and financial resources of some of Registrant's
competitors. In addition, as a result of interstate banking, out-of-state
commercial banks have acquired North Carolina banks and which has heightened the
competition among banks in North Carolina.

Despite the competition in its market area, Registrant believes that it has
certain competitive advantages that distinguish it from its competition.
Registrant believes that its primary competitive advantages are its strong local
identity and affiliation with the community and its emphasis on providing
specialized services to small and medium-sized business enterprises, as well as
professional and upper-income individuals. Registrant is locally owned and
managed, making credit and other decisions that have a direct bearing on service
faster and more efficient to obtain. Registrant offers customers modern,
high-tech banking without forsaking community values such as prompt, personal
service and friendliness. Registrant offers many personalized services and
attracts customers by being responsive and sensitive to their individualized
needs.


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 Registrant also relies on goodwill and referrals from shareholders and
satisfied customers, as well as traditional newspaper and radio media to attract
new customers. To enhance a positive image in the community, Registrant supports
and participates in local events and its officers and directors serve on boards
of local civic and charitable organizations.

Employees

The Bank currently employs 30 full-time equivalent employees. Registrant does
not have any officers or employees who are not also officers or employees of the
Bank. None of the Registrant's employees are covered by a collective bargaining
agreement. The Registrant believes its relations with its employees to be good.

Regulation

Registrant is extensively regulated under both federal and state law. Generally,
these laws and regulations are intended to protect depositors and borrowers, not
shareholders. To the extent that the following information describes statutory
and regulatory provisions, it is qualified in its entirety by reference to the
particular statutory and regulatory provisions. Any change in applicable law or
regulation may have a material effect on the business of the Registrant.

                          The Bank Holding Company Act

The Registrant is a bank holding company within the meaning of the Bank Holding
Company Act of 1956, as amended (the "Bank Holding Company Act"), and is
required to register as such with the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board" or "FRB"). A bank holding company is
required to file with the FRB annual reports and other information regarding its
business operations and those of its subsidiaries. It is also subject to
examination by the Federal Reserve Board and is required to obtain Federal
Reserve Board approval prior to acquiring, directly or indirectly, more than 5%
of the voting stock of such bank, unless it already owns a majority of the
voting stock of such bank. Furthermore, a bank holding company must engage, with
limited exceptions, in the business of banking or managing or controlling banks
or furnishing services to or performing services for its subsidiary banks. One
of the exceptions to this prohibition is the ownership of shares of a company
the activities of which the FRB has determined to be so closely related to
banking or managing or controlling banks as to be a proper incident thereto.

STATE LAW. The Bank is subject to extensive supervision and regulation by the
North Carolina Commissioner of Banks (the "Commissioner"). The Commissioner
oversees state laws that set specific requirements for bank capital and regulate
deposits in, and loans and investments by, banks, including the amounts, types,
and in some cases, rates. The Commissioner supervises and performs periodic
examinations of North Carolina-chartered banks to assure compliance with state
banking statutes and regulations, and Bank is required to make regular reports
to the Commissioner describing in detail its resources, assets, liabilities and
financial condition of Registrant. Among other things, the Commissioner
regulates mergers and consolidations of state-chartered banks, the payment of
dividends, loans to officers and directors, record keeping, types and amounts of
loans and investments, and the establishment of branches.

DEPOSIT INSURANCE. As a member institution of the FDIC, Registrant's deposits
are insured up to a maximum of $100,000 per depositor through the Bank Insurance
Fund ("BIF"), administered by the FDIC, and each member institution is required
to pay semi-annual deposit insurance premium assessments to the FDIC. The BIF
assessment rates have a range of 0 cents to 27 cents for every $100 in
assessable deposits. Banks with no premium are subject to an annual statutory
minimum assessment.



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CAPITAL REQUIREMENTS. The federal banking regulators have adopted certain
risk-based capital guidelines to assist in the assessment of the capital
adequacy of a banking organization's operations for both transactions reported
on the balance sheet as assets and transactions, such as letters of credit, and
recourse arrangements, which are recorded as off balance sheet items. Under
these guidelines, nominal dollar amounts of assets and credit equivalent amounts
of off balance sheet items are multiplied by one of several risk adjustment
percentages which range from 0% for assets with low credit risk, such as certain
U.S. Treasury securities, to 100% for assets with relatively high credit risk,
such as business loans.

A banking organization's risk-based capital ratios are obtained by dividing its
qualifying capital by its total risk adjusted assets. The regulators measure
risk-adjusted assets, which include off balance sheet items, against both total
qualifying capital (the sum of Tier 1 capital and limited amounts of Tier 2
capital) and Tier 1 capital. "Tier 1," or core capital, includes common equity,
qualifying noncumulative perpetual preferred stock and minority interests in
equity accounts of consolidated subsidiaries, less goodwill and other
intangibles, subject to certain exceptions. "Tier 2," or supplementary capital,
includes among other things, limited-life preferred stock, hybrid capital
instruments, mandatory convertible securities, qualifying subordinated debt, and
the allowance for loan and lease losses, subject to certain limitations and less
required deductions. The inclusion of elements of Tier 2 capital is subject to
certain other requirements and limitations of the federal banking agencies.
Banks and bank holding companies subject to the risk-based capital guidelines
are required to maintain a ratio of Tier 1 capital to risk-weighted assets of at
least 4% and a ratio of total capital to risk-weighted assets of at least 8%.
The appropriate regulatory authority may set higher capital requirements when
particular circumstances warrant. As of December 31, 2001, Registrant was
classified as "well-capitalized" with Tier 1 and Total Risk - Based Capital of
12.53% and 13.79% respectively.

The federal banking agencies have adopted regulations specifying that they will
include, in their evaluations of a bank's capital adequacy, an assessment of the
bank's interest rate risk ("IRR") exposure. The standards for measuring the
adequacy and effectiveness of a banking organization's IRR management include a
measurement of board of director and senior management oversight, and a
determination of whether a banking organization's procedures for comprehensive
risk management are appropriate for the circumstances of the specific banking
organization.

Failure to meet applicable capital guidelines could subject a banking
organization to a variety of enforcement actions, including limitations on its
ability to pay dividends, the issuance by the applicable regulatory authority of
a capital directive to increase capital and, in the case of depository
institutions, the termination of deposit insurance by the FDIC, as well as the
measures described under the "Federal Deposit Insurance Corporation Improvement
Act of 1991" below, as applicable to undercapitalized institutions. In addition,
future changes in regulations or practices could further reduce the amount of
capital recognized for purposes of capital adequacy. Such a change could affect
the ability of Registrant to grow and could restrict the amount of profits, if
any, available for the payment of dividends to the shareholders.

FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991. In December,
1991, Congress enacted the Federal Deposit Insurance Corporation Improvement Act
of 1991 ("FDICIA"), which substantially revised the bank regulatory and funding
provisions of the FDIA and made significant revisions to several other federal
banking statutes. FDICIA provides for, among other things:


                                       5
<PAGE>



o    publicly available annual financial condition and management reports for
     certain financial institutions, including audits by independent
     accountants,

o    the establishment of uniform accounting standards by federal banking
     agencies,

o    the establishment of a "prompt corrective action" system of
     regulatory supervision and intervention, based on capitalization levels,
     with greater scrutiny and restrictions placed on depository institutions
     with lower levels of capital,

o    additional grounds for the appointment of a conservator or receiver, and

o    restrictions or prohibitions on accepting brokered deposits,
     except for institutions which significantly exceed minimum capital
     requirements.

FDICIA also provides for increased funding of the FDIC insurance funds and the
implementation of risk-based premiums.

A central feature of FDICIA is the requirement that the federal banking agencies
take "prompt corrective action" with respect to depository institutions that do
not meet minimum capital requirements. Pursuant to FDICIA, the federal bank
regulatory authorities have adopted regulations setting forth a five-tiered
system for measuring the capital adequacy of the depository institutions that
they supervise. Under these regulations, a depository institution is classified
in one of the following capital categories: "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized" and
"critically undercapitalized." An institution may be deemed by the regulators to
be in a capitalization category that is lower than is indicated by its actual
capital position if, among other things, it receives an unsatisfactory
examination rating with respect to asset quality, management, earnings or
liquidity.

FDICIA provides the federal banking agencies with significantly expanded powers
to take enforcement action against institutions which fail to comply with
capital or other standards. Such action may include the termination of deposit
insurance by the FDIC or the appointment of a receiver or conservator for the
institution. FDICIA also limits the circumstances under which the FDIC is
permitted to provide financial assistance to an insured institution before
appointment of a conservator or receiver.

MISCELLANEOUS. The dividends that may be paid by Registrant are subject to legal
limitations. In accordance with North Carolina banking law, dividends may not be
paid unless Registrant's capital surplus is at least 50% of its paid-in capital.
Further, without the approval of the North Carolina Commissioner of Banks, a
bank that has not been in existence for at least three years may pay cash
dividends.

The earnings of Registrant will be affected significantly by the policies of the
Federal Reserve Board, which is responsible for regulating the United States
money supply in order to mitigate recessionary and inflationary pressures. Among
the techniques used to implement these objectives are open market transactions
in United States government securities, changes in the rate paid by banks on
bank borrowings, and changes in reserve requirements against bank deposits.
These techniques are used in varying combinations to influence overall growth
and distribution of bank loans, investments, and deposits, and their use may
also affect interest rates charged on loans or paid for deposits.


                                       6
<PAGE>


The monetary policies of the Federal Reserve Board have had a significant effect
on the operating results of commercial banks in the past and are expected to
continue to do so in the future. In view of changing conditions in the national
economy and money markets, as well as the effect of actions by monetary and
fiscal authorities, no prediction can be made as to possible future changes in
interest rates, deposit levels, loan demand or the business and earnings of
Registrant.

Recent Legislative Developments

Effective March 11, 2000, the Gramm-Leach-Bliley Act of 1999, which was signed
into law on November 12, 1999, will allow a bank holding company to qualify as a
"financial holding company" and, as a result, be permitted to engage in a
broader range of activities that are "financial in nature" and in activities
that are determined to be incidental or complementary to activities that are
financial in nature. The Gramm-Leach-Bliley Act amends the BHC Act to include a
list of activities that are financial in nature, and the list includes
activities such as underwriting, dealing in and making a market in securities,
insurance underwriting and agency activities and merchant banking. The Federal
Reserve Board is authorized to determine other activities that are financial in
nature or incidental or complementary to such activities. The Gramm-Leach-Bliley
Act also authorizes banks to engage through financial subsidiaries in certain of
the activities permitted for financial holding companies.

Registrant cannot predict what legislation might be enacted or what regulations
might be adopted, or if enacted or adopted, the effect thereof on Registrant's
operations.

ITEM 2:  PROPERTIES

The following table sets forth the location of the Registrant's offices as of
December 31, 2001.

                                                     APPROX.
                                    YEAR             SQUARE
OFFICE LOCATION            OPENED   FOOTAGE          OWN/LEASE
---------------            ------   -------          ---------

Main Office
79 Woodfin Place           1997      10,000             Own
Asheville, NC

Candler Office
6 Dogwood Road             1999       1,900             Own building,
Candler, NC                                              lease land

Leicester Highway Office   2000         800             Lease
557 New Leicester Highway
Asheville, NC

ITEM 3:  LEGAL PROCEEDINGS

There were no known current or pending proceedings as of December 31, 2001.

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.
PART II


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ITEM 5: MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS

Market Summary

Weststar Financial Services Corporation stock is traded on the Over-The-Counter
Bulletin Board under the symbol "WFSC." There were 869,721 shares outstanding at
December 31, 2001 owned by approximately 800 shareholders.

During 2001, 107,470 shares of the Company's common stock were traded. The
closing price of the stock was $8.25.

The following table represents stock prices during the trading periods.

2001     1st      2nd      3rd      4th
         Qtr.     Qtr.     Qtr.     Qtr.
High     $7.73    $7.77    $7.73    $8.25
Low      $6.47    $6.42    $7.05    $7.09
Close    $7.73    $7.27    $7.50    $8.25

2000     1st      2nd      3rd      4th
         Qtr.     Qtr.     Qtr.     Qtr.
High     $8.64    $8.52    $8.07    $8.18
Low      $5.80    $5.11    $4.55    $4.66
Close    $7.61    $6.93    $5.11    $6.93

No cash dividends were paid in 2001 or 2000. A 10% stock dividend in the form of
an 11-for-10 stock split was paid to shareholders in November, 2001.

Stock Transfer Agent and Registrar

Registrar and Transfer Company
10 Commerce Drive
Cranford, NJ 07016
908.497.2312 or 800.368.5948

Shareholder Information

For information, contact Randall C. Hall, Executive Vice President and
Secretary, Registrant, 79 Woodfin Place Asheville, North Carolina, 28801 or
rhall@bankofasheville.com.

Annual Shareholders Meeting

The Annual Meeting of the shareholders of Registrant will be held at 3:00 p.m.,
Tuesday, April 16, 2002, at the Renaissance Asheville Hotel, One Thomas Wolfe
Plaza, Asheville, North Carolina.

Independent Auditors



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Deloitte & Touche LLP, 310 First Union Financial Center, P.O. Box 9197, Hickory,
North Carolina 28603.

ITEM 6:  MANAGEMENT'S DISCUSSION AND ANALYSIS

See Proxy Statement pages 12 - 44.

ITEM 7:  FINANCIAL STATEMENTS

See Proxy Statement pages F1 - F18.

ITEM 8:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no changes in or disagreements with accountants.


PART III

ITEM 9:  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

See Proxy Statement pages 4 and 8.

ITEM 10:  EXECUTIVE COMPENSATION

See Proxy Statement pages 8 - 10.

ITEM 11:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

See Proxy Statement page 3.


ITEM 12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See Proxy Statement pages 10.

ITEM 13:  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

3(i) Articles of Incorporation of the Registrant*

3(ii) Bylaws of the Registrant*

10(i) Employment Agreement between the Bank and G. Gordon Greenwood dated
     February 9, 2000*

10(ii) Employment Agreement between the Bank and Randall C. Hall, dated March
     20, 1998*


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10(iii) 401(k) Savings Plan of the Bank*

10(iv) 2001 Incentive Stock Option Plan

10(v) 2001 Nonstatutory Stock Option Plan

99   2002 Proxy Statement**

*Incorporated by reference to the Registration Statement on Form S-4
(Registration No. 333-30200 filed February 11, 2000 with the Securities and
Exchange Commission.)

**As filed with the SEC pursuant to Rule 14a-6(b).


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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                          WESTSTAR FINANCIAL SERVICES CORPORATION
                          ---------------------------------------
                                        (Registrant)



                       By:               /s/Randall C. Hall
                                         Randall C. Hall
                                         Executive Vice President
                                         Chief Financial Officer and Principal
                                         Accounting Officer

                       Date:             March 19, 2002




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In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.


/s/W. Edward Anderson                                   March 19, 2002
----------------------
W. Edward Anderson
Director

/s/Max O. Cogburn, Sr.                                  March 19, 2002
----------------------
Max O. Cogburn, Sr.
Director

/s/M. David Cogburn, M.D.                               March 19, 2002
-------------------------
M. David Cogburn, M.D.
Director

/s/G. Gordon Greenwood
----------------------
G. Gordon Greenwood                                     March 19, 2002
President & Chief Executive Officer


/s/Darryl J. Hart                                       March 19, 2002
-----------------
Darryl J. Hart
Director

/s/Carol L. King                                        March 19, 2002
----------------
Carol L. King
Director

/s/Stephen L. Pignatiello                               March 19, 2002
-------------------------
Stephen L. Pignatiello
Director

/s/Kent W. Salisbury, M.D.                              March 19, 2002
-------------------------
Kent W. Salisbury, M.D.
Director

/s/Laura A. Webb                                        March 19, 2002
----------------
Laura A. Webb
Director

/s/David N. Wilcox                                      March 19, 2002
------------------
David N. Wilcox
Director




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                                  EXHIBIT INDEX



        Exhibit                                                      Page Number
         Number     Exhibit

          3(i)      Articles of Incorporation                             *

         3(ii)      Bylaws                                                *

         10(i)      Employment Agreement of G. Gordon Greenwood           *

         10(ii)     Employment Agreement of Randall C. Hall               *

        10(iii)     401 (k) Savings Plan                                  *

        10(iv)      Incentive Stock Option Plan                          14

         10(v)      Nonstatutory Stock Option Plan                       31

           99       2002 Proxy Statement                                 **


*        Incorporated by reference.
**       As filed with the SEC pursuant to Rule 14a-6(b).


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