8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 25, 2008

1st Financial Services Corporation

(Exact name of registrant as specified in its charter)

North Carolina	000-53264	26-0207901
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

101 Jack Street Hendersonville, North Carolina	28792
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (828) 697-3100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On June 25, 2008, 1st Financial Services Corporation (“1st Financial”) entered into a Letter Loan Agreement—Line of Credit (the “Loan Agreement”) with Branch Banking and Trust Company (“BB&T”), pursuant to which BB&T provides a revolving line of credit to 1st Financial up to a maximum principal amount of Ten Million Dollars ($10,000,000) (the “Line of Credit”). A copy of the Loan Agreement is attached as Exhibit 10.1 to this Form 8-K.

Any advances made by BB&T under the Line of Credit will be covered by a Promissory Note in the face amount of $10,000,000, and will bear interest, unless there is an event of default, at the one month LIBOR rate, adjusted monthly on the first day of each month for each LIBOR interest period, as defined in the Addendum to the Promissory Note, plus one and one-half percent (1.50%) per annum. A copy of this Promissory Note is attached as Exhibit 10.2 to this Form 8-K. A copy of an Addendum to this Promissory Note is attached as Exhibit 10.3 to this Form 8-K.

1st Financial may borrow, repay, and re-borrow any time through June 25, 2009, the “Maturity Date.” Accrued interest only must be repaid quarterly beginning on September 25, 2008. One final payment of the entire unpaid principal balance then outstanding with accrued interest shall be due in full at the Maturity Date, or that outstanding balance may be repaid over a period of five years in equal annual installments. As security for the Line of Credit, 1st Financial has entered into a Pledge and Security Agreement giving BB&T a first and prior security interest in 1st Financial’s wholly-owned subsidiary, Mountain 1st Bank & Trust Company. A copy of the Pledge and Security Agreement is attached as Exhibit 10.4 to this Form 8-K.

Other customary terms of the Line of Credit are set forth in Exhibits 10.1, 10.2, 10.3, and 10.4.

Item 9.01. Financial Statements and Exhibits

Exhibits. The following exhibits are being filed or furnished with this Report:

Exhibit No.	Exhibit Description
10.1	Letter Loan Agreement - Line of Credit dated June 25, 2008, by and between 1st Financial Services Corporation and Branch Banking and Trust Company
10.2	Promissory Note dated June 25, 2008, by 1st Financial Services Corporation
10.3	Addendum to Promissory Note dated June 25, 2008, by 1st Financial Services Corporation
10.4	Pledge and Security Agreement dated June 25, 2008, by 1st Financial Services Corporation for the benefit of Branch Banking and Trust Company

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	1ST FINANCIAL SERVICES CORPORATION
Date: June 26, 2008	By:	/s/ Gregory Gibson
		Gregory L. Gibson
		Chief Executive Officer

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INDEX TO EXHIBITS

Exhibit
10.1	Letter Loan Agreement - Line of Credit dated June 25, 2008, by and between 1st Financial Services Corporation and Branch Banking and Trust Company
10.2	Promissory Note dated June 25, 2008, by 1st Financial Services Corporation
10.3	Addendum to Promissory Note dated June 25, 2008, by 1st Financial Services Corporation
10.4	Pledge and Security Agreement dated June 25, 2008, by 1st Financial Services Corporation for the benefit of Branch Banking and Trust Company

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EX-10.1

EXHIBIT 10.1

	Branch Banking & Trust Co.
	Correspondent Banking P.O. Box 628 Monroe, NC 28111-0628

LETTER LOAN AGREEMENT - LINE OF CREDIT

June 25, 2008

Mr. Greg Gibson

Chief Executive Officer

1^st Financial Services Corporation

101 Jack Street

Hendersonville, NC 28792

RE: Line of Credit

Dear Greg:

This letter sets forth the terms and conditions under which Branch Banking and Trust Company (“Bank”) shall make to 1^st Financial Services Corporation (“Borrower”) the following loan:

A revolving line of credit (“Line”) up to the maximum principal amount outstanding of ten million dollars ($10,000,000) subject to the terms and conditions of this agreement.

Borrower and Bank hereby further agree as follows:

1. Promissory Note. All advances made to Borrower under the Line shall be evidenced by Borrower’s Promissory Note dated of even date herewith in the face amount of $10,000,000, which shall bear interest, prior to default, at the one Month LIBOR Rate, adjusted monthly on the first day of each month for each LIBOR interest period, as defined in Bank’s Note, plus one and one halve percent (1.50%) per annum (including all extensions, renewals, modifications and substitutions thereof, the “Note”). From and after the occurrence of an event of default hereunder, Bank shall be entitled to charge interest at the default rate, as set forth in the Note, at its option.

2. Advances and Repayment. Prior to maturity on June 25, 2009, or an occurrence of an event of default hereunder, Bank shall make advances at the request of the authorized officers of Borrower up to an aggregate principal amount not to exceed $10,000,000 at any time. Borrower may borrow, repay, and re-borrow any time through maturity. Accrued interest only shall be repayable quarterly beginning on September 25, 2008. One final payment of the entire unpaid principal balance then outstanding with accrued interest thereon shall be due in full at maturity or it may be repaid over a period of five years in equal annual installments.

Bank shall not be obligated to make advances after an event of default hereunder, but may do so in its sole discretion.

3. Collateral. To secure payment of the Line, Borrower shall grant, pledge, assign and/or convey to Bank the following:

A first and prior security interest in the securities, securities account(s), mutual fund account(s), or other investment property or financial asset(s) of 1st Financial services Corporation, pursuant to appropriate pledge, security and control agreements.

4. Fees and Taxes. If not previously paid, Borrower shall pay a commitment/origination fee in the amount of $5,000 at closing. In addition, Borrower shall pay all legal fees and all other costs and expenses incurred by Bank in connection with the making, documenting and closing of the Loan.

OTHER TERMS AND CONDITIONS:

Representations and Warranties. Borrower represents and warrants to Bank (which shall survive the execution hereof) that: (i) it is a corporation duly organized and validly existing in good standing under the laws of North Carolina, having the legal name set forth in the first paragraph hereof; (ii) Borrower owns the Collateral free and clear of all liens, security interests, and encumbrances except for those granted to Bank; (iii) Borrower has paid all income and property taxes due and owing by Borrower; (iv) there is no pending or threatened litigation against Borrower or the Collateral which, if adversely decided, would materially and adversely affect the financial condition of Borrower; (v) all financial reports, statements, and related information furnished to Bank on Borrower accurately reflect its financial condition on the dates thereof, and no material adverse change has occurred in such financial conditions since the date of the most recently furnished thereof; (vi) it has all necessary and appropriate authority to borrow money and pledge assets under its Articles of Incorporation and no consents are required of its shareholders to be obtained or, if required, such consent has been obtained; (vii) this agreement, the Note, the Security Agreement, and all other security documents and agreements executed by Borrower in connection therewith constitutes the valid and legally binding obligation of Borrower enforceable against Borrower in accordance with their terms; and (viii) authorized officers of Borrower have read this agreement, the Note, and the accompanying security documents and fully understands and accept each of their respective terms.

Covenants.

a. Borrower shall: (I) maintain its existence in good standing as a corporation; (ii) maintain its current management and ownership; (iii) maintain insurance covering the risks usually carried by companies in the same business with an insurance company acceptable to Bank; (iv) furnish, in addition to an annual financial statement within 120 days after the end of each fiscal year, a quarterly financial statement within 30 days after the end of such period consistently prepared in accordance with GAAP and in a form satisfactory to Bank; (v) furnish information and documentation as required by the Bank sufficient to verify the identify of the Borrower as required under the USA Patriot Act; (vi) furnish notice to Bank of any event of default under this agreement, of any law suit against Borrower involving any claim of $10,000 or more, or of any complaint involving a violation of environmental law; and (vii) comply with applicable law including without limitation payment of all taxes due (including withholding taxes).

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b. Borrower shall not, without the prior written consent of Bank: (i) grant or permit a security interest, lien or encumbrance of any kind on the Collateral; (ii) incur or guarantee any significant debt except to Bank and except for debt showing on its most recent financial statement preceding this agreement, other than trade accounts payable incurred in the ordinary course of business or purchase money loans which are secured only by the asset purchased; (iii) sell all or substantially all of its assets to any person or entity.

Key Financial Ratios and Limitations. Borrower shall at all times maintain the following financial covenants and ratios all in accordance with GAAP unless otherwise specified:

a. Minimum equity of $45 million;

b. Minimum return on assets (ROA) of .50%;

c. Minimum loan loss reserve of 1.00%;

d. Maximum nonperforming assets to total assets of 1.25%.

Events of Default. Borrower shall be in default under this agreement upon the occurrence of any of the following events: (i) failure to pay within five (5) days of the date due any installment of principal or interest under the Note; (ii) should any representation or warranty made herein or in any security document, or should any financial statement furnished, be false or misleading in any material respect; (iii) failure to comply with any covenant or requirement set forth in this agreement, the Note, or any security document; (iv) failure to maintain its existence as a corporation, (v) should Borrower become a “debtor”, as defined in the U.S. Bankruptcy Code, whether voluntarily or otherwise; (vi) should the liens and security interests granted to Bank in the Collateral fail to have the priority expected or should the security instruments be invalid or unenforceable for any reason, or (vii) should Bank in good faith deem itself insecure or believe that the prospect of payment or performance by Borrower is impaired.

Remedies. Upon the occurrence of any one or more events of default listed above, Bank may, at its option, take all or any number of the following actions: (i) declare the outstanding balance of the Note to be immediately due and payable together with accrued interest without demand presentment, protest or notice thereof of any kind, all of which are hereby waived by Borrower; (ii) take immediate possession of the Collateral and foreclose upon the same; (iii) exercise all rights of offset against Borrower’s accounts with Bank; (iv) exercise all rights and remedies of a secured party under the North Carolina Uniform Commercial Code, and (v) exercise all other legal rights and remedies.

Miscellaneous Covenants. Borrower and Bank further agree as follows:

a. This agreement is made in and shall be construed in accordance with the laws of the State of North Carolina and shall bind Borrower and its successors and assigns.

b. This agreement may not be modified or supplemented except by a written instrument signed by Borrower and Bank.

c. Should Borrower default in the payment or performance of its obligations hereunder, and Bank believes it necessary to employ an attorney to assist in the enforcement hereof or collection of the debt, or to defend Bank in a law suit or other legal proceeding, Borrower hereby agrees to pay all attorneys’ fees, related fees and expenses, and all court costs that may be reasonably incurred by Bank, whether or not any suit or proceeding actually commences.

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d. This agreement, the Note(s), and the security documents executed in connection herewith constitute the entire agreement among the parties hereto and no oral agreements or unwritten understandings with respect to the indebtedness and obligations described in this agreement exist as of the date hereof.

e. Borrower shall indemnify and hold Bank harmless from, and shall reimburse Bank for, all obligations, suits, judgments, claims, demands, damages, proceedings, expenses (including all attorneys’ fees), or liabilities whatsoever which may be asserted against Bank or which may be incurred by Bank arising out of or relating to a breach of Borrower’s representations and warranties made in Paragraph 3 hereof, or arising out of or relating to a breach or non-performance by Borrower of any covenant or provision of this agreement.

f. The failure or delay of Bank to exercise any right under this agreement, the Note(s), or the security documents, shall not operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude the exercise of any other right or remedy which Bank may have hereunder or by law.

g. Borrower shall furnish to Bank upon Bank’s request any additional financial information, reports on the Collateral, and any information or documentation, including but not limited to Borrower’s legal name, address, and tax identification number sufficient for the Bank to verify the identify of the Borrower in accordance with the USA Patriot Act. Borrower shall notify Bank promptly of any change in such information.

Upon Borrower’s acceptance of the terms and provisions of this agreement, the Note and the accompanying security documents, please so indicate by having the duly authorized officer of Borrower sign below on its behalf. We appreciate the opportunity to offer this commitment to your company and look forward to establishing a continued, mutually beneficial relationship.

Sincerely,

BRANCH BANKING AND TRUST COMPANY

By:	/s/ Clegg E. Sell, Jr.
Title:	SVP
Phone:	704 239 7438

Read and accepted this 25 day of June, 2008.

1st Financial Services Corporation		(SEAL)
(Name of Borrower)
By:	/s/ Gregory Gibson
Title:	CEO

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EX-10.2

EXHIBIT 10.2

Borrower: 1^st FINANCIAL SERVICES CORPORATION

Account Number:	[REDACTED]	BB&T PROMISSORY NOTE	Note Number: 00001
Address:	101 JACK STREET		Monroe, North Carolina
	HENDERSONVILLE, NC 28792		Date: June 25, 2008

THE UNDERSIGNED BORROWER REPRESENTS THAT THE LOAN EVIDENCED HEREBY IS BEING OBTAINED FOR BUSINESS/COMMERCIAL OR AGRICULTURAL PURPOSES AND NOT FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES. For value received, the undersigned, jointly and severally, if more than one, promises to pay to BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation (the “Bank”), or order, at any of Bank’s offices in the above referenced city (or such other place or places that may be hereafter designated by Bank), the sum of Ten Million Dollars ($10,000,000), in immediately available coin or currency of the United States of America.

¨ Borrower shall pay a prepayment fee as set forth in the Prepayment Fee Addendum attached to this Promissory Note (this “Note”).

Interest shall accrue from the date hereof on the unpaid balance outstanding from time to time at the:

¨ Fixed rate of             % per annum.

¨ Variable rate of the Bank’s Prime Rate plus              % per annum to be adjusted              as the Bank’s Prime Rate changes. If checked here  ¨, the interest rate will not exceed a(n)  ¨ fixed  ¨ average maximum rate of             % or a  ¨ floating maximum rate of the greater of              % or the Bank’s Prime Rate; and the interest rate will not decrease below a fixed minimum rate of              %. If an average maximum rate is specified, a determination of any required reimbursement of interest by Bank will be made: ¨ when Note is repaid in full by Borrower ¨ annually beginning on             .

¨ Fixed rate of              % per annum through              which automatically converts on              to a variable rate equal to the Bank’s Prime Rate plus              % per annum which shall be adjusted              as such Prime Rate changes.

x Adjusted LIBOR Rate, as defined on the attached Addendum to Promissory Note and incorporated herein by reference.

Principal and interest are payable as follows:

x       Principal (plus any accrued interest not otherwise scheduled herein)		}	is due in full at maturity on June 25, 2009.
¨        Principal plus accrued interest
¨        Payable in consecutive              installments of	¨ Principal
	¨ Principal and Interest	}	commencing on

and continued on the same day of each calendar period thereafter, in              equal payments of $            , with one final payment of all remaining principal and accrued interest due on             .

x Accrued interest is payable quarterly commencing on September 25, 2008 and continuing on the same day of each calendar period thereafter, with one final payment of all remaining interest due on June 25, 2009.

¨ Bank reserves the right in its sole discretion to adjust the fixed payment due hereunder              on              and continuing on the same day of each calendar period thereafter, in order to maintain an amortization period of no more than              months from the date of this Note. Borrower understands the payment may increase if interest rates increase.

x Prior to an event of default, Borrower may borrow, repay, and reborrow hereunder pursuant to the terms of the Loan Agreement, hereinafter defined.

¨

¨ Borrower hereby authorizes Bank to automatically draft from its demand, deposit, or savings account(s) with Bank or other bank, any payment(s) due under this Note on the date(s) due. Borrower shall provide appropriate account number(s) for account(s) at Bank or other bank.

Borrower shall pay to Bank, or order, a late fee in the amount of four percent (4%) of any installment past due for fifteen (15) or more days. When any installment payment is past due for fifteen (15) or more days, subsequent payments shall first be applied to the past due balance. In addition, the undersigned shall pay to Bank a returned payment fee if the undersigned or any other obligor hereon makes any payment at any time by check or other instrument, or by any electronic means, which is returned to Bank because of nonpayment due to nonsufficient funds.

All interest shall be computed and charged for the actual number of days elapsed on the basis of a year consisting of three hundred sixty (360) days. In the event periodic accruals of interest shall exceed any periodic fixed payment amount described above, the fixed payment amount shall be immediately increased, or additional supplemental interest payments required on the same periodic basis as specified above (increased fixed payments or supplemental payments to be determined in the Bank’s sole discretion), in such amounts and at such times as shall be necessary to pay all accruals of interest for the period and all accruals of unpaid interest from previous periods. Such adjustments to the fixed payment amount or supplemental payments shall remain in effect for so long as any interest accruals shall exceed the original fixed payment amount and shall be further adjusted upward or downward to reflect changes in any variable interest rate; provided that unless elected otherwise above, the fixed payment amount shall not be reduced below the original fixed payment amount. However, Bank shall have the right, in its sole discretion, to lower the fixed payment amount below the original payment amount. Notwithstanding any other provision contained in this Agreement, in no event shall the provisions of this paragraph be applicable to any Promissory Note which requires disclosures pursuant to the Consumer Protection Act (Truth-In-Lending Act), 15 USC § 1601, et seq., as implemented by Regulation Z.

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This Note is given by the undersigned in connection with the following agreements (if any) between the undersigned and the Bank:

Deed(s) of Trust / S.C. Mortgage(s) granted in favor of Bank as beneficiary / mortgagee:

¨ dated              in the maximum principal amount of $            

granted by             

¨ dated              in the maximum principal amount of $            

granted by            

Security Agreement(s) conveying a security interest to Bank:

¨ dated              given by             

¨ dated              given by             

¨ Securities Account Pledge and Security Agreement dated           , executed by           .

¨ Control Agreement(s) dated             , covering	¨ Deposit Account(s)	¨ Investment Property
	¨ Letter of Credit Rights	¨ Electronic Chattel Paper

¨ Assignment of Certificate of Deposit, Security Agreement, and Power of Attorney (for Certificated Certificates of Deposit) dated             , executed by             .

¨ Pledge and Security Agreement for Publicly Traded Certificated Securities dated                         , executed by                     .

¨ Assignment of Life Insurance Policy as Collateral dated                             , executed by             .

x Letter Loan Agreement dated June 25, 2008, executed by  x Borrower and  ¨ Guarantor(s).

x Pledge and Security Agreement dated June 25, 2008.

All of the terms, conditions and covenants of the above described agreements (the “Agreements”) are expressly made a part of this Note by reference in the same manner and with the same effect as if set forth herein at length, and any holder of this Note is entitled to the benefits of and remedies provided in the Agreements and any other agreements by and between the undersigned and the Bank. In addition to Bank’s right of set-off and to any liens and security interests granted to Bank in the Agreements, the undersigned hereby grants to Bank a security interest in all of its deposit accounts with and investment property held by Bank, which shall serve as collateral for the indebtedness and obligations evidenced by this Note.

No delay or omission on the part of the holder in exercising any right hereunder shall operate as a waiver of such right or of any other right of such holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or of any other right on any future occasion. Every one of the undersigned and every endorser or guarantor of this note regardless of the time, order or place of signing waives presentment, demand, protest and notices of every kind and assents to any one or more extensions or postponements of the time of payment or any other indulgences, to any substitutions, exchanges or releases of collateral if at any time there be available to the holder collateral for this Note, and to the additions or releases of any other parties or persons primarily or secondarily liable.

The failure to pay any part of the principal or interest when due on this Note or to fully perform any covenant, obligation or warranty on this or on any other liability to the Bank by any one or more of the undersigned, by any affiliate of the undersigned (as defined in 11 USC Section (101)(2)), or by any guarantor or surety of this Note (said affiliate, guarantor, and surety are herein called “Obligor”); or if any financial statement or other representation made to the Bank by any of the undersigned or any Obligor shall be found to be materially incorrect or incomplete; or if any of the undersigned shall fail to furnish information and documentation to the Bank sufficient to verify the identity of the undersigned as required under the USA Patriot Act; or in the event of a default under any of the Agreements or any other obligation of any of the undersigned or any Obligor; or should the Bank demand that the undersigned secure or provide additional security for its obligations under this Note and security deemed adequate and sufficient by the Bank is not given when demanded; or in the event one or more of the undersigned or any Obligor shall die, terminate its existence, allow the appointment of a receiver for any part of its property, make an assignment for the benefit of creditors, or should a proceeding under bankruptcy or insolvency laws be initiated by or against any of the undersigned or any Obligor; or should the Bank otherwise deem itself, its security interests, or any collateral unsafe or insecure; or should the Bank in good faith believe that the prospect of payment or other performance is impaired; or if there is an attachment, execution, or other judicial seizure of all or any portion of the Borrower’s or any Obligor’s assets, including an action or proceeding to seize any funds on deposit with the Bank, and such seizure is not discharged within 20 days; or if final judgment for the payment of money shall be rendered against the Borrower or any Obligor which is not covered by insurance or debt cancellation contract and shall remain undischarged for a period of 30 days unless such judgment or execution thereon is effectively stayed; or should any guarantor terminate any guaranty agreement given in connection with this Note, then any one of the same shall be a material default hereunder and this Note and other debts due the Bank by any one or more of undersigned shall immediately become due and payable at the option of the Bank without notice or demand of any kind, which is hereby waived. From and after any event of default hereunder, interest shall accrue on the sum of the principal balance and accrued interest then outstanding at the variable rate equal to the Bank’s Prime Rate plus 5% per annum (“Default Rate”) until such principal and interest have been paid in full, provided that such rate shall not exceed at any time the highest rate of interest permitted by the laws of the State of North Carolina; and further provided that such rate shall apply after judgment. In addition, upon default, the Bank may pursue its full legal remedies at law or equity, and the balance due hereunder may be charged against any obligation of the Bank to any party including any Obligor. Bank shall not be obligated to accept any check, money order, or other payment instrument marked “payment in full” on any disputed amount due hereunder, and Bank expressly reserves the right to reject all such payment instruments. Borrower agrees that tender of its check or other payment instrument so marked will not satisfy or discharge its obligation under this Note, disputed or otherwise, even if such check or payment instrument is inadvertently processed by Bank unless in fact such payment is in fact sufficient to pay the amount due hereunder.

Unless otherwise required under a Loan Agreement, if applicable, and as long as any indebtedness evidenced by this Note remains outstanding or as long as Bank remains obligated to make advances, the undersigned shall furnish annually an updated financial statement in a form satisfactory to Bank, which, when delivered shall be the property of the Bank.

The term “Prime Rate,” if used herein, means the rate of interest per annum announced by the Bank from time to time and adopted as its Prime Rate at its executive offices in Winston-Salem, North Carolina. The Prime Rate is one of several rate indexes employed by the Bank when extending credit, and not necessarily the lowest rate. Any change in the interest rate resulting from a change in the Bank’s Prime Rate shall become effective as of the opening of business on the effective date of the change. If this Note is placed with an attorney for collection, the undersigned agrees to pay, in addition to principal, interest, and late fees, if any, all costs of collection, including but not limited to reasonable attorneys’ fees. All obligations of

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the undersigned and of any Obligor shall bind his heirs, executors, administrators, successors, and/or assigns. Use of the masculine pronoun herein shall include the feminine and the neuter, and also the plural. If more than one party shall execute this Note, the term “undersigned” as used herein shall mean all the parties signing this Note and each of them, and all such parties shall be jointly and severally obligated hereunder. Wherever possible, each provision of this Note shall be interpreted in such a manner to be effective and valid under applicable law, but if any provision of this Note shall be prohibited by or invalid under such law, such provision shall be ineffective but only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note. All of the undersigned hereby waive all exemptions and homestead laws. The proceeds of the loan evidenced by this Note may be paid to any one or more of the undersigned.

From time to time the maturity date of this Note may be extended, or this Note may be renewed in whole or in part, or a new note of different form may be substituted for this Note, or the rate of interest may be modified, or changes may be made in consideration of loan extensions, and the holder hereof, from time to time may waive or surrender, either in whole or in part any rights, guaranties, secured interest, or liens, given for the benefit of the holder in connection with the payment and the securing the payment of this Note; but no such occurrence shall in any manner affect, limit, modify, or otherwise impair any rights, guaranties or security of the holder not specifically waived, released, or surrendered in writing, nor shall the undersigned makers, or any obligor, either primarily or contingently, be released by reason of the occurrence of any such event. The holder hereof, from time to time, shall have the unlimited right to release any person who might be liable hereon, and such release shall not affect or discharge the liability of any other person who is or might be liable hereon. No waivers and modifications shall be valid unless in writing and signed by the Bank. The Bank may, at its option, charge any fees for the modification, renewal, extension, or amendment of any of the terms of the Note permitted by N.C.G.S.§ 24-1.1. In case of a conflict between the terms of this Note and the Loan Agreement or Commitment Letter issued in connection herewith, the priority of controlling terms shall be first this Note, then the Loan Agreement, and then the Commitment Letter. This Note shall be governed by and construed in accordance with the laws of North Carolina.

(SIGNATURES ON FOLLOWING PAGE)

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BB&T

PROMISSORY NOTE SIGNATURE PAGE

Borrower:	1st FINANCIAL SERVICES CORPORATION
Account Number:	[REDACTED]	Note Number:	00001
Note Amount:	$10,000,000.00	Date:	June 25, 2008

Notice of Right to Copy of Appraisal: If a 1-4 family residential dwelling is pledged as collateral for this Note, you, the undersigned, have a right to a copy of the real estate appraisal report used in connection with your application for credit. If you wish to receive a copy, please notify in writing the branch office where you applied for credit. You must forward your request to the Bank no later than 90 days after the date of this Note. In your request letter, please provide your name, mailing address, appraised property address, the date of this Note, and the Account and Note Numbers shown on the front of this Note.

IN WITNESS WHEREOF, the undersigned, on the day and year first written above, has caused this note to be executed under seal.

If Borrower is a Corporation:

	1st FINANCIAL SERVICES CORPORATION
WITNESS:	Name of Corporation
/s/ Clegg E. Sell, Jr.	By:	/s/ Gregory Gibson
		GREG GIBSON
	Title:	CHIEF EXECUTIVE OFFICER
	By:
		Enter Name
	Title:	Title

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EX-10.3

EXHIBIT 10.3

BB&T

ADDENDUM TO PROMISSORY NOTE

THIS ADDENDUM TO PROMISSORY NOTE (“Addendum”) is hereby made a part of the Promissory Note dated June 25, 2008, from 1^st FINANCIAL SERVICES CORPORATION (“Borrower”) payable to the order of Branch Banking and Trust Company (“Bank”) in the principal amount of $10,000,000.00 (including all renewals, extensions, modifications and substitutions thereof, the “Note”).

I. DEFINITIONS.

1.1 Adjusted LIBOR Rate means a rate of interest per annum equal to the sum obtained (rounded upwards, if necessary, to the next higher 1/100th of 1.0%) by adding (i) the One Month LIBOR plus (ii) One and one-half percent (1.50%) per annum, which shall be adjusted monthly on the first day of each month for each LIBOR Interest Period. If the first day of any month falls on a date when the Bank is closed, the Adjusted LIBOR Rate shall be determined as of the last preceding business day. The Adjusted LIBOR Rate shall be adjusted for any change in the LIBOR Reserve Percentage so that Bank shall receive the same yield. If checked here ¨ the interest rate will not exceed a(n) ¨ fixed ¨ average maximum rate of             % and will not decrease below a minimum rate of             %. If an average maximum rate is specified, a determination of the average interest rate assessed and a reimbursement by Bank of interest paid in excess of the maximum rate, if any, will be made on             . If the loan has been repaid prior to this date, no reimbursement will be made.

1.2 One Month LIBOR means the average rate (rounded upward, if necessary, to the next higher 1/100th of 1.0%) quoted on Bloomberg Screen BBAMI or Page 3750 (or such replacement page) of the Telerate Service on the determination date for deposits in U. S. Dollars offered in the London interbank market for one month, or if the above method for determining LIBOR shall not be available, the rate quoted in The Wall Street Journal, a rate determined by a substitute method of determination agreed on by Borrower and Bank; provided, if such agreement is not reached within a reasonable period of time (in Bank’s sole judgment), a rate reasonably determined by Bank in its sole discretion as a rate being paid, as of the determination date, by first class banking organizations (as determined by Bank) in the London interbank market for U. S. Dollar deposits.

1.3 LIBOR Advance means the term loan advances made by Bank to Borrower evidenced by this Note upon which the Adjusted LIBOR Rate of interest shall apply.

1.4 LIBOR Interest Period means a period of one calendar month as may be elected by the Borrower applicable to any LIBOR Advance which shall begin on first day of any month notwithstanding the maturity date of this Note; provided, however, that a LIBOR Interest Period may be less than one calendar month in and only in the calendar month in which the Note originates or matures.

1.5 LIBOR Reserve Percentage means the maximum aggregate rate at which reserves (including, without limitation, any marginal supplemental or emergency reserves) are required to be maintained under Regulation D by member banks of the Federal Reserve System with respect to dollar funding in the London interbank market. Without limiting the effect of the foregoing, the LIBOR Reserve Percentage shall reflect any other reserves required to be maintained by such member banks by reason of any applicable regulatory change against (i) any category of liability which includes deposits by reference to which the Adjusted LIBOR Rate is to be determined or (ii) any category of extensions of credit or other assets related to LIBOR.

1.6 Standard Rate means, for any day, a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1.0%) equal to the Bank’s announced Prime Rate minus             % per annum, and each change in the Standard Rate shall be effective on the date any change in the Prime Rate is publicly announced as being effective.

II. LOAN BEARING ADJUSTED LIBOR RATE

2.1 Application of Adjusted LIBOR Rate. The Adjusted LIBOR Rate shall apply to the entire principal balance outstanding of a LIBOR Advance for any LIBOR Interest Period.

2.2 Adjusted LIBOR Based Rate Protections.

(a) Inability to Determine Rate. In the event that Bank shall have determined, which determination shall be final, conclusive and binding, that by reason of circumstances occurring after the date of this Note affecting the London interbank market, adequate and fair means do not exist for ascertaining the LIBOR on the basis provided for in this Note, Bank shall give notice (by telephone confirmed in writing or by telecopy) to Borrower of such determination, whereupon (i) no LIBOR Advance shall be made until Bank notifies Borrower that the circumstances giving rise to such notice no longer exist, and (ii) any request by Borrower for a LIBOR Advance shall be deemed to be a request for an advance at the Standard Rate.

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(b) Illegality; Impracticability. In the event that Bank shall determine, which determination shall be final, conclusive and binding, that the making, maintaining or continuance of any portion of a LIBOR Advance (i) has become unlawful as a result of compliance by Bank with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any of the same not having the force of law even though the failure to comply therewith would not be unlawful) or (ii) has become impracticable, or would cause Bank material hardship, as a result of contingencies occurring after the date of this Note materially and adversely affect the London interbank market or Bank’s ability to make LIBOR Advances generally, then, and in any such event, Bank shall give notice (by telephone confirmed in writing or by telecopy) to Borrower of such determination. Thereafter, (x) the obligation of Bank to make any LIBOR Advances or to convert any portion of the loan to a LIBOR Advance shall be suspended until such notice shall be withdrawn by Bank, and (y) any request by Borrower for a LIBOR Advance shall be deemed to be a request for an advance at the Standard Rate.

	1st FINANCIAL SERVICES CORPORATION
WITNESS:	Name of Corporation
/s/ Clegg E. Sell, Jr.	By:	/s/ Gregory Gibson	(SEAL)
	Name:	GREG GIBSON
	Title:	CHIEF EXECUTIVE OFFICER

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EX-10.4

EXHIBIT 10.4

BB&T Account No. [REDACTED] 

PLEDGE AND SECURITY AGREEMENT

THIS PLEDGE AND SECURITY AGREEMENT (““Agreement”) is made this 25^th day of June, 2008, by 1^st FINANCIAL SERVICES CORPORATION, a North Carolina bank holding company (the “Pledgor”) for the benefit of BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation (the “Bank”).

RECITALS

A. The Bank has agreed to lend to the Pledgor the principal sum of $10,000,000.00 which shall be evidenced by a Promissory Note dated as of the date herewith, payable to the order of the Bank (including all extensions, renewals, modifications and substitutions thereof, the “Note”).

B. The Pledgor is a shareholder of Mountain 1^st Bank & Trust Company. To secure payment of all indebtedness and obligations evidenced by the Note and under this Agreement and all of Pledgor’s future indebtedness or obligations to us (the “Obligations”), the Pledgor has agreed to pledge and grant to the Bank the Pledged Securities (hereinafter defined).

NOW, THEREFORE, it is agreed as follows:

1. Pledge. As collateral security for the full and timely payment, performance and observance of the Obligations, whether now existing or hereafter arising, the Pledgor herewith pledges, assigns, transfers, hypothecates, delivers and deposits with the Bank, in a form transferable for delivery (together with stock powers duly executed in blank by the Pledgor), and grants to the Bank, a first priority security interest in the shares of stock and the certificates or other instruments or documents evidencing same more particularly described in Exhibit A hereto and such additional property at any time and from time to time receivable by the Bank hereunder or otherwise distributed in respect of or in exchange for any or all such shares and any other shares or instruments issued to the Pledgor by the corporations shown on Exhibit A (herein collectively called the “Pledged Securities”) together with any and all products and proceeds of any of the foregoing in whatever form (the Pledged Securities and the products and proceeds thereof may be referred to collectively as the “Pledged Collateral”).

2. Title. The Pledgor represents and warrants that the Pledged Securities are, and will be on deposit hereunder, duly and validly issued and duly and validly pledged with the Bank in accordance with the law, and agrees to defend the Bank’s right, title, lien and security interest in and to the Pledged Collateral against the claims and demands of all persons whomsoever. The Pledgor also represents and warrants to the Bank that he has, and will have on deposit hereunder, good title to all of the Pledged Securities, free and clear of all claims, mortgages, pledges, liens, encumbrances and security interests of every nature whatsoever except those granted to the Bank herein, and that no consent or approval of any governmental or regulatory authority, or of any securities exchange which has not been obtained, was or is necessary to the validity of this pledge. In addition, the Pledgor represents and warrants that he is the sole shareholder of record and the sole beneficial owner of the Pledged Securities. The Pledgor covenants and warrants that he will not, except with the written consent of the Bank, exercise any rights of conversion with respect to any of the Pledged Securities which are convertible into debt instruments, cash or any other securities or instruments of any kind.

3. Voting Prior to Event of Default. So long as no Event of Default shall have occurred, the Pledgor shall be entitled to exercise, as it shall determine, but in a manner not inconsistent with the terms hereof or, the Note, any loan document or any of the security documents, the voting power with respect to the Pledged Securities, if any.

4. Event of Default. Upon the occurrence of an event of default under this Agreement, the Note or any other security documents (“Event of Default”), the Bank may cause all or any of the Pledged Securities to be transferred to or registered in its name or the name of the Bank’s nominee or nominees.

5. Rights and Remedies. Bank shall have, by way of example and not of limitation, the rights and remedies in subparagraph (a) of this paragraph at all times prior to and/or after the occurrence of an Event of Default, and shall have all the rights and remedies enumerated herein after the occurrence of an Event of Default.

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(a) Bank may, at its option and without notice: (i) transfer to its name or the name of its nominee all or any part of the Pledged Collateral including stocks, bonds, and other securities; (ii) demand, sue for, collect and receive all interest, dividends, including liquidating dividends, and other proceeds thereof, and hold same as security for payment of the Borrower’s Obligations or, if cash proceeds, apply same as payment thereof; (iii) notify any person obligated on any of the Pledged Collateral of the security interest of Bank therein and request such person to make payment directly to Bank; or (iv) demand, sue for, collect, or make any settlement or compromise Bank deems desirable with respect to any of the Pledged Collateral.

(b) The Bank shall be a secured party under the North Carolina Uniform Commercial Code and, from and after an Event of Default hereunder, without obligations to resort to other security, shall have the right at any time and from time to time to sell, resell, assign and deliver, in its discretion, all or any of the Pledged Collateral, at the same or different times, and all right, title and interest, claim and demand therein and right of redemption thereof, on any securities exchange on which the Pledged Securities or any of them may be listed, or at public or private sale, for cash, upon credit or for future delivery, and in connection therewith the Bank may grant options, the Pledgor hereby waiving and releasing any and all equity or right of redemption. If any of the Pledged Collateral is sold by the Bank upon credit or for future delivery, the Bank shall not be liable for the failure of the purchaser to purchase or pay for the same and, in the event of any such failure, the Bank may resell such Pledged Collateral. In no event shall the Pledgor be credited with any part of the proceeds of sale of any Pledged Collateral until cash payment of such sale has actually been received by the Bank.

(c) Should the market value of the Pledged Collateral at any time fall below the unpaid principal balance of the Note; or if the Bank has required that a minimum loan to value ratio be maintained throughout the term of the loan, and the market value of the Pledged Collateral at any time falls below the amount required to maintain the minimum loan to value ratio, the Pledgor shall deposit such funds or additional securities as may be required to restore the market value to a satisfactory level within five (5) days.

6. Covenants of Pledgor. Pledgor covenants and agrees to and in favor of Bank that, so long as any of the Obligations secured hereby remain unpaid or unperformed:

(a) Delivery of Pledged Securities. The Pledgor shall deliver possession of the Pledged Securities to the Bank upon the execution of this Agreement. If the Pledgor is unable to deliver possession of the Pledged Securities upon execution of this Agreement, the Pledgor shall deliver possession of the Pledged Securities to the Bank within five (5) days after the execution of this Agreement.

(b) Protection of Security and Legal Proceedings. Pledgor shall, at its own expense, take any and all actions necessary to preserve, protect and defend the security interest of Bank in the Pledged Collateral and the priority thereof against any and all adverse claims, including appearing in and defending any and all actions and proceedings which purpose to affect any of the foregoing; promptly reimburse Bank for any and all sums, including costs, expenses and reasonable attorneys’ fees, which Bank may pay or incur in defending, protecting or enforcing its security interest in the Pledged Collateral or the priority thereof, or in discharging any prior to subsequent lien or adverse claim against the Pledged Collateral or any part thereof, or by reason of becoming or being made a party to or intervening in any action or proceeding affecting the Pledged Collateral or the rights of Bank therein, all of which actions Pledgor hereby agrees that Bank shall have the right to take in its sole and absolute discretion.

(c) Sale or Hypothecation of Pledged Collateral. Pledgor shall not, without the prior consent of the Bank, exchange, lease, lend, sell, encumber or dispose of the Pledged Collateral or any part thereof, or any of Pledgor’s rights therein, or grant any option with respect thereto, nor cause, suffer or permit the Pledged Collateral to be affected by any encumbrance, security interest, option or adverse claim of any kind or nature whatsoever, other than the security interests of Bank. All proceeds, additions, substitutions or replacement stocks, bonds or securities for the Pledged Securities shall be and remain Pledged Collateral subject to the security interest in favor of Bank as provided herein. Unless otherwise agreed in advance by the Bank, all proceeds from the sale of the Pledged Collateral shall be immediately paid to the Bank and shall be applied to the Obligations.

(d) Certain Agreements. Pledgor shall not make any compromise, adjustment, amendment, modification, settlement, substitution or termination in respect of the Pledged Collateral; nor cause, suffer or permit anything to be done which might impair, or fail to do anything necessary or advisable in order to preserve, the value of the Pledged Collateral and the security interest of Bank therein.

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7. Preservation of Collateral. In case of any failure of Pledgor to keep the Pledged Collateral free from liens or adverse claims, or to pay taxes on or in respect thereof, or to fully and punctually keep and perform any other covenant hereof, then Bank may (but shall not be required to) pay or contest or settle such taxes, liens or adverse claims, or any judgments based thereon, or otherwise make good any other aforesaid failure of Pledgor. Pledgor shall promptly reimburse Bank for any sums paid or advanced by Bank or any such purpose, together with interest at a rate equal to the Bank’s announced prime rate plus 5.0% per annum from the date of any such advance to the date of reimbursement.

8. Rights to Distributions. So long as (but only for so long as) no Event of Default or event which, with the giving of notice or the lapse of time, or both, would become an Event of Default, shall have occurred and be continuing, Pledgor shall be entitled to receive and retain any and all dividends, interest and distributions paid in cash in respect of the Pledged Collateral; provided, however, that Bank shall receive and retain in Pledged Collateral any and all dividends, interest and distributions paid or payable other than in cash in respect of, or in exchange for, any Pledged Collateral.

9. Waivers. No demand, advertisement or notice, all of which are hereby expressly waived by the Pledgor, shall be required in connection with any sale or other disposition of any part of the Pledged Collateral which threatens to decline speedily in value or which is of a type customarily sold on a recognized market; otherwise the Bank shall give Pledgor at least ten days’ prior notice of the time and place of any public sale and of the time after which any private sale or other disposition is to be made, which notice the Pledgor agrees is reasonable, all other demand, advertisements and notices being hereby waived. The Bank shall not be obligated to make any sale of Pledged Collateral if it shall determine not to do so, regardless of the fact that notice of sale may have been given. The Bank may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. Upon each private sale of Pledged Collateral of a type customarily sold in a recognized market and upon each public sale, the Bank, or any holder of any of the Obligations may purchase all or any of the Pledged Collateral being sold, free from any equity or right of redemption, which is hereby waived and released by the Pledgor, and may make payment therefor (by endorsement without recourse) in the Obligations in lieu of cash to the amount then due thereon which the Pledgor hereby agrees to accept. In the case of all sales of Pledged Collateral, public or private, the Pledgor shall pay all costs and expenses of every kind for sale or delivery, including brokers’ and attorneys’ fees, and after deducting such costs and expenses from the proceeds of sale, the Bank shall apply any residue to the payment of the Obligations, and the Pledgor shall continue to be liable for any deficiency. The balance, if any, remaining after payment in full of all of the Obligations, shall be paid to the Pledgor, subject to any duty of the Bank imposed by law to the holder of any subordinate security interest in the Pledged Securities known to the Bank.

10. Unregistered Securities. The Pledgor recognizes that the Bank may be unable to effect a public sale of all or a part of the Pledged Securities by reason of certain prohibitions contained in the Securities Act of 1933, as amended, as now or hereafter in effect, or in applicable “Blue Sky” or other state securities laws, as now or hereafter in effect, but may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such Pledged Securities for their own account, for investment and not with a view to the distribution or resale thereof. The Pledgor agrees that private sales so made may be at prices and other terms less favorable to the seller than if such Pledged Securities were sold at public sales, and that the Bank has no obligation to delay sale of any such Pledged Securities for the period of time necessary to permit the issuer of such Pledged Securities, even if such issuer would agree, to register such Pledged Securities for public sale under such applicable securities laws. The Pledgor agrees that private sales made under the foregoing circumstances shall be deemed to have been made in a commercially reasonable manner.

11. Remedies Non-Exclusive. The remedies provided herein in favor of the Bank shall not be deemed exclusive, but shall be cumulative, and shall be in addition to all other remedies in favor of the Bank existing at law or in equity.

12. Endorsement. Upon the occurrence of an Event of Default, the Bank shall have the right, for and in the name, place and stead of the Pledgor, to execute endorsements, assignments, stock powers, or other instruments of conveyance or transfer with respect to all or any of the Pledged Collateral.

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13. Bank’s Obligation. The Bank shall have no duty as to the collection or protection of the Pledged Collateral or any income thereon or as to the preservation of any rights pertaining thereto, beyond the sale custody of any thereof actually in its possession. With respect to any maturities, calls, conversions, exchanges, redemptions, offers, tenders or similarly matters relating to any of the Pledged Securities (herein called “events”) the Bank’s duty shall be fully satisfied if (i) the Bank exercises reasonable care to ascertain the occurrence and to give reasonable notice to the Pledgor of any events applicable to any Pledged Securities which are registered and held in the name of the Bank or its nominee, (ii) the Bank gives the Pledgor reasonable notice of the occurrence of any events, of which the Bank has received actual knowledge, as to any securities which are in bearer form or are not registered and held in the name of the Bank or its nominee (the Pledgor agreeing to give the Bank reasonable notice of the occurrence of any events applicable to any securities in the possession of the Bank of which the Pledgor has received knowledge), and (iii) in the exercise of its sole discretion (a) the Bank endeavors to take such action with respect to any of the events as the Pledgor may reasonably and specifically request in writing in sufficient time for such action to be evaluated and taken or (b) if the Bank determines that the action requested might adversely affect the value of the Pledged Securities as collateral, the collection of the Obligations, or otherwise prejudice the interests of the Bank, the Bank gives reasonable notice to the Pledgor that any such requested action will not be taken if the Bank makes such determination or if the Pledgor fails to make such timely request, the Bank takes such other action as it deems advisable in the circumstances. Except as hereinabove specifically set forth, the Bank shall have no further obligation to ascertain the occurrence of, or to notify the Pledgor with respect to, any events and shall not be deemed to assume any such further obligations as a result of the establishment by the Bank of any internal procedures with respect to any securities in its possession.

14. Release and Indemnity. The Pledgor releases the Bank from any claims, causes of action and demands at any time arising out of or with respect to this Agreement, the Pledged Collateral and/or any actions, taken or omitted to be taken by the Bank with respect thereto, and the Pledgor hereby agrees to hold the Bank harmless from and with respect to any and all such claims, causes of action and demands other than those resulting from the gross negligence or willful misconduct of the Bank.

15. Power of Attorney. The Pledgor hereby irrevocably appoints the Bank or Bank’s designees, successors or assigns as the Pledgor’s attorney-in-fact for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument which the Bank may deem necessary or advisable to accomplish the purposes hereof. Without limiting the generality of the foregoing, the Bank shall have the right and power to receive, endorse and collect all checks and other orders for the payment of money made payable to the Pledgor representing any interest or dividend or other distribution payable in respect of the Pledged Collateral which the Bank is entitled to receive hereunder or any part thereof and to give full discharge for the same. This appointment is a power coupled with an interest which is irrevocable until all of the Obligations have been paid and performed in full.

16. Delay in Exercise of Rights. No delay on the part of the Bank or of any holder of any of the Pledgor’s Obligations in exercising any of its options, powers or rights, or partial or single exercise thereof, shall constitute a waiver thereof.

17. Notice. Any notice or demand upon the Pledgor shall be deemed to have been sufficiently given for all purposes thereof if mailed, postage prepaid, by registered or certified mail, return receipt requested, or if delivered, to the addresses set out below or at such other address as the parties hereto may heretofore have designated in writing:

If to the Pledgor:

1^st Financial Services Corporation

101 Jack Street

Hendersonville, North Carolina 28792

Attn: Greg Gibson, CEO

Fax: 828/697-7756

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If to the Bank:

Branch Banking and Trust Company

P.O. Box 628

Monroe, North Carolina 28111-0628

Fax: (704) 289-7442

18. Choice of Law. This Agreement and the rights and obligations of the Bank and the Pledgor hereunder shall be construed in accordance with and governed by the laws of the State of North Carolina applicable to contracts executed and to be performed in such State cannot be changed orally and shall bind and inure to the benefit of the Pledgor and the Bank and their respective successors and assigns, and all subsequent holders of any of the Obligations.

19. Multiple Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly executed under seal as of the day and year first above written.

	PLEDGOR:
	1st FINANCIAL SERVICES CORPORATION
/s/ Clegg E. Sell, Jr.	By	/s/ Gregory Gibson	(SEAL)
Witness		Greg Gibson, Chief Executive Officer
	Accepted this 25 day of June, 2008.
	BRANCH BANKING AND TRUST COMPANY
	By	/s/ Clegg E. Sell, Jr.
		Clegg E. Sell, Jr., Senior Vice President

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EXHIBIT A

[Description of Pledged Securities]

Name of Pledgor	Name of Csompany	Certificate Number	No. of Shares
1st Financial Services	Mountain 1st Bank & Trust Company	13327	4,997,027

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