ATFS

PROXY STATEMENT

FOR SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON [                      ], 2008

SUMMARY

This summary, together with “Questions and Answers About the Meeting,” “Questions and Answers About the Reorganization,” and “Questions and Answers About the Subchapter-S Election,” summarizes the material information in this proxy statement. You should carefully read this entire proxy statement and the other documents to which the proxy statement refers you for a more complete understanding of the matters being considered at the special meeting. In addition, this proxy statement incorporates by reference important business and financial information about us. You may obtain the information incorporated by reference into this proxy statement without charge by following the instructions in “Where You Can Find Additional Information.”

References to “Altrust”, “we,” “our” or “us” in this proxy statement refer to Altrust Financial Services, Inc. and its subsidiaries unless otherwise indicated by context.

Reorganization

The reorganization plan provides for substantially reducing the number of our shareholders to below 300 holders of record for SEC purposes so that we can suspend our obligation to file periodic reports with the SEC under the Securities Exchange Act of 1934. The reorganization is also intended to permit us to elect to be taxed under Subchapter S of the Internal Revenue Code of 1981 or the “Code” at the earliest date when a Subchapter S election can become effective. The reorganization will be accomplished through the merger of Holly Pond Corp., an Alabama corporation and our wholly owned subsidiary that we organized solely to facilitate the reorganization stock (referred to in this proxy statement as Holly Pond), with and into Altrust. If the reorganization plan is approved by our shareholders, certain shares of Altrust common stock held by our smaller shareholders and persons who are not or who elect not to become eligible shareholders for Subchapter S purposes will be converted into the right to receive $17.25 in cash. See “The Reorganization Plan—The Reorganization” beginning on page 52.

Purpose of the Reorganization Plan

The primary purposes of the reorganization plan are to eliminate our obligation to file periodic reports with the SEC under the Securities Exchange Act, which we expect will result in a significant decrease in expenses and administrative burdens related to ongoing regulatory compliance and reporting matters, and to promote more efficient capital utilization and enhance shareholder value by reducing the combined taxes we and our shareholders currently pay by electing to be taxed under Subchapter S of the Internal Revenue Code. We intend to elect to be taxed under Subchapter S as soon as possible following the effective time of the reorganization. Under Internal Revenue Service rules, and assuming we qualify, we will not be taxed under Subchapter S until the tax year beginning January 1, 2009. See “Special Factors—Purpose of the Reorganization Plan” beginning on page 15.

Parties to the Merger

Altrust Financial Services, Inc. We were incorporated in 1985 as Cullman Bancshares, Inc., an Alabama corporation, and changed our name in 1996 to Altrust Financial Services, Inc. We are a bank holding company registered with the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended, and a financial holding company registered under the Gramm-Leach-Bliley Act of 1999. We primarily conduct our business through our wholly owned bank subsidiary, Peoples Bank of North Alabama, referred to in this proxy statement as Peoples Bank. We have three other wholly owned subsidiaries: Southern Insurance of Cullman, Inc., Southern Appraisal Services, Inc. and Holly Pond.

Table of Contents

Holly Pond Corp. Holly Pond is a new Alabama corporation formed solely to facilitate the reorganization and which is wholly owned by Altrust. Prior to the reorganization, Holly Pond will have not business operations. Pursuant to the reorganization plan, Holly Pond will merge with and into Altrust and will cease to exist as a separate entity thereafter.

Cash Conversion

Each outstanding share of Altrust common stock held by shareholders who are not eligible to be S-corporation shareholders or who do not timely sign and return the shareholders’ agreement and a properly completed questionnaire and election form will be exchanged for cash at a rate of $17.25 per share. Additionally, each outstanding share of Altrust common stock held by a shareholder (other than one of our directors or executive officers) who is the record holder of 6,400 or fewer shares of Altrust common stock will be entitled only to receive for cash at a rate of $17.25 per share upon the reorganization’s effective time. If you hold 6,400 or fewer shares, you may remain a shareholder if you have a family member who will satisfy the requirements to remain one of our shareholders (including holding more than 6,400 shares) and that family member elects to aggregate your shares with his. See “The Reorganization Plan—Cash Conversion” beginning on page 53.

Continuing Shareholders

Each shareholder who is either the holder of more than 6,400 shares of Altrust common stock (directly or through a permitted aggregation with a family member who holds more than 6,400 shares of common stock) or one of our directors or executive officers will remain a shareholder after the reorganization, provided that the shareholder is eligible to be an S-corporation shareholder and timely signs and returns the shareholders’ agreement and a properly completed questionnaire and election form. A shareholder must be a citizen or resident of the United States to be an eligible S-corporation shareholder. Generally, while certain trusts and estates can be S-corporation shareholders, corporations, partnerships, most limited liability companies, REITs and nonresident aliens may not be S-corporation shareholders. Pursuant to the reorganization plan, IRAs are not S-eligible shareholders once we make the S-corporation election (expected to be within 10 business days following the reorganization’s effective time), so the beneficiaries who wish to remain shareholders after that time will be required to purchase the shares of Altrust common stock held by the IRA prior to Altrust making the S-corporation election. An IRA may continue to hold shares of Altrust common stock after the reorganization’s effective time and prior to Altrust making an election to be taxed under Subchapter S of the Code if (i) the IRA and the beneficiary of the IRA enter into an agreement with Altrust prior to the reorganization’s effective time pursuant to which the IRA agrees to sell the Altrust common stock held by the IRA to the beneficiary of such IRA prior to Altrust making its election to be taxed under Subchapter S of the Code and otherwise in accordance to Section 4975(d)(16) of the Code, (ii) the beneficiary agrees to execute and deliver a fully completed and executed shareholders’ agreement and Subchapter S consent in form and substance satisfactory to Altrust prior to the special meeting, (iii) at the reorganization’s effective time the beneficiary of the IRA is an S-eligible shareholder (or would be if the beneficiary were the record holder of the shares of Altrust common stock held by the IRA as of the reorganization’s effective time), and (iv) immediately after the sale of the shares of Altrust common stock by the IRA to the beneficiary, the beneficiary is an S-eligible shareholder. We recommend that you consult with your own tax advisor as to the manner and tax consequences of selling your IRA shares in order to hold such shares individually in a manner eligible to continue as an Altrust shareholder. Failure to meet all of these requirements will result in shares held by any IRA being eligible only to receive the cash consideration in the reorganization or, if applicable, to exercise applicable dissenters’ rights. See “Dissenters’ Rights.”

See Exhibit 1 to Annex C for guidance on whether certain trusts or estates qualify to be S-corporation shareholders. If you believe your trust is eligible to be an S-corporation shareholder, please attach the relevant trust agreement to the questionnaire and election form. See “The Reorganization Plan” beginning on page 52.

The Merger Consideration

The cash price per share of $17.25 was determined and set by our board of directors after considering numerous factors as described in greater detail under “Special Factors—Recommendation of the Board of Directors; Fairness of the Reorganization Plan” beginning on page 19. The board engaged a financial advisor, FTN Midwest Securities Corp., referred to in this proxy statement as FTN, to advise us as to the structure and terms of the reorganization and to give an opinion as to the fairness of the merger consideration to our shareholders generally. Because we have various relationships with FTN, including engaging FTN as placement agent for the sale of the trust preferred securities, the proceeds of which will be used to fund the reorganization, the board also engaged an independent financial advisor, FIG Partners, LLC, referred to in this proxy statement as FIG, to give an independent opinion as to the fairness of the merger consideration to our shareholders generally. Finally, the trustees of the Altrust ESOP engaged Mercer Capital Management, Inc., referred to in this proxy statement as Mercer, to give an opinion, on which the board was permitted to rely, as to the fairness of the merger consideration to the Altrust ESOP. Summaries of the opinions are provided under “Special Factors—The FTN Opinion,” “Special Factors—The FIG Opinion” and “Special Factors—The Mercer Opinion,” beginning on pages 21, 31 and 35, respectively.

- 2 -

Table of Contents

QUESTIONS AND ANSWERS ABOUT THE MEETING

This proxy statement summarizes information that you need to know to vote your share at the meeting. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card.

- 3 -

Table of Contents

- 4 -

Table of Contents

QUESTIONS AND ANSWERS ABOUT THE REORGANIZATION

Generally, if you own more than 6,400 shares of Altrust common stock as of [Record Date] , are an eligible S-corporation shareholder and you timely sign and return the shareholders’ agreement and a properly completed questionnaire and election form, you will continue as a shareholder of Altrust after the reorganization and will not receive any cash for your shares.

- 5 -

Table of Contents

QUESTIONS AND ANSWERS ABOUT THE S-CORPORATION ELECTION

Assuming we remain qualified, beginning January 1, 2009, the S-corporation election will permit us to distribute our net income to our shareholders without subjecting them to additional income taxation upon receipt of distributions we make. Since our shareholders will become subject to tax on our taxable income once the S-corporation election is effective (and will therefore be required to pay taxes on their proportionate share of our income), we anticipate that we will distribute enough of our earnings to provide shareholders with cash sufficient to pay their individual federal income tax liabilities at the highest applicable federal marginal income tax rate. However, because we must maintain adequate capital and comply with the Alabama corporate and banking law and are subject to the rules and regulations of various regulatory authorities limiting the declaration and payment of dividends by us and our bank subsidiary, there can be no assurance that we always will be allowed or able to make distributions or distributions in amounts sufficient to cover all of each shareholder’s federal income tax liability that results from being taxed on their respective share of our taxable income. Under federal and state laws, we and Peoples Bank are generally prohibited from paying dividends out of surplus and from paying dividends if we or Peoples Bank were insolvent (or payment of such dividend would render the entity insolvent) or if applicable federal bank regulators determined that payment of dividends, under certain circumstances relating to the financial condition of us or Peoples Bank, would be an unsafe or unsound practice. All distributions will be taxed individually for Alabama excise tax purposes.

As an S-corporation, we expect that, subject to available cash and sufficient capital, as well as the absence of any restrictions by our regulators, our board will declare and pay quarterly dividends that will equal or exceed the amount of federal income tax due for the year on our taxable income. We will also provide information about the projected annual taxable income that can be used to compute estimated federal income tax payments. It is possible, however, that we will not have sufficient capital, earnings or cash (or may have other restrictions on our ability) to pay dividends at all, or in an amount needed to cover a shareholder’s federal income tax liability. In that event, the shareholder will need to use other funds to pay that tax liability.

Since dividends from us generally will not be subject to income tax withholding, shareholders may be required to pay the tax in quarterly estimated installments. The installments are due on April 15, June 15, September 15 and January 15. During the first year of S-corporation status with taxable income, some shareholders will

- 6 -

Table of Contents

qualify for an exception based on the prior year’s tax due. In subsequent years, all shareholders will need to take action to ensure that adequate tax is paid either through withholding or estimated tax installments. As a result, your tax filings may become more complicated. We expect that as an S-corporation we will pay quarterly dividends in anticipation of the due dates for quarterly estimated tax payments.

Once we elect S-corporation status we will not have to pay federal income taxes and should have increased cash available to pay dividends. We expect to use some of this cash to pay quarterly dividends to our shareholders. We cannot guarantee that we will be able to declare or pay sufficient quarterly dividends to cover your federal income taxes on our taxable income. It is possible that our shareholders could have taxable income as a result of our income, but due to our need for capital or cash, limited earnings or regulatory restrictions, we will be unable to pay sufficient dividends to cover our shareholders’ taxes in respect of their share of our income.

It is possible that we could have a taxable loss in a year. In the event of a taxable loss, your share of the loss would mean you would not have taxable income from Altrust, and the loss might decrease your other taxable income. However, generally speaking, the amount of loss that can be reported from passive investments in S-corporations cannot exceed the income from other passive investments in the same year. Any disallowed loss is suspended and carried forward as a deduction that may be taken in subsequent years.

Losses from passive activities may only be used to offset passive activity income. Thus they cannot offset regular compensation, interest or dividends. A passive activity is a trade or business in which the investor does not “materially participate.” Generally, investments in partnerships and S-corporations are passive investments. There are special tax rules that determine when such investments are “active” and thus not subject to the limitations. You should explore this with your own tax advisor to determine how his income will be taxed.

Material participation is involvement on a regular, continuous and substantial basis in the operations of Altrust. In general, participation for more than 500 hours in one year qualifies as material participation. Participation for less than 500 hours may qualify under certain circumstances.

No. There should not be any increase to your personal liability as a result of our election of S-corporation status.

No. You should not owe self-employment tax on these earnings. If you also receive salary from Altrust, the salary is expected to continue to be subject to regular employment taxes.

Yes, employee-shareholders who hold more than 2% of Altrust common stock will find that some of their fringe benefits are taxed differently.

Federal income tax rates on corporations and individuals have changed in the past and may change in the future. If corporate income tax rates are decreased in the future and individual tax rates increase, the advantages of an S-corporation will likely be reduced. Altrust will need to pay out more in dividends to cover shareholders’ individual taxes, and Altrust’s ability to grow with adequate capital may be reduced. The double taxation of Altrust income and its shareholders’ dividend income would still be eliminated, however.

- 7 -

Table of Contents

Yes. The tax preference items of Altrust will be passed through to our shareholders. However, unless a shareholder has other significant tax preference items, these should not be material enough to generate alternative minimum tax.

If you currently file your personal tax returns early, our S-corporation election could delay the process. We should be able to provide all the information that you need to file before the April 15th deadline (in addition to information to assist in making estimated tax payments) but cannot guarantee this. If there are compelling reasons for filing a return before the time final data is available, you may consider filing returns with year-end estimated information and then amending the returns after receipt of the final numbers. We suggest that you explore this alternative with your own tax advisor and use it only if necessary.

No, family limited partnerships are not qualified S-corporation shareholders and may be bank holding companies subject to Federal Reserve regulations under the Bank Holding Company Act of 1956, as amended. Any estate planning will need to be structured to comply with the shareholder eligibility requirements of Subchapter S.

We will determine which trusts are eligible to continue as shareholders after the reorganization. If you believe that your trust is eligible to be an S-corporation shareholder, please attach the relevant trust agreement to the questionnaire and election form for review and determination of eligibility.

Generally, there are four common types of trusts that are eligible to be S-corporation shareholders:

Each “potential current beneficiary” (“PCB”) of the ESBT must be eligible to be an S-corporation shareholder. A PCB is a person who is entitled to, or in the discretion of any person may receive, a distribution of income or principal from the ESBT. If a PCB is not an eligible S-corporation shareholder, the ESBT has a one-year grace period to dispose of all of its stock in the S-corporation. Accordingly, a non-foreign trust cannot be an ESBT unless all its PCBs are eligible to be S-corporation shareholders.

Each PCB is a separate S-corporation shareholder for purposes of the 100-shareholder limit. If, however, there are no PCBs during any period, the ESBT is counted as the shareholder. A PCB is counted as only one shareholder even if a PCB is also a direct shareholder in the S-corporation. In addition, members of a “family” are treated as one shareholder for purposes of determining the 100-shareholder limit, whether a family member holds S-corporation stock directly or by reason of being a PCB in an ESBT.

An ESBT is treated as two separate trusts for federal income tax purposes. The “S portion” holds the stock in one or more S-corporations, and the “non-S portion” holds all the other assets of the trust, if any. The non-S portion’s income is subject to the normal federal income tax rules for trusts, which currently impose a 35-percent tax on the trust’s taxable income in excess of $7,500. The S portion is subject to entity-level income tax at the highest individual rate (currently, 35 percent on ordinary income and 15 percent on net capital gains). Thus, the rate of federal income taxation to which a PCB’s S portion of an ESBT is subject could vary from the beneficiary’s non-S portion, depending upon the trust’s income and the beneficiary’s marginal federal income tax rate.

- 8 -

Table of Contents

We intend to pay, subject to available funds, earnings, regulatory restrictions, and the determination of our board of directors, quarterly cash distributions to our shareholders in amounts sufficient to cover their federal income tax liability on our taxable income attributable to our shareholders, assuming that the shareholders are in the highest marginal tax bracket for federal income tax purposes.

The following items are taken into account in determining the taxable income of the S portion of an ESBT: (i) the items of income, loss, deduction, or credit attributable to it as an S-corporation shareholder under the rules of subchapter S; (ii) gain or loss from the sale of any S-corporation stock; (iii) state and local income taxes or administrative expenses properly allocable to the S portion; and (iv) interest expense paid or accrued by the ESBT on debt incurred to acquire S-corporation stock. The income from the S portion of the ESBT is not included in the beneficiaries’ income.

In addition, in order to qualify as a QSST, (i) all of the trust’s “income” that is distributed (or required to be distributed) currently must be distributed to an individual U.S. citizen or resident, and (ii) the beneficiary of the trust must properly elect to treat the trust as a QSST with respect to the Company on its enclosed questionnaire and election form.

A QSST may not be an ESBT if it has made a QSST election with respect to us.

It is likely that this will be allowed. Although S-corporations are legally limited to 100 S-corporation shareholders, qualifying family members can be counted as one S-corporation shareholder.

We hope this does not happen. In the event that it does, unless our board of directors approves increasing the number of S-corporation shareholders, we will require that the shares be distributed to only one of the parties in the asset settlement. If a satisfactory settlement cannot be accomplished, the shares will be subject to the same procedures as a proposed stock sale, and Altrust will have a right of first refusal.

After the reorganization, if you want to sell to another shareholder that is an S-eligible shareholder, our board of directors can allow the sale. However, it will not be able to authorize any sale or transfer to any person that is not, an S-eligible shareholder or that would cause us to exceed 100 shareholders for Subchapter S purposes, or that otherwise would invalidate our S-corporation status. In the event that a proposed sale would have such an effect, Altrust may help you find another purchaser or our board of directors may authorize us to purchase the shares from you, although we have no obligation to do either. If the proposed purchaser is eligible to be an S-corporation shareholder, the board has authority to approve the sale, subject to the limit on the total number of shareholders, and the purchaser completing, to our satisfaction a questionnaire and a signed shareholders’ agreement.

- 9 -

Table of Contents

Yes, after the reorganization, you may pledge your stock as long as the lender is clear that foreclosure will be treated as a sale and that we have the first option to purchase the stock, and if we do not exercise this right, any purchaser in such a sale must be acceptable to us and be eligible to be an S-corporation shareholder with out causing us to exceed 100 shareholders for Subchapter S purposes.

We recommend that each shareholder specify either qualified individuals as beneficiaries in his or her will, or leave the shares in one of several types of permissible trusts. You should seek independent estate and tax planning advice. As long as the recipient is eligible to be an S-corporation shareholder, that person will inherit the shares. If a shareholder dies without specifying a qualified recipient, it will be the responsibility of the executor to ensure that the shares are transferred in a way that complies with the terms of the shareholder agreement. We will have the right to purchase the stock from the estate if a recipient is not eligible to be an S-corporation shareholder necessary to protect our S-corporation status.

- 10 -

Table of Contents

- 11 -

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We make forward-looking statements in this proxy statement that are subject to risks and uncertainties. Forward-looking statements include information about our possible or assumed future results of operations or performance if the reorganization plan is approved, and assumes no changes in current tax rates, the Internal Revenue Code, or Treasury Regulations promulgated under the Internal Revenue code. When we use words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” and similar expressions, we are making forward-looking statements that are subject to risks and uncertainties. Various economic, regulatory, legislative, administrative and technological future events, factors and changes may cause our results of operations or performance to differ materially from those expressed in our forward-looking statements. Also, this document contains analyses of the potential effects of the tax election on Altrust and our shareholders. These analyses are hypothetical in nature and do not necessarily reflect actual or expected results. In addition, these analyses are based on various assumptions that may or may not prove accurate, or which do not reflect future events, factors or changes. See “Important Information About Altrust — Risk Factors” beginning on page 62 and the risk factors identified in our current filings with the SEC, including our annual report on Form 10-K for the year ended December 31, 2006. See “Where You Can Find Additional Information.”

INFORMATION REGARDING SPECIAL MEETING OF SHAREHOLDERS

Time and Place of Meeting

We are soliciting proxies through this proxy statement for use at a special meeting of Altrust shareholders. The special meeting will be held on                      ,                           , 2008, at [ 8:00 a.m ] local time at                      ,                      , Alabama.

Record Date and Mailing Date

The close of business of [Record Date] is the record date for the determination of shareholders entitled to notice of and to vote at the special meeting. We are mailing this proxy statement and the accompanying form of proxy to shareholders beginning on or about [Mailing Date] .

Number of Shares Outstanding

As of the close of business on the record date, we had 10,000,000 shares of common stock, $0.01 par value, authorized, of which [ · ] shares were issued and outstanding. Each outstanding share is entitled to one vote on all matters presented at the meeting.

Purpose of Special Meeting

The purpose of the special meeting is for our shareholders to consider and vote on the reorganization plan, pursuant to which our obligation to file periodic reports with the SEC under the Securities Exchange Act will be suspended and we will become eligible to, and will, elect to be taxed as an S-corporation for income tax purposes. Shareholders are also being asked to vote on a proposal to approve the adjournment of the special meeting, if necessary, in order to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the reorganization plan.

Requirements for Shareholder Approval

A quorum will be present at the meeting if a majority of the outstanding shares of Altrust common stock are represented in person or by valid proxy. We will count abstentions and broker non-votes, which are described below, in determining whether a quorum exists. Approval of the reorganization plan requires the affirmative vote of two-thirds of the outstanding shares of Altrust common stock entitled to vote on the matter. Additionally, because all of our directors and executive officers will continue as shareholders after the reorganization (even if they currently hold 6,400 or fewer shares), and because they have interests that may be different than those of our other shareholders, the merger agreement requires the approval by a majority of votes entitled to be cast by unaffiliated

- 12 -

Table of Contents

shareholders in order to approve and adopt the reorganization plan. The approval of the adjournment proposal requires the affirmative vote of the holders of a majority of the shares of Altrust common stock present or represented by proxy at the meeting and entitled to vote on the matter. Any other matter that may properly come before the special meeting requires the vote of the holders of a majority of the outstanding shares having voting power present in person or represented by proxy and entitled to vote on the matter unless a higher vote requirement is imposed by applicable law. We will count abstentions and broker non-votes in determining the minimum number of votes required for approval. Therefore, abstentions and broker non-votes have the effect of negative votes, even though abstentions and broker non-votes will not be counted as votes in favor of or against the reorganization plan.

Abstentions . A shareholder who is present in person or by proxy at the special meeting and who abstains from voting on any or all proposals will be included in the number of shareholders present at the special meeting for the purpose of determining the presence of a quorum. An abstention will have the same effect as a vote against the reorganization plan.

Broker Non-Votes. Brokers who hold shares for the accounts of their clients may vote these shares either as directed by their clients or in their own discretion if permitted by the exchange or other organization of which they are members. Proxies that contain a broker vote on one or more proposal but no vote on others are referred to as “broker non-votes” with respect to the proposal(s) not voted upon. A broker non-vote is included in determining the presence of a quorum, but will have the same effect as a vote against the reorganization plan.

Procedures for Voting by Proxy

If you properly sign, return and do not revoke your proxy, the persons appointed as proxies will vote your shares according to the instructions you have specified on the proxy. If you sign and return your proxy but do not specify how the persons appointed and the adjournment proposal as proxies are to vote your shares, your proxy will be voted for the approval of the reorganization plan and, in the best judgment of the persons appointed as proxies, on all other matters properly brought before the special meeting. You can revoke your proxy at any time before it is voted by delivering to Altrust either a written revocation of the proxy or a duly signed proxy bearing a later date, or by attending the special meeting and voting in person. You may not change or revoke your proxy by facsimile or telephone.

Dissenters’ Rights

Shareholders of Altrust are entitled to dissent from the reorganization plan. If you dissent from the reorganization plan, you are entitled to the statutory rights and remedies of dissenting shareholders provided in Article 13 of the Alabama Business Corporation Act, referred to in this proxy statement as the Alabama dissent provisions, as long as you comply with the Alabama dissent provisions. The Alabama dissent provisions provide that a dissenting shareholder is entitled to receive cash in an amount equal to the fair value of his or her shares. We have included a copy of Article 13 of the Alabama Business Corporation Act in Appendix D to this proxy statement and a summary of the Alabama dissent provisions under “Dissenters’ Rights.”

To perfect dissenters’ rights, you must strictly comply with Article 13 of the Alabama Business Corporation Act, which requires, among other things, that you give us notice of your intent to dissent from the reorganization plan prior to the vote of the shareholders at the special meeting and that you do not vote your shares in favor of the reorganization plan.

Any shareholder who returns a signed proxy but fails to provide instructions as to the manner in which his or her shares are to be voted will be deemed to have voted in favor of the reorganization plan and will not be entitled to assert dissenters’ rights.

Failure to vote against the reorganization plan will not result in a waiver of your right to dissent. Furthermore, voting against the reorganization plan will not satisfy the requirement that you provide us prior notice of your intent to dissent from the reorganization plan.

- 13 -

Table of Contents

Solicitation of Proxies

We are soliciting proxies and we will pay the cost of the proxy solicitation. Our directors, officers and employees may, without additional compensation, solicit proxies by personal interview, telephone, fax, or otherwise. We will direct brokerage firms or other custodians, nominees or fiduciaries to forward our proxy solicitation material to the beneficial owners of common stock held of record by these institutions and will reimburse them for the reasonable out-of-pocket expenses they incur in connection with this process.

Other Business

We are not currently aware of any business to be acted upon at the special meeting other than the matters discussed in this proxy statement. Under our bylaws, business transacted at the special meeting is limited to the purposes stated in the notice of the special meeting, which is provided at the beginning of this proxy statement. If other matters do properly come before the special meeting, or at any adjournment or postponement of the special meeting, we intend that shares of Altrust common stock represented by properly submitted proxies will be voted in accordance with the recommendations of our board.

Questions and Additional Information

If you have more questions about the reorganization or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact us in writing at our principal executive offices: Altrust Financial Services, Inc., 811 2nd Avenue S.W., Cullman, Alabama 35055-4222, or calling us at (256) 737-7000.

Availability of Documents

The reports, opinions or appraisals referenced in this proxy statement and filed as exhibits to the Schedule 13E-3 that we are filing with the SEC concurrently with this proxy statement will be made available for inspection and copying at our principal executive offices during our regular business hours by any interested holder of Altrust common stock.

- 14 -

Table of Contents

SPECIAL FACTORS

Purpose of the Reorganization

The reorganization is to allow us to suspend our obligation to file periodic reports with the SEC under the Securities Exchange Act, which we expect will result in a significant decrease in expenses and administrative burdens related to ongoing regulatory compliance matters. We believe that the S-corporation election will promote more efficient capital utilization and enhance shareholder value by reducing the combined taxes paid by Altrust and its shareholders in accordance with Subchapter S of the Internal Revenue Code.

As an S-corporation, we will pass through our taxable income to the remaining shareholders for taxation at their personal rates, thus allowing us to avoid paying corporate-level income tax. As a result, we expect, under current federal income tax laws, that we may be able to generate a higher level of net income and, consequently, a higher after-tax return to our shareholders.

We currently have approximately 627 shareholders of record, but approximately 88% of the outstanding shares are held by 235 shareholders. As a result, there is a limited market for Altrust common stock and our board of directors believes there is little likelihood that a more active market will develop. However, as long as we continue to have more than 300 shareholders of record for SEC purposes, we are required to file periodic reports with the SEC in compliance with the Securities Exchange Act. The cost of complying with the SEC’s reporting and Sarbanes-Oxley Act requirements is substantial, and in light of the limited trading market for Altrust common stock, the board believes we receive little benefit from being a SEC-reporting company. We also incur printing, postage, data entry and other administrative expenses related to servicing shareholders who own relatively small numbers of shares.

Because the number of shareholders of an S-corporation is limited to 100 for Subchapter S purposes (although certain family members can be treated as one S-corporation shareholder), the reorganization plan is designed to substantially reduce the number of our shareholders. As of December 1, 2007, we had approximately 392 shareholders who owned 6,400 or fewer shares of Altrust common stock. The reorganization plan will allow us to pay these shareholders a fair price for their shares and afford them a liquidity opportunity not otherwise available, given the limited trading market for shares of Altrust common stock.

Alternatives Considered by the Board of Directors

Our board of directors routinely reviews and discusses with senior management our capital levels, capital utilization and returns on equity. In making its determination to adopt the reorganization plan, the board considered other alternatives to achieve its financial goals, as well as reduce our regulatory burdens and costs associated with our reporting company status under federal securities laws. The board rejected these alternatives because it believed the reorganization would be the best method in which to achieve its goals of improving capital utilization and shareholder value while also continuing to serve the financial needs of the communities in which we operate. These alternatives included:

Reverse stock split. Our board of directors considered declaring a reverse stock split with cash payments for resulting fractional shares. This alternative would also have the effect of eliminating our reporting obligations under the Securities Exchange Act. However, a reverse stock split would not, by itself, provide a mechanism to ensure that the remaining shareholders would sign the shareholders’ agreement, which protects against the inadvertent termination of our S-corporation election. Rather, we would still have to solicit individual shareholder approval of the shareholders’ agreement (as the shareholders’ agreement and related tax consents are specific to each shareholder, the shareholders’ agreement cannot be adopted by a shareholders’ vote). Further, a reverse stock split, by itself, does not provide a mechanism equivalent to the requirement in the merger agreement that the merger agreement be approved by a “Majority of the Minority” or provide dissenters’ rights protection, for those unaffiliated shareholders receiving cash in the reorganization that were important factors to our board, our executive officers and the Altrust ESOP in determining the fairness of the reorganization to our unaffiliated shareholders. See “— Recommendation of the Board of Directors; Fairness of the Reorganization Plan.” Accordingly, the board rejected this alternative.

Issuer tender offer. Our board considered an issuer tender offer to repurchase outstanding shares of Altrust common stock. The results of an issuer tender offer would be unpredictable, however, due to its voluntary nature. The board believed this alternative would have similar costs to the reorganization, but was uncertain as to whether this alternative would result in shares being tendered by a sufficient number of shareholders so as to enhance the utilization of existing capital, permit Altrust to elect to become an S-corporation, and to terminate its disclosure and reporting requirements under the Securities Exchange Act. As a result, the board rejected this alternative.

Selling Altrust. Our board did not consider seeking another financial institution to purchase Altrust and its subsidiaries, including Peoples Bank. Our board does not believe that there are any purchasers offering a high-quality, truly liquid

- 15 -

Table of Contents

currency seeking to purchase institutions of our size and in our market area and, even if there were a potential purchaser, any such purchaser would significantly reduce our ability to serve our communities as well as we do. This belief is based upon several factors. First, our board has not solicited, nor has it received any, third party bids, and although from time to time we receive preliminary overtures from possible acquirers, we have not engaged in any specific discussions with potential purchasers. Second, we believe that the overall market for banks of our size has been on the decline. Most of our competitors have seen their per share market price decline during the time our board has considered the reorganization plan. Therefore, we believe that most of our competitors are not in a position to purchase Altrust. Even if an offer were made, we believe that the consideration most likely to be offered would be in the acquiror’s own common stock. Given the declining share prices of our competitors and the fact that we are an industry leader, we believe that accepting an acquiror’s common stock as consideration would cause our shareholders to lose value. Third, Peoples Bank is truly a community bank, and any other bank that may have the ability to acquire us would likely be a large regional or national bank. We believe that if we were to sell to such a bank, many of our customers who thrive in a community bank setting, particularly the rural and agricultural customers we serve, would not be served as well, if at all, after such a sale. As a result, those customers would have fewer options to have their banking needs met. Fourth, we believe a sale of Altrust is unlikely given the numerous bank consolidations that have already occurred during the last two to three years. Finally, any sale of Altrust would almost certainly result in the loss of employment and benefits from the Altrust ESOP by many of our employees, many of whom have been with us for their entire careers. Therefore, our board believes that a sale at this time would not be in the best interests of our shareholders, employees or communities. For the foregoing reasons, the board rejected this alternative.

Background; Reasons for the Reorganization

We became subject to the SEC’s periodic reporting requirements in January 2005. We did not choose to become a reporting company, but rather as a result of transfers among shareholders and their families, we ended up with over 500 shareholders of record for SEC purposes at that time, which triggered our reporting obligations. As a result, we have had to hire additional personnel and expend significant amounts of money to comply with SEC regulations. Further, there is no corresponding active trading market of Altrust common stock served by the periodic reports we file with the SEC. For example, in 2006 we believe that only 41,877 shares, or approximately 0.76% of the total outstanding shares of Altrust common stock, traded. As a result, our periodic reporting obligations are expensive and provide little or no benefit to us or our shareholders. If the reorganization is approved by our shareholders, we expect that the savings in the first full year on professional fees and other expenses associated with public company reporting will be approximately $250,000.

Also, a significant portion of our shareholder base have held their shares since Peoples Bank was started in 1977. We value the loyalty of our shareholders, however the cost of serving numerous small shareholders has dramatically increased especially due to our SEC and Sarbanes-Oxley Act compliance costs. We believe that our shareholders should be given an opportunity to realize value for their shares through the reorganization and without forcing a sale of Altrust. The reorganization is intended to provide smaller shareholders with the opportunity to realize cash at a premium to the current market and the current Altrust ESOP valuation while preserving Altrust as a community institution serving its customers and communities with local management and local decision-making. We will continue to recognize our founding shareholders. We always value our founders and other shareholders’ views and their contributions as customers and look forward to continuing to serve them.

Against this backdrop, our board, in accordance with its role as steward of our long-term strategy, held a special meeting on February 8, 2007, at which Robin Cummings, our chief executive officer, Lionel Powell, our chief financial officer, and Kenneth Weldon, our executive vice president, made a management presentation to the board to explain why management believed the board should consider a change in our business model to maximize shareholder value. Given concerns about our current size, the average age of our shareholders, the illiquidity of Altrust common stock, the escalating accounting and legal expenses associated with being an SEC reporting company, the flat yield curve of our earnings performance and our general need for growth, management believed that a reorganization that would allow us to cease our reporting obligations with the SEC as well as to elect to be taxed as an S-corporation would be in the best interests of our shareholders. Such a reorganization would maintain our independence, reduce our tax liability (and that of our shareholders), and allow us to distribute more of our profits directly to our shareholders. Management believed that this would allow us to improve employee retention and morale, reduce the cost of regulatory compliance and reward our shareholders. The board considered the various methods by which we could accomplish such a reorganization, including the costs and benefits of each. In considering the number of outstanding shares we would have to reduce in order to have fewer than the maximum number of shareholders allowed for federal income tax purposes, management presented an analysis of the holdings of our shareholders, including the number of shareholders holding specified amounts of shares. Based on that analysis, management proposed that all shareholders with fewer than 7,000 shares should be cashed out in connection with the reorganization. The board also discussed the requirements under the federal tax code to elect S-corporation status, including the maximum number of shareholders for federal income tax purposes that we could have in order to elect to be taxed as an S-corporation. The board determined to meet later that month in order to hear presentations from legal counsel and financial advisors on the proposed reorganization.

At a special meeting of the board on February 22, 2007, a representative of Jones Day, our corporate counsel, made a presentation to the board discussing the legal issues involved with the proposed reorganization, including the requirements to elect S-corporation status, board fiduciary duties to shareholders, and regulatory issues. A representative of First Tennessee Bank of Chattanooga, an affiliate of FTN, referred to in this proxy statement as First Tennessee, was present to discuss methods of financing the proposed reorganization. Also present at the meeting was a representative from Benefit Consultants, the manager of the Altrust ESOP, as well as Lionel Powell, Ray Lindsey, Ken Weldon, Debra Goble, Donald Law, Pam Calvert, Candace Hooten, John Whitley, Steve Stanford, Steve Freeman, Gwen Parker and Sheila Sizemore from management. After discussion, the board determined to continue consideration of the proposed merger of a newly created subsidiary into Altrust, pursuant to which shareholders holding fewer than a predetermined number of shares of Altrust common stock would receive cash for their shares, thereby lowering the number of shareholders of record for SEC purposes below 300, and the number of shareholders for federal income tax purposes below 100.

On March 8, 2007, the board held another special meeting to discuss the proposed reorganization. Our auditors attended the meeting, to review with our board the tax effects of the proposed reorganization, including the tax effects on those of our shareholders who would continue as shareholders after an S-corporation election.

At a regularly scheduled board meeting on April 12, 2007, the board reviewed a proposal from First Tennessee Bank regarding the proposed issuance of trust preferred securities, the proceeds of which would be used to finance the proposed reorganization.

At the next regularly scheduled board meeting, on July 12, 2007, the board received an update on efforts to raise capital through the sale of the trust preferred securities.

A special called meeting of the board was held on August 9, 2007, to approve a resolution to issue $18 million in trust preferred securities with the assistance of First Tennessee Bank, with the proceeds to be available to finance the proposed reorganization if ultimately approved.

At another special called meeting of the board held on September 25, 2007, the board considered the minimum number of shares necessary to repurchase in order to qualify for S-corporation status, noting that endeavoring to repurchase all shares held by shareholders holding 6,400 or fewer shares, instead of 7,000, would achieve the objectives of the reorganization at the minimum cost, with the added benefit of allowing the maximum number of shareholders to continue as shareholders after the reorganization. Management, including Chris Sawyer, the president of Peoples Bank, and Michael Babb, our general counsel, noted that lowering the threshold further would unduly restrict our ability to offer Altrust common stock to our employees as long-term incentive compensation. Also during the meeting, representatives of FTN reviewed with the board its financial analysis of the proposed consideration to be offered in the reorganization and rendered to the board an oral opinion, subsequently confirmed in writing, that the per share price $17.25 to be paid by Altrust in the reorganization is fair to Altrust shareholders from a financial point of view.

Given FTN’s affiliate relationship with First Tennessee, in late September 2007, the board instructed management to engage an independent financial advisor to render an opinion as to the fairness of the merger consideration. Additionally, in September 2007, the trustees of the Altrust ESOP engaged Mercer to render a similar opinion as to the fairness of the proposed reorganization to the Altrust ESOP.

At the next regularly scheduled board meeting of October 11, 2007, the board of directors continued its discussion and deliberations. At this meeting, representatives of FIG reviewed with the board its financial analysis of the merger consideration and rendered to the board an oral opinion, confirmed by delivery of a written opinion, dated October 17, 2007, to the effect that, as of that date and based on and subject to the matters described in the opinion, the merger consideration to be received pursuant to the merger agreement is fair from a financial point of view to our shareholders generally. Representatives of Mercer then reviewed with the board its financial analysis of the merger consideration and the reorganization’s effects on the Altrust ESOP, and rendered to the trustees of the Altrust ESOP an oral opinion, confirmed by delivery of a written opinion, dated October 22, 2007, to the effect that, as of that date and based on and subject to the matters described in the opinion, the merger consideration to be paid in the reorganization is fair, from a financial point of view, to the Altrust ESOP. Representatives of Jones Day reviewed the key terms of the proposed merger agreement and proposed shareholders’ agreement, and discussed with the board the various risks that the reorganization poses for our shareholders. After considering the proposed terms of the reorganization plan and shareholders’ agreement, the board (including those directors who are not employees of Altrust) unanimously resolved to authorize its officers to finalize the merger agreement and to recommend that our shareholders approve the reorganization plan.

- 16 -

Table of Contents

Timing of the “going private” transaction and S-corporation election . As noted above, our public reporting requirements began in 2005. Prior to this, we had been a private company. It became apparent in 2006 that the costs associated with public reporting were becoming considerable. As the discussion of “going private” continued into 2007, it also became apparent that it was possible to facilitate an S-corporation election simultaneous with suspension of our SEC reporting obligations, which would offer considerable benefits to us and our shareholders. Based upon our investigation of the cost savings and the reduction in tax liability, as well as continued decline of net-interest income in the banking industry and the flattening of the interest rate yield curve, we concluded that we needed to “go private” and elect to be taxed as an S-corporation as soon as possible.

Cost savings related to the suspension of SEC reporting. The reorganization will allow us to save the administrative, accounting and legal expenses incurred in complying with the disclosure and reporting requirements under the Securities Exchange Act and to eliminate the costs associated with servicing shareholders who own relatively small numbers of shares. We estimate that we will save approximately $250,000 per year as a result of the reduction in the number of shareholders and the elimination of our periodic reporting requirements under the Securities Exchange Act.

Benefits of S-Corporation election. We believe that our ability to be taxed as an S-corporation for federal income tax purposes will be beneficial to our shareholders. An S-corporation generally is not subject to federal income taxation. Instead, the S-corporation’s shareholders are taxed (proportionately, based upon their shareholdings) on the taxable income of the S-corporation. These earnings may then be distributed by the S-corporation to its shareholders “tax-free”—that is, without the shareholder having to include the earnings in income again as a dividend, which would not be the case for a C-corporation. The following table illustrates the federal income tax effects of an S-corporation election on a hypothetical shareholder in a corporation with $1 million in taxable income. The table shows the cash flow remaining to the shareholder after all federal income taxes are paid under three scenarios: a 10% shareholder in a C-corporation, a 10% shareholder in an S-corporation, and a 10% shareholder in an S-corporation holding all shares through an ESOP. In each scenario, the company pays a 15% “economic” dividend and in the two S-corporation scenarios, also distributes 35% of its earnings to its shareholders so that they may pay their federal income tax liabilities on their respective shares of the company’s taxable income. Please note that this table assumes current federal income tax rates; these rates could change in the future. Further, state income taxes or excise taxes are not included in the analysis.

Since our shareholders will become subject to tax on our taxable income once the S-corporation election is effective, we anticipate that we will distribute our earnings (or at least enough of our earnings) to provide our shareholders with cash sufficient to pay their individual federal income tax liabilities. However, because we must comply with the Alabama Business Corporation Act and are subject to the rules and regulations of various regulatory authorities with respect to the declaration of dividends, there can be no assurance that we will be allowed to make distributions in amounts sufficient to cover all of each shareholder’s federal income tax liability that results from being taxed on their respective share of our taxable income. Under federal and state laws, we and Peoples Bank are generally prohibited from paying dividends out of surplus and from paying dividends if we or Peoples Bank were insolvent (or payment of such dividend would render the entity insolvent) or if applicable federal bank regulators determined that payment of dividends, under certain circumstances relating to the financial condition of us or Peoples Bank, would be an unsafe or unsound practice.

The foregoing table is provided as an example only and the results shown are hypothetical and may not reflect actual results.

- 17 -

Table of Contents

An S-corporation can be subject to a corporate-level tax upon a sale of some or all of its assets where it has been taxed as a C-corporation in the past. The corporate level tax generally applies to any “built-in” gains of the corporation. Built-in gains are those gains which economically accrue prior to the time that the corporation’s S-corporation election becomes effective. The built-in gains tax applies generally only to built-in gains that are recognized during the first ten years after the corporation’s S-corporation election is effective. For example, if an S-corporation owns real estate that has appreciated by $1,000 in value at the effective time of its election and the S-corporation sells the real estate within ten years of the date of its S election when the real estate has appreciated $2,000 in the value, the S-corporation will pay federal corporate income tax (currently at a 35% rate) on the recapture of its $1,000 of built-in gains. The remaining $1,000 of appreciation would not be subject to corporate taxes (but would be taxable to the shareholders—even if the proceeds are not distributed to them).

Our primary assets that would be subject to built-in gains tax as of September 30, 2007 are the real property and investment portfolio of Peoples Bank. No formal analysis of the potential gains that exist has been performed. However, management presently estimates that the total “built-in” gain would approximate $4 million. At this time, we have no plans to enter into transactions that would trigger the payment of taxes as a result of sales of appreciated assets.

As stated above, an S-corporation is subject to tax in limited circumstances. Accordingly, an S-corporation (unlike a C-corporation) may sell its assets in a taxable sale and distribute the proceeds from the sale to its shareholders with the shareholders being taxed only once on the gain generated by the sale. In the case of a C-corporation, a similar sale of assets would be subject to corporate taxation and then the proceeds remaining after paying the corporate-level tax would be subject to tax again when distributed to the corporation’s shareholders. Thus, an S-corporation has a distinct advantage over a C-corporation in structuring a more tax-advantaged sale of the corporation’s business to a prospective buyer.

Benefits of Altrust to the community. In reaching the conclusion to recommend the reorganization plan, our board of directors gave serious attention to the fact that our shareholders have long been loyal and supportive of Altrust. The board also recognized that the reorganization plan will result in the shares of a large number of shareholders being converted to cash, in some cases against the wishes of those shareholders. While the board was mindful of these issues, it ultimately concluded that given the vital role we have played in our communities—as an employer, as a source of credit for capital and business growth, and as a community resource—our continued viability as an independent financial institution was of significant benefit to our communities and to our shareholders as a whole.

Potential disadvantages of the reorganization plan to shareholders. Currently, only a limited public trading market exists for Altrust common stock. The market liquidity for shares of Altrust common stock after the reorganization will be even lower because each shareholder will be bound by the terms of the shareholders’ agreement, which, among other obligations, will restrict the sale of Altrust common stock.

Although we anticipate that we will have earning and that we can make distribution of our earnings to provide shareholders with sufficient cash to pay their individual federal income tax liabilities resulting from being taxed on their respective shares of our income, we can give no assurance that these distributions will be made. The amount of dividends or distributions we can pay depends upon maintaining our capital adequacy and having sufficient earnings and capital as well as other regulatory restrictions. Shareholders after the reorganization will be subject to tax on our taxable income regardless of whether or not we distribute any of our earnings to our shareholders. As a result, our shareholders may be required to pay taxes on their respective share of our taxable income at a time when they have no cash flow from their shares with which to pay the taxes. Shareholders may also need to pay estimated tax payments.

Finally, in order to continue be a shareholder after the reorganization, you must be eligible to be an S-corporation shareholder. As a result, some shareholders who are not eligible S-corporation shareholders but who desire to remain shareholders may have no choice but to receive cash in the reorganization.

The merger consideration. Because Holly Pond has not carried on any active business before the proposed merger, the aggregate merger consideration (consisting of the $11.4 million aggregate cash payment to those shareholders who are not eligible S-corporation shareholders plus the value, at $17.25 per share, of the shares held by the eligible S-corporation shareholders that will remain outstanding after the reorganization) is expected to represent the total value of Altrust as a going concern immediately prior to the merger transaction. Because the cash price being offered to shareholders in exchange for their Altrust common stock is above our book value per share,

- 18 -

Table of Contents

those eligible S-corporation shareholders whose shares will remain outstanding after the reorganization will experience an immediate, and material dilution in the book value of their shares in Altrust. Conversely, those shareholders who receive cash in exchange for their Altrust common stock will receive what we believe to be the fair value of their stock without taking into effect the proposed reorganization of Altrust, in conformity with Alabama law. For information regarding the anticipated advantages and disadvantages of the reorganization, see “—Effects of the Reorganization Plan on Altrust.”

The cash price per share of $17.25 was determined and set by the board of directors of Altrust after considering numerous factors as described in greater detail under “—Recommendation of the Board of Directors; Fairness of the Reorganization Plan.” Additionally, the board engaged FTN to give an opinion as to the fairness of the merger consideration to our shareholders generally. Because Altrust has various relationships with FTN, including engaging FTN as placement agent for the sale of the trust preferred securities the proceeds of which will be used to fund the reorganization, the board also engaged FIG to give an independent opinion as to the fairness of the merger consideration to our shareholders generally. Finally, the trustees of the Altrust ESOP engaged Mercer to give an opinion as to the fairness of the merger consideration to the Altrust ESOP. Summaries of the opinions are provided under “—The FTN Opinion,” “—The FIG Opinion” and “—The Mercer Opinion.”

Recommendation of the Board of Directors; Fairness of the Reorganization Plan

Our board of directors believe that the reorganization plan, taken as a whole, is substantively and procedurally fair to, and in the best interests of, Altrust and its shareholders, including unaffiliated shareholders. The board, including those directors who are not employees of Altrust, have unanimously approved the reorganization plan, and the board unanimously recommends that our shareholders vote for approval of the reorganization plan.

The board considered a number of factors in determining to approve the reorganization plan, including the relative advantages and disadvantages described under “—Reasons for the Reorganization Plan.” The board also reviewed the pro forma financial and tax effects on Altrust, the Altrust ESOP and our shareholders related to the S-corporation election. The tax benefits and the earnings potential that result from the S-corporation election were significant factors in the board’s determination that the S-corporation election should be a part of the reorganization plan.

Additionally, the board considered the effect that suspension of our periodic reporting requirements with the SEC would have on the market for Altrust common stock and the ability of our shareholders to buy and sell shares. In this regard, the board determined that, even as an SEC-reporting company, there is no active trading market for the shares of Altrust common stock, especially for sales of large blocks of shares, and that our shareholders derive little benefit from our status as an SEC-reporting company. The board determined that the benefits of the S-corporation election and the cost savings and reduced management time to be achieved by suspension of our periodic reporting requirements with the SEC outweighed any potential detriment.

The board further considered alternative transactions to accomplish the proposed going-private transaction but ultimately approved the reorganization proposal. Please read the discussion under “—Alternatives Considered by the Board of Directors” for a description of the alternatives considered by the board.

Substantive fairness. The board considered numerous factors, discussed below, in reaching its conclusion as to the substantive fairness of the reorganization plan, both to affiliated and unaffiliated shareholders (both those who will receive cash in the reorganization and those who will continue as shareholders after the reorganization). The board did not assign any specific weights to the factors listed below, and individual directors may have given differing weights to different factors.

- 19 -

Table of Contents

In connection with its deliberations, the board did not consider, and did not request that its financial advisors evaluate, our liquidation value. The board did not view our liquidation value to be a relevant measure of valuation, given that the reorganization consideration significantly exceeded our book value per share, and it was the board’s view that we are far more valuable as a going concern than our net book value per share of $9.34 as of September 30, 2007. The board also believes liquidation is not a feasible alternative for a financial institution because of tax and regulatory concerns. However, book value per share is an historical accounting number, and an evaluation of liquidation value could produce a higher valuation than book value per share. Additionally, we can give no assurance that the liquidation value would not produce a higher valuation than our value as a going concern.

The board is not aware of any firm offers, negotiations, transactions or material contracts, other than in conjunction with the reorganization, having been made by an unaffiliated person or entity during the preceding two years for:

- 20 -

Table of Contents

After consideration of all of the foregoing factors and information, the board determined that $17.25 per share is a fair price to be paid to cashed-out shareholders in the reorganization and, correspondingly, set the merger consideration at $17.25 per share.

Procedural fairness. The Alabama Business Corporation Act requires shareholder approval of the transactions contemplated by the reorganization plan—specifically, the affirmative vote of two-thirds of the outstanding shares of Altrust common stock entitled to vote on the reorganization plan. Additionally, because all of our directors and executive officers will continue as shareholders after the reorganization (even if they currently hold 6,400 or fewer shares), and because they have interests that may be different than those of our other shareholders, the merger agreement requires the approval by a majority of votes entitled to be cast by those shareholders not eligible to continue as shareholders after the reorganization in order to approve and adopt the reorganization plan (the “majority of the minority” requirement).

Because we have various relationships with FTN, including engaging FTN as placement agent for the sale of the trust preferred securities the proceeds of which will be used to fund the reorganization, the board engaged an independent financial advisor, FIG, to give an independent opinion as to the fairness of the merger consideration to our shareholders generally. In addition, the trustees of the Altrust ESOP engaged Mercer to give an opinion, on which the board was permitted to rely, as to the fairness of the merger consideration to the Altrust ESOP. Summaries of the opinions are provided under “—The FTN Opinion,” “—The FIG Opinion” and “—The Mercer Opinion.”

The board also considered the right of shareholders, whether unaffiliated or not, to dissent from the reorganization plan.

The board noted that we did not retain an independent representative to act solely on behalf of unaffiliated shareholders for the purpose of negotiating the terms of the reorganization or preparing a report covering the fairness of the reorganization. In addition, the board noted that we have not made any provision in connection with the reorganization to grant unaffiliated shareholders access to our corporate files, except as provided under the Alabama Business Corporation Act, or to obtain legal counsel or appraisal services at our expense. With respect to unaffiliated shareholders’ access to our corporate files, the board determined that this proxy statement, together with our other filings with the SEC, provide adequate information for unaffiliated shareholders to make an informed decision with respect to the reorganization plan. The board also considered the fact that under the Alabama Business Corporation Act, and subject to specified conditions set forth under Alabama law, shareholders have the right to review our relevant books and records. As for obtaining legal counsel or appraisal services for unaffiliated shareholders at our expense, the board did not consider these necessary or customary. In deciding not to adopt these additional procedures, the board also took into account factors such as our size and financial capacity, the cost of such procedures, and that most of our shareholders live in northern Alabama and are familiar with our operations and management.

After consideration of the factors described above, the board determined that the transaction is procedurally fair, primarily due to the “majority of the minority” requirement, despite the absence of an unaffiliated shareholder representative or the provision of legal counsel or appraisal services at the expense of Altrust.

Our board of directors recommends that you vote “FOR” the approval of the reorganization plan.

The FTN Opinion

Our board of directors retained FTN to act as its financial advisor to render a fairness opinion in connection with the reorganization. On September 25, 2007, FTN delivered to the board an oral opinion, which was confirmed by delivery of a written opinion dated October 16, 2007, to the effect that, as of that date, and based upon and subject to the factors and assumptions set forth in the opinion, the consideration to be paid by Altrust in the reorganization is fair, from a financial point of view, to our shareholders generally.

- 21 -

Table of Contents

The full text of FTN’s opinion, dated October 16, 2007, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken by FTN, is attached as Annex E to this proxy statement and is incorporated by reference into this proxy statement. The summary of FTN’s opinion set forth below is qualified in its entirety by reference to the full text of the opinion. You are urged to read the opinion carefully in its entirety. FTN’s opinion was delivered to the board for its information and is directed only to the fairness, from a financial point of view, to our shareholders, of the consideration paid in the reorganization and does not address the fairness to, or any other consideration of, the holders of any class of securities, creditors or other constituencies of Altrust, or any other aspect of the reorganization, including the merits of our underlying decision to engage in the reorganization. FTN’s opinion does not constitute a recommendation to any shareholder as to how the shareholder should vote with respect to the reorganization or any other matter. FTN has consented to its opinion being summarized herein and reproduced in its entirety as Annex E to this proxy statement.

In preparing its opinion to our board of directors, FTN performed various financial and comparative analyses, including those described below. The summary set forth below does not purport to be a complete description of the analyses underlying FTN’s opinion or the presentation made by FTN to the board. The preparation of a fairness opinion is a complex analytic process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, FTN did not attribute any particular weight to any analysis or factor considered by it, but rather made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. Also, no company included in FTN’s comparative analyses described below is identical to Altrust and no transaction is identical to the merger. Therefore, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of Altrust and the companies to which it is being compared. Accordingly, FTN believes that its analyses must be considered as a whole and that selecting portions of its analyses and factors, or focusing on information presented in tabular format, without considering all of the analyses and factors or the narrative description of the analyses, would create a misleading or incomplete view of the process underlying its opinion.

In performing its analyses, FTN made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of FTN or Altrust. Any estimates contained in the analyses performed by FTN are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than those suggested by such analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. In addition, as described above, FTN’s opinion was among several factors taken into consideration by the board in making its determination to approve the reorganization plan and the aggregate consideration to be paid by Altrust in the reorganization. Consequently, FTN’s analyses should not be viewed as determinative of the decision of the board or of management with respect to the fairness of the consideration in the reorganization.

In arriving at its opinion, FTN, among other things, did the following:

- 22 -

Table of Contents

In performing its reviews and analyses and in rendering its opinion, FTN relied upon the accuracy and completeness of all of the financial and other information that was available to it from public sources, that was provided by Altrust or its respective representatives, or that was otherwise reviewed by FTN and has assumed such accuracy and completeness for purposes of rendering the opinion. FTN further relied on the assurances of our management that they were not aware of any facts or circumstances that would make any of the information provided by Altrust inaccurate or misleading. FTN has not been asked to undertake, and has not undertaken, an independent verification of any of such information and FTN does not assume any responsibility or liability for the accuracy or completeness thereof. FTN did not undertake an independent evaluation or appraisal of any of our assets or liabilities, nor was it furnished with any evaluations or appraisals. FTN did not make an independent evaluation of the adequacy of our allowance for loan losses nor has FTN reviewed any individual credit files relating to Altrust. FTN assumed, with our consent, that our respective allowances for loan losses are adequate to cover such losses. With respect to the management forecasts furnished to or discussed with FTN, FTN assumed, with the consent of the board, that they were reasonably prepared and reflected the best currently available estimates and judgments of our management as to our expected future financial performance and that the forecasts would be achieved.

FTN’s opinion is necessarily based upon market, economic and other conditions as they existed on, and on the information made available to FTN as of, October 4, 2007. FTN assumed that in the course of obtaining the necessary regulatory or other consents or approvals (contractual or otherwise) for the merger, no restrictions, including any divestiture requirements or amendments or modifications, will be imposed that will have a material adverse effect on the contemplated benefits of the reorganization. FTN did not express any opinion as to the prices at which Altrust common stock will trade following the announcement of the reorganization or the price at which Altrust common stock will trade following the completion of the reorganization. No other limitation was imposed on FTN with respect to the investigations made or procedures followed by FTN in rendering its opinion.

Financial Analysis. The following is a summary of the material analyses performed by FTN in connection with its opinion to our board of directors dated October 16, 2007. Some of the financial analyses summarized below include information presented in tabular format. In order to understand fully FTN’s financial analyses, the tables must be read together with the text of the summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of FTN’s financial analyses.

Premium Analysis. Based upon per-share financial information for Altrust for the twelve months ended June 30, 2007, FTN calculated the following ratios:

- 23 -

Table of Contents

For purposes of FTN’s analyses, earnings per share were based on fully diluted earnings per share. The aggregate consideration for the repurchase was approximately $12.0 million with approximately 700,000 shares repurchased at $17.25 per share.

Comparable Company Analysis. FTN used publicly available information to compare selected financial and market trading information for Altrust and three different groups of depository institutions selected by FTN.

The first comparable group consisted of the following publicly traded depository institutions located in the southeast region of the United States with assets of $350—$500 million:

The table below compares the data for Altrust as of and for the twelve-month period ended June 30, 2007 and the median, minimum and maximum data for the comparable peer group as of and for the twelve-month period ended June 30, 2007 with pricing data as of October 4, 2007. Financials are in ($000) unless otherwise noted.

Altrust market multiples are based on the proposed repurchase price of $17.25.

- 24 -

Table of Contents

Applying these comparable company multiples to our financials as of June 30, 2007 provided the following range of values.

Comparable Group Market Multiples and Implied Values

Altrust market multiples are based on the proposed repurchase price of $17.25.

The second comparable group consisted of the following publicly traded depository institutions located in the southeast region of the United States with assets of $350—$500 million and a Return on Average Assets of greater than 1.0% over the last twelve months as of June 30, 2007:

The table below compares the data for Altrust as of and for the twelve-month period ended June 30, 2007 and the median, minimum and maximum data for the comparable peer group as of and for the twelve-month period ended June 30, 2007 with pricing data as of October 4, 2007. Financials are in ($000) unless otherwise noted.

- 25 -

Table of Contents

Altrust market multiples are based on the proposed repurchase price of $17.25.

Applying these comparable company multiples to Altrust financials as of June 30, 2007 provided the following range of values.

Comparable Group Market Multiples and Implied Values

Altrust market multiples are based on the proposed repurchase price of $17.25.

The third comparable group consisted of the following publicly traded depository institutions located in the United States with assets of $350—$500 million and a Return on Average Assets of greater than 1.25% over the last twelve months as of June 30, 2007:

- 26 -

Table of Contents

The table below compares the data for Altrust as of and for the twelve-month period ended June 30, 2007 and the median, minimum and maximum data for the comparable peer group as of and for the twelve-month period ended June 30, 2007 with pricing data as of October 4, 2007. Financials are in ($000) unless otherwise noted.

Altrust market multiples are based on the proposed repurchase price of $17.25.

Applying these comparable company multiples to Altrust financials as of June 30, 2007 provided the following range of values.

Comparable Group Market Multiples and Implied Values

Altrust market multiples are based on the proposed repurchase price of $17.25.

- 27 -

Table of Contents

Analysis of Selected Merger Transactions. FTN reviewed 12 merger transactions announced from January 1, 2005 through October 4, 2007 involving depository institutions acquired in the southeast region of the United States with assets of $300—$600 million:

FTN reviewed the following multiples: transaction price at announcement to last twelve months’ EPS, transaction price to book value per share, transaction price to tangible book value per share, tangible book premium to core deposits, and premium to current market price. FTN computed a median, minimum and maximum multiple for the transactions. The multiples were applied to our financial information as of and for the twelve months ended June 30, 2007. As illustrated in the following table, FTN derived imputed ranges of values per share for Altrust common stock of $17.18 to $25.47 based upon the median multiples for these transactions.

Comparable Transaction Multiples