FORM  10-Q

                SECURITIES  AND  EXCHANGE  COMMISSION
                       Washington,  D.C.  20549

     QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)
            OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

      For  The  Quarterly  Period  Ended  March  31,  2002

               Commission  File  Number  000-19235

                   SUMMIT  FINANCIAL  CORPORATION
     (Exact  name  of  registrant  as  specified  in  its  charter)


SOUTH  CAROLINA                                                57-0892056
(State  or  other  jurisdiction                         (I.R.S.  Employer
of  incorporation  or                                Identification  No.)
organization)

                    Post  Office  Box  1087
                 937  North  Pleasantburg  Drive
               Greenville,  South  Carolina  29602
     (Address,  including  zip  code,  of  principal  executive  offices)

                       (864)  242-2265
     (Registrant's  telephone  number,  including  area  code)


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

Indicate  the  number  of  shares outstanding of each of the issuer's classes of
common  stock,  as  of  the  latest  practicable  date.

As  of  April  30,  2002,  3,799,133 shares of $1.00 par value common stock were
outstanding.


<PAGE>

<TABLE>
<CAPTION>

                     SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS
                                 (Dollars in Thousands)
                                      (Unaudited)


                                                             March 31,    December 31,
                                                               2002           2001
                                                            -----------  --------------
<S>                                                         <C>          <C>
ASSETS
Cash and due from banks. . . . . . . . . . . . . . . . . .  $    7,609   $       8,579
Interest-bearing bank balances . . . . . . . . . . . . . .       4,292             945
Federal funds sold . . . . . . . . . . . . . . . . . . . .      10,260             925
Investments available for sale . . . . . . . . . . . . . .      46,755          47,400
Investment in Federal Home Loan Bank and other stock . . .       2,083           1,733
Loans, net of unearned income and net of
 allowance for loan losses of $2,994 and $2,937. . . . . .     206,300         204,104
Premises and equipment, net. . . . . . . . . . . . . . . .       4,339           4,447
Accrued interest receivable. . . . . . . . . . . . . . . .       1,352           1,393
Other assets . . . . . . . . . . . . . . . . . . . . . . .       3,975           3,571
                                                            -----------  --------------
                                                            $  286,965   $     273,097
                                                            ===========  ==============
  LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Noninterest-bearing demand. . . . . . . . . . . . . . . .  $   30,537   $      29,372
 Interest-bearing demand . . . . . . . . . . . . . . . . .      21,636          21,807
 Savings and money market. . . . . . . . . . . . . . . . .      80,739          85,388
 Time deposits, $100,000 and over. . . . . . . . . . . . .      48,778          41,798
 Other time deposits . . . . . . . . . . . . . . . . . . .      46,370          40,413
                                                            -----------  --------------
                                                               228,060         218,778
Short-term borrowings. . . . . . . . . . . . . . . . . . .         500             500
Federal Home Loan Bank advances. . . . . . . . . . . . . .      30,900          26,900
Accrued interest payable . . . . . . . . . . . . . . . . .         920           1,194
Other liabilities. . . . . . . . . . . . . . . . . . . . .       1,657           1,124
                                                            -----------  --------------
                                                               262,037         248,496
                                                            -----------  --------------
Shareholders' equity:
 Common stock, $1.00 par value; 20,000,000
  shares authorized; issued and
  outstanding 3,796,395 and 3,793,032 shares . . . . . . .       3,796           3,793
 Additional paid-in capital. . . . . . . . . . . . . . . .      18,425          18,409
 Retained earnings . . . . . . . . . . . . . . . . . . . .       3,152           2,379
 Accumulated other comprehensive (loss) income, net of tax        (294)            203
 Nonvested resticted stock . . . . . . . . . . . . . . . .        (151)           (183)
                                                            -----------  --------------
     Total shareholders' equity. . . . . . . . . . . . . .      24,928          24,601
                                                            -----------  --------------
                                                            $  286,965   $     273,097
                                                            ===========  ==============
<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                  SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                 (Dollars, except per share data, in Thousands)
                                   (Unaudited)

                                           For the Three Months Ended
                                                       March 31,
                                              -----------------------
                                                  2002         2001
                                              -----------  ----------
<S>                                            <C>         <C>
Interest Income:
 Loans. . . . . . . . . . . . . . . . . . . .  $    3,768  $    4,599
 Taxable investment securities. . . . . . . .         462         400
 Nontaxable investment securities . . . . . .         174         131
 Federal funds sold . . . . . . . . . . . . .          21         153
 Other. . . . . . . . . . . . . . . . . . . .          40          95
                                               ----------  ----------
                                                    4,465       5,378
                                               ----------  ----------
Interest Expense:
 Deposits . . . . . . . . . . . . . . . . . .       1,210       2,508
 Federal Home Loan Bank advances. . . . . . .         392         252
 Other borrowings . . . . . . . . . . . . . .           9           8
                                               ----------  ----------
                                                    1,611       2,768
                                               ----------  ----------
     Net interest income. . . . . . . . . . .       2,854       2,610
Provision for loan losses . . . . . . . . . .         125         128
                                               ----------  ----------
     Net interest income after
      provision for loan losses . . . . . . .       2,729       2,482
                                               ----------  ----------

Noninterest Income:
 Service charges and fees on deposit accounts         127          99
 Credit card service fees and income. . . . .         112         105
 Insurance commission fee income. . . . . . .         219         120
 Gain on sale of investment securities. . . .          16          12
 Other income . . . . . . . . . . . . . . . .         208         247
                                               ----------  ----------
                                                      682         583
                                               ----------  ----------
Noninterest Expenses:
 Salaries, wages and benefits . . . . . . . .       1,367       1,225
 Occupancy. . . . . . . . . . . . . . . . . .         160         169
 Furniture, fixtures and equipment. . . . . .         182         168
 Other operating expenses . . . . . . . . . .         564         517
                                               ----------  ----------
                                                    2,273       2,079
                                               ----------  ----------
Income before income taxes. . . . . . . . . .       1,138         986
Income taxes. . . . . . . . . . . . . . . . .         365         324
                                               ----------  ----------
Net income. . . . . . . . . . . . . . . . . .  $      773  $      662
                                               ==========  ==========

Net income per share:
   Basic. . . . . . . . . . . . . . . . . . .  $      .20  $      .18
   Diluted. . . . . . . . . . . . . . . . . .  $      .18  $      .16
Average shares outstanding:
   Basic. . . . . . . . . . . . . . . . . . .   3,775,370   3,742,795
   Diluted. . . . . . . . . . . . . . . . . .   4,199,312   4,104,999
<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                         SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                       FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
                                                     (Dollars in Thousands)
                                                          (Unaudited)

                                                                                    Accumulated
                                                                                       other
                                                          Additional               comprehensive    Nonvested        Total
                                                Common     paid-in     Retained       (loss)       restricted    shareholders'
                                                stock      capital     earnings     income, net       stock         equity
                                               --------  ------------  ---------  ---------------  -----------  ---------------
<S>                                            <C>       <C>           <C>        <C>              <C>          <C>
Balance at December 31, 2000. . . . . . . . .  $ 3,598   $    16,803   $   1,425  $           32        ($330)  $       21,528
Net income for the three months
 ended March 31, 2001 . . . . . . . . . . . .        -             -         662               -            -              662
Other comprehensive income:
 Unrealized holding gains arising during
  the period, net of tax of $134. . . . . . .        -             -           -             221            -                -
 Less: reclassification adjustment for gains
  included in net income, net of tax of ($4).        -             -           -              (8)           -                -
                                                                                  ---------------
 Other comprehensive income . . . . . . . . .        -             -           -             213            -              213
                                                                                  ---------------               ---------------
Comprehensive income. . . . . . . . . . . . .        -             -           -               -            -              875
                                                                                                                ---------------
Forfeiture of common stock issued pursuant
 to restricted stock plan . . . . . . . . . .       (2)          (19)          -               -           21                -
Amortization of deferred
 compensation on restricted stock . . . . . .        -             -           -               -           30               30
                                               --------  ------------  ---------  ---------------  -----------  ---------------
Balance at March 31, 2001 . . . . . . . . . .  $ 3,596   $    16,784   $   2,087  $          245        ($279)  $       22,433
                                               ========  ============  =========  ===============  ===========  ===============

Balance at December 31, 2001. . . . . . . . .  $ 3,793   $    18,409   $   2,379  $          203        ($183)  $       24,601
Net income for the three months
 ended March 31, 2002 . . . . . . . . . . . .        -             -         773               -            -              773
Other comprehensive loss:
 Unrealized holding losses arising during
  the period, net of tax of ($299). . . . . .        -             -           -            (487)           -                -
 Less: reclassification adjustment for gains
  included in net income, net of tax of ($6).        -             -           -             (10)           -                -
                                                                                  ---------------
 Other comprehensive loss . . . . . . . . . .        -             -           -            (497)           -             (497)
                                                                                  ---------------               ---------------
Comprehensive income. . . . . . . . . . . . .        -             -           -               -            -              276
                                                                                                                ---------------
Stock options exercised . . . . . . . . . . .        3            16           -               -            -               19
Amortization of deferred
 compensation on restricted stock . . . . . .        -             -           -               -           32               32
                                               --------  ------------  ---------  ---------------  -----------  ---------------
Balance at March 31, 2002 . . . . . . . . . .  $ 3,796   $    18,425   $   3,152           ($294)       ($151)  $       24,928
                                               ========  ============  =========  ===============  ===========  ===============

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                  SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Dollars in Thousands)
                                   (Unaudited)

                                                   For  the  Three  Months  Ended
                                                                   March 31,
                                                               ------------------
                                                                 2002      2001
                                                               --------  --------
<S>                                                            <C>       <C>
Cash flows from operating activities:
 Net income . . . . . . . . . . . . . . . . . . . . . . . . .  $   773   $   662
Adjustments to reconcile net income to net cash
 provided by operating activities:
    Provision for loan losses . . . . . . . . . . . . . . . .      125       128
    Depreciation and amortization . . . . . . . . . . . . . .      135       117
    Gain on sale of equipment and vehicles. . . . . . . . . .        -       (13)
    Gain on sale of investments available for sale. . . . . .      (16)      (12)
    Net amortization of net premium on investments. . . . . .       51        11
    Amortization of deferred compensation on restricted stock       32        30
    Decrease (increase) in other assets . . . . . . . . . . .       15      (197)
    Increase in other liabilities . . . . . . . . . . . . . .      259       431
    Deferred income taxes . . . . . . . . . . . . . . . . . .      (73)      (70)
                                                               --------  --------
Net cash provided by operating activities . . . . . . . . . .    1,301     1,087
                                                               --------  --------

Cash flows from investing activities:
  Purchases of securities available for sale. . . . . . . . .   (5,057)   (7,936)
  Proceeds from maturities of securities
   available for sale . . . . . . . . . . . . . . . . . . . .    2,376     2,449
  Proceeds from sales of securities available for sale. . . .    2,489       508
  Purchases of investments in FHLB and other stock. . . . . .     (350)        -
  Net increase in loans . . . . . . . . . . . . . . . . . . .   (2,321)   (3,895)
  Purchases of premises and equipment . . . . . . . . . . . .      (27)     (507)
  Proceeds from sale of equipment and vehicles. . . . . . . .        -        25
                                                               --------  --------
Net cash used in investing activities . . . . . . . . . . . .   (2,890)   (9,356)
                                                               --------  --------

Cash flows from financing activities:
  Net increase in deposit accounts. . . . . . . . . . . . . .    9,282     7,338
  Proceeds from FHLB advances . . . . . . . . . . . . . . . .    4,000         -
  Proceeds from employee stock options exercised. . . . . . .       19         -
                                                               --------  --------
Net cash provided by financing activities . . . . . . . . . .   13,301     7,338
                                                               --------  --------
Net increase (decrease) in cash and cash equivalents. . . . .   11,712      (931)
Cash and cash equivalents, beginning of period. . . . . . . .   10,449    29,395
                                                               --------  --------
Cash and cash equivalents, end of period. . . . . . . . . . .  $22,161   $28,464
                                                               ========  ========

SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest. . . . . . . . . . .  $ 1,885   $ 2,714
Cash paid during the period for income taxes. . . . . . . . .  $    37   $    30
Change in market value of investment securities
 available for sale, net of income taxes. . . . . . . . . . .    ($497)  $   213

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

                          SUMMIT FINANCIAL CORPORATION
     CONDENSED  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
                                 MARCH 31, 2002

NOTE  1  -  BASIS  OF  PRESENTATION:
     Summit  Financial  Corporation (the Company), a South Carolina corporation,
is  the parent holding company for Summit National Bank (the Bank), a nationally
chartered  bank,  and  Freedom  Finance,  Inc. (the Finance Company), a consumer
finance  company.

     Through  its  bank subsidiary, which commenced operations in July 1990, the
Company  provides  a  full  range  of  banking services, including the taking of
demand  and  time deposits and the making of commercial and consumer loans.  The
Bank  currently  has  four  full  service  branch  locations  in  Greenville and
Spartanburg,  South  Carolina.  In 1997, the Bank incorporated Summit Investment
Services,  Inc.  as  a  wholly-owned subsidiary to offer nondeposit products and
financial  management  services.  The  Finance  Company  commenced operations in
November 1994 and makes and services small installment loans to individuals from
its  eleven  offices  throughout  South  Carolina.

     The  accompanying consolidated financial statements include the accounts of
the  Company  and  its  subsidiaries.  All significant intercompany accounts and
transactions  have  been eliminated in consolidation. The unaudited consolidated
financial  statements  of  the Company at March 31, 2002 and for the three month
periods  ended  March  31,  2002  and  2001 were prepared in accordance with the
instructions  for  Form  10-Q.  In  the  opinion  of management, all adjustments
(consisting  only  of  items  of a normal recurring nature) necessary for a fair
presentation  of  the  financial  position at March 31, 2002, and the results of
operations  and  cash  flows  for the periods ended March 31, 2002 and 2001 have
been  included.  The results for the three month period ended March 31, 2002 are
not necessarily indicative of the results that may be expected for the full year
or  any  other  interim  period.

     The  consolidated  financial  statements  are  prepared  in conformity with
accounting  principles  generally  accepted  in  the  United  States  of America
("GAAP")  which  requires  management  to make estimates and assumptions.  These
estimates  and assumptions affect the reported amounts of assets and liabilities
and  the  disclosure  of  contingent  assets  and liabilities at the date of the
financial statements.  In addition, the estimates affect the reported income and
expense  during  the  reporting  period.  Actual results could differ from these
estimates  and  assumptions.

     These  consolidated  financial  statements  do  not include all disclosures
required  by  GAAP  and should be read in conjunction with the Company's audited
consolidated  financial statements and related notes for the year ended December
31,  2001  included  in  the  Company's  2001  Annual  Report  on  Form  10-K.

NOTE  2  -  CASH  FLOW  INFORMATION:
          For  the  purposes of reporting cash flows, cash includes currency and
coin,  cash items in process of collection and due from banks.  Included in cash
and  cash  equivalents  are  federal  funds sold and overnight investments.  The
Company  considers  the  amounts included in the balance sheet line items, "Cash
and  due  from banks", "Interest-bearing bank balances" and "Federal funds sold"
to  be  cash  and  cash  equivalents.  These  accounts  totaled  $22,161,000 and
$28,464,000  at  March  31,  2002  and  2001,  respectively.


NOTE  3  -  NONPERFORMING  ASSETS:
     Loans past due in excess of 90 days and still accruing interest amounted to
approximately  $116,000  and  $136,000 at March 31, 2002 and 2001, respectively.
There  were  no  non-accrual  or impaired loans at March 31, 2002.  At March 31,
2001  the Company had $1.2 million in non-accrual loans which were considered to
be  impaired under Statement of Financial Accounting Standards 114.  The average
balance  of impaired loans was $1,245,000 for the three month period ended March
31,  2001 and there was no impairment allowance required at that date.  Interest
income  recognized  on  impaired  loans  during  the  first  quarter of 2001 was
approximately  $27,000.  Other  real  estate  owned  ("OREO")  at March 31, 2001
totaled  $243,000,  while  there  was  no  OREO  at  March  31,  2002.


NOTE  4  -  PER  SHARE  INFORMATION:
     The  following  is  a  reconciliation  of the denominators of the basic and
diluted  per  share computations for net income for the three months ended March
31,  2002  and  2001.  There is no required reconciliation of the numerator from
the  net  income  reported on the accompanying statements of income. All average
share and per share data have been restated to reflect all stock dividends as of
the  earliest  period  presented.

<TABLE>
<CAPTION>

                                          Three Months Ended March 31,
                                ----------------------------------------------
                                   2002        2002        2001        2001
                                ----------  ----------  ----------  ----------
                                  BASIC      DILUTED      BASIC      DILUTED
                                ----------  ----------  ----------  ----------
<S>                             <C>         <C>         <C>         <C>
Net Income . . . . . . . . . .  $  773,000  $  773,000  $  662,000  $  662,000
                                ----------  ----------  ----------  ----------

Average shares outstanding . .   3,775,370   3,775,370   3,742,795   3,742,795
Effect of Dilutive Securities:
    Stock options. . . . . . .           -     403,752           -     327,115
    Unvested restricted stock.           -      20,190           -      35,089
                                ----------  ----------  ----------  ----------
                                 3,775,370   4,199,312   3,742,795   4,104,999
                                ----------  ----------  ----------  ----------

Per-share amount . . . . . . .  $     0.20  $     0.18  $     0.18  $     0.16
</TABLE>


NOTE  5  -  SEGMENT  INFORMATION:
     The  Company reports information about its operating segments in accordance
with  SFAS  131,  "Disclosures  about  Segments  of  an  Enterprise  and Related
Information".  Summit  Financial  Corporation  is the parent holding company for
Summit National Bank ("Bank"), a nationally chartered bank, and Freedom Finance,
Inc.  ("Finance"),  a  consumer finance company.  The Company considers the Bank
and  the  Finance  Company  separate  business  segments.

     Financial performance for each segment is detailed in the following tables.
Included  in the "Corporate" column are amounts for general corporate activities
and  eliminations  of  intersegment  transactions.

<TABLE>
<CAPTION>

At  and  for  the  three  months  ended  March  31,  2002

                             Bank    Finance    Corporate    Total
                           --------  --------  -----------  --------
<S>                        <C>       <C>       <C>          <C>
Interest income . . . . .  $  3,950  $    520         ($5)  $  4,465
Interest expense. . . . .     1,606        45         (40)     1,611
                           --------  --------  -----------  --------
Net interest income . . .     2,344       475          35      2,854
Provision for loan losses        50        75           0        125
Other income. . . . . . .       606        91         (15)       682
Other expenses. . . . . .     1,902       369           2      2,273
                           --------  --------  -----------  --------
Income before taxes . . .       998       122          18      1,138
Income taxes. . . . . . .       313        45           7        365
                           --------  --------  -----------  --------
Net income. . . . . . . .  $    685  $     77  $       11   $    773
                           ========  ========  ===========  ========
Net loans . . . . . . . .  $203,750  $  3,056       ($506)  $206,300
                           ========  ========  ===========  ========
Total assets. . . . . . .  $283,237  $  3,627  $      101   $286,965
                           ========  ========  ===========  ========
</TABLE>


<TABLE>
<CAPTION>

At  and  for  the  three  months  ended  March  31,  2001

                             Bank    Finance    Corporate    Total
                           --------  --------  -----------  --------
<S>                        <C>       <C>       <C>          <C>
Interest income . . . . .  $  4,921  $    477        ($20)  $  5,378
Interest expense. . . . .     2,759        79         (70)     2,768
                           --------  --------  -----------  --------
Net interest income . . .     2,162       398          50      2,610
Provision for loan losses        95        33           0        128
Other income. . . . . . .       505        90         (12)       583
Other expenses. . . . . .     1,704       371           4      2,079
                           --------  --------  -----------  --------
Income before taxes . . .       868        84          34        986
Income taxes. . . . . . .       277        34          13        324
                           --------  --------  -----------  --------
Net income. . . . . . . .  $    591  $     50  $       21   $    662
                           ========  ========  ===========  ========
Net loans . . . . . . . .  $179,367  $  3,018       ($657)  $181,728
                           ========  ========  ===========  ========
Total assets. . . . . . .  $255,541  $  3,667       ($719)  $258,489
                           ========  ========  ===========  ========
</TABLE>

<PAGE>

                          SUMMIT FINANCIAL CORPORATION

                      PART  I.  FINANCIAL  INFORMATION

              ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS
            OF  FINANCIAL  CONDITION  AND  RESULTS  OF  OPERATIONS


     The  following  discussion  and analysis should be read in conjunction with
the consolidated financial statements and related notes and with the statistical
information  and  financial  data appearing in this report as well as the Annual
Report  of Summit Financial Corporation (the "Company") on Form 10K for the year
ended December 31, 2001.  Results of operations for the three month period ended
March  31, 2002 are not necessarily indicative of results to be attained for any
other  period.

FORWARD-LOOKING  STATEMENTS
     This  report  may  contain certain "forward-looking statements", within the
meaning  of Section 27A of the Securities Exchange Act of l934, as amended, that
represent  the Company's expectations or beliefs concerning future events.  Such
forward-looking  statements  are  about  matters  that are inherently subject to
certain risks, uncertainties, and assumptions.  Factors that could influence the
matters  discussed  in  certain  forward-looking statements include the relative
levels of market interest rates, loan prepayments and deposit decline rates, the
timing  and  amount  of  revenues  that  may  be  recognized  by  the  Company,
continuation  of  current  revenue,  expense  and  charge-off  trends, legal and
regulatory  changes,  and general changes in the economy.  Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect,  actual results may vary materially from those expected or projected.
These forward-looking statements speak only as of the date of the document.  The
Company assumes no obligation to update any forward-looking statements.  Because
of  the  risks and uncertainties inherent in forward-looking statements, readers
are  cautioned  not  to  place  undue  reliance  on  them.

OVERVIEW
     Summit  Financial  Corporation  (the  "Company") is a financial institution
holding company headquartered in Greenville, South Carolina.  The Company offers
a  broad range of financial services through its wholly-owned subsidiary, Summit
National  Bank  (the  "Bank,"  or "Summit").  The Bank is a nationally chartered
commercial  bank  which  operates  principally in the Upstate of South Carolina.
The  Bank  received its charter and commenced operations in July 1990.  In 1997,
the  Bank  incorporated  Summit  Investment  Services,  Inc.  as  a wholly-owned
subsidiary  to  provide  a  wider  range  of  investment  products and financial
planning  services.  The  Bank  currently  has  four  full  service  offices  in
Greenville  and  Spartanburg,  South  Carolina.  Summit provides a full range of
banking services to individuals and businesses, including the taking of time and
demand deposits, making loans, and offering nondeposit investment services.  The
Bank emphasizes close personal contact with its customers and strives to provide
a consistently high level of service to both individual and corporate customers.

     Freedom  Finance,  Inc.  (the  "Finance  Company"  or  "Freedom,")  is  a
wholly-owned  subsidiary of the Company which is operating as a consumer finance
company  headquartered  in  Greenville,  South  Carolina.  The  Finance  Company
primarily  makes  and  services  installment  loans  to  individuals  with  loan
principal  amounts  generally  not  exceeding $2,000 and with maturities ranging
from  three  to  eighteen  months.  Freedom  operates eleven branches throughout
South  Carolina.

     During  the  quarter ended March 31, 2002, the Company's net income totaled
$773,000  or $.18 per diluted share.  This is compared to net income of $662,000
or  $.16  per diluted share for the same quarterly period of 2001 or an increase
of  17%.

BALANCE  SHEET  ACTIVITY
     Total  assets  increased  $13.9  million  or 5.1% from December 31, 2001 to
March  31,  2002 to total $287.0 million.  Deposits increased approximately $9.3
million  or  4.2%  during the period totaling $228.1 million.  A majority of the
increase  in  deposits  was in the time deposit categories which increased $12.9
million,  offset  somewhat by the $4.6 million decrease in money market accounts
during  the  first  quarter  of  2002.

     The increase in deposits, combined with $4 million in new Federal Home Loan
Bank  advances,  funded gross loan growth of $2.2 million, and the $12.7 million
increase  in  federal  funds  sold and interest-bearing deposits during the same
period.

ALLOWANCE  FOR  LOAN  LOSSES  AND  NON-PERFORMING  ASSETS
     The allowance for loan losses is established through charges in the form of
a  provision  for  loan  losses based on management's periodic evaluation of the
loan  portfolio.  Loan losses and recoveries are charged or credited directly to
the  allowance.  The amount of the allowance reflects management's opinion of an
adequate level to absorb probable losses inherent in the loan portfolio at March
31, 2002.  The amount charged to the provision and the level of the allowance is
based  on  management's  judgment  and  is  dependent  upon  growth  in the loan
portfolio,  the  total  amount  of past due loans and nonperforming loans, known
loan  deteriorations, and concentrations of credit.  Other factors affecting the
allowance  are  trends in portfolio volume, maturity and composition, collateral
values,  and  general  economic conditions.  Finally, management's assessment of
probable  losses  based  upon  internal credit grading of the loans and periodic
reviews  and  assessments  of  credit  risk  associated with particular loans is
considered  in  establishing  the  allowance  amount.  The Company considers its
policies  regarding  the  allowance  for  loan  losses  to  be its most critical
accounting policy due to the significant degree of management judgment involved.

     Management  maintains  an  allowance  for  loan  losses  which  it believes
adequate to cover probable losses in the loan portfolio.  It must be emphasized,
however,  that  the  determination  of  the  allowance for loan losses using the
Company's  procedures  and  methods rests upon various judgments and assumptions
about  future  economic  conditions,  events,  and other factors affecting loans
which  are  believed  to  be  reasonable,  but which may or may not prove valid.
While  it  is the Company's policy to provide for the loan losses in the current
period  in  which  a  loss is considered probable, there are additional risks of
future  losses  which cannot be quantified precisely or attributed to particular
loans  or  classes  of  loans.  Because  these  risks  include  the state of the
economy,  industry  trends,  and  conditions  affecting  individual  borrowers,
management's judgment of the allowance is necessarily approximate and imprecise.
No  assurance  can  be  given that the Company will not in any particular period
sustain  loan  losses  which  would  be  sizable  in  relationship to the amount
reserved  or  that  subsequent  evaluation  of  the  loan portfolio, in light of
conditions  and factors then prevailing, will not require significant changes in
the  allowance for loan losses or future charges to earnings.  The allowance for
loan  losses  is  also  subject to review by various regulatory agencies through
their  periodic  examinations  of  the  Company's subsidiaries. Such examination
could  result  in  required  changes  to  the  allowance  for  loan  losses.  No
adjustment  in  the  allowance or significant adjustments to the Bank's internal
classified  loans  were  made  as a result of the Bank's most recent examination
performed  by  the  Office  of  the  Comptroller  of  the  Currency.

     The  allowance  for  loan  losses  totaled  $3.0 million, or 1.43% of total
loans,  at March 31, 2002.  This is compared to an allowance of $2.9 million, or
1.42%  of  total  loans,  at December 31, 2001.  For the quarter ended March 31,
2002,  the Company reported net charge-offs of $67,000, or 0.13% (annualized) of
average  loans.  This  is  compared  to  net  charge-offs  of  $50,000, or 0.11%
(annualized)  of  average  loans,  for  the  comparable  quarter  of  2001.

          The  Company's  nonperforming  assets  consist  of loans on nonaccrual
basis,  loans which are contractually past due 90 days or more on which interest
is still being accrued, and other real estate owned ("OREO").  Loans past due 90
days  and  greater  totaled $116,000, or 0.06% of gross loans, at March 31, 2002
compared  to  $136,000,  or  0.07%  of gross loans, at March 31, 2001.  Loans on
non-accrual  totaled  $1.2  million  at  March 31, 2001.  There were no loans on
nonaccrual  at  the  2002  first  quarter end.  Generally, loans of the Bank are
placed on non-accrual status at the earlier of when they are 90 days past due or
when  the collection of the loan becomes doubtful.  Loans of the Finance Company
are not classified as non-accrual, but are charged-off when such become 150 days
contractually  past  due  or  earlier  if  the  loan  is  deemed  uncollectible.

     There  were no loans considered to be impaired under Statement of Financial
Accounting  Standards  114 and no other real estate owned acquired in partial or
total satisfaction of problem loans ("OREO") at March 31, 2002.  Impaired loans,
which were on non-accrual status, at March 31, 2001, totaled $1.2 million.  OREO
at  March  31,  2001  totaled  $243,000.

EARNINGS  REVIEW  FOR  THE  THREE  MONTHS  ENDED  MARCH  31,  2002  AND  2001

GENERAL
     The  Company  reported  consolidated  net income for the three months ended
March  31,  2002  of  $773,000, compared to net income of $662,000 for the three
months ended March 31, 2001, or an improvement of approximately $111,000 or 17%.
Contributors  to  increased  earnings for the first quarter of 2002 were the 13%
growth  in  average earning assets, the 42% reduction in interest expense due to
lower  cost  of  funds,  and  the  17%  increase in noninterest income which was
primarily in the area of nondeposit product sales.  The increases in income were
somewhat  offset  by  the  9%  increase  in overhead associated with the greater
number  of  accounts  and  higher  level  of  activity  at  the  Bank.

NET  INTEREST  INCOME
     Net  interest  income,  the  difference  between  the  interest  earned and
interest paid, is the largest component of the Company's earnings and changes in
it  have the greatest impact on net income.  Variations in the volume and mix of
assets and liabilities and their relative sensitivity to interest rate movements
determine  changes  in net interest income.  During the three months ended March
31,  2002,  the  Company  recorded  net  interest income of $2.9 million, a 9.3%
increase from the net interest income of $2.6 million for the three months ended
March 31, 2001.  The increase in this amount is directly related to the increase
in  the  average  earning  asset  and  interest-bearing  liability volume of the
Company  of  13.2% and 13.4% respectively, offset by the 13 basis point decrease
in  the  net  interest  margin  for  the  Company.

     For  the  three  months  ended  March  31, 2002 and 2001, the Company's net
interest  margin  was 4.52% and 4.65%, respectively.  The net interest margin is
calculated  as  annualized  net  interest income divided by year-to-date average
earning  assets. The decrease in net interest margin is related primarily to the
246  basis  point  reduction  in  the  average  yield  on  assets related to the
decreasing  interest  rate  environment  throughout 2002.  The lower yields were
offset  somewhat  by  the 277 basis point reduction in the average cost of funds
related  to maturity of higher priced promotional time deposits which renewed at
lower current market rates.  During the period between the first quarter of 2001
and  2002,  the  average  prime  rate decreased 388 basis points resulting in an
average  prime rate of 4.75% for the first quarter of 2002 compared to 8.63% for
the  first  quarter  of  the  prior  year.

INTEREST  INCOME
     For  the  three  months  ended March 31, 2002, the Company's earning assets
averaged  $264.4  million  and  had an average yield of 6.99%.  This compares to
average  earning  assets  of  $233.6 million for the first three months of 2001,
yielding  approximately  9.45%.  Thus,  the  13.2% increase in volume of average
earning  assets,  offset  by  the  246  basis  point  decrease in average yield,
accounts  for the $913,000 (17.0%) decrease in interest income between the first
quarters  of  2001  and  2002.

     Gross  loans  comprised  approximately 78% of the Company's average earning
assets  for  the  first  three  months  of  2002  and 2001.  The majority of the
Company's  loans are tied to the prime rate (over 60% of the Bank's portfolio is
at  floating  rates  at  March 31, 2002), which averaged 4.75% and 8.63% for the
three  months  ended  March  31,  2002 and 2001, respectively.  During the first
three  months  of  2002,  loans  averaged $207.5 million, yielding an average of
7.37%,  compared  to $181.8 million, yielding an average of 10.26% for the first
three  months  of  2001.  The  289  basis point decrease in the average yield on
loans is directly related to the drastic reductions in the general interest rate
environment  and  lower  prime  lending  rate  during 2001.  The higher level of
average loans (which increased 14.1%), was more than offset by the lower average
yields  and resulted in the reduction in interest income on loans of $831,000 or
18.1%.

     Investment  securities  averaged  $47.0 million or 17.8% of average earning
assets and yielded 6.25% (tax equivalent basis) during the first three months of
2002,  compared  to  average  securities  of  $34.2  million yielding 7.09% (tax
equivalent  basis)  for  the three months ended March 31, 2001.  The decrease in
the average yield of the investment portfolio is related to the general declines
in  market  interest  rates  during  2001,  the portfolio mix, and the timing of
security  calls  and  maturities  which  were  reinvested in significantly lower
current  market  rate  instruments.  The  37.6%  increase in average securities,
offset  somewhat  by the decrease in yield, resulted in the increase of interest
income  on  securities  of  $105,000  or  19.7%.

INTEREST  EXPENSE
     The  Company's  interest  expense for the three months ended March 31, 2002
was  $1.6  million.  The decrease in interest expense of $1.2 million, or 41.8%,
from  the  comparable  three  months  in 2001 of $2.8 million was related to the
13.4%  increase  in the level of average interest-bearing liabilities being more
than  offset by the 277 basis point decrease in the average rate on liabilities.
Interest-bearing  liabilities averaged $223.7 million for the first three months
of  2002  with  an  average  rate  of  2.92%.  This  is  compared  to  average
interest-bearing liabilities of $197.3 million with an average rate of 5.69% for
the  three  months  ended  March  31,  2001.  The  decrease  in  average rate on
liabilities  is  directly  related  to the general reductions in market interest
rates  and  the  maturities  of  promotional rate deposits which were renewed or
repriced  at  lower  current  market  rates.

PROVISION  FOR  LOAN  LOSSES
     The  provision  for loan losses was $125,000 for the first quarter of 2002,
compared  to  $128,000  for  the  comparable  period  of  2001.  Changes  in the
provision  each year are related to the level of net originations in each period
as  follows:  $2.3 million for the quarter ended March 31, 2002 and $3.9 million
for  the  2001  quarter.  As  discussed  further  under  the "Allowance for Loan
Losses"  section  above,  other  factors  influencing  the amount charged to the
provision  each  year  include  (1)  trends in and the total amount of past due,
classified  and  nonperforming  loans  and net chargeoffs, (2) concentrations of
credit  risk  in  the loan portfolio, (3) local and national economic conditions
and  anticipated  trends,  and  (4)  the  total outstanding loans and charge-off
activity of the Finance Company which have higher inherent risk than do loans of
the  Bank.  Although  the  net  originations  were lower in the first quarter of
2002,  contributing  to  the  higher  provision  in  2002 was the net charge-off
activity of the Finance Company which increased $39,000 or 81.7% between the two
quarterly periods.  Estimates charged to the provision for loan losses are based
on  management's  judgment as to the amount required to cover probable losses in
the  loan  portfolio  and  are  adjusted  as  necessary.

NONINTEREST  INCOME  AND  EXPENSES
     Noninterest  income,  which  is  primarily  related  to  service charges on
customers'  deposit accounts; credit card merchant discount fees; commissions on
nondeposit  investment  product  sales and insurance product sales; and mortgage
origination  fees,  was  $682,000  for  the  three  months  ended March 31, 2002
compared  to  $583,000  for  the  first  three months of 2001, or an increase of
17.0%.  The  increase  is  primarily  related to higher insurance commission and
other  nondeposit  income  and  higher  service charge on deposit accounts.  The
increases are primarily related to the higher level of activity and transactions
of  the  Bank  generating  other  income  in  the  normal  course  of  business.

     For  the  three months ended March 31, 2002, noninterest expenses were $2.3
million  which  is  an  increase  of 9.3% over the amount incurred for the three
months ended March 31, 2001 of $2.1 million.  The most significant item included
in other expenses is salaries, wages and benefits which totaled $1.4 million for
the  three months ended March 31, 2002 as compared to $1.2 million for the three
months  ended  March 31, 2001.  The increase of $142,000 or 11.6% is a result of
normal  annual  raises,  higher  commission  on the increased nondeposit product
sales,  increased  payroll  taxes  related  to the amount and timing of year end
bonus  payments,  group  health plan premium rate increases, and four additional
support  staff  added  throughout  2001.

     Occupancy and furniture, fixtures, and equipment ("FFE") expenses were up a
total  of $5,000 or 1.5% between the first three months of 2001 and 2002.  There
were no significant changes in or additions to property and premises between the
two  quarterly  periods.

     Included  in  the  line  item  "other  operating expenses", which increased
$47,000  or  9.1%  from  the  comparable  period  of  2001,  are charges for OCC
assessments; property and bond insurance; ATM switch fees; credit card expenses;
professional services; education and seminars; advertising and public relations;
and  other  branch  and  customer  related  expenses.  The increase is primarily
related  to  higher  legal and loan collection expenses ($31,000) related to the
nonperforming  loans  collected  in  the  first quarter of 2002 and increases in
advertising  expenses  ($15,000)  related  to  new  marketing  campaigns.  Other
fluctuations  related  to deposit related expenses which increase in relation to
higher  levels  of  accounts.

INCOME  TAXES
     For the three months ended March 31, 2002, the Company reported $365,000 in
income  tax  expense,  or  an  effective tax rate of 32.1%.  This is compared to
income  tax  expense  of  $324,000  for the same period of the prior year, or an
effective  tax  rate  of  32.9%.


LIQUIDITY
     Liquidity  management  involves  meeting  the cash flow requirements of the
Company  both at the holding company level as well as the subsidiary level.  The
Company's  bank subsidiary must maintain an adequate liquidity position in order
to  respond  to  the  short-term demand for funds caused by the withdrawals from
deposit  accounts, maturities of short-term borrowings, extensions of credit and
for  the  payment  of  operating  expenses.  Maintaining  an  adequate  level of
liquidity  is  accomplished through a combination of liquid assets, assets which
can  be  easily  converted into cash, and access to additional sources of funds.
The  Company's  primary liquid assets are cash and due from banks, federal funds
sold,  unpledged  investment  securities  available  for  sale, other short-term
investments  and  maturing loans.  These primary liquidity sources (exclusive of
cash flow on loans) accounted for 16% of average assets for both the three month
periods  ended  March 31, 2002 and 2001, respectively.  In management's opinion,
the  Company  maintains  adequate levels of liquidity by retaining liquid assets
and  assets which can easily be converted into cash and by maintaining access to
various  sources  of  funds.  The primary sources of funds available through the
Bank  include advances from the Federal Home Loan Bank, purchasing federal funds
from  other  financial institutions, lines of credit through the Federal Reserve
Bank,  and  increasing  deposits  by  raising rates paid. At March 31, 2002, the
Company  had  approximately $27.1 million in available credit under its FHLB and
correspondent  bank  borrowing  facilities.

     Summit  Financial  Corporation  ("Summit  Financial"),  the  parent holding
company,  has  limited  liquidity needs.  Summit Financial requires liquidity to
pay  limited  operating expenses, to service its debt, and to provide funding to
its  consumer  finance  subsidiary,  Freedom  Finance.  Summit  Financial  has
approximately  $3.2  million  in  available liquidity remaining from its initial
public  offering and the retention of earnings.  A total of $2.2 million of this
liquidity  was  advanced  to  the Finance Company in the form of an intercompany
loan to fund its operations as of March 31, 2002.  In addition, Summit Financial
has  an  available  line  of  credit  totaling $2.5 million with an unaffiliated
financial institution, all of which was available at March 31, 2002.  Additional
sources of liquidity for Summit Financial include borrowing funds from unrelated
correspondent  banks, unsecured borrowings from individuals, and management fees
and  debt  service  which  are  paid  by  its  subsidiaries.

     Liquidity  needs  of  Freedom  Finance,  primarily  for the funding of loan
originations,  acquisitions,  and  operating  expenses,  have  been  met to date
through  the  initial  capital  investment of $500,000 made by Summit Financial,
borrowings  from  an  unrelated  private investor, and line of credit facilities
provided  by  Summit  Financial  and  Summit  National Bank, its sister company.

     The  Company's  management  believes  its liquidity sources are adequate to
meet  its  operating  needs  and  does  not  know  of  any  trends,  events  or
uncertainties  that  may result in a significant adverse affect on the Company's
liquidity  position.


OFF-BALANCE  SHEET  COMMITMENTS
     The  Company  is party to financial instruments with off-balance sheet risk
in  the  normal course of business to meet the financing needs of its customers.
These  financial  instruments  include  commitments to extend credit and standby
letters  of  credit  and  involve,  to  varying  degrees, elements of credit and
interest rate risk in excess of the amount recognized in the balance sheet.  The
Company's  exposure  to  credit loss in the event of nonperformance by the other
party  to  the financial instrument for commitments to extend credit and standby
letters  of  credit  is  represented  by  the  contractual  amounts  of  those
instruments.

     The  Company  uses  the  same  credit  and  collateral  policies  in making
commitments  and  conditional  obligations  as  it  does  for  on-balance  sheet
instruments.  The  Company  evaluates  each  customer's  creditworthiness  on  a
case-by-case  basis.  The  amount  of collateral obtained if deemed necessary by
the Company upon extension of credit is based on management's credit evaluation.
Commitments  to  extend  credit  are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.  Commitments
generally  have  fixed  expiration  dates  or  other termination clauses and may
require  payment  of  a  fee.  Since  many of the commitments may expire without
being  drawn  upon,  the  total  commitment amounts do not necessarily represent
future  cash  requirements.

     As  of  March  31, 2002, there was no substantial change from the Company's
commitments  reported as of December 31, 2001.  The foregoing disclosures should
be  read  in  conjunction  with  the  Company's  audited  consolidated financial
statements,  related notes and management's discussion and analysis of financial
condition  and  results  of  operations  for  the  year  ended December 31, 2001
included  in  the  Company's  2001  Annual  Report  on  Form  10-K.
EFFECT  OF  INFLATION  AND  CHANGING  PRICES
     The consolidated financial statements have been prepared in accordance with
accounting  principles  generally accepted in the United States of America which
require the measurement of financial position and results of operations in terms
of  historical  dollars,  without  consideration  of  changes  in  the  relative
purchasing  power over time due to inflation.  Unlike most industries, virtually
all  of  the  assets  and liabilities of a financial institution are monetary in
nature.  As a result, interest rates generally have a more significant effect in
the  financial  institution's  performance  than  does  the effect of inflation.

     The  yield  on  a  majority  of  the  Company's  earning  assets  adjusts
simultaneously  with  changes in the general level of interest rates.  Given the
Company's  asset-sensitive  balance  sheet  position, assets reprice faster than
liabilities,  which generally results in decreases in net interest income during
periods  of  declining interest rates, as experienced in 2001.  This may cause a
decrease in the net interest margin until the fixed rate deposits mature and are
repriced  at  lower  current market rates, thus narrowing the difference between
what  the  Company earns on its assets and what it pays on its liabilities.  The
opposite  effect  (that  is,  an  increase  in net interest income) is generally
realized  in a rising rate environment.  The degree of interest rate sensitivity
of  the  Company's  assets  and  liabilities  and  the  differences in timing of
repricing  assets  and liabilities provides an indication of the extent to which
the  Company's  net  interest income may be affected by interest rate movements.

INTEREST  RATE  SENSITIVITY
     Achieving  consistent  growth  in net interest income, which is affected by
fluctuations  in  interest  rates,  is  the  primary  goal  of  the  Company's
asset/liability  function.  The  Company  attempts  to  control  the  mix  and
maturities  of  assets  and liabilities to maintain a reasonable balance between
exposure  to  interest  rate fluctuations and earnings and to achieve consistent
growth in net interest income, while maintaining adequate liquidity and capital.
A  sudden  and  substantial  increase in interest rates may adversely impact the
Company's  earnings  to  the  extent that the interest rates on interest-earning
assets  and interest-bearing liabilities do not change at the same speed, to the
same  extent  or  on  the  same  basis.  The  Company's  asset/liability  mix is
sufficiently  balanced  so  that  the  effect of interest rates moving in either
direction  is  not  expected  to  be  significant  over  time.

     The  Company's  Asset/Liability Committee ("ALCO") uses a simulation model,
among other techniques, to assist in achieving consistent growth in net interest
income  while  managing interest rate risk. The model takes into account, over a
12 month period or longer if necessary, interest rate changes as well as changes
in  the  mix  and  volume  of  assets  and liabilities.  The model simulates the
Company's  balance  sheet  and  income  statement  under  several different rate
scenarios  and  rate  shocks.  The  model's  inputs  (such as interest rates and
levels  of  loans  and deposits) are updated as necessary throughout the year in
order  to  maintain  a current forecast as assumptions change.  According to the
model,  the  Company  is  presently  positioned so that net interest income will
increase  in  the  short-term  if  interest  rates rise and will decrease in the
short-term  if  interest  rates  decline.

     The Company also uses interest rate sensitivity gap analysis to monitor the
relationship  between  the maturity and repricing of its interest-earning assets
and  interest-bearing  liabilities.  Interest rate sensitivity gap is defined as
the  difference  between  the  amount  of  interest-earning  assets  maturing or
repricing  within  a  specific  time  period  and the amount of interest-bearing
liabilities  maturing  or  repricing  within  the  same time period.  The static
interest  sensitivity  gap  position,  while  not a complete measure of interest
sensitivity, is also reviewed periodically to provide insights related to static
repricing  structure  of  assets  and  liabilities.  At  March  31,  2002,  on a
cumulative  basis  through  12  months,  rate-sensitive  liabilities  exceed
rate-sensitive  assets,  resulting  in  a  12  month  period liability sensitive
position  of  $23.7  million.  When  the  effective change ratio (the historical
relative  movement  of  each  asset's and liability's rates in relation to a 100
basis  point  change in the prime rate) is applied to the interest gap position,
the  Company  is  actually in an asset sensitive position over a 12 month period
and the entire repricing lives of the assets and liabilities.  This is primarily
due  to  the  fact  that  over  60% of the loan portfolio moves immediately on a
one-to-one  ratio with a change in the prime rate, while the deposit accounts do
not  increase  or  decrease  as  much  relative  to  a prime rate movement.  The
Company's  asset-sensitive  position  means  that assets reprice faster than the
liabilities, which generally results in short-term increases in the net interest
income  during  periods of rising rates and short-term decreases in net interest
income  when  market  rates  decline.

CAPITAL  RESOURCES
     Total  shareholders'  equity at March 31, 2002 was $24.9 million or 8.7% of
total  assets.  This  is  compared  to  $24.6 million or 9.0% of total assets at
December 31, 2001.  The $327,000 increase in total shareholders' equity resulted
principally  from  the  retention  of  earnings and stock issued pursuant to the
Company's  incentive  stock  option  plan,  offset partially by the increases in
unrealized  loss  on  investments  available  for  sale.

     Book  value per share at March 31, 2002 and December 31, 2001 was $6.57 and
$6.49,  respectively.  Tangible  book  value  per  share  at  March 31, 2002 and
December  31,  2001  was $6.52 and $6.44, respectively.  Tangible book value was
less than book value as a result of the purchase premiums associated with branch
acquisitions  of  Freedom  Finance.

     To  date,  the  capital  needs  of  the  Company  have been met through the
retention  of net income and from the proceeds of its initial offering of common
stock.  The  Company  has  no commitments or immediate plans for any significant
capital  expenditures  outside  the  normal  course  of business.  The Company's
management  does not know of any trends, events or uncertainties that may result
in  the  Company's  capital  resources  materially  increasing  or  decreasing.

     The  Company  and  the  Bank  are  subject  to  various  regulatory capital
requirements  administered  by  the  federal  banking agencies.  Failure to meet
minimum  capital  requirements  can  initiate  certain  mandatory  and  possibly
additional discretionary actions by regulators that, if undertaken, could have a
material  effect on the financial statements.  Under capital adequacy guidelines
and  the  regulatory framework for prompt corrective action, the Company and the
Bank must meet specific capital guidelines that involve quantitative measures of
the  Company's  and the Bank's assets, liabilities and certain off-balance sheet
items  as  calculated  under regulatory accounting practices.  The Company's and
the  Bank's  capital  amounts and classification are also subject to qualitative
judgments  by  the  regulators  about  components,  risk  weightings,  and other
factors.

     The  Company  and  the  Bank  are  required to maintain minimum amounts and
ratios  of total risk-based capital, Tier 1 capital, and Tier 1 leverage capital
as set forth in the table following.  Management believes, as of March 31, 2002,
that  the  Company  and the Bank meet all capital adequacy requirements to which
they are subject.  At March 31, 2002 and 2001, the Bank was categorized as "well
capitalized" under the regulatory framework for prompt corrective action.  There
are  no  current  conditions or events that management believes would change the
Company's  or  the  Bank's  category.

     The  following  table  presents the Company's and the Bank's actual capital
amounts  (dollars in thousands) and ratios at March 31, 2002 and 2001 as well as
the  minimum  calculated  amounts  for  each  regulatory  defined  category.

<TABLE>
<CAPTION>

                              RISK-BASED CAPITAL CALCULATION

                                                                                TO BE
                                                          FOR CAPITAL       CATEGORIZED
                                                            ADEQUACY          "WELL-
                                            ACTUAL          PURPOSES        CAPITALIZED"
                                        ---------------  --------------  ---------------
                                        AMOUNT   RATIO   AMOUNT   RATIO   AMOUNT   RATIO
                                        -------  ------  -------  ------  -------  ------
<S>                                     <C>      <C>     <C>      <C>     <C>      <C>
AS OF MARCH 31, 2002
THE COMPANY
Total capital to risk-weighted assets.  $27,986  12.51%  $17,895   8.00%       N.A.
Tier 1 capital to risk-weighted assets  $25,190  11.26%  $ 8,947   4.00%       N.A.
Tier 1 capital to average assets . . .  $25,190   9.02%  $11,171   4.00%       N.A.

THE BANK
Total capital to risk-weighted assets.  $24,473  11.10%  $17,637   8.00%  $22,046  10.00%
Tier 1 capital to risk-weighted assets  $21,717   9.85%  $ 8,818   4.00%  $13,227   6.00%
Tier 1 capital to average assets . . .  $21,717   7.88%  $11,025   4.00%  $13,782   5.00%

AS OF MARCH 31, 2001
THE COMPANY
Total capital to risk-weighted assets.  $24,698  12.19%  $16,205   8.00%       N.A.
Tier 1 capital to risk-weighted assets  $22,166  10.94%  $ 8,102   4.00%       N.A.
Tier 1 capital to average assets . . .  $22,166   8.96%  $ 9,891   4.00%       N.A.

THE BANK
Total capital to risk-weighted assets.  $21,506  10.78%  $15,954   8.00%  $19,942  10.00%
Tier 1 capital to risk-weighted assets  $19,082   9.57%  $ 7,977   4.00%  $11,965   6.00%
Tier 1 capital to average assets . . .  $19,082   7.80%  $ 9,781   4.00%  $12,227   5.00%

</TABLE>


ACCOUNTING,  REPORTING  AND  REGULATORY  MATTERS
     In July 2001, SFAS 141, "Business Combinations" and SFAS 142, "Goodwill and
Other  Intangible  Assets"  were  issued.  SFAS  141  requires that the purchase
method  of accounting be used for all business combinations initiated after June
30,  2001.  SFAS 141 also specifies criteria which intangible assets acquired in
a  purchase  method business combination must meet to be recognized and reported
apart from goodwill.  SFAS 142 requires that goodwill and intangible assets with
indefinite  useful  lives  no  longer  be  amortized,  but instead be tested for
impairment  at  least  annually  in  accordance with the provisions of SFAS 142.
SFAS  142  also  requires  that intangible assets with estimable useful lives be
amortized  over  their  respective  estimated  useful  lives  to their estimated
residual  values,  and  reviewed  for  impairment  in  accordance with SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be  Disposed  Of".

The Company was required to adopt the provisions of SFAS 141 immediately and has
adopted  SFAS  142  effective  January  1,  2002.  SFAS  141  requires that upon
adoption  of  SFAS  142, the Company evaluate its existing intangible assets and
goodwill  that were acquired in any prior purchase business combination and make
any  necessary  reclassifications  in  order to conform with the new criteria in
SFAS  141  for  recognition apart from goodwill.  Upon adoption of SFAS 142, the
Company  was  required  to  reassess the useful lives and residual values of all
intangible  assets  acquired,  and  make  any  necessary  amortization  period
adjustments by the end of the first interim period after adoption.  In addition,
to  the  extent an intangible asset is identified as having an indefinite useful
life,  the  Company will be required to test the intangible asset for impairment
in  accordance  with the provisions of SFAS 142 within the first interim period.
Any  impairment  loss will be measured as of the date of adoption and recognized
as  the  cumulative  effect  of  a  change in accounting principles in the first
interim  period.

     In  connection with SFAS 142's transitional goodwill impairment evaluation,
the  statement requires the Company to perform an assessment of whether there is
an  indication  that  goodwill  is  impaired  as  of  the  date of adoption.  To
accomplish this, the Company must identify its reporting units and determine the
carrying value and the fair value of each reporting unit by assigning the assets
and liabilities, including the existing goodwill and intangible assets, to those
reporting  units  as  of the date of adoption.  To the extent a reporting unit's
carrying  amount exceeds its fair value, an indication exists that the reporting
unit's  goodwill may be impaired and the Company must perform the second step of
the  transitional impairment test.  In the second step, the Company must compare
the  implied fair value of the reporting unit's goodwill to its carrying amount,
both of which would be measured as of the date of adoption.  This second step is
required  to  be completed as soon as possible, but no later than the end of the
year  of  adoption.  Any  transitional impairment loss will be recognized as the
cumulative effect of a change in accounting principle in the Company's statement
of  operations.

     The  Company  adopted SFAS No. 142 effective January 1, 2002.  The adoption
of  SFAS  142 did not have a material effect on results of operations during the
first  quarter.  As of the date of adoption, the Company's gross carrying amount
for  goodwill associated with its previous acquisitions totaled $184,000, net of
accumulated  amortization.  For  the  year  ended  December  31,  2001,  the
amortization  of goodwill was $157,000 and for the quarter ended March 31, 2001,
amortization  totaled  $39,000.  The  amortization  of goodwill ceased effective
January  1,  2002.

     Information  regarding the effect of amortization expense and net income of
the  Company  for  the quarters ended March 31, 2002 and March 31, 2001 follows:

<TABLE>
<CAPTION>

                              For the Quarters Ended March 31,
                                         2002   2001
                                         -----  -----
<S>                                      <C>    <C>
Net income as reported. . . . . . . . .  $ 773  $ 662
Goodwill amortization, net of taxes . .      -     26
                                         -----  -----
Adjusted net income . . . . . . . . . .  $ 773  $ 688
                                         =====  =====

Basic earnings per share, as reported .  $0.20  $0.18
Goodwill amortization, net of taxes . .      -      -
                                         -----  -----
Adjusted basic earnings per share . . .  $0.20  $0.18
                                         =====  =====

Diluted earnings per share, as reported  $0.18  $0.16
Goodwill amortization, net of taxes . .      -   0.01
                                         -----  -----
Adjusted diluted earnings per share . .  $0.18  $0.17
                                         =====  =====
</TABLE>


     In  August  2001,  SFAS  144, "Accounting for the Impairment or Disposal of
Long-Lived  Assets"  was  issued  which  addresses  the financial accounting and
reporting  for  the impairment or disposal of long-lived assets.  While SFAS 144
supercedes  SFAS 121, "Accounting for the Impaiment of Long-Lived Assets and for
Long-Lived  Assets  to  Be  Disposed  Of",  it  retains  many of the fundamental
provisions  of SFAS 121.  The provisions of SFAS 144 are effective for financial
statements  issued  for  fiscal  years  beginning  after  December 15, 2001, and
interim  periods  within  those  fiscal  years.  The Company adopted SFAS 144 on
January  1,  2002  with  no  material  effect  on  the  Company.


       ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market  risk  is the risk of loss from adverse changes in market prices and
rates.  The  Company's  market  risk  arises principally from interest rate risk
inherent  in its lending, deposit and borrowing activities.  Management actively
monitors  and  manages  its  interest  rate risk exposure.  Although the Company
manages  other  risks,  as  in  credit quality and liquidity risk, in the normal
course  of  business,  management  considers  interest  rate risk to be its most
significant  market  risk  and  it  could  potentially have the largest material
effect  on  the  Company's financial condition and results of operations.  Other
types of market risks, such as foreign currency exchange rate risk and commodity
price  risk,  do  not  arise  in  the  normal  course  of the Company's business
activities.

     The  Bank's  ALCO  monitors  and considers methods of managing the rate and
sensitivity repricing characteristics of the balance sheet components consistent
with maintaining acceptable levels of changes in net portfolio value ("NPV") and
net  interest  income.  Net  portfolio  value  represents  the  market  value of
portfolio  equity  and  is  equal to the market value of assets minus the market
value  of  liabilities, with adjustments made for off-balance sheet items over a
range  of  assumed  changes  in market interest rates.  A primary purpose of the
Company's  asset  and  liability  management  is to manage interest rate risk to
effectively  invest  the  Company's capital and to preserve the value created by
its  core business operations.  As such, certain management monitoring processes
are  designed to minimize the impact of sudden and sustained changes in interest
rates  on  NPV  and  net  interest  income.

     The  Company's  exposure  to  interest  rate risk is reviewed on a periodic
basis  by  the  Board  of  Directors  and  the  ALCO  which  is charged with the
responsibility  to maintain the level of sensitivity of the Bank's net portfolio
value  within  Board  approved  limits.  Interest rate risk exposure is measured
using  interest  rate sensitivity analysis by computing estimated changes in NPV
of  its  cash flows from assets, liabilities, and off-balance sheet items in the
event  of  a  range  of assumed changes in market interest rates.  This analysis
assesses the risk of loss in market risk sensitive instruments in the event of a
sudden  and  sustained 100 - 300 basis points increase or decrease in the market
interest rates.  The Board of Directors has adopted an interest rate risk policy
which  establishes  maximum  allowable decreases in NPV in the event of a sudden
and  sustained  increase  or  decrease  in  market  interest  rates.

     As  of  March  31,  2002, there was no substantial change from the interest
rate  sensitivity  analysis  or the market value of portfolio equity for various
changes  in  interest  rates  calculated  as of December 31, 2001. The foregoing
disclosures  related  to  the  market  risk  of  the  Company  should be read in
conjunction  with  the  Company's  audited  consolidated  financial  statements,
related  notes  and  management's discussion and analysis of financial condition
and  results  of operations for the year ended December 31, 2001 included in the
Company's  2001  Annual  Report  on  Form  10-K.



<PAGE>
                          SUMMIT FINANCIAL CORPORATION

                          PART  II.  OTHER  INFORMATION


Item  1.     Legal  Proceedings.

The  Corporation  and  its  subsidiaries  from  time  to time may be involved as
plaintiff or defendant in various legal actions incident to its business.  There
are  no  material  actions  currently  pending.

Item  2.     Changes  in  Securities.

     None.

Item  3.     Defaults  Upon  Senior  Securities.

     None.

Item  4.     Submission  of  Matters  to  a  Vote  of  Security  Holders.

No  matters were submitted to the shareholders for a vote at any time during the
quarter.

Item  5.     Other  Information.

     None.

Item  6.     Exhibits  and  Reports  on  Form  8-K.

(a)     Exhibits:

     None

     (b)     Reports  on  Form  8-K:

     None.


<PAGE>


                         SUMMIT  FINANCIAL  CORPORATION

                                  SIGNATURES


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

SUMMIT  FINANCIAL  CORPORATION


Dated:  May  7,  2002

/s/  J.  Randolph  Potter
-------------------------
J.  Randolph  Potter,  President
and  Chief  Executive  Officer


Dated:  May  7,  2002

/s/  Blaise  B.  Bettendorf
---------------------------
Blaise  B.  Bettendorf,  Senior  Vice  President
and  Chief  Financial  Officer