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  June  30,  2001

     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  July  30,  2001,  3,596,218  shares of $1.00 par value common stock were
outstanding.

<PAGE>

<TABLE>
<CAPTION>

                  SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (Dollars in Thousands, Except Per Share Data)
                                   (Unaudited)


                                                      June 30,    December 31,
                                                        2001          2000
                                                     ----------  --------------
<S>                                                  <C>         <C>
ASSETS
Cash and due from banks . . . . . . . . . . . . . .  $  10,166   $       7,604
Interest-bearing bank balances. . . . . . . . . . .        288           5,111
Federal funds sold. . . . . . . . . . . . . . . . .      1,330          16,680
Investments available for sale. . . . . . . . . . .     38,289          32,445
Loans, net of unearned income and net of
 allowance for loan losses of $2,743 and $2,560 . .    199,639         177,961
Premises and equipment, net . . . . . . . . . . . .      4,534           3,473
Accrued interest receivable . . . . . . . . . . . .      1,547           1,691
Other assets. . . . . . . . . . . . . . . . . . . .      4,826           4,870
                                                     ----------  --------------
                                                     $ 260,619   $     249,835
                                                     ==========  ==============
  LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Noninterest-bearing demand . . . . . . . . . . . .  $  30,651   $      35,468
 Interest-bearing demand. . . . . . . . . . . . . .     18,921          14,641
 Savings and money market . . . . . . . . . . . . .     77,961          63,821
 Time deposits, $100,000 and over . . . . . . . . .     41,058          46,523
 Other time deposits. . . . . . . . . . . . . . . .     45,917          48,738
                                                     ----------  --------------
                                                       214,508         209,191
FHLB advances . . . . . . . . . . . . . . . . . . .     20,000          16,000
Other short-term borrowings . . . . . . . . . . . .        500             500
Accrued interest payable. . . . . . . . . . . . . .      1,637           1,753
Other liabilities . . . . . . . . . . . . . . . . .        939             863
                                                     ----------  --------------
                                                       237,584         228,307
                                                     ----------  --------------
Shareholders' equity:
 Common stock, $1.00 par value; 20,000,000
  shares authorized; issued and
  outstanding 3,596,218 and 3,598,318 shares. . . .      3,596           3,598
 Additional paid-in capital . . . . . . . . . . . .     16,784          16,803
 Retained earnings. . . . . . . . . . . . . . . . .      2,761           1,425
 Accumulated other comprehensive income, net of tax        141              32
 Nonvested resticted stock. . . . . . . . . . . . .       (247)           (330)
                                                     ----------  --------------
     Total shareholders' equity . . . . . . . . . .     23,035          21,528
                                                     ----------  --------------
                                                     $ 260,619   $     249,835
                                                     ==========  ==============
<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 Quarters Ended     For the Six Months Ended
                                                       June 30,                  June 30,
                                                  2001         2000         2001         2000
                                               -----------  -----------  -----------  -----------
<S>                                            <C>          <C>          <C>          <C>
Interest Income:
 Loans. . . . . . . . . . . . . . . . . . . .  $    4,383   $    4,020   $    8,982   $    7,846
 Taxable investment securities. . . . . . . .         435          264          835          514
 Nontaxable investment securities . . . . . .         131          135          262          270
 Federal funds sold . . . . . . . . . . . . .          66           35          219           69
 Other. . . . . . . . . . . . . . . . . . . .          70           44          165           80
                                               -----------  -----------  -----------  -----------
                                                    5,085        4,498       10,463        8,779
                                               -----------  -----------  -----------  -----------
Interest Expense:
 Deposits . . . . . . . . . . . . . . . . . .       2,287        1,832        4,795        3,541
 Other. . . . . . . . . . . . . . . . . . . .         245          227          505          395
                                               -----------  -----------  -----------  -----------
                                                    2,532        2,059        5,300        3,936
                                               -----------  -----------  -----------  -----------
     Net interest income. . . . . . . . . . .       2,553        2,439        5,163        4,843
Provision for loan losses . . . . . . . . . .        (209)        (105)        (337)        (198)
                                               -----------  -----------  -----------  -----------
     Net interest income after
      provision for loan losses . . . . . . .       2,344        2,334        4,826        4,645
                                               -----------  -----------  -----------  -----------
Noninterest income:
 Service charges and fees on deposit accounts         103           95          202          190
 Credit card service fees and income. . . . .         120           98          225          187
 Insurance commission fee income. . . . . . .         129           70          249          146
 Gain on sale of securities . . . . . . . . .          78           10           90           10
 Other income . . . . . . . . . . . . . . . .         259          160          506          302
                                               -----------  -----------  -----------  -----------
                                                      689          433        1,272          835
                                               -----------  -----------  -----------  -----------
Noninterest expenses:
 Salaries, wages and benefits . . . . . . . .       1,207        1,030        2,432        2,002
 Occupancy. . . . . . . . . . . . . . . . . .         171          151          339          294
 Furniture, fixtures and equipment. . . . . .         174          166          342          333
 Other expenses . . . . . . . . . . . . . . .         490          454        1,008          925
                                               -----------  -----------  -----------  -----------
                                                    2,042        1,801        4,121        3,554
                                               -----------  -----------  -----------  -----------
Income before income taxes. . . . . . . . . .         991          966        1,977        1,926
Provision for income taxes. . . . . . . . . .        (317)        (297)        (641)        (605)
                                               -----------  -----------  -----------  -----------
Net income. . . . . . . . . . . . . . . . . .  $      674   $      669   $    1,336   $    1,321
                                               ===========  ===========  ===========  ===========

Net income per share:
   Basic. . . . . . . . . . . . . . . . . . .  $      .19   $      .19   $      .38   $      .38
   Diluted. . . . . . . . . . . . . . . . . .  $      .17   $      .17   $      .34   $      .34
Average shares outstanding:
   Basic. . . . . . . . . . . . . . . . . . .   3,563,000    3,523,000    3,564,000    3,503,000
   Diluted. . . . . . . . . . . . . . . . . .   3,913,000    3,852,000    3,912,000    3,871,000
<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 SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                                                   (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, 1999. . . .  $      3,244   $       14,730   $      482         ($563)       ($303)  $       17,590
Net income for the six months
 ended June 30, 2000. . . . . . . .             -                -        1,321             -            -            1,321
Other comprehensive income:
Unrealized gain on securities:
 Unrealized holding losses arising
  during the period, net
  of tax of ($16) . . . . . . . . .             -                -            -           (27)           -                -
 Less: reclassification adjustment
  for gains included in net
  income, net of tax of $4. . . . .             -                -            -            (6)           -                -
                                                                                 -------------
 Other comprehensive loss . . . . .             -                -            -           (33)           -              (33)
                                                                                 -------------               ---------------
Comprehensive income. . . . . . . .             -                -            -             -            -            1,288
                                                                                                             ---------------
Employee stock options exercised. .           164              342            -             -            -              506
Restricted stock issued . . . . . .            14              141            -             -         (155)               -
Amortization of deferred
 compensation on restricted stock .             -                -            -             -           63               63
                                     -------------  ---------------  ----------  -------------  -----------  ---------------
Balance at June 30, 2000. . . . . .  $      3,422   $       15,213   $    1,803         ($596)       ($395)  $       19,447
                                     =============  ===============  ==========  =============  ===========  ===============


Balance at December 31, 2000. . . .  $      3,598   $       16,803   $    1,425  $         32        ($330)  $       21,528
Net income for the six months
 ended June 30, 2001. . . . . . . .             -                -        1,336             -            -            1,336
Other comprehensive income:
Unrealized gain on securities:
 Unrealized holding gains arising
  during the period, net
  of tax of $97 . . . . . . . . . .             -                -            -           168            -                -
 Less: reclassification adjustment
  for gains included in net
  income, net of tax of $31 . . . .             -                -            -           (59)           -                -
                                                                                 -------------
 Other comprehensive income . . . .             -                -            -           109            -              109
                                                                                 -------------               ---------------
Comprehensive income. . . . . . . .             -                -            -             -            -            1,445
                                                                                                             ---------------
Forfiture of common stock issued
 pursuant to restricted stock plan.            (2)             (19)           -             -           21                -
Amortization of deferred
 compensation on restricted stock .             -                -            -             -           62               62
                                     -------------  ---------------  ----------  -------------  -----------  ---------------
Balance at June 30, 2001. . . . . .  $      3,596   $       16,784   $    2,761  $        141        ($247)  $       23,035
                                     =============  ===============  ==========  =============  ===========  ===============
<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  Six  Months  Ended
                                                                    June 30,
                                                                 2001       2000
                                                               ---------  ---------
<S>                                                            <C>        <C>
Cash flows from operating activities:
 Net income . . . . . . . . . . . . . . . . . . . . . . . . .  $  1,336   $  1,321
Adjustments to reconcile net income to net cash
 provided by operating activities:
    Provision for loan losses . . . . . . . . . . . . . . . .       337        198
    Depreciation and amortization . . . . . . . . . . . . . .       240        242
    Gain on sale of equipment and vehicles. . . . . . . . . .       (28)         -
    Gain on sale securities available for sale. . . . . . . .       (90)       (10)
    Net amortization of net premium on investments. . . . . .        54         17
    Amortization of deferred compensation on restricted stock        62         63
    Decrease (increase) in other assets . . . . . . . . . . .       183       (102)
    (Decrease) increase in other liabilities. . . . . . . . .       (20)       105
    Deferred income taxes . . . . . . . . . . . . . . . . . .       (81)       (36)
                                                               ---------  ---------
Net cash provided by operating activities . . . . . . . . . .     1,993      1,798
                                                               ---------  ---------

Cash flows from investing activities:
  Purchases of securities available for sale. . . . . . . . .   (12,844)    (3,805)
  Proceeds from maturities of securities available for sale .     4,165        606
  Proceeds from sales of securities available for sale. . . .     3,046      2,912
  Purchases of investments in FHLB and other stock. . . . . .         -       (450)
  Net increase in loans . . . . . . . . . . . . . . . . . . .   (22,015)    (9,604)
  Purchases of premises and equipment . . . . . . . . . . . .    (1,330)      (139)
  Proceeds from sale of equipment and vehicles. . . . . . . .        57          -
                                                               ---------  ---------
Net cash used in investing activities . . . . . . . . . . . .   (28,921)   (10,480)
                                                               ---------  ---------

Cash flows from financing activities:
  Net increase in deposit accounts. . . . . . . . . . . . . .     5,317      9,988
  Net decrease in federal funds purchased . . . . . . . . . .         -     (4,000)
  Proceeds from FHLB advances . . . . . . . . . . . . . . . .    10,000     20,000
  Repayments of FHLB advances . . . . . . . . . . . . . . . .    (6,000)    (9,000)
  Proceeds from employee stock options exercised. . . . . . .         -        506
                                                               ---------  ---------
Net cash provided by financing activities . . . . . . . . . .     9,317     17,494
                                                               ---------  ---------
Net (decrease) increase in cash and cash equivalents. . . . .   (17,611)     8,812
Cash and cash equivalents, beginning of period. . . . . . . .    29,395      9,821
                                                               ---------  ---------
Cash and cash equivalents, end of period. . . . . . . . . . .  $ 11,784   $ 18,633
                                                               =========  =========

SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest. . . . . . . . . . .  $  5,415   $  3,765
Cash paid during the period for income taxes. . . . . . . . .  $    663   $    712
Change in fair market value of investment securities
 available for sale, net of income taxes. . . . . . . . . . .  $    109       ($33)
<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

                          SUMMIT FINANCIAL CORPORATION
     CONDENSED  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
                                  JUNE 30, 2001

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 June 30, 2001 and for the three month and
six  month periods ended June 30, 2001 and 2000 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 June 30, 2001, and the results of
operations and cash flows for the periods ended June 30, 2001 and 2000 have been
included.  The  results  for the three month or six month periods ended June 30,
2001  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
generally  accepted  accounting principles ("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  generally  accepted  accounting  principles  and should be read in
conjunction  with  the  Company's  audited consolidated financial statements and
related  notes  for  the  year ended December 31, 2000 included in the Company's
2000  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  $11,784,000 and
$18,633,000  at  June  30,  2001  and  2000,  respectively.


NOTE  3  -  NONPERFORMING  ASSETS:
     Loans past due in excess of 90 days and still accruing interest amounted to
approximately  $126,000 and $73,000 at June 30, 2001 and 2000, respectively.  At
June  30, 2001 and 2000 the Company had approximately $1.2 million and $147,000,
respectively,  in  non-accrual loans.  The $1.2 million non-accrual loan at June
30,  2001  is  considered to be impaired under Statement of Financial Accounting
Standards  114.  There  were  no  impaired  loans at June 30, 2000.  The average
balance  of impaired loans was $1,231,000 for the six months ended June 30, 2001
and  there  was  no  impairment  allowance  required at June 30, 2001.  Interest
income  recognized  on  impaired  loans  during  2001 was approximately $27,000.
There  was  no  other  real  estate  owned  ("OREO")  at  June 30, 2001 or 2000.

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 quarter and the six months
ended  June  30,  2001  and  2000.  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.  (All numbers, except per share
data,  in  thousands).

<TABLE>
<CAPTION>

                                         For the Quarter Ended June 30,
                                   2001        2001        2000        2000
                                ----------  ----------  ----------  ----------
                                   BASIC      DILUTED      BASIC      DILUTED
                                ----------  ----------  ----------  ----------
<S>                             <C>         <C>         <C>         <C>
Net Income . . . . . . . . . .  $  674,000  $  674,000  $  669,000  $  669,000
                                ----------  ----------  ----------  ----------

Average shares outstanding . .   3,562,800   3,562,800   3,523,094   3,523,094
Effect of Dilutive Securities:
    Stock options. . . . . . .           -     317,272           -     279,481
    Unvested restricted stock.           -      33,418           -      49,707
                                ----------  ----------  ----------  ----------
                                 3,562,800   3,913,490   3,523,094   3,852,282
                                ----------  ----------  ----------  ----------

Per-share amount . . . . . . .  $     0.19  $     0.17  $     0.19  $     0.17
                                ==========  ==========  ==========  ==========

</TABLE>

<TABLE>
<CAPTION>

                                        For the Six Months Ended June 30,
                                   2001        2001        2000        2000
                                ----------  ----------  ----------  ----------
                                   BASIC      DILUTED      BASIC      DILUTED
                                ----------  ----------  ----------  ----------
<S>                             <C>         <C>         <C>         <C>
Net Income . . . . . . . . . .  $1,336,000  $1,336,000  $1,321,000  $1,321,000
                                ----------  ----------  ----------  ----------

Average shares outstanding . .   3,563,679   3,563,679   3,502,960   3,502,960
Effect of Dilutive Securities:
    Stock options. . . . . . .           -     314,421           -     318,257
    Unvested restricted stock.           -      33,418           -      49,707
                                ----------  ----------  ----------  ----------
                                 3,563,679   3,911,518   3,502,960   3,870,924
                                ----------  ----------  ----------  ----------

Per-share amount . . . . . . .  $     0.38  $     0.34  $     0.38  $     0.34
                                ==========  ==========  ==========  ==========

</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>

                         For  the  quarter  ended  June  30, 2001     At and for the six months ended June 30, 2001
                             Bank      Finance    Corporate     Total      Bank     Finance    Corporate    Total
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
<S>                        <C>        <C>        <C>          <C>        <C>       <C>        <C>          <C>
Interest income . . . . .  $  4,672   $    427         ($14)  $  5,085   $ 9,593   $    904         ($34)  $10,463
Interest expense. . . . .    (2,523)       (70)          61     (2,532)   (5,282)      (149)         131    (5,300)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Net interest income . . .     2,149        357           47      2,553     4,311        755           97     5,163
Provision for loan losses      (155)       (54)           -       (209)     (250)       (87)           -      (337)
Other income. . . . . . .       618         83          (12)       689     1,123        173          (24)    1,272
Other expenses. . . . . .    (1,677)      (363)          (2)    (2,042)   (3,381)      (734)          (6)   (4,121)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Income before taxes . . .       935         23           33        991     1,803        107           67     1,977
Income taxes. . . . . . .      (299)        (8)         (10)      (317)     (576)       (42)         (23)     (641)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Net income. . . . . . . .  $    636   $     15   $       23   $    674   $ 1,227   $     65   $       44   $ 1,336
                           =========  =========  ===========  =========  ========  =========  ===========  ========
Net loans . . . . . . . .                                              $197,283   $  3,160        ($804)  $199,639
                                                                       =========  =========  ===========  =========
Total assets. . . . . . .                                              $257,680   $  3,809        ($870)  $260,619
                                                                       =========  =========  ===========  =========

</TABLE>


<TABLE>
<CAPTION>

                         For  the  quarter  ended  June  30, 2000     At and for the six months ended June 30, 2000
                             Bank      Finance    Corporate     Total      Bank     Finance    Corporate    Total
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
<S>                        <C>        <C>        <C>          <C>        <C>       <C>        <C>          <C>
Interest income . . . . .  $  4,114   $    410         ($26)  $  4,498   $ 7,953   $    875         ($49)  $ 8,779
Interest expense. . . . .    (2,050)       (83)          74     (2,059)   (3,918)      (159)         141    (3,936)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Net interest income . . .     2,064        327           48      2,439     4,035        716           92     4,843
Provision for loan losses       (72)       (33)           -       (105)     (137)       (61)           -      (198)
Other income. . . . . . .       369         76          (12)       433       689        170          (24)      835
Other expenses. . . . . .    (1,422)      (377)          (2)    (1,801)   (2,782)      (766)          (6)   (3,554)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Income before taxes . . .       939         (7)          34        966     1,805         59           62     1,926
Income taxes. . . . . . .      (285)         2          (14)      (297)     (558)       (22)         (25)     (605)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Net income. . . . . . . .  $    654        ($5)  $       20   $    669   $ 1,247   $     37   $       37   $ 1,321
                           =========  =========  ===========  =========  ========  =========  ===========  ========
Net loans . . . . . . . .                                              $153,607   $  2,966      ($1,160)  $155,413
                                                                       =========  =========  ===========  =========
Total assets. . . . . . .                                              $207,660   $  3,724      ($1,206)  $210,178
                                                                       =========  =========  ===========  =========

</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,  2000.  Results  of  operations for the three month and six
month  periods  ended June 30, 2001 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 June 30, 2001, the Company's net income totaled
$674,000  or $.17 per diluted share.  This is compared to net income of $669,000
or  $.17 per diluted share for the same quarterly period of 2000.  For the first
six  months  of 2001, the Company reported net income of $1,336,000 or $0.34 per
diluted share, an improvement of approximately $15,000 or 1% from the net income
for  the  first  six  months  of  2000 of $1,321,000 or $0.34 per diluted share.

BALANCE  SHEET  ACTIVITY
     Total assets increased $10.8 million or 4.3% from December 31, 2000 to June
30,  2001.  Deposits  increased  approximately  $5.3  million or 2.5% during the
period.  A  majority of the increase in deposits was in the money market deposit
category  which accounted for $14.1 million of the increase, which was offset by
decreases  in the jumbo (greater than $100,000) certificates of deposit category
of  $5.5  million and other time deposits of $2.8 million.  Gross loan growth of
$21.9  million  (12.1%) was funded by the increase in deposits; the reduction in
liquidity  (primarily the $15.4 million decrease in federal funds sold); and the
25%  ($4  million)  increase  in  FHLB  advances.

ALLOWANCE  FOR  LOAN  LOSSES
     The  amount  charged  to  the provision for loan losses by the Bank and the
Finance  Company is based on management's judgment as to the amounts required to
maintain  an  allowance  adequate to provide for probable losses inherent in the
loan  portfolio.  The  level  of  this allowance is dependent upon growth in the
loan  portfolios; the total amount of past due loans; nonperforming loans; known
loan deteriorations and/or concentrations of credit; trends in portfolio volume,
maturity  and  composition;  estimated  collateral  values;  general  economic
conditions;  and  management's assessment of inherent losses based upon internal
credit  grading of the loans and periodic reviews and assessments of credit risk
associated  with  particular  loans.

          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").  Generally, loans
of  the  Bank are placed on nonaccrual status when loans become 90 days past due
as  to  principal  or  interest,  or when management believes, after considering
economic  and  business  conditions  and collection efforts, that the borrower's
financial  condition  is such that collection of the loan is doubtful.  Payments
of interest on loans which are classified as nonaccrual are recognized as income
when  received.  Loans  of the Finance Company are not classified as nonaccrual,
but  are charged-off when such become 150 days contractually past due or earlier
if  the  loan  is  deemed  uncollectible.

     At  June  30,  2001,  the  consolidated  allowance for loan losses was $2.7
million  or  1.36%  of  total loans net of unearned income.  This compares to an
allowance  of  $2.6  million  or  1.42% of total loans net of unearned income at
December  31,  2000.  For  the quarter ended June 30, 2001, the Company reported
consolidated  net  charge-offs  of  $104,000  or  0.22%  of  average loans on an
annualized  basis.  This  is compared to consolidated net charge-offs of $36,000
or  0.09% (annualized) of average loans for the comparable quarter of 2000.  For
the six months ended June 30, 2001, net charge-offs totaled $154,000 or 0.17% of
average  loans  on  an  annualized  basis.  This is compared to consolidated net
charge-offs  of  $82,000  or  0.05%  (annualized) of average loans for the prior
year.  Loans  on  nonaccrual  at  June 30, 2001 totaled $1.2 million or 0.58% of
total  loans,  compared  to  $147,000  or 0.09% of total loans at June 30, 2000.
Loans  past  due 90 days and greater totaled $126,000 or 0.06% of gross loans at
June  30,  2001  and  $73,000 or 0.05% of gross loans at June 30, 2000. The $1.2
million  non-accrual  loan  at  June 30, 2001 is considered to be impaired under
Statement of Financial Accounting Standards 114. There were no impaired loans at
June  30,  2000.

     Management  considers  the  allowance  for  loan  losses  adequate to cover
probable  losses  inherent  in  the  loan  portfolio  at  June  30,  2001.  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  and other factors affecting loans.  While it is the Company's policy
to  provide  for 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  judgement  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 and
approval  by  various regulatory agencies through their periodic examinations of
the  Company's subsidiaries.  Such examinations could result in required changes
to  the  allowance  for  loan  losses.  No  adjustments  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.

EARNINGS  REVIEW  FOR  THE  QUARTER  ENDED  JUNE  30,  2001  AND  2000

GENERAL
     The Company reported consolidated net income for the quarter ended June 30,
2001  of $674,000, compared to net income of $669,000 for the quarter ended June
30,  2000,  or  an  improvement  of  approximately $5,000 or 0.7%.  Increases in
interest  income  and  other  income  were  offset  by the increases in interest
expense,  the provision for loan losses and the higher overhead costs associated
with  expansion  resulting in relatively flat earnings between the two quarterly
periods.

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 quarter ended June 30,
2001,  the  Company recorded consolidated net interest income of $2.6 million, a
4.7% increase from the net interest income of $2.4 million for the quarter ended
June  30,  2000.  The  increase in this amount is related to the increase in the
average  earning  asset  and interest-bearing liability volume of the Company of
28.9%  and 31.0% respectively, offset by the 104 basis point decrease in the net
interest  margin  for  the  Company between the second quarter of 2000 and 2001.

     For  the  quarter  ended June 30, 2001 and 2000, the Company's consolidated
net  interest margin was 4.35% and 5.39%, respectively.  The net interest margin
is  calculated as annualized net interest income divided by year-to-date average
earning  assets.  The  decrease  in  consolidated net interest margin is related
primarily  to  the  125  basis  point  reduction  in the average yield on assets
resulting  from  the  decreasing  interest rate environment in the first half of
2001.  The rate decreases were offset somewhat by the 35 basis point decrease in
the  cost  of  funds during the same period.  During the first half of 2001, the
average prime rate decreased 191 basis points resulting in an average prime rate
of  7.34%  for  the  second  quarter  of  2001.

INTEREST  INCOME
     For  the quarter ended June 30, 2001, the Company's earning assets averaged
$  241.4  million  and  had an average yield of 8.56%.  This compares to average
earning  assets  of  $187.3  million  for  the  second quarter of 2000, yielding
approximately  9.81%.  Thus,  the  28.9%  increase  in volume of average earning
assets,  offset  by  the 125 basis point decrease in average yield, accounts for
the  $587,000  (13.1%) increase in interest income between the second quarter of
2000  and  2001.

     Consolidated  loans  comprised  approximately  79% and 83% of the Company's
average  earning  assets  for the second quarter of 2001 and 2000, respectively.
The  majority  of  the Company's loans are tied to the prime rate (approximately
66%  of  the  Bank's  portfolio  is  at  floating rates at June 30, 2001), which
averaged  7.34%  and  9.25%  for  the  quarters  ended  June  30, 2001 and 2000,
respectively.  During  the  second  quarter of 2001, consolidated loans averaged
$190.7  million,  yielding  an  average  of  9.22%,  compared to $154.6 million,
yielding  an  average  of  10.46% for the second quarter of 2000.  The 124 basis
point  decrease  in the average yield on loans is primarily related to the lower
prime  lending rate.  The higher level of average loans (which increased 23.4%),
offset  somewhat  by  the  decrease  in  average  rate,  resulted  in the higher
consolidated  interest  income  on  loans  of  $363,000  or  9.0%.

     Investment  securities  averaged  $39.1 million or 16.2% of average earning
assets  and  yielded  6.49%  (tax equivalent basis) during the second quarter of
2001,  compared  to  average  securities  of  $27.5  million yielding 6.85% (tax
equivalent  basis)  for  the  quarter  ended June 30, 2000.  The decrease in the
average  yield  of the investment portfolio is related to the portfolio mix, the
timing  of  security  maturities and sales which were reinvested in lower market
rate  instruments,  and  reductions of yields on variable rate investments.  The
42.4%  increase  in  average  securities,  offset  somewhat  by the reduction in
average  rate,  resulted  in  the  increase  of interest income on securities of
$167,000  or  41.9%.

INTEREST  EXPENSE
     The Company's interest expense for the quarter ended June 30, 2001 was $2.5
million.  The  increase  of  23.0%  from  the comparable quarter in 2000 of $2.1
million  was  directly  related  to  the  31.0%  increase  in  volume of average
interest-bearing  liabilities,  offset  by  the  35  basis point decrease in the
average  rate  on  liabilities.  Interest-bearing  liabilities  averaged  $202.5
million  for  the  second quarter of 2001 with an average rate of 5.01%. This is
compared  to  average  interest-bearing  liabilities  of  $154.6 million with an
average  rate  of  5.36%  for  the quarter ended June 30, 2000.  The decrease in
average  rate  on  liabilities  is  related  to  the  decreasing  interest  rate
environment  and  the  repricing  of  deposits  at  lower  current market rates.

PROVISION  FOR  LOAN  LOSSES
     The allowance for loan losses is established through charges in the form of
a provision for loan losses.  Loan losses and recoveries are charged or credited
directly  to the allowance.  The amount charged to the provision for loan losses
by  the Bank and the Finance Company is based on management's judgment as to the
amounts  required  to  maintain  an  adequate  allowance,  as  discussed  above.

     Included  in  the  net  income  for  the  quarter  ended June 30, 2001 is a
provision  for  loan  losses of $209,000 compared to a provision of $105,000 for
the  second  quarter  of  2000.  The  increase  in  the provision for the second
quarter of 2001 is primarily related to the higher level of originations in 2001
as  compared  to  the  prior  year.  Also  impacting  the  amount charged to the
provision  each  period  are  the  increases in past due, classified and problem
loans;  concentrations  of credit risk in the loan portfolio; local and national
economic  conditions and anticipated trends; and the total outstanding loans and
charge-off  activity of the Finance Company which generally have higher inherent
risk  than  do  loans  of the Bank.  Estimates charged to the provision for loan
losses  are  based  on  management's judgment as to the amount required to cover
probable  losses  inherent  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 interchange fees; merchant discount
fees;  commissions  on nondeposit investment product sales and insurance product
sales;  and  mortgage  origination fees, was $689,000 for the quarter ended June
30,  2001 compared to $433,000 for the second quarter of 2000, or an increase of
59.1%.  Increases  in  service  charges  ($8,000 increase), credit card/merchant
fees  ($22,000  increase),  gains  on  sales  of  available  for sale investment
securities  ($68,000  increase),  and  mortgage  referral  and  other  loan fees
($45,000  increase)  accounted  for  a majority of the higher other income.  The
higher  level  of nondeposit sales activity contributed $98,000 of the increase.
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 quarter ended June 30, 2001, noninterest expenses were $2.0 million
which  is  an  increase  of 13.4% over the amount incurred for the quarter ended
June  30,  2000  of  $1.8  million.  The most significant item included in other
expenses  is salaries, wages and benefits which amounted to $1.2 million for the
quarter  ended  June  30, 2001 as compared to $1.0 million for the quarter ended
June  30,  2000.  The increase of $177,000 or 17.2% is a result of normal annual
raises,  higher  commissions on nondeposit sales, and approximately 8 additional
full-time equivalent staff, primarily related to the fully operational branch in
Spartanburg.

     Occupancy and furniture, fixtures, and equipment ("FFE") expenses increased
a  total  of $28,000 or 8.8% between the second quarter of 2001 and 2000 related
primarily  to  the  expenses  associated  with  branch  expansion  during  2000.

     Included  in  the  line  item  "other  operating expenses", which increased
$36,000  or  8.0%  from  the  comparable  period  of  2000,  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  level  of  activity  and  the  additional  branch location.

INCOME  TAXES
     For  the  quarter  ended  June  30,  2001, the Company reported $317,000 in
income  tax  expense,  or  an  effective tax rate of 32.0%.  This is compared to
income  tax  expense  of  $297,000  for the same period of the prior year, or an
effective  tax  rate  of  30.8%. The increase in the effective rate is primarily
related  to  the  full utilization of state net operating loss carryforwards and
adjustments  to  the  TEFRA  interest  disallowance  on  tax-free  municipal
investments.


RESULTS  OF  OPERATIONS  -  COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2001 AND
2000

GENERAL
     The  Company reported consolidated net income for the six months ended June
30,  2001 of $1,336,000, compared to net income of $1,321,000 for the six months
ended  June  30,  2000,  or  an  improvement  of  approximately $15,000 or 1.1%.
Increases  in  interest  income and other income were offset by the increases in
interest  expense,  the  provision for loan losses and the higher overhead costs
associated  with  expansion  resulting  in  relatively flat earnings between the
first  six  months  of  2000  and  2001.

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 six months ended June 30,
2001,  the  Company recorded consolidated net interest income of $5.2 million, a
6.6%  increase  from  the net interest income of $4.8 million for the six months
ended  June 30, 2000.  The increase in this amount is related to the increase in
the  average  earning asset and interest-bearing liability volume of the Company
of  29.2%  and  31.2% respectively, offset by the 95 basis point increase in the
net  interest  margin  for  the  Company.

     For the six months ended June 30, 2001 and 2000, the Company's consolidated
net  interest margin was 4.50% and 5.45%, respectively.  The net interest margin
is  calculated as annualized net interest income divided by year-to-date average
earning  assets.  The  decrease  in  consolidated net interest margin is related
primarily  to  the  general  declining  interest  rate  environment during 2001.

INTEREST  INCOME
     For  the  six  months  ended  June  30,  2001, the Company's earning assets
averaged  $237.6  million  and  had an average yield of 8.99%.  This compares to
average  earning  assets  of  $183.9  million  for the first six months of 2000,
yielding  approximately  9.75%.  Thus,  the  29.2% increase in volume of average
earning assets, offset somewhat by the 76 basis point decrease in average yield,
accounts  for  the $1.7 million (19.2%) increase in interest income between 2000
and  2001.

     Consolidated  loans  averaged  approximately  78%  and 83% of the Company's
average  earning assets for the first six months of 2001 and 2000, respectively.
The  majority  of  the Company's loans are tied to the prime rate (approximately
66%  of  the  Bank's  portfolio  is  at  floating rates at June 30, 2001), which
averaged  7.98%  and  8.97%  for  the  six  months ended June 30, 2001 and 2000,
respectively.  During  the first six months of 2001, consolidated loans averaged
$186.4  million,  yielding  an  average  of  9.72%,  compared to $151.7 million,
yielding  an  average  of 10.40% for the first six months of 2000.  The 68 basis
point  decrease  in the average yield on loans is primarily related to the lower
prime  lending  rate  which  decreased  275  basis points through mid-2001.  The
higher level of average loans (which increased 22.8%), offset by the decrease in
average  rate,  resulted in an increase in consolidated interest income on loans
of  $1.1  million  or  14.5%.

     Investment  securities  averaged  $36.7 million or 15.4% of average earning
assets  and  yielded 6.77% (tax equivalent basis) during the first six months of
2001,  compared  to  average  securities  of  $27.4  million yielding 6.79% (tax
equivalent basis) for the six months ended June 30, 2000.  The 34.0% increase in
volume  of  investment securities resulted in the increase in interest income on
securities  of  $313,000.

INTEREST  EXPENSE
     The  Company's  interest expense for the six months ended June 30, 2001 was
$5.3  million.  The  increase of 34.7% from the comparable six months in 2000 of
$3.9  million  was  related  to  the  31.2%  increase  in  the volume of average
interest-bearing  liabilities,  combined with the 15 basis point increase in the
average  rate  on  liabilities.  Interest-bearing  liabilities  averaged  $200.0
million  for the first six months of 2001 with an average rate of 5.34%. This is
compared  to  average  interest-bearing  liabilities  of  $152.5 million with an
average  rate  of 5.19% for the six months ended June 30, 2000.  The increase in
the  average rate on liabilities is primarily related to increasing market rates
and  promotional  rates  offered  on  certificates  of  deposit and money market
accounts  during  2000.

PROVISION  FOR  LOAN  LOSSES
     As previously discussed under the quarterly analysis, the amount charged to
the  provision  for  loan losses by the Bank and the Finance Company is based on
management's  judgment  as  to  the  amounts  required  to maintain an allowance
adequate  to  provide  for  probable  losses  inherent  in  the  loan portfolio.

     Included  in  the  net  income  for the six months ended June 30, 2001 is a
provision  for  loan  losses of $337,000 compared to a provision of $198,000 for
the same period of 2000.  The increase in the provision for the first six months
of  2001  is  primarily  related  to the higher level of originations in 2001 as
compared  to the prior year.  Also impacting the amount charged to the provision
each  period  are  the  increases  in  past  due,  classified and problem loans;
concentrations of credit risk in the loan portfolio; local and national economic
conditions  and  anticipated  trends;  and  the  total  outstanding  loans  and
charge-off  activity of the Finance Company which generally have higher inherent
risk  than  do  loans  of the Bank.  Estimates charged to the provision for loan
losses  are  based  on  management's judgment as to the amount required to cover
probable  losses  inherent  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 interchange fees; merchant discount
fees;  commissions  on nondeposit investment product sales and insurance product
sales;  and mortgage origination fees, was $1.3 million for the six months ended
June  30,  2001  compared  to  $835,000  for the first six months of 2000, or an
increase of 52.4%.  Increases in service charges, credit card/merchant fees, and
insurance  commissions  accounted  for a majority of the increase.  Increases in
service  charges  ($12,000  increase),  credit  card/merchant  fees  ($38,000
increase),  gains  on sales of available for sale investment securities ($80,000
increase),  and  mortgage  referral  and  other  loan  fees  ($99,000  increase)
accounted  for  a  majority  of  the  higher  other income.  The higher level of
nondeposit sales activity contributed $171,000 of the increase and gains on sale
of  fixed  assets  accounted  for  $28,000  of  the increase.  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  six  months  ended June 30, 2001, total noninterest expenses were
$4.1  million which is an increase of 15.9% over the amount incurred for the six
months  ended June 30, 2000 of $3.6 million.  The most significant item included
in other expenses is salaries, wages and benefits which amounted to $2.4 million
for  the  six months ended June 30, 2001 as compared to $2.0 million for the six
months  ended  June  30, 2000.  The increase of $430,000 or 21.5% is a result of
normal  annual  raises,  higher commissions on nondeposit sales, approximately 8
additional  full-time  equivalent  staff,  primarily  related  to  the  fully
operational  branch  in Spartanburg, and higher group insurance premiums related
to  rate  increases.

     Occupancy and furniture, fixtures, and equipment ("FFE") expenses increased
a total of $54,000 or 8.6% between the first six months of 2001 and 2000 related
primarily  to  the  expenses  associated  with  branch  expansion  during  2000.

     Included  in  the  line  item  "other  operating expenses", which increased
$83,000  or  9.0%  from  the  comparable  period  of  2000,  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  level  of  activity  and  the  additional  branch location.

INCOME  TAXES
     For  the  six  months ended June 30, 2001, the Company reported $641,000 in
income  tax  expense,  or  an  effective tax rate of 32.4%.  This is compared to
income  tax  expense  of  $605,000  for the same period of the prior year, or an
effective  tax  rate  of  31.4%. The increase in the effective rate is primarily
related  to  the  full  utilization  of  state net operating loss carryforwards.


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 (those which
can  easily  be  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 accounted for
15%  and 12% of average assets for the six month periods ended June 30, 2001 and
2000,  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 June 30, 2001, the Company had approximately
$35  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  $3.0  million  in  available liquidity remaining from its initial
public  offering  and  the  retention  of  earnings.  Substantially  all of this
liquidity  was advanced to the Finance Company to fund its operations as of June
30,  2001.  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  June  30,  2001.  Additional sources of liquidity for Summit
Financial include 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.


CAPITAL  RESOURCES
     Total  shareholders'  equity  at June 30, 2001 was $23.0 million or 8.8% of
total  assets.  This  is  compared  to  $21.5 million or 8.6% of total assets at
December  31,  2000.  The  $1.5  million  increase in total shareholders' equity
resulted  principally  from  the  retention  of  earnings  and  the  increase in
unrealized  gain  on  available  for  sale  investment  securities.

     Book  value  per  share  at  June  30,  2001  and 2000 was $6.41 and $5.41,
respectively.  Tangible book value per share at June 30, 2001 and 2000 was $6.33
and  $5.30,  respectively.  Tangible book value was below book value as a result
of  the purchase premiums associated with branch acquisitions of Freedom Finance
which  were  accounted  for  as  purchases.

     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'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 June 30, 2001,
that  the  Company  and the Bank meet all capital adequacy requirements to which
they  are subject.  At June 30, 2001 and 2000, 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 June 30, 2001 and 2000 as well as
the  minimum  calculated  amounts  for  each  regulatory  defined  category.

<TABLE>
<CAPTION>

                              RISK-BASED CAPITAL CALCULATION

                                                         FOR CAPITAL      TO BE CATEGORIZED
                                           ACTUAL      ADEQUACY PURPOSES  "WELL-CAPITALIZED"
                                        AMOUNT   RATIO   AMOUNT   RATIO   AMOUNT   RATIO
                                        -------  ------  -------  ------  -------  ------
<S>                                     <C>      <C>     <C>      <C>     <C>      <C>
AS OF JUNE 30, 2001
THE COMPANY
Total capital to risk-weighted assets.  $25,546  11.98%  $17,064   8.00%  N.A.
Tier 1 capital to risk-weighted assets  $22,880  10.73%  $ 8,532   4.00%  N.A.
Tier 1 capital to average assets . . .  $22,880   9.09%  $10,067   4.00%  N.A.

THE BANK
Total capital to risk-weighted assets.  $22,249  10.57%  $16,836   8.00%  $21,045  10.00%
Tier 1 capital to risk-weighted assets  $19,717   9.37%  $ 8,418   4.00%  $12,627   6.00%
Tier 1 capital to average assets . . .  $19,717   7.92%  $ 9,953   4.00%  $12,441   5.00%

AS OF JUNE 30, 2000
THE COMPANY
Total capital to risk-weighted assets.  $22,164  12.92%  $13,723   8.00%  N.A.
Tier 1 capital to risk-weighted assets  $20,020  11.67%  $ 6,862   4.00%  N.A.
Tier 1 capital to average assets . . .  $20,020  10.31%  $ 7,768   4.00%  N.A.

THE BANK
Total capital to risk-weighted assets.  $19,298  11.60%  $13,311   8.00%  $16,639  10.00%
Tier 1 capital to risk-weighted assets  $17,242  10.36%  $ 6,655   4.00%  $ 9,983   6.00%
Tier 1 capital to average assets . . .  $17,242   9.00%  $ 7,667   4.00%  $ 9,583   5.00%

</TABLE>

ACCOUNTING,  REPORTING  AND  REGULATORY  MATTERS
     In  June  1998,  the  Financial  Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standards  ("SFAS")  133,  "Accounting for
Derivative  Instruments  and Hedging Activities."  SFAS 133 establishes, for the
first  time,  comprehensive  accounting  and  reporting standards for derivative
instruments  and  hedging  activities.  For  accounting  purposes,  SFAS  133
comprehensively  defines  a  derivative  instrument.  SFAS 133 requires that all
derivative  instruments  be  recorded  in the statement of financial position at
fair  value.  The accounting for the gain or loss due to change in fair value of
the derivative instrument depends on whether the derivative instrument qualifies
as  a hedge.  If the derivative does not qualify as a hedge, the gains or losses
are reported in earnings when they occur.  However, if the derivative instrument
qualifies  as  a  hedge,  the  accounting varies based on the type of risk being
hedged.

     SFAS  137,  "Accounting for Derivative Instruments and Hedging Activities -
Deferral  of the Effective Date of FASB Statement No. 133 - an Amendment of SFAS
133",  delayed  the  effective  date  of this statement for one year.  SFAS 138,
"Accounting  for Certain Derivative Instruments and Certain Hedging Activities -
an Amendment of Statement No. 133", addresses a limited number of issues causing
implementation  difficulties for entities that apply SFAS 133.  SFAS 133 applies
to all entities and is effective as of the beginning of the first quarter of the
fiscal  year  beginning  after  June  15,  2000.  The  Company  adopted SFAS 133
effective  January  1, 2001.  The Company identified no freestanding or imbedded
derivative  instruments  requiring  separate  accounting  treatment.

     In  July  2001, the FASB issued SFAS 141, "Business Combinations", and SFAS
142,  "Goodwill  and  Other  Intangible  Assets".  SFAS  141  requires  that the
purchase  method  of  accounting be used for all business combinations initiated
after  June  30,  2001  as  well  as  all  purchase method business combinations
completed  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 will require that
goodwill  and  intangible  assets  with  indefinite  useful  lives  no longer be
amortized,  but  instead tested for impairment at least annually.  SFAS 142 will
also require that intangible assets with definite 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 is required to adopt the provisions of SFAS 141 immediately and
SFAS  142  effective  January  1,  2002.  Furthermore,  any  goodwill  and  any
intangible  asset determined to have an indefinite useful life that are acquired
in  a  purchase  business  combination completed after June 30, 2001 will not be
amortized,  but  will continue to be evaluated for impairment in accordance with
the  appropriate  pre-SFAS  142  accounting literature.  Goodwill and intangible
assets  acquired  in  business  combinations  completed before July 1, 2001 will
continue  to  be  amortized  prior  to  the  adoption  of  SFAS  142.

     SFAS  141 will require upon adoption of SFAS 142, that the Company evaluate
its  existing  intangible  assets  and  goodwill  that  were acquired in a prior
purchase  business  combination,  and to 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 will be required to reassess
the  useful  lives  and  residual  values  of  all intangible assets acquired in
purchase  business  combinations,  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 principle in the first
interim  period.

     As  of  the  date  of  adoption,  the  Company  expects to have unamortized
goodwill  in  the  amount  of  $184,000  which will be subject to the transition
provisions  of  SFAS  141 and 142.  Amortization expense related to goodwill was
$157,000  and  $78,000  for  the year ended December 31, 2000 and the six months
ended  June  30,  2001, respectively.  Because of the extensive effort needed to
comply  with  adopting  SFAS  141  and  142, it is not practicable to reasonably
estimate  the  impact  of  adopting  these Statements on the Company's financial
statements  at  the  date  of  this  report,  including whether any transitional
impairment  losses will be required to be recognized as the cumulative effect of
a  change  in  accounting  principle.


EFFECT  OF  INFLATION  AND  CHANGING  PRICES
     The consolidated financial statements have been prepared in accordance with
generally  accepted  accounting  principles  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.

     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 increases in net interest income during
periods  of  rising  interest  rates, as experienced from mid-2000 through 2001.
This  may  cause  an  increase  in  the net interest margin until the fixed rate
deposits  mature and are repriced at higher 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,  a decrease in net interest
income)  is  generally  realized in a declining 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  slightly  if  interest  rates  rise in the near term and will decrease
slightly  if  interest  rates  decline  in  the  near  term.

     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  June  30,  2001,  on  a
cumulative  basis  through  12  months,  rate-sensitive  liabilities  exceed
rate-sensitive  assets,  resulting  in  a  12  month  period liability-sensitive
position  of  $27  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 decreases in the net interest
income  during  periods  of declining rates and increases in net interest income
when  market rates rise.  The Company's net interest margin decreased during the
first  six months of 2001 primarily as a result of the rapid decline in interest
rates  during  the  period.


       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 June 30, 2001, 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, 2000.  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, 2000 included in the Company's 2000
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.

          At  the Annual Meeting of Shareholders held April 18, 2001 pursuant to
the Notice of Annual Meeting of Shareholders and Proxy Statement dated March 18,
2001,  the  following  matters  were  voted  on:

Election  of  3  nominees  for  director  to  3-year  terms
Election  of  1  nominee  for  director  to  a  2-year  term
Election  of  1  nominee  for  director  to  a  1-year  term

For  each of the above, 3,139,016 shares (99.9% of the votes cast) voted FOR the
election  of  the  directors

          No  other matters were submitted to the shareholders for a vote at the
Annual  Meeting  or  at  any  other  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:  July  30,  2001

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


Dated:  July  30,  2001

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