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,  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  July  31,  2002,  3,803,972  shares of $1.00 par value common stock were
outstanding.


<PAGE>

<TABLE>
<CAPTION>

                               SUMMIT FINANCIAL COPORATION
                        FORM 10-Q FOR QUARTER ENDED JUNE 30, 2002
                   TABLE OF CONTENTS OF INFORMATION REQUIRED IN REPORT



<S>                                                                                    <C>
PART I. FINANCIAL INFORMATION
Item 1.
Consolidated Balance Sheets
     June 30, 2002 and December 31, 2001. . . . . . . . . . . . . . . . . . . . . . .   3
Consolidated Statements of Income
     Three months and six months ended June 30, 2002 and 2001 . . . . . . . . . . . .   4
Consolidated Statements of Changes in Shareholders' Equity and Comprehensive Income
     Six months ended June 30, 2002 and 2001. . . . . . . . . . . . . . . . . . . . .   5
Consolidated Statements of Cash Flows
     Six months ended June 30, 2002 and 2001. . . . . . . . . . . . . . . . . . . . .   6
Condensed Notes to Consolidated Financial Statements June 30, 2002. . . . . . . . . .   7

Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations  10

Item 3.
Quantitative and Qualitative Disclosures About Market Risk. . . . . . . . . . . . . .  24


PART II. OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25


SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

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


                                                       June 30,    December 31,
                                                         2002          2001
                                                      ----------  --------------
<S>                                                   <C>         <C>
ASSETS
Cash and due from banks. . . . . . . . . . . . . . .  $   8,812   $       8,579
Interest-bearing bank balances . . . . . . . . . . .      4,644             945
Federal funds sold . . . . . . . . . . . . . . . . .      5,409             925
Investments available for sale . . . . . . . . . . .     45,396          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 $3,026 and $2,937. . .    213,048         204,104
Premises and equipment, net. . . . . . . . . . . . .      4,298           4,447
Accrued interest receivable. . . . . . . . . . . . .      1,347           1,393
Other assets . . . . . . . . . . . . . . . . . . . .      3,734           3,571
                                                      ----------  --------------
                                                      $ 288,771   $     273,097
                                                      ==========  ==============
  LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Noninterest-bearing demand. . . . . . . . . . . . .  $  31,941   $      29,372
 Interest-bearing demand . . . . . . . . . . . . . .     21,605          21,807
 Savings and money market. . . . . . . . . . . . . .     71,572          85,388
 Time deposits, $100,000 and over. . . . . . . . . .     47,829          41,798
 Other time deposits . . . . . . . . . . . . . . . .     55,477          40,413
                                                      ----------  --------------
                                                        228,424         218,778
FHLB advances. . . . . . . . . . . . . . . . . . . .     31,600          26,900
Other short-term borrowings. . . . . . . . . . . . .          -             500
Accrued interest payable . . . . . . . . . . . . . .        853           1,194
Other liabilities. . . . . . . . . . . . . . . . . .      1,614           1,124
                                                      ----------  --------------
                                                        262,491         248,496
                                                      ----------  --------------
Shareholders' equity:
 Common stock, $1.00 par value; 20,000,000
  shares authorized; issued and
  outstanding 3,803,972 and 3,793,032 shares . . . .      3,804           3,793
 Additional paid-in capital. . . . . . . . . . . . .     18,446          18,409
 Retained earnings . . . . . . . . . . . . . . . . .      3,952           2,379
 Accumulated other comprehensive income, net of tax.        198             203
 Nonvested resticted stock . . . . . . . . . . . . .       (120)           (183)
                                                      ----------  --------------
     Total shareholders' equity. . . . . . . . . . .     26,280          24,601
                                                      ----------  --------------
                                                      $ 288,771   $     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 Quarters Ended   For the Six Months Ended
                                                       June 30,                June 30,
                                               ----------------------  ----------------------
                                                  2002        2001        2002        2001
                                               ----------  ----------  ----------  ----------
<S>                                            <C>         <C>         <C>         <C>
Interest Income:
 Loans. . . . . . . . . . . . . . . . . . . .  $    3,765  $    4,383  $    7,533  $    8,982
 Taxable investment securities. . . . . . . .         445         435         907         835
 Nontaxable investment securities . . . . . .         181         131         355         262
 Federal funds sold . . . . . . . . . . . . .          20          66          41         219
 Other. . . . . . . . . . . . . . . . . . . .          42          70          82         165
                                               ----------  ----------  ----------  ----------
                                                    4,453       5,085       8,918      10,463
                                               ----------  ----------  ----------  ----------
Interest Expense:
 Deposits . . . . . . . . . . . . . . . . . .       1,147       2,287       2,357       4,795
 Other. . . . . . . . . . . . . . . . . . . .         393         245         794         505
                                               ----------  ----------  ----------  ----------
                                                    1,540       2,532       3,151       5,300
                                               ----------  ----------  ----------  ----------
     Net interest income. . . . . . . . . . .       2,913       2,553       5,767       5,163
Provision for loan losses . . . . . . . . . .         225         209         350         337
                                               ----------  ----------  ----------  ----------
     Net interest income after
      provision for loan losses . . . . . . .       2,688       2,344       5,417       4,826
                                               ----------  ----------  ----------  ----------
Noninterest income:
 Service charges and fees on deposit accounts         144         103         271         202
 Credit card service fees and income. . . . .         125         120         237         225
 Insurance commission fee income. . . . . . .         141         129         360         249
 Gain on sale of securities . . . . . . . . .          30          78          45          90
 Other income . . . . . . . . . . . . . . . .         222         259         431         506
                                               ----------  ----------  ----------  ----------
                                                      662         689       1,344       1,272
                                               ----------  ----------  ----------  ----------
Noninterest expenses:
 Salaries, wages and benefits . . . . . . . .       1,334       1,207       2,701       2,432
 Occupancy. . . . . . . . . . . . . . . . . .         160         171         319         339
 Furniture, fixtures and equipment. . . . . .         166         174         349         342
 Other expenses . . . . . . . . . . . . . . .         518         490       1,082       1,008
                                               ----------  ----------  ----------  ----------
                                                    2,178       2,042       4,451       4,121
                                               ----------  ----------  ----------  ----------
Income before income taxes. . . . . . . . . .       1,172         991       2,310       1,977
Provision for income taxes. . . . . . . . . .         372         317         737         641
                                               ----------  ----------  ----------  ----------
Net income. . . . . . . . . . . . . . . . . .  $      800  $      674  $    1,573  $    1,336
                                               ==========  ==========  ==========  ==========

Net income per share:
   Basic. . . . . . . . . . . . . . . . . . .  $      .21  $      .18  $      .42  $      .36
   Diluted. . . . . . . . . . . . . . . . . .  $      .19  $      .16  $      .37  $      .32
Average shares outstanding:
   Basic. . . . . . . . . . . . . . . . . . .   3,783,000   3,741,000   3,779,000   3,747,000
   Diluted. . . . . . . . . . . . . . . . . .   4,323,000   4,109,000   4,261,000   4,112,000
<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, 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 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
                                                                                                      ---------------
Forfeiture 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
                                     ========  ============  =========  ===============  ===========  ===============


Balance at December 31, 2001. . . .  $ 3,793   $    18,409   $   2,379  $          203        ($183)  $       24,601
Net income for the six months
 ended June 30, 2002. . . . . . . .        -             -       1,573               -            -            1,573
Other comprehensive loss:
Unrealized gain on securities:
 Unrealized holding gains arising
  during the period, net
  of tax of $13 . . . . . . . . . .        -             -           -              23            -                -
 Less: reclassification adjustment
  for gains included in net
  income, net of tax of ($17) . . .        -             -           -             (28)           -                -
                                                                        ---------------
 Other comprehensive loss . . . . .        -             -           -              (5)           -               (5)
                                                                        ---------------               ---------------
Comprehensive income. . . . . . . .        -             -           -               -            -            1,568
                                                                                                      ---------------
Stock options exercised . . . . . .       11            37           -               -            -               48
Amortization of deferred
 compensation on restricted stock .        -             -           -               -           63               63
                                     --------  ------------  ---------  ---------------  -----------  ---------------
Balance at June 30, 2002. . . . . .  $ 3,804   $    18,446   $   3,952  $          198        ($120)  $       26,280
                                     ========  ============  =========  ===============  ===========  ===============
<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,
                                                               --------------------
                                                                 2002       2001
                                                               ---------  ---------
<S>                                                            <C>        <C>
Cash flows from operating activities:
 Net income . . . . . . . . . . . . . . . . . . . . . . . . .  $  1,573   $  1,336
Adjustments to reconcile net income to net cash
 provided by operating activities:
    Provision for loan losses . . . . . . . . . . . . . . . .       350        337
    Depreciation and amortization . . . . . . . . . . . . . .       260        240
    Gain on sale of equipment and vehicles. . . . . . . . . .         -        (28)
    Gain on sale securities available for sale. . . . . . . .       (45)       (90)
    Net amortization of net premium on investments. . . . . .        86         54
    Amortization of deferred compensation on restricted stock        63         62
    Decrease in other assets. . . . . . . . . . . . . . . . .        26        183
    Increase (decrease) in other liabilities. . . . . . . . .       149        (20)
    Deferred income taxes . . . . . . . . . . . . . . . . . .      (139)       (81)
                                                               ---------  ---------
Net cash provided by operating activities . . . . . . . . . .     2,323      1,993
                                                               ---------  ---------

Cash flows from investing activities:
  Purchases of securities available for sale. . . . . . . . .   (10,873)   (12,844)
  Proceeds from maturities of securities available for sale .     4,898      4,165
  Proceeds from sales of securities available for sale. . . .     7,929      3,046
  Purchases of investments in FHLB and other stock. . . . . .      (350)         -
  Net increase in loans . . . . . . . . . . . . . . . . . . .    (9,294)   (22,015)
  Purchases of premises and equipment . . . . . . . . . . . .      (111)    (1,330)
  Proceeds from sale of equipment and vehicles. . . . . . . .         -         57
                                                               ---------  ---------
Net cash used in investing activities . . . . . . . . . . . .    (7,801)   (28,921)
                                                               ---------  ---------

Cash flows from financing activities:
  Net increase in deposit accounts. . . . . . . . . . . . . .     9,646      5,317
  Net decrease in other short-term borrowings . . . . . . . .      (500)         -
  Proceeds from FHLB advances . . . . . . . . . . . . . . . .    11,000     10,000
  Repayments of FHLB advances . . . . . . . . . . . . . . . .    (6,300)    (6,000)
  Proceeds from employee stock options exercised. . . . . . .        48          -
                                                               ---------  ---------
Net cash provided by financing activities . . . . . . . . . .    13,894      9,317
                                                               ---------  ---------
Net increase (decrease) in cash and cash equivalents. . . . .     8,416    (17,611)
Cash and cash equivalents, beginning of period. . . . . . . .    10,449     29,395
                                                               ---------  ---------
Cash and cash equivalents, end of period. . . . . . . . . . .  $ 18,865   $ 11,784
                                                               =========  =========

SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest. . . . . . . . . . .  $  3,492   $  5,415
Cash paid during the period for income taxes. . . . . . . . .  $    687   $    663
Change in fair market value of investment securities
 available for sale, net of income taxes. . . . . . . . . . .       ($5)  $    109
<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

                          SUMMIT FINANCIAL CORPORATION
     CONDENSED  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
                                  JUNE 30, 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 June 30, 2002 and for the three month and
six  month periods ended June 30, 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 June 30, 2002, and the results of
operations and cash flows for the periods ended June 30, 2002 and 2001 have been
included.  The  results  for the three month or six month periods ended June 30,
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  $18,865,000 and
$11,784,000  at  June  30,  2002  and  2001,  respectively.


NOTE  3  -  NONPERFORMING  ASSETS:
     Loans past due in excess of 90 days and still accruing interest amounted to
approximately  $90,000  and  $153,000  at  June  30, 2002 and December 31, 2001,
respectively.  At  June  30,  2002  and  December  31,  2001  the  Company  had
approximately  $213,000  and  $1.2  million, respectively, in non-accrual loans.
There  were  no  impaired loans at June 30, 2002.  Approximately $1.0 million of
the  non-accrual  loans at December 31, 2001 was considered to be impaired under
Statement  of  Financial  Accounting  Standards  114.  The  average  balance  of
impaired loans was $1,099,000 for the year ended December 31, 2001 and there was
no  impairment  allowance  required at that date.  Interest income recognized on
impaired  loans  during 2001 was approximately $35,000.  There was no other real
estate  owned  at  June  30,  2002  or  December  31,  2001.

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,  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.  (All numbers, except per share
data,  in  thousands).

<TABLE>
<CAPTION>

                                         For the Quarters Ended June 30,
                                   2002        2002        2001        2001
                                ----------  ----------  ----------  ----------
                                  BASIC      DILUTED      BASIC      DILUTED
                                ----------  ----------  ----------  ----------
<S>                             <C>         <C>         <C>         <C>
Net Income . . . . . . . . . .  $  800,000  $  800,000  $  674,000  $  674,000
                                ----------  ----------  ----------  ----------

Average shares outstanding . .   3,782,584   3,782,584   3,740,940   3,740,940
Effect of Dilutive Securities:
    Stock options. . . . . . .           -     519,850           -     333,136
    Unvested restricted stock.           -      20,190           -      35,089
                                ----------  ----------  ----------  ----------
                                 3,782,584   4,322,624   3,740,940   4,109,165
                                ----------  ----------  ----------  ----------
Per-share amount . . . . . . .  $     0.21  $     0.19  $     0.18  $     0.16
                                ==========  ==========  ==========  ==========
</TABLE>


<TABLE>
<CAPTION>

                                      For the Six Months Ended June 30,
                                   2002        2002        2001        2001
                                ----------  ----------  ----------  ----------
                                  BASIC      DILUTED      BASIC      DILUTED
                                ----------  ----------  ----------  ----------
<S>                             <C>         <C>         <C>         <C>
Net Income . . . . . . . . . .  $1,573,000  $1,573,000  $1,336,000  $1,336,000
                                ----------  ----------  ----------  ----------

Average shares outstanding . .   3,778,997   3,778,997   3,746,863   3,746,863
Effect of Dilutive Securities:
    Stock options. . . . . . .           -     462,121           -     330,142
    Unvested restricted stock.           -      20,190           -      35,089
                                ----------  ----------  ----------  ----------
                                 3,778,997   4,261,308   3,746,863   4,112,094
                                ----------  ----------  ----------  ----------
Per-share amount . . . . . . .  $     0.42  $     0.37  $     0.36  $     0.32
                                ==========  ==========  ==========  ==========
</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                At and for the six months ended
                                    June 30, 2002                              June 30,2002
                           ------------------------------------   -----------------------------------------
                            Bank   Finance    Corporate   Total     Bank    Finance    Corporate    Total
                           ------  --------  -----------  ------  --------  --------  -----------  --------
<S>                        <C>     <C>       <C>          <C>     <C>       <C>       <C>          <C>
Interest income . . . . .  $4,001  $    460         ($8)  $4,453  $  7,951  $    980        ($13)  $  8,918
Interest expense. . . . .   1,537        46         (43)   1,540     3,143        91         (83)     3,151
                           ------  --------  -----------  ------  --------  --------  -----------  --------
Net interest income . . .   2,464       414          35    2,913     4,808       889          70      5,767
Provision for loan losses     145        80           -      225       195       155           -        350
Other income. . . . . . .     600        77         (15)     662     1,206       168         (30)     1,344
Other expenses. . . . . .   1,834       339           5    2,178     3,736       708           7      4,451
                           ------  --------  -----------  ------  --------  --------  -----------  --------
Income before taxes . . .   1,085        72          15    1,172     2,083       194          33      2,310
Income taxes. . . . . . .     340        27           5      372       653        72          12        737
                           ------  --------  -----------  ------  --------  --------  -----------  --------
Net income. . . . . . . .  $  745  $     45  $       10   $  800  $  1,430  $    122  $       21   $  1,573
                           ======  ========  ===========  ======  ========  ========  ===========  ========
Net loans                                                         $210,986  $  3,228     ($1,166)  $213,048
                                                                  ========  ========  ===========  ========
Total assets                                                      $285,405  $  3,816       ($450)  $288,771
                                                                  ========  ========  ===========  ========
</TABLE>


<TABLE>
<CAPTION>

                               For  the  quarter ended                At and for the six months ended
                                    June 30, 2001                              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>

<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 and six
month  periods  ended June 30, 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  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, 2002, the Company's net income totaled
$800,000  or $.19 per diluted share.  This is compared to net income of $674,000
or  $.16 per diluted share for the same quarterly period of 2001.  For the first
six  months  of 2002, the Company reported net income of $1,573,000 or $0.37 per
diluted  share,  an  improvement  of  approximately $237,000 or 18% from the net
income  for  the  first  six  months  of 2001 of $1,336,000 or $0.32 per diluted
share.

BALANCE  SHEET  ACTIVITY
     Total  assets  increased $15.7 million or 6% from December 31, 2001 to June
30,  2002.  Deposits  increased  approximately  $9.6  million  or  4% during the
period.  A  majority  of  the  increase  in deposits was in time deposits, which
increased  $21.1  million  related primarily to promotional offerings during the
period.  This  increase  was  partially  offset by decreases in the money market
deposit  category  of  $13.8 million. Gross loan growth of $9.0 million (4%) was
funded  by  the increase in deposits. Increases in FHLB advances of $4.7 million
funded  increases  in  liquidity, primarily in federal funds sold which was $4.5
million  higher  at  June  30,  3002  than  at  year  end.

ALLOWANCE  FOR  LOAN  LOSSES
     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 June
30, 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.

     In assessing the adequacy of the allowance, management relies predominately
on  its  ongoing  review  of  the  loan  portfolio,  which is undertaken both to
ascertain  whether  there are losses which must be charged-off and to assess the
risk  characteristics  of  the portfolio in the aggregate.  The Bank attempts to
deal  with credit risks through the establishment of, and adherence to, internal
credit  policies.  These  policies  include  loan  officer  and  credit  limits,
periodic  documentation examination, and follow-up procedures for any exceptions
to  credit  policies.  Loans  that  are  determined to involve any more than the
normal  risk  are  placed in a special review status.  The Company's methodology
for  evaluating  the  adequacy  of  the  allowance  for loan losses incorporates
management's  current  judgments  about the credit quality of the loan portfolio
through  a  disciplined  and  consistently  applied  process.  The  methodology
includes  segmentation  of  the  loan  portfolio  into reasonable components for
calculation  of  the  most  accurate  possible  reserve.  The  loan portfolio is
grouped  into  commercial  real  estate,  residential  mortgages,  construction,
commercial  and  industrial,  and consumer loans.  The loan segments are further
grouped  into  performing  loans,  past  due loans, nonaccrual loans, internally
classified  loans  and loans considered impaired.  Appropriate reserve estimates
are  determined  for  each  segment  based  on  a  review  of  individual loans,
application  of historical loss factors for each segment, and adjustment factors
applied  as  considered  necessary.  The  adjustment  factors  are  applied
consistently and are quantified for consideration of national and local economic
conditions,  exposure  to concentrations that may exist in the portfolio, impact
of  off-balance  sheet  risk,  alterations  of  lending policies and procedures,
changes  in  trends of past due loans, problem loans and charge-offs, variations
in  the  nature  and  volume  of  the  loan  portfolio, modification of director
oversight,  entry  into  new  markets,  and  other  factors which may impact the
current  credit  quality  of  the  loan  portfolio.

     The  allowance  for  loan  losses  totaled  $3.0 million, or 1.40% of total
loans,  at  June  30, 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 June 30,
2002, the Company reported net charge-offs of $195,000, or 0.37% (annualized) of
average  loans.  This  is  compared  to  net  charge-offs  of $104,000, or 0.22%
(annualized)  of  average  loans,  for  the  comparable  quarter  of  2001.

NONPERFORMING  ASSETS  AND  POTENTIAL  PROBLEM  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. Loans past due 90 days and
greater  totaled  $90,000, or 0.04% of gross loans, at June 30, 2002 compared to
$153,000,  or  0.07% of gross loans, at December 31, 2001.  Loans on non-accrual
totaled  $213,000  and  $1.2  million  at  June  30, 2002 and December 31, 2001,
respectively.  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 June 30, 2002.  Impaired loans,
which  were  on  non-accrual status, at December 31, 2001, totaled $1.0 million.
There  was  no  OREO  at  December  31,  2001.

     Management  maintains  a  list  of  potential  problem loans which includes
nonaccrual  loans,  loans past due in excess of 90 days which are still accruing
interest,  and  other  loans  which  are  credit  graded  (either internally, by
external  audits  or  regulatory  examinations) as "substandard", "doubtful", or
"loss".  A  loan  is  added  to  the  list  when  management  becomes  aware  of
information about possible credit problems of borrowers that causes doubts as to
the  ability  of such borrowers to comply with the current loan repayment terms.
The  total  amount  of loans determined to be potential problem loans based upon
management's  internal  designations at June 30, 2002 and December 31, 2001, was
$2.9  million or 1.4% of the total loans outstanding and $2.5 million or 1.2% of
the loan portfolio, respectively.  The amount of potential problem loans at June
30,  2002 does not represent management's estimate of potential losses since the
majority of such loans are considered adequately secured by real estate or other
collateral.  Management  believes  that the allowance for loan losses as of June
30,  2002  was  adequate to absorb any losses related to the nonperforming loans
and  problem  loans  as  of  that  date.

     Management  continues  to  monitor  closely the levels on nonperforming and
problem  loans  and  will address the weaknesses in these credits to enhance the
amount  of ultimate collection or recovery on these assets.  Should increases in
the  overall  level of nonperforming and potential problem loans accelerate from
the  current  trend,  management will adjust the methodology for determining the
allowance  for  loan  losses  and  will  increase  the provision for loan losses
accordingly.  This  would  likely  decrease  net  income.

RESULTS  OF OPERATIONS - COMPARISON OF THE QUARTERS ENDED JUNE 30, 2002 AND 2001

GENERAL
     The Company reported consolidated net income for the quarter ended June 30,
2002  of $800,000, compared to net income of $674,000 for the quarter ended June
30,  2001,  or  an  improvement  of  approximately $126,000 or 19%.  The primary
factor  in  the  increased  earnings was a significant reduction in the interest
expense  due  to  lower cost of funds as higher priced promotional time deposits
have  matured  and  renewed  at  lower  current  market rates. The other primary
contributor  to the higher net income for the second quarter of 2002 was the 11%
growth  in  average earning assets. The increases in income were somewhat offset
by  the  4%  decrease in other income and the 7% 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 quarter ended June 30,
2002,  the  Company recorded consolidated net interest income of $2.9 million, a
14%  increase from the net interest income of $2.6 million for the quarter ended
June  30,  2001.  The  increase in this amount is related to the increase in the
average  earning  asset  and interest-bearing liability volume of the Company of
11%  each,  combined with the 14 basis point increase in the net interest margin
for  the  Company  between  the  second  quarter  of  2001  and  2002.

     For  the  quarter  ended June 30, 2002 and 2001, the Company's consolidated
net  interest margin was 4.49% and 4.35%, respectively.  The net interest margin
is  calculated as annualized net interest income divided by year-to-date average
earning  assets.  The  increase in consolidated net interest margin is primarily
related  to the 227 basis point reduction in the average cost of funds resulting
from  the  decreasing  interest  rate environment and repricing of maturing time
deposits.  The cost of funds decrease was offset somewhat by the 177 basis point
decrease in the average yield on assets during the same period related primarily
to  the  lower  prime  interest  rate.  During  the  second quarter of 2002, the
average  prime rate decreased 259 basis points compared to the second quarter of
2001, resulting in an average prime rate of 4.75% for the second quarter of 2002
compared  to  7.34%  for  the  quarter  ended  June  30,  2001.

INTEREST  INCOME
     For  the quarter ended June 30, 2002, the Company's earning assets averaged
$ 268.7 million and had an average tax-equivalent yield of 6.79%.  This compares
to  average  earning  assets  of  $241.4 million for the second quarter of 2001,
yielding  approximately  8.56%.  Thus,  the  11%  increase  in volume of average
earning  assets,  offset  by  the  177  basis  point  decrease in average yield,
accounts  for  the $632,000 (12%) decrease in interest income between the second
quarter  of  2002  and  2001.

     Average  loans comprised approximately 79% of the Company's average earning
assets  for  the both the second quarters 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  June  30, 2002), which averaged 4.75% and 7.34% for the
quarters  ended June 30, 2002 and 2001, respectively.  During the second quarter
of  2002,  consolidated  loans  averaged  $211.8 million, yielding an average of
7.13%,  compared  to $190.7 million, yielding an average of 9.22% for the second
quarter  of 2001.  The 209 basis point decrease in the average yield on loans is
primarily  related  to  the  lower prime lending rate and the general decline in
interest  rates.  The  higher  level of average loans (which increased 11%), was
more  than  offset  by  the  decrease in average rate, and resulted in the lower
consolidated  interest  income  on  loans  of  $618,000  or  14%.

     Investment  securities  averaged  $46.4  million  or 17% of average earning
assets  and  yielded  6.21%  (tax equivalent basis) during the second quarter of
2002,  compared  to  average  securities  of  $39.1  million yielding 6.49% (tax
equivalent  basis)  for  the  quarter  ended June 30, 2001.  The decrease in the
average  yield  of the investment portfolio is related to the general decline in
market  interest  rates  during  2001, portfolio mix, and the timing of security
maturities,  calls, and sales which were reinvested in lower current market rate
instruments.  The  19%  increase  in  average securities, offset somewhat by the
reduction  in  average  rate  of  28  basis  points, resulted in the increase of
interest  income  on  securities  of  $60,000  or  11%.

INTEREST  EXPENSE
     The Company's interest expense for the quarter ended June 30, 2002 was $1.5
million.  The  decrease  of  39%  from  the  comparable  quarter in 2001 of $2.5
million  was  directly  related  to  the  11%  increase  in  volume  of  average
interest-bearing  liabilities, which was more than offset by the 227 basis point
decrease  in  the  average  rate  on  liabilities.  Interest-bearing liabilities
averaged  $225.7  million for the second quarter of 2002 with an average rate of
2.74%.  This  is  compared  to  average  interest-bearing  liabilities of $202.5
million  with an average rate of 5.01% for the quarter ended June 30, 2001.  The
decrease  in  average  rate  on  liabilities  is directly related to the general
decreasing  interest  rate  environment  and  the repricing of deposits at lower
current  market  rates.

PROVISION  FOR  LOAN  LOSSES
     The  provision for loan losses was $225,000 for the second quarter of 2002,
compared  to  $209,000  for  the  comparable  period  of  2001.  Changes  in the
provision  each  year  are generally related to the level of net originations in
each  period  as  follows:  $7.0 million for the quarter ended June 30, 2002 and
$18.1  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 second quarter of 2002
as  compared  to the prior year, the higher provision in 2002 was related to the
increase  in  net  charge-off  activity of both the Bank and the Finance Company
which  increased  $90,000  or  87% 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 interchange fees; merchant discount
fees;  commissions  on nondeposit investment product sales and insurance product
sales;  and  mortgage  origination fees, was $662,000 for the quarter ended June
30,  2002 compared to $689,000 for the second quarter of 2001, or an decrease of
4%.  Increases  in service charges ($41,000 increase), credit card/merchant fees
($5,000  increase),  and  insurance  commissions  from  nondeposit product sales
($12,000  increase)  were  related  to  higher  levels of activity and number of
accounts  at the Bank. These increases were more than offset by decreases in the
volume  of  sales  of investments securities generating gains on sales and lower
mortgage origination and loan referral fees during the second quarter of 2002 as
compared  with  the  prior  year.

     For the quarter ended June 30, 2002, noninterest expenses were $2.2 million
which  is  an increase of 7% over the amount incurred for the quarter ended June
30,  2001 of $2.0 million.  The most significant item included in other expenses
is  salaries,  wages and benefits which amounted to $1.3 million for the quarter
ended  June  30, 2002 as compared to $1.2 million for the quarter ended June 30,
2001.  The  increase  of  $127,000  or  11% 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  increases  in  group  insurance  and  other  benefit  costs.

     Occupancy and furniture, fixtures, and equipment ("FFE") expenses decreased
$19,000  or  6%  between  the  second  quarter  of  2002 and 2001. There were no
significant  changes  in  or  additions to property and premises between the two
quarterly  periods.

     Included  in  the line item "other expenses", which increased $28,000 or 6%
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  level  of  activity,  the  additional  branch  location,  increases  in
advertising  for  deposit promotions and advertising campaigns, and higher legal
and  consultant  expenses  incurred  in  2002.


INCOME  TAXES
     For  the  quarter  ended  June  30,  2002, the Company reported $372,000 in
income  tax  expense,  or  an  effective tax rate of 31.7%.  This is compared to
income  tax  expense  of  $317,000  for the same period of the prior year, or an
effective  tax  rate  of  32.0%.


RESULTS  OF  OPERATIONS  -- COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2002 AND
2001

GENERAL
     The  Company reported consolidated net income for the six months ended June
30,  2002 of $1,573,000, compared to net income of $1,336,000 for the six months
ended  June  30,  2001, or an improvement of approximately $237,000 or 18%.  The
primary  factor in the increased earnings from the same period of the prior year
was the significant reduction in interest expense due to the lower cost of funds
as  higher  priced  promotional  time deposits have matured and renewed at lower
current  market  rates.  The other primary contributors to higher net income for
the  six  months ended June 30, 2002 as compared with the prior year was the 12%
growth  in  average  earning  assets  and the 6% increase in other income. These
increases  were  somewhat  offset by the 8% 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 six months ended June 30,
2002,  the  Company recorded consolidated net interest income of $5.8 million, a
12%  increase  from  the  net interest income of $5.2 million for the six months
ended  June  30,  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  12%  each.

     For  both  the  six  months  ended  June  30,  2002 and 2001, the Company's
consolidated  net  interest  margin  was  4.50%.  The  net  interest  margin  is
calculated  as  annualized  net  interest income divided by year-to-date average
earning assets. The net interest margin did not change between the 2001 and 2002
periods  because  decreases  in the average yield on assets due to a lower prime
interest  rate  were  offset  by  reductions in the cost of funds related to the
declining interest rate environment and the repricing of maturing time deposits.

INTEREST  INCOME
     For  the  six  months  ended  June  30,  2002, the Company's earning assets
averaged  $266.7  million  and  had an average yield of 6.88%.  This compares to
average  earning  assets  of  $237.6  million  for the first six months of 2001,
yielding  approximately  8.99%.  Thus,  the  12%  increase  in volume of average
earning  assets,  which  was more than offset by the 211 basis point decrease in
average  yield,  accounts for the $1.5 million (15%) decrease in interest income
between  2002  and  2001.

     Consolidated  loans  averaged  approximately  79%  and 78% of the Company's
average  earning assets for the first six months of 2002 and 2001, respectively.
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 June 30, 2002), which averaged 4.75%
and 7.98% for the six months ended June 30, 2002 and 2001, respectively.  During
the  first  six  months  of  2002,  consolidated  loans averaged $209.7 million,
yielding an average of 7.25%, compared to $186.4 million, yielding an average of
9.72%  for  the  first  six months of 2001.  The 247 basis point decrease in the
average  yield  on  loans  is  primarily related to the lower prime lending rate
which  decreased  323  basis  points  between 2001 and 2002. The higher level of
average  loans  (which  increased  13%), offset by the decrease in average rate,
resulted  in a decrease in consolidated interest income on loans of $1.4 million
or  16%.

     Investment  securities  averaged  $46.9  million  or 18% of average earning
assets  and  yielded 6.21% (tax equivalent basis) during the first six months of
2002,  compared  to  average  securities  of  $36.7  million yielding 6.77% (tax
equivalent  basis)  for  the  six  months  ended June 30, 2001.  The decrease in
average  yield  on the investment portfolio of 56 basis points is related to the
general  decline  in  market  interest rates during 2001, portfolio mix, and the
timing  of  security maturities, calls, and sales which were reinvested in lower
current  market  rate  instruments.  The  28%  increase  in volume of investment
securities,  offset  somewhat  by the reduction in average rate, resulted in the
increase  in  interest  income  on  securities  of  $165,000  or  15%.

INTEREST  EXPENSE
     The  Company's  interest expense for the six months ended June 30, 2002 was
$3.2  million.  The  decrease  of  41% from the comparable six months in 2001 of
$5.3  million  was  related  to  the  12%  increase  in  the  volume  of average
interest-bearing  liabilities, which was more than offset by the 251 basis point
decrease  in  the  average  rate  on  liabilities.  Interest-bearing liabilities
averaged $224.7 million for the first six months of 2002 with an average rate of
2.83%.  This  is  compared  to  average  interest-bearing  liabilities of $200.0
million  with  an  average rate of 5.34% for the six months ended June 30, 2001.
The  decrease  in average rate on liabilities is directly related to the general
decreasing  interest  rate  environment  and  the repricing of deposits at lower
current  market  rates.

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, 2002 is a
provision  for  loan  losses of $350,000 compared to a provision of $337,000 for
the  same  period of 2001. Factors impacting the amount charged to the provision
each  period, in addition to the level of net originations, 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. Although
the  net originations were lower for the first six months of 2002 as compared to
the  prior  year ($9.6 million in 2002 versus $22.0 million in 2001), the higher
provision in 2002 was related to the increase in net charge-off activity of both
the  Bank  and  the  Finance  Company which increased $108,000 (70%) between the
comparable periods of 2002 and 2001. 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 $1.34 million for the six months ended
June  30, 2002 compared to $1.27 million for the first six months of 2001, or an
increase  of  6%.  Increases  in  service  charges  ($69,000  increase),  credit
card/merchant  fees  ($12,000  increase)  and  insurance  commission  fees  from
nondeposit  product  sales  ($111,000  increase) accounted for a majority of the
higher other income. The increases are primarily related to the higher levels of
activity  and  transactions  of  the  Bank generating other income in the normal
course  of  business.  These  increases were somewhat offset by decreases in the
volume of investment security sales generating gains on sales and lower mortgage
originations  and  loan  referral  fees  during  2002.

     For  the  six  months  ended June 30, 2002, total noninterest expenses were
$4.5  million  which  is  an increase of 8% over the amount incurred for the six
months  ended June 30, 2001 of $4.1 million.  The most significant item included
in other expenses is salaries, wages and benefits which amounted to $2.7 million
for  the  six months ended June 30, 2002 as compared to $2.4 million for the six
months  ended  June  30,  2001.  The  increase of $269,000 or 11% 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 increases in group insurance and other benefit costs.

     Occupancy and furniture, fixtures, and equipment ("FFE") expenses decreased
a  total  of  $13,000 or 2% between the first six months of 2002 and 2001. There
were no significant changes in or additions to property and premises between the
two  periods.

     Included  in  the line item "other expenses", which increased $74,000 or 7%
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  levels  of  activity and numbers of accounts at the Bank, the additional
branch  location,  increases in advertising for deposit promotion campaigns, and
higher  legal  and  consultant  expenses  incurred  in  2002.

INCOME  TAXES
     For  the  six  months ended June 30, 2002, the Company reported $737,000 in
income  tax  expense,  or  an  effective tax rate of 31.9%.  This is compared to
income  tax  expense  of  $641,000  for the same period of the prior year, or an
effective  tax  rate  of  32.4%.


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 approximately 14% and 15% of average assets
for  the  six  month  periods  ended  June  30, 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  June  30,  2002,  the  Company  had approximately $42.0 million in available
credit under its FHLB and correspondent bank federal funds 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  $3.3  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 June 30, 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 June 30, 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 effect 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.

     At  June 30, 2002 and December 31, 2001 the Company's commitments to extend
additional  credit  totaled  approximately  $54.7  million  and  $47.2  million,
respectively.  Included in the total commitments were approximately $3.4 million
and  $2.8  million  at  June 30, 2002 and December 31, 2001, respectively, which
represent  commitments to extend credit at fixed rates of interest.  Commitments
to  extend  credit  at fixed rates expose the Company to some degree of interest
rate  risk.  Included  in the Company's total commitments are standby letters of
credit.  Letters  of  credit  are commitments issued by the Company to guarantee
the performance of a customer to a third party and totaled $5.0 million and $4.8
million  at  June 30, 2002 and December 31, 2001, respectively.  The credit risk
involved  in  the  underwriting  of letters of credit is essentially the same as
that  involved  in  extending  loan  facilities  to  customers.


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  June  30,  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  $22.0  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 June 30, 2002 was $26.3 million or 9.1% of
total  assets.  This  is  compared  to  $24.6 million or 9.0% of total assets at
December  31,  2001.  The  $1.7  million  increase in total shareholders' equity
resulted principally from the retention of earnings and proceeds from employees'
exercises  of  stock  options.

     Book  value  per share at June 30, 2002 and December 31, 2001 was $6.91 and
$6.49, respectively. Tangible book value per share at June 30, 2002 and December
31,  2001  was $6.86 and $6.44, 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  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 June 30, 2002,
that  the  Company  and the Bank meet all capital adequacy requirements to which
they  are subject.  At June 30, 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 June 30, 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 JUNE 30, 2002
THE COMPANY
Total capital to risk-weighted assets.  $28,903  12.51%  $18,487   8.00%  N.A.
Tier 1 capital to risk-weighted assets  $26,014  11.26%  $ 9,244   4.00%  N.A.
Tier 1 capital to average assets . . .  $26,014   9.25%  $11,244   4.00%  N.A.

THE BANK
Total capital to risk-weighted assets.  $25,247  11.06%  $18,263   8.00%  $22,829  10.00%
Tier 1 capital to risk-weighted assets  $22,461   9.84%  $ 9,132   4.00%  $13,698   6.00%
Tier 1 capital to average assets . . .  $22,461   8.09%  $11,099   4.00%  $13,874   5.00%

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%
</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  was required to test the intangible asset for impairment in
accordance with the provisions of SFAS 142 within the first interim period.  Any
impairment  loss  was  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 June 30, 2001,
amortization  totaled  $39,000,  and  for  the  six  months  ended June 30, 2001
amortization  totaled  $78,000.  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  and the six months ended June 30, 2002 and June 30,
2001  follows:

<TABLE>
<CAPTION>

                                           For the        For the
                                           Quarter       Six Months
                                            Ended          Ended
                                           June 30,       June 30,
                                        ------------   --------------
                                         2002   2001    2002    2001
                                         -----  -----  ------  ------
<S>                                      <C>    <C>    <C>     <C>
Net income as reported. . . . . . . . .  $ 800  $ 674  $1,573  $1,336
Goodwill amortization, net of taxes . .      -     26       -      52
                                         -----  -----  ------  ------
Adjusted net income . . . . . . . . . .  $ 800  $ 700  $1,573  $1,388
                                         =====  =====  ======  ======

Basic earnings per share, as reported .  $0.21  $0.18  $ 0.42  $ 0.36
Goodwill amortization, net of taxes . .      -   0.01       -    0.01
                                         -----  -----  ------  ------
Adjusted basic earnings per share . . .  $0.21  $0.19  $ 0.42  $ 0.37
                                         =====  =====  ======  ======

Diluted earnings per share, as reported  $0.19  $0.16  $ 0.37  $ 0.32
Goodwill amortization, net of taxes . .      -   0.01       -    0.02
                                         -----  -----  ------  ------
Adjusted diluted earnings per share . .  $0.19  $0.17  $ 0.37  $ 0.34
                                         =====  =====  ======  ======
</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.

     In  April 2002, SFAS 145, "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections" was issued.  This
statement  rescinds  SFAS  4, "Reporting Gains and Losses from Extinguishment of
Debt",  SFAS  64,  "Extinguishment  of  Debt  Made  to  Satisfy  Sinking-Fund
Requirements",  and  SFAS  44,  "Accounting  for  Intangible  Assets  of  Motor
Carriers".  SFAS  145  amends  SFAS 13, "Accounting for Leases", to eliminate an
inconsistency  between  the  required accounting for sale-leaseback transactions
and  the  required accounting for certain lease modifications that have economic
effects  that  are similar to sale-leaseback transactions.  SFAS 145 also amends
other  existing  authoritative  pronouncements  to  make  various  technical
corrections,  clarify  meanings,  or  describe their applicability under changed
conditions.  SFAS  145  has  no  material  effect  on  the  Company.

     In  June  2002,  SFAS  146,  "Accounting  for Costs Associated with Exit or
Disposal  Activities,"  was  issued  which  addresses  financial  accounting and
reporting  for  costs  associated with exit or disposal activities and nullifies
Emerging  Issues  Task  Force  (EITF) Issue No. 94-3, "Liability Recognition for
Certain  Employee  Termination  Benefits  and  Other  Costs  to Exit an Activity
(including  Certain  Costs  Incurred  in a Restructuring)".  SFAS 146 applies to
costs  associated  with  an  exit activity that does not involve an entity newly
acquired  in  a business combination or with a disposal activity covered by SFAS
144,  "Accounting  for  the Impairment or Disposal of Long-Lived Assets".  Those
costs  include,  but are not limited to, the following:  a) termination benefits
provided  to current employees that are involuntarily terminated under the terms
of  a  benefit  arrangement  that,  in  substance,  is  not  an  ongoing benefit
arrangement  or  an  individual  deferred  compensation  contract  (hereinafter
referred  to as one-time termination benefits); b) costs to terminate a contract
that  is not a capital lease; and c) costs to consolidate facilities or relocate
employees.  SFAS 146 does not apply to costs associated with the retirement of a
long-lived  asset  covered  by  SFAS  143,  "Accounting  for  Asset  Retirement
Obligations".  A  liability  for  a  cost  associated  with  an exit or disposal
activity  shall  be  recognized  and measured initially at its fair value in the
period  in  which  the liability is incurred.  A liability for a cost associated
with an exit or disposal activity is incurred when the definition of a liability
is  met.  The  provisions  of  SFAS  146  are  effective  for  exit  or disposal
activities  that  are  initiated after December 31, 2002, with early application
encouraged.  The  impact  of  adoption on the Company is not known at this time.


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, 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.

          At  the Annual Meeting of Shareholders held April 23, 2002 pursuant to
the Notice of Annual Meeting of Shareholders and Proxy Statement dated March 21,
2002,  the  following  matters  were  voted  on:

          Election  of  4  nominees  for  director  to  3-year  terms

For  the  above matter, 3,304,101 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:
3.2     Amended  and  Restated  Bylaws  of  Summit  Financial  Corporation

     (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:  August  12,  2002

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


Dated:  August  12,  2002

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