FORM  10-Q

                SECURITIES  AND  EXCHANGE  COMMISSION
                    Washington,  D.C.  20549

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

      For  The  Quarterly  Period  Ended  March  31,  2001

                Commission  File  Number  000-19235

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


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

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

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


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

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

As  of  April  27,  2001,  3,596,318 shares of $1.00 par value common stock were
outstanding.

<PAGE>

<TABLE>
<CAPTION>

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


                                                      March 31,    December 31,
                                                        2001           2000
                                                     -----------  --------------
<S>                                                  <C>          <C>
ASSETS
Cash and due from banks . . . . . . . . . . . . . .  $    7,001   $       7,604
Interest-bearing bank balances. . . . . . . . . . .       5,765           5,111
Federal funds sold. . . . . . . . . . . . . . . . .      15,698          16,680
Investments available for sale. . . . . . . . . . .      37,768          32,445
Loans, net of unearned income and net of
 allowance for loan losses of $2,638 and $2,560 . .     181,728         177,961
Premises and equipment, net . . . . . . . . . . . .       3,851           3,473
Accrued interest receivable . . . . . . . . . . . .       1,605           1,691
Other assets. . . . . . . . . . . . . . . . . . . .       5,073           4,870
                                                     -----------  --------------
                                                     $  258,489   $     249,835
                                                     ===========  ==============
  LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Noninterest-bearing demand . . . . . . . . . . . .  $   32,095   $      35,468
 Interest-bearing demand. . . . . . . . . . . . . .      18,464          14,641
 Savings and money market . . . . . . . . . . . . .      68,995          63,821
 Time deposits, $100,000 and over . . . . . . . . .      49,320          46,523
 Other time deposits. . . . . . . . . . . . . . . .      47,655          48,738
                                                     -----------  --------------
                                                        216,529         209,191
Short-term borrowings . . . . . . . . . . . . . . .         500             500
FHLB advances . . . . . . . . . . . . . . . . . . .      16,000          16,000
Accrued interest payable. . . . . . . . . . . . . .       1,807           1,753
Other liabilities . . . . . . . . . . . . . . . . .       1,220             863
                                                     -----------  --------------
                                                        236,056         228,307
                                                     -----------  --------------
Shareholders' equity:
 Common stock, $1.00 par value; 20,000,000
  shares authorized; issued and
  outstanding 3,596,318 and 3,598,318 shares. . . .       3,596           3,598
 Additional paid-in capital . . . . . . . . . . . .      16,784          16,803
 Retained earnings. . . . . . . . . . . . . . . . .       2,087           1,425
 Accumulated other comprehensive income, net of tax         245              32
 Nonvested resticted stock. . . . . . . . . . . . .        (279)           (330)
                                                     -----------  --------------
     Total shareholders' equity . . . . . . . . . .      22,433          21,528
                                                     -----------  --------------
                                                     $  258,489   $     249,835
                                                     ===========  ==============
<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

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

                                             For the Three Months Ended
                                                      March 31,
                                               ------------------------
                                                  2001          2000
                                               ----------   -----------
<S>                                            <C>          <C>
Interest Income:
 Loans. . . . . . . . . . . . . . . . . . . .  $    4,599   $    3,826
 Taxable investment securities. . . . . . . .         400          251
 Nontaxable investment securities . . . . . .         131          135
 Federal funds sold . . . . . . . . . . . . .         153           33
 Other. . . . . . . . . . . . . . . . . . . .          95           36
                                               -----------  -----------
                                                    5,378        4,281
                                               -----------  -----------
Interest Expense:
 Deposits . . . . . . . . . . . . . . . . . .       2,508        1,709
 Other. . . . . . . . . . . . . . . . . . . .         260          168
                                               -----------  -----------
                                                    2,768        1,877
                                               -----------  -----------
     Net interest income. . . . . . . . . . .       2,610        2,404
Provision for loan losses . . . . . . . . . .        (128)         (93)
                                               -----------  -----------
     Net interest income after
      provision for loan losses . . . . . . .       2,482        2,311
                                               -----------  -----------

Noninterest Income:
 Service charges and fees on deposit accounts          99           94
 Credit card service fees and income. . . . .         105           89
 Insurance commission fee income. . . . . . .         120           76
 Gain on sale of securities . . . . . . . . .          12            -
 Other income . . . . . . . . . . . . . . . .         247          143
                                               -----------  -----------
                                                      583          402
                                               -----------  -----------
Noninterest Expenses:
 Salaries, wages and benefits . . . . . . . .       1,225          973
 Occupancy. . . . . . . . . . . . . . . . . .         169          142
 Furniture, fixtures and equipment. . . . . .         168          167
 Other operating expenses . . . . . . . . . .         517          471
                                               -----------  -----------
                                                    2,079        1,753
                                               -----------  -----------
Income before income taxes. . . . . . . . . .         986          960
Income taxes. . . . . . . . . . . . . . . . .        (324)        (308)
                                               -----------  -----------
Net income. . . . . . . . . . . . . . . . . .  $      662   $      652
                                               ===========  ===========

Net income per share:
   Basic. . . . . . . . . . . . . . . . . . .  $      .19   $      .19
   Diluted. . . . . . . . . . . . . . . . . .  $      .17   $      .17
Average shares outstanding:
   Basic. . . . . . . . . . . . . . . . . . .   3,564,567    3,482,829
   Diluted. . . . . . . . . . . . . . . . . .   3,909,523    3,889,253

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                    SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                  FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                                (Dollars in Thousands)
                                                     (Unaudited)

                                                                                           Accumulated
                                                                                               other
                                                                 Additional               comprehensive     Nonvested
                                                  Common          paid-in       Retained      (loss)       restricted
                                                   stock          capital       earnings    income, net       stock
                                               -------------  ---------------  ----------  -------------  -----------
<S>                                            <C>            <C>              <C>         <C>            <C>
Balance at December 31, 1999. . . . . . . . .  $      3,244   $       14,730   $      483         ($563)       ($303)
Net income for the three months
 ended March 31, 2000 . . . . . . . . . . . .             -                -          652             -            -
Other comprehensive income:
 Unrealized holding losses arising during
  the period, net of tax of ($40) . . . . . .             -                -            -           (66)           -

Comprehensive income. . . . . . . . . . . . .

Employee stock options exercised. . . . . . .           136              220            -             -            -
Issuance of common stock pursuant
 to restricted stock plan . . . . . . . . . .            14              142            -             -         (156)
Amortization of deferred
 compensation on restricted stock . . . . . .             -                -            -             -           31
                                               -------------  ---------------  ----------  -------------  -----------
Balance at March 31, 2000 . . . . . . . . . .  $      3,394   $       15,092   $    1,135         ($629)       ($428)
                                               =============  ===============  ==========  =============  ===========


Balance at December 31, 2000. . . . . . . . .  $      3,598   $       16,803   $    1,425  $         32        ($330)
Net income for the three months
 ended March 31, 2001 . . . . . . . . . . . .             -                -          662             -            -
Other comprehensive income:
 Unrealized holding gains arising during
  the period, net of tax of $134. . . . . . .             -                -            -           221            -
 Less: reclassification adjustment for gains
  included in net income, net of tax of ($4).             -                -            -            (8)           -
                                                                                           -------------
 Other comprehensive income . . . . . . . . .             -                -            -           213            -
                                                                                           -------------
Comprehensive income. . . . . . . . . . . . .             -                -            -             -            -

Forfeiture of common stock issued pursuant
 to restricted stock plan . . . . . . . . . .            (2)             (19)           -             -           21
Amortization of deferred
 compensation on restricted stock . . . . . .             -                -            -             -           30
                                               -------------  ---------------  ----------  -------------  -----------
Balance at March 31, 2001 . . . . . . . . . .  $      3,596   $       16,784   $    2,087  $        245        ($279)
                                               =============  ===============  ==========  =============  ===========


                                                   Total
                                                shareholders'
                                                   equity
                                               ---------------
<S>                                            <C>
Balance at December 31, 1999. . . . . . . . .  $       17,591
Net income for the three months
 ended March 31, 2000 . . . . . . . . . . . .             652
Other comprehensive income:
 Unrealized holding losses arising during
  the period, net of tax of ($40) . . . . . .             (66)
                                               ---------------
Comprehensive income                                      586
                                               ---------------
Employee stock options exercised. . . . . . .             356
Issuance of common stock pursuant
 to restricted stock plan . . . . . . . . . .               -
Amortization of deferred
 compensation on restricted stock . . . . . .              31
                                               ---------------
Balance at March 31, 2000 . . . . . . . . . .  $       18,564
                                               ===============


Balance at December 31, 2000. . . . . . . . .  $       21,528
Net income for the three months
 ended March 31, 2001 . . . . . . . . . . . .             662
Other comprehensive income:
 Unrealized holding gains arising during
  the period, net of tax of $134. . . . . . .
 Less: reclassification adjustment for gains
  included in net income, net of tax of ($4).

 Other comprehensive income . . . . . . . . .             213
                                               ---------------
Comprehensive income. . . . . . . . . . . . .             875
                                               ---------------
Forfeiture of common stock issued pursuant
 to restricted stock plan . . . . . . . . . .               -
Amortization of deferred
 compensation on restricted stock . . . . . .              30
                                               ---------------
Balance at March 31, 2001 . . . . . . . . . .  $       22,433
                                               ===============

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

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

                                                   For  the  Three  Months  Ended
                                                                    March 31,
                                                               ------------------
                                                                 2001      2000
                                                               --------  --------
<S>                                                            <C>       <C>
Cash flows from operating activities:
 Net income . . . . . . . . . . . . . . . . . . . . . . . . .  $   662   $   652
Adjustments to reconcile net income to net cash
 provided by operating activities:
    Provision for loan losses . . . . . . . . . . . . . . . .      128        93
    Depreciation and amortization . . . . . . . . . . . . . .      117       121
    Gain on sale of equipment and vehicles. . . . . . . . . .      (13)        -
    Gain on sale of investments available for sale. . . . . .      (12)        -
    Net amortization of net premium on investments. . . . . .       11        10
    Amortization of deferred compensation on restricted stock       30        31
    (Increase) decrease in other assets . . . . . . . . . . .     (197)      127
    Increase in other liabilities . . . . . . . . . . . . . .      431       446
    Deferred income taxes . . . . . . . . . . . . . . . . . .      (70)      (36)
                                                               --------  --------
Net cash provided by operating activities . . . . . . . . . .    1,087     1,444
                                                               --------  --------

Cash flows from investing activities:
  Purchases of securities available for sale. . . . . . . . .   (7,936)        -
  Proceeds from maturities of securities
   available for sale . . . . . . . . . . . . . . . . . . . .    2,449       245
  Proceeds from sales of securities available for sale. . . .      508         -
  Purchases of investments in FHLB and other stock. . . . . .        -      (100)
  Net increase in loans . . . . . . . . . . . . . . . . . . .   (3,895)   (2,896)
  Purchases of premises and equipment . . . . . . . . . . . .     (507)      (31)
  Proceeds from sale of equipment and vehicles. . . . . . . .       25         -
                                                               --------  --------
Net cash used in investing activities . . . . . . . . . . . .   (9,356)   (2,782)
                                                               --------  --------

Cash flows from financing activities:
  Net increase in deposit accounts. . . . . . . . . . . . . .    7,338     6,048
  Net decrease in federal funds purchased . . . . . . . . . .        -    (4,000)
  Proceeds from FHLB advances . . . . . . . . . . . . . . . .        -     6,000
  Repayments of FHLB advances . . . . . . . . . . . . . . . .        -    (2,000)
  Proceeds from employee stock options exercised. . . . . . .        -       356
                                                               --------  --------
Net cash provided by financing activities . . . . . . . . . .    7,338     6,404
                                                               --------  --------
Net (decrease) increase in cash and cash equivalents. . . . .     (931)    5,066
Cash and cash equivalents, beginning of period. . . . . . . .   29,395     9,821
                                                               --------  --------
Cash and cash equivalents, end of period. . . . . . . . . . .  $28,464   $14,887
                                                               ========  ========

SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest. . . . . . . . . . .  $ 2,714   $ 1,798
Cash paid during the period for income taxes. . . . . . . . .  $   330   $    32
Change in market value of investment securities
 available for sale, net of income taxes. . . . . . . . . . .  $   213      ($66)

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

                          SUMMIT FINANCIAL CORPORATION
     CONDENSED  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
                                 MARCH 31, 2001

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

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

     The  accompanying consolidated financial statements include the accounts of
the  Company  and  its  subsidiaries.  All significant intercompany accounts and
transactions  have been eliminated in consolidation.  The unaudited consolidated
financial  statements  of  the Company at March 31, 2001 and for the three month
periods  ended  March  31,  2001  and  2000 were prepared in accordance with the
instructions  for  Form  10-Q.  In  the  opinion  of management, all adjustments
(consisting  only  of  items  of a normal recurring nature) necessary for a fair
presentation  of  the  financial  position at March 31, 2001, and the results of
operations  and  cash  flows  for the periods ended March 31, 2001 and 2000 have
been  included.  The results for the three month period ended March 31, 2001 are
not necessarily indicative of the results that may be expected for the full year
or  any  other  interim  period.

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

     These  consolidated  financial  statements  do  not include all disclosures
required  by  generally  accepted  accounting  principles  and should be read in
conjunction  with  the  Company's  audited consolidated financial statements and
related  notes  for  the  year ended December 31, 2000 included in the Company's
2000  Annual  Report  on  Form  10-K.

NOTE  2  -  CASH  FLOW  INFORMATION:
          For  the  purposes of reporting cash flows, cash includes currency and
coin,  cash items in process of collection and due from banks.  Included in cash
and  cash  equivalents  are  federal  funds sold and overnight investments.  The
Company  considers  the  amounts included in the balance sheet line items, "Cash
and  due  from banks", "Interest-bearing bank balances" and "Federal funds sold"
to  be  cash  and  cash  equivalents.  These  accounts  totaled  $28,464,000 and
$14,887,000  at  March  31,  2001  and  2000,  respectively.

NOTE  3  -  NONPERFORMING  ASSETS:
     Loans past due in excess of 90 days and still accruing interest amounted to
approximately $136,000 and $83,000 at March 31, 2001 and 2000, respectively.  At
March 31, 2001 and 2000 the Company had approximately $1.2 million and $267,000,
respectively,  in non-accrual loans.  The $1.2 million non-accrual loan at March
31,  2001  is  considered to be impaired under Statement of Financial Accounting
Standards  114.  There  were  no  impaired loans at March 31, 2000.  The average
balance  of impaired loans was $1,245,000 for the three month period ended March
31,  2001  and  there  was  no  impairment allowance required at March 31, 2001.
Interest  income  recognized  on  impaired  loans  during 2001 was approximately
$27,000.  Other  real  estate owned ("OREO") at March 31, 2001 totaled $243,000,
while  there  was  no  OREO  at  March  31,  2000.

NOTE  4  -  PER  SHARE  INFORMATION:
     The  following  is  a  reconciliation  of the denominators of the basic and
diluted  per  share computations for net income for the three months ended March
31,  2001  and  2000.  There is no required reconciliation of the numerator from
the  net  income  reported on the accompanying statements of income. All average
share and per share data have been restated to reflect all stock dividends as of
the  earliest  period  presented.

<TABLE>
<CAPTION>

                                         Three Months Ended March 31,
                                   2001        2001        2000        2000
                                ----------  ----------  ----------  ----------
                                   BASIC      DILUTED       BASIC      DILUTED
                                ----------  ----------  ----------  ----------
<S>                             <C>         <C>         <C>         <C>
Net Income . . . . . . . . . .  $  662,000  $  662,000  $  652,000  $  652,000
                                ----------  ----------  ----------  ----------

Average shares outstanding . .   3,564,567   3,564,567   3,482,829   3,482,829
Effect of Dilutive Securities:
    Stock options. . . . . . .           -     311,538           -     356,717
    Unvested restricted stock.           -      33,418           -      49,707
                                ----------  ----------  ----------  ----------
                                 3,564,567   3,909,523   3,482,829   3,889,253
                                ----------  ----------  ----------  ----------

Per-share amount . . . . . . .  $     0.19  $     0.17  $     0.19  $     0.17
                                ==========  ==========  ==========  ==========
</TABLE>

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

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

<TABLE>
<CAPTION>

At  and  for  the  three  months  ended  March  31,  2001
                             Bank      Finance    Corporate     Total
                           ---------  ---------  -----------  ---------
<S>                        <C>        <C>        <C>          <C>
Interest income . . . . .  $  4,921   $    477         ($20)  $  5,378
Interest expense. . . . .    (2,759)       (79)          70     (2,768)
                           ---------  ---------  -----------  ---------
Net interest income . . .     2,162        398           50      2,610
Provision for loan losses       (95)       (33)           -       (128)
Other income. . . . . . .       505         90          (12)       583
Other expenses. . . . . .    (1,704)      (371)          (4)    (2,079)
                           ---------  ---------  -----------  ---------
Income before taxes . . .       868         84           34        986
Income taxes. . . . . . .      (277)       (34)         (13)      (324)
                           ---------  ---------  -----------  ---------
Net income. . . . . . . .  $    591   $     50   $       21   $    662
                           =========  =========  ===========  =========
Net loans . . . . . . . .  $179,367   $  3,018        ($657)  $181,728
                           =========  =========  ===========  =========
Total assets. . . . . . .  $255,541   $  3,667        ($719)  $258,489
                           =========  =========  ===========  =========
</TABLE>


<TABLE>
<CAPTION>

At  and  for  the  three  months  ended  March  31,  2000
                             Bank      Finance    Corporate     Total
                           ---------  ---------  -----------  ---------
<S>                        <C>        <C>        <C>          <C>
Interest income . . . . .  $  3,839   $    464         ($22)  $  4,281
Interest expense. . . . .    (1,868)       (77)          68     (1,877)
                           ---------  ---------  -----------  ---------
Net interest income . . .     1,971        387           46      2,404
Provision for loan losses       (65)       (28)           -        (93)
Other income. . . . . . .       321         93          (12)       402
Other expenses. . . . . .    (1,361)      (389)          (3)    (1,753)
                           ---------  ---------  -----------  ---------
Income before taxes . . .       866         63           31        960
Income taxes. . . . . . .      (273)       (24)         (11)      (308)
                           ---------  ---------  -----------  ---------
Net income. . . . . . . .  $    593   $     39   $       20   $    652
                           =========  =========  ===========  =========
Net loans . . . . . . . .  $147,003   $  2,742        ($935)  $148,810
                           =========  =========  ===========  =========
Total assets. . . . . . .  $196,157   $  3,529        ($991)  $198,695
                           =========  =========  ===========  =========
</TABLE>

<PAGE>

                          SUMMIT FINANCIAL CORPORATION

                       PART  I.  FINANCIAL  INFORMATION

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


     The  following  discussion  and analysis should be read in conjunction with
the consolidated financial statements and related notes and with the statistical
information  and  financial  data appearing in this report as well as the Annual
Report  of Summit Financial Corporation (the "Company") on Form 10K for the year
ended December 31, 2000.  Results of operations for the three month period ended
March  31, 2001 are not necessarily indicative of results to be attained for any
other  period.

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

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

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

     During  the  quarter ended March 31, 2001, the Company's net income totaled
$662,000  or $.17 per diluted share.  This is compared to net income of $652,000
or  $.17  per diluted share for the same quarterly period of 2000 or an increase
of  2%.

BALANCE  SHEET  ACTIVITY
     Total assets increased $8.7 million or 3.5% from December 31, 2000 to March
31,  2001.  Deposits  increased  approximately  $7.3  million or 3.5% during the
period.  A  majority  of  the  increase  in deposits was in the money market and
interest-bearing  demand  categories which accounted for a total of $9.0 million
of  the  increase.

     The  increase  in deposits funded gross loan growth of $3.8 million (2.1%),
and  the  $5.3 million (16.4%) increase in investment securities during the same
period.

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

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

     At  March  31,  2001,  the  consolidated allowance for loan losses was $2.6
million  or  1.43%  of  total loans net of unearned income.  This compares to an
allowance  of  $2.6  million  or  1.42% at December 31, 2000 and $2.2 million or
1.46%  of total loans net of unearned income at March 31, 2000.  For the quarter
ended  March  31,  2001,  the  Company  reported consolidated net charge-offs of
$50,000  or  0.11%  (annualized)  of  average  loans.  This  is  compared  to
consolidated  net  charge-offs of $46,000 or 0.12% (annualized) of average loans
for  the  comparable quarter of 2000.  Loans on nonaccrual for the 2001 and 2000
quarter  ends totaled $1.2 million (0.68% of total loans) and $267,000 (0.18% of
total loans), respectively.  Loans past due 90 days and greater totaled $136,000
or 0.07% of gross loans at March 31, 2001 and $83,000 or 0.05% of gross loans at
March  31,  2000.  OREO  at  March 31, 2001 totaled $243,000, while there was no
OREO  at March 31, 2000.  The $1.2 million non-accrual loan at March 31, 2001 is
considered to be impaired under Statement of Financial Accounting Standards 114.
There  were  no  impaired  loans  at  March  31,  2000.

     Management  considers  the  allowance  for  loan  losses  adequate to cover
probable  losses  inherent  in  the  loan  portfolio  at  March  31,  2001.  The
determination  of  the  allowance for loan losses using the Company's procedures
and  methods  rests upon various judgments and assumptions about future economic
conditions  and other factors affecting loans.  While it is the Company's policy
to  provide  for loan losses in the current period in which a loss is considered
probable, there are additional risks of future losses which cannot be quantified
precisely  or attributed to particular loans or classes of loans.  Because these
risks  include  the  state  of  the  economy,  industry  trends,  and conditions
affecting  individual  borrowers,  management's  judgement  of  the allowance is
necessarily  approximate  and  imprecise.  No  assurance  can  be given that the
Company  will  not  in  any particular period sustain loan losses which would be
sizable  in relationship to the amount reserved or that subsequent evaluation of
the loan portfolio, in light of conditions and factors then prevailing, will not
require  significant  changes in the allowance for loan losses or future charges
to  earnings.  The  allowance  for  loan  losses  is  also subject to review and
approval  by  various regulatory agencies through their periodic examinations of
the  Company's subsidiaries.  Such examinations could result in required changes
to  the  allowance  for  loan  losses.  No  adjustments  in  the  allowance  or
significant  adjustments  to the Bank's internal classified loans were made as a
result  of  the  Bank's  most  recent examination performed by the Office of the
Comptroller  of  the  Currency.


EARNINGS  REVIEW  FOR  THE  THREE  MONTHS  ENDED  MARCH  31,  2001  AND  2000

GENERAL
     The  Company  reported  consolidated  net income for the three months ended
March  31,  2001  of  $662,000, compared to net income of $652,000 for the three
months  ended  March 31, 2000, or an improvement of approximately $10,000 or 2%.
Increases  in  interest  income  and other income were offset by the significant
increase  in  interest  expense  and  the  higher overhead costs associated with
expansion  resulting  in  relatively  flat  earnings  between  the two quarterly
periods.

NET  INTEREST  INCOME
     Net  interest  income,  the  difference  between  the  interest  earned and
interest paid, is the largest component of the Company's earnings and changes in
it  have the greatest impact on net income.  Variations in the volume and mix of
assets and liabilities and their relative sensitivity to interest rate movements
determine  changes  in net interest income.  During the three months ended March
31, 2001, the Company recorded consolidated net interest income of $2.6 million,
a  8.6%  increase  from  the  net  interest income of $2.4 million for the three
months ended March 31, 2000.  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  30.2% and 31.1% respectively, offset by the 90 basis point
decrease  in  the  net  interest  margin  for  the  Company.

     For  the  three  months  ended  March  31,  2001  and  2000,  the Company's
consolidated  net  interest  margin  was 4.65% and 5.55%, respectively.  The net
interest  margin  is  calculated  as  annualized  net interest income divided by
year-to-date  average  earning assets. The decrease in consolidated net interest
margin is related primarily to the 67 basis point increase in the cost of funds,
combined  with  the  30  basis  point  reduction  in the average yield on assets
related  to  the decreasing interest rate environment in the first quarter 2001.
During  this period, the average prime rate decreased 150 basis points resulting
in  an  average  prime  rate  of  8.63%  for  the  first  quarter  of  2001.

INTEREST  INCOME
     For  the  three  months  ended March 31, 2001, the Company's earning assets
averaged  $233.6  million  and  had an average yield of 9.45%.  This compares to
average  earning  assets  of  $179.4 million for the first three months of 2000,
yielding  approximately  9.75%.  Thus,  the  30.2% increase in volume of average
earning assets, offset by the 30 basis point decrease in average yield, accounts
for  the $1.1 million (25.6%) increase in interest income between 2000 and 2001.

     Consolidated  loans  comprised  approximately  78% of the Company's average
earning  assets for the first three months of 2001 compared to 83% for the prior
year.  The  majority of the Company's loans are tied to the prime rate (over 60%
of  the Bank's portfolio is at floating rates at March 31, 2001), which averaged
8.63%  and  8.69%  for  the  three  months  ended  March  31,  2001  and  2000,
respectively.  During  the  first  three  months  of  2001,  consolidated  loans
averaged  $181.8  million,  yielding  an  average  of 10.26%, compared to $148.8
million, yielding an average of 10.34% for the first three months of 2000. The 8
basis  point  decrease in the average yield on loans is primarily related to the
lower  prime  lending  rate.  The higher level of average loans (which increased
22.2%),  was  the  primary  contributor to the increase in consolidated interest
income  on  loans  of  $773,000  or  20.2%.

     Investment  securities  averaged  $34.2 million or 14.6% of average earning
assets and yielded 7.09% (tax equivalent basis) during the first three months of
2001,  compared  to  average  securities  of  $26.2  million yielding 7.00% (tax
equivalent  basis)  for  the three months ended March 31, 2000.  The increase in
the  average  yield  of the investment portfolio is related to the portfolio mix
and  the  timing  of  security maturities which were reinvested in higher market
rate  instruments.  This  increase,  combined with the 30.8% increase in average
securities,  resulted  in  the  increase  of  interest  income  on securities of
$145,000  or  37.6%.

INTEREST  EXPENSE
     The  Company's  interest  expense for the three months ended March 31, 2001
was  $2.8  million.  The  increase  of 47.5% from the comparable three months in
2000  of  $1.9 million was related to the 31.2% increase in the level of average
interest-bearing  liabilities,  combined with the 67 basis point increase in the
average  rate  on  liabilities.  Interest-bearing  liabilities  averaged  $197.3
million  for  the first three months of 2001 with an average rate of 5.69%. This
is  compared  to  average interest-bearing liabilities of $150.4 million with an
average  rate  of 5.02% for the three months ended March 31, 2000.  The increase
in  average  rate  on  liabilities  is  primarily  related  to increasing market
interest  rates  during  2000  and  promotional rates offered on certificates of
deposits  and  money  market  accounts  during  2000.

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

     Included  in  the net income for the three months ended March 31, 2001 is a
provision for loan losses of $128,000 compared to a provision of $93,000 for the
first three months of 2000.  The increase in the provision for the first quarter
of  2001  is  primarily  related  to the higher level of originations in 2001 as
compared  to the prior year.  Also impacting the amount charged to the provision
each  period  are  the  increases  in  past  due,  classified and problem loans;
concentrations of credit risk in the loan portfolio; local and national economic
conditions  and  anticipated  trends;  and  the  total  outstanding  loans  and
charge-off  activity of the Finance Company which generally have higher inherent
risk  than  do  loans  of the Bank.  Estimates charged to the provision for loan
losses  are  based  on  management's judgment as to the amount required to cover
probable  losses  inherent  in the loan portfolio and are adjusted as necessary.

NONINTEREST  INCOME  AND  EXPENSES
     Noninterest  income,  which  is  primarily  related  to  service charges on
customers'  deposit  accounts;  credit  card interchange fees; merchant discount
fees;  commissions  on nondeposit investment product sales and insurance product
sales;  and  mortgage  origination fees, was $583,000 for the three months ended
March  31,  2001  compared to $402,000 for the first three months of 2000, or an
increase  of  45.0%.  The  increase  is  primarily  related  to higher insurance
commission  and  other nondeposit income, referral and other loan fee income and
gains  on  sales  of  securities  and fixed assets.  The increases are primarily
related  to the higher level of activity and transactions of the Bank generating
other  income  in  the  normal  course  of  business.

     For  the  three months ended March 31, 2001, noninterest expenses were $2.1
million  which  is  an  increase of 18.6% over the amount incurred for the three
months ended March 31, 2000 of $1.8 million.  The most significant item included
in other expenses is salaries, wages and benefits which amounted to $1.2 million
for  the three months ended March 31, 2001 as compared to $973,000 for the three
months  ended  March 31, 2000.  The increase of $252,000 or 25.9% is a result of
normal  annual  raises  and  additional  staff,  including 3 executive officers,
related  to  the  Spartanburg  branch  expansion  in  April  2000.

     Occupancy and furniture, fixtures, and equipment ("FFE") expenses were up a
total of $28,000 or 9.1% between the first three months of 2000 and 2001 and was
directly  related  to  the  new  branch  expansion  during  2000.

     Included  in  the  line  item  "other  operating expenses", which increased
$46,000  or  9.8%  from  the  comparable  period  of  2000,  are charges for OCC
assessments; property and bond insurance; ATM switch fees; credit card expenses;
professional services; education and seminars; advertising and public relations;
and  other  branch  and  customer  related  expenses.  The increase is primarily
related  to deposit related expenses which increase in relation to higher levels
of account transaction and general business volume resulting from the new branch
expansion  in  2000.

INCOME  TAXES
     For the three months ended March 31, 2001, the Company reported $324,000 in
income  tax  expense,  or  an  effective tax rate of 32.9%.  This is compared to
income  tax  expense  of  $308,000  for the same period of the prior year, or an
effective  tax  rate  of  32.1%.


LIQUIDITY
     Liquidity  management  involves  meeting  the cash flow requirements of the
Company  both at the holding company level as well as the subsidiary level.  The
Company's  bank subsidiary must maintain an adequate liquidity position in order
to  respond  to  the  short-term demand for funds caused by the withdrawals from
deposit  accounts, maturities of short-term borrowings, extensions of credit and
for  the  payment  of  operating  expenses.  Maintaining  an  adequate  level of
liquidity  is  accomplished  through a combination of liquid assets (those which
can  easily  be  converted into cash) and access to additional sources of funds.
The  Company's  primary liquid assets are cash and due from banks, federal funds
sold,  unpledged  investment  securities  available  for  sale, other short-term
investments  and  maturing loans.  These primary liquidity sources accounted for
16%  and  13% of average assets for the three month periods ended March 31, 2001
and 2000, respectively.  In management's opinion, the Company maintains adequate
levels  of  liquidity  by retaining liquid assets and assets which can easily be
converted  into cash and by maintaining access to various sources of funds.  The
primary  sources  of  funds available through the Bank include advances from the
Federal  Home  Loan  Bank,  purchasing  federal  funds  from  other  financial
institutions,  lines  of credit through the Federal Reserve Bank, and increasing
deposits by raising rates paid. At March 31, 2001, the Company had approximately
$24.2  million  in  available  credit  under  its  FHLB  and  correspondent bank
borrowing  facilities.

     Summit  Financial  Corporation  ("Summit  Financial"),  the  parent holding
company,  has  limited  liquidity needs.  Summit Financial requires liquidity to
pay  limited  operating expenses, to service its debt, and to provide funding to
its  consumer  finance  subsidiary,  Freedom  Finance.  Summit  Financial  has
approximately  $2.9  million  in  available liquidity remaining from its initial
public  offering  and  the  retention  of  earnings.  Substantially  all of this
liquidity  was  advanced  to  the Finance Company in the form of an intercompany
loan to fund its operations as of March 31, 2001.  In addition, Summit Financial
has  an  available  line  of  credit  totaling $2.5 million with an unaffiliated
financial institution, all of which was available at March 31, 2001.  Additional
sources  of  liquidity  for  Summit  Financial include unsecured borrowings from
individuals,  and  management  fees  and  debt  service  which  are  paid by its
subsidiaries.

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

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


CAPITAL  RESOURCES
     Total  shareholders'  equity at March 31, 2001 was $22.4 million or 8.7% of
total  assets.  This  is  compared  to  $18.6 million or 9.3% of total assets at
March  31,  2000.  The  $3.8  million  increase  in  total  shareholders' equity
resulted  principally  from  the retention of earnings, stock issued pursuant to
the  Company's incentive stock option plan, and the increases in unrealized gain
on  investments  available  for  sale.

     Book  value  per  share  at  March  31,  2001 and 2000 was $6.24 and $5.21,
respectively.  Tangible  book  value  per  share  at March 31, 2001 and 2000 was
$6.15  and  $5.08,  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 March 31, 2001,
that  the  Company  and the Bank meet all capital adequacy requirements to which
they are subject.  At March 31, 2001 and 2000, the Bank was categorized as "well
capitalized" under the regulatory framework for prompt corrective action.  There
are  no  current  conditions or events that management believes would change the
Company's  or  the  Bank's  category.

     The  following  table  presents the Company's and the Bank's actual capital
amounts  (dollars in thousands) and ratios at March 31, 2001 and 2000 as well as
the  minimum  calculated  amounts  for  each  regulatory  defined  category.

<TABLE>
<CAPTION>

                              RISK-BASED CAPITAL CALCULATION

                                                          FOR CAPITAL    TO BE CATEGORIZED
                                            ACTUAL     ADEQUACY PURPOSES "WELL-CAPITALIZED"
                                        AMOUNT   RATIO   AMOUNT   RATIO   AMOUNT   RATIO
                                        -------  ------  -------  ------  -------  ------
<S>                                     <C>      <C>     <C>      <C>     <C>      <C>
AS OF MARCH 31, 2001
THE COMPANY
Total capital to risk-weighted assets.  $24,698  12.19%  $16,205   8.00%  N.A.
Tier 1 capital to risk-weighted assets  $22,166  10.94%  $ 8,102   4.00%  N.A.
Tier 1 capital to average assets . . .  $22,166   8.96%  $ 9,891   4.00%  N.A.

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

AS OF MARCH 31, 2000
THE COMPANY
Total capital to risk-weighted assets.  $21,186  13.09%  $12,946   8.00%  N.A.
Tier 1 capital to risk-weighted assets  $19,163  11.84%  $ 6,473   4.00%  N.A.
Tier 1 capital to average assets . . .  $19,163  10.04%  $ 7,634   4.00%  N.A.

THE BANK
Total capital to risk-weighted assets.  $18,570  11.67%  $12,730   8.00%  $15,913  10.00%
Tier 1 capital to risk-weighted assets  $16,588  10.42%  $ 6,365   4.00%  $ 9,548   6.00%
Tier 1 capital to average assets . . .  $16,588   8.81%  $ 7,534   4.00%  $ 9,417   5.00%

</TABLE>

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

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

EFFECT  OF  INFLATION  AND  CHANGING  PRICES
     The consolidated financial statements have been prepared in accordance with
generally  accepted  accounting  principles  which  require  the  measurement of
financial  position  and  results  of operations in terms of historical dollars,
without  consideration of changes in the relative purchasing power over time due
to  inflation.

     The  yield  on  a  majority  of  the  Company's  earning  assets  adjusts
simultaneously  with  changes in the general level of interest rates.  Given the
Company's  asset-sensitive  balance  sheet  position, assets reprice faster than
liabilities,  which generally results in 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  slightly  if  interest  rates  rise in the near term and will decrease
slightly  if  interest  rates  decline  in  the  near  term.

     The Company also uses interest rate sensitivity gap analysis to monitor the
relationship  between  the maturity and repricing of its interest-earning assets
and  interest-bearing  liabilities.  Interest rate sensitivity gap is defined as
the  difference  between  the  amount  of  interest-earning  assets  maturing or
repricing  within  a  specific  time  period  and the amount of interest-bearing
liabilities  maturing  or  repricing  within  the  same time period.  The static
interest  sensitivity  gap  position,  while  not a complete measure of interest
sensitivity, is also reviewed periodically to provide insights related to static
repricing  structure  of  assets  and  liabilities.  At  March  31,  2001,  on a
cumulative  basis  through  12  months,  rate-sensitive  liabilities  exceed
rate-sensitive  assets,  resulting  in  a  12  month  period liability sensitive
position  of  $14.0  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.


       ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

     As  of  March  31,  2001, there was no substantial change from the interest
rate  sensitivity  analysis  or the market value of portfolio equity for various
changes  in  interest  rates  calculated  as of December 31, 2000. The foregoing
disclosures  related  to  the  market  risk  of  the  Company  should be read in
conjunction  with  the  Company's  audited  consolidated  financial  statements,
related  notes  and  management's discussion and analysis of financial condition
and  results  of operations for the year ended December 31, 2000 included in the
Company's  2000  Annual  Report  on  Form  10-K.



<PAGE>

                          SUMMIT FINANCIAL CORPORATION

                         PART  II.  OTHER  INFORMATION



Item  1.     Legal  Proceedings.

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

Item  2.     Changes  in  Securities.

     None.

Item  3.     Defaults  Upon  Senior  Securities.

     None.

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

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

Item  5.     Other  Information.

     None.

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

(a)     Exhibits:

     None

     (b)     Reports  on  Form  8-K:

     None.

<PAGE>

                        SUMMIT  FINANCIAL  CORPORATION

                                 SIGNATURES


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

SUMMIT  FINANCIAL  CORPORATION


Dated:  May  10,  2001

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


Dated:  May  10,  2001

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