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,  1998

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  August  5, 1998, 1,443,410 shares of $1.00 par value common stock were
outstanding.



<TABLE>
<CAPTION>

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


                                                      June 30,    December 31,
                                                        1998          1997
                                                     ----------  --------------
<S>                                                  <C>         <C>
ASSETS
Cash and short-term interest-bearing deposits . . .  $   8,226   $       6,441 
Federal funds sold. . . . . . . . . . . . . . . . .     10,950           2,920 
Investments available for sale (amortized cost of
 $27,118 and $28,007) . . . . . . . . . . . . . . .     27,329          28,213 
Investments in stock of Federal Reserve Bank,
Federal Home Loan Bank and other stock, at cost . .        792             708 
Loans, net of unearned income and net of allowance
 for loan losses of $1,789 and $1,728 . . . . . . .    117,744         117,027 
Property and equipment, net . . . . . . . . . . . .      2,482           2,360 
Accrued interest receivable . . . . . . . . . . . .      1,193           1,168 
Other assets. . . . . . . . . . . . . . . . . . . .      1,296           1,442 
                                                     ----------  --------------
                                                     $ 170,012   $     160,279 
                                                     ==========  ==============
  LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Demand . . . . . . . . . . . . . . . . . . . . . .  $  18,285   $      17,679 
 Interest-bearing demand. . . . . . . . . . . . . .      6,867           6,249 
 Savings and money market . . . . . . . . . . . . .     43,574          37,355 
 Time deposits, $100,000 and over . . . . . . . . .     28,408          29,495 
 Other time deposits. . . . . . . . . . . . . . . .     48,345          50,150 
                                                     ----------  --------------
                                                       145,479         140,928 
Securities sold under repurchase agreements . . . .        824             803 
Other borrowings. . . . . . . . . . . . . . . . . .      7,000           3,000 
Accrued interest payable. . . . . . . . . . . . . .      1,139           1,370 
Other liabilities . . . . . . . . . . . . . . . . .      1,192             809 
                                                     ----------  --------------
                                                       155,634         146,910 
                                                     ----------  --------------
Shareholders' equity:
 Common stock, $1.00 par value; 20,000,000 shares
  authorized; issued and outstanding 1,443,410
  and 1,438,424 . . . . . . . . . . . . . . . . . .      1,443           1,438 
 Additional paid-in capital . . . . . . . . . . . .     12,384          12,346 
 Retained earnings. . . . . . . . . . . . . . . . .        870               - 
 Nonvested restricted stock . . . . . . . . . . . .       (454)           (505)
 Accumulated other comprehensive income . . . . . .        135              90 
                                                     ----------  --------------
     Total shareholders' equity . . . . . . . . . .     14,378          13,369 
                                                     ----------  --------------
                                                     $ 170,012   $     160,279 
                                                     ==========  ==============
<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>



<TABLE>
<CAPTION>

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



                                                         For the Quarters Ended
                                                                 June 30,
                                                           ---------------------    
                                                           1998            1997
                                                    ------------------  -----------
<S>                                                 <C>                 <C>
Interest Income:
 Loans . . . . . . . . . . . . . . . . . . . . . .  $           3,023   $    2,871 
 Taxable investment securities . . . . . . . . . .                289          287 
 Nontaxable investment securities. . . . . . . . .                 98           19 
 Federal funds sold. . . . . . . . . . . . . . . .                122           54 
 Other . . . . . . . . . . . . . . . . . . . . . .                 55           38 
                                                    ------------------  -----------
                                                                3,587        3,269 
                                                    ------------------  -----------
Interest Expense:
 Deposits. . . . . . . . . . . . . . . . . . . . .              1,642        1,446 
 Other . . . . . . . . . . . . . . . . . . . . . .                 89           67 
                                                    ------------------  -----------
                                                                1,731        1,513 
                                                    ------------------  -----------
     Net interest income . . . . . . . . . . . . .              1,856        1,756 
Provision for loan losses. . . . . . . . . . . . .                (51)        (124)
                                                    ------------------  -----------
     Net interest income after
      provision for loan losses. . . . . . . . . .              1,805        1,632 
                                                    ------------------  -----------
Other Income:
 Service charges and fees on deposit accounts. . .                 58           52 
 Credit card service fees and income . . . . . . .                 76           62 
 Insurance commission fee income . . . . . . . . .                 80           46 
 Other income. . . . . . . . . . . . . . . . . . .                170           94 
                                                    ------------------  -----------
                                                                  384          254 
                                                    ------------------  -----------
Other Operating Expenses:
 Salaries, wages and benefits. . . . . . . . . . .                807          649 
 Occupancy . . . . . . . . . . . . . . . . . . . .                109          119 
 Furniture, fixtures and equipment . . . . . . . .                130          107 
 Other operating expenses. . . . . . . . . . . . .                419          380 
                                                    ------------------  -----------
                                                                1,465        1,255 
                                                    ------------------  -----------
Income before income taxes . . . . . . . . . . . .                724          631 
Provision for income taxes . . . . . . . . . . . .               (269)        (231)
                                                    ------------------  -----------
Net income . . . . . . . . . . . . . . . . . . . .                455          400 
                                                    ------------------  -----------

Other comprehensive income, net of tax:
  Unrealized net gain on investments available for
   sale, net of income taxes of $5 and $36 . . . .                  7           76 
                                                    ------------------  -----------
Comprehensive income . . . . . . . . . . . . . . .  $             462   $      476 
                                                    ==================  ===========

Net income per share
   Basic . . . . . . . . . . . . . . . . . . . . .  $             .16   $      .14 
   Diluted . . . . . . . . . . . . . . . . . . . .  $             .14   $      .13 
Average shares outstanding:
   Basic . . . . . . . . . . . . . . . . . . . . .          2,884,594    2,822,000 
   Diluted . . . . . . . . . . . . . . . . . . . .          3,432,474    3,038,000 

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>


<TABLE>
<CAPTION>

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


                                                        For the Six Months Ended
                                                               June 30,
                                                        -------------------------
                                                         1998            1997
                                                     -------------  --------------
<S>                                                  <C>            <C>
Interest Income:
 Loans. . . . . . . . . . . . . . . . . . . . . . .  $      6,032   $       5,544 
 Taxable investment securities. . . . . . . . . . .           635             554 
 Nontaxable investment securities . . . . . . . . .           182              28 
 Federal funds sold . . . . . . . . . . . . . . . .           190             125 
 Other. . . . . . . . . . . . . . . . . . . . . . .            98              78 
                                                     -------------  --------------
                                                            7,137           6,329 
                                                     -------------  --------------
Interest Expense:
 Deposits . . . . . . . . . . . . . . . . . . . . .         3,273           2,785 
 Other. . . . . . . . . . . . . . . . . . . . . . .           144             128 
                                                     -------------  --------------
                                                            3,417           2,913 
                                                     -------------  --------------
     Net interest income. . . . . . . . . . . . . .         3,720           3,416 
Provision for loan losses . . . . . . . . . . . . .          (101)           (211)
                                                     -------------  --------------
     Net interest income after
      provision for loan losses . . . . . . . . . .         3,619           3,205 
                                                     -------------  --------------

Other Income:
 Service charges and fees on deposit accounts . . .            98             102 
 Credit card service fees and income. . . . . . . .           152             122 
 Insurance commission fee income. . . . . . . . . .           181              96 
 Other income . . . . . . . . . . . . . . . . . . .           334             174 
                                                     -------------  --------------
                                                              765             494 
                                                     -------------  --------------
Other Operating Expenses:
 Salaries, wages and benefits . . . . . . . . . . .         1,644           1,341 
 Occupancy. . . . . . . . . . . . . . . . . . . . .           220             231 
 Furniture, fixtures and equipment. . . . . . . . .           274             214 
 Other operating expenses . . . . . . . . . . . . .           872             744 
                                                     -------------  --------------
                                                            3,010           2,530 
                                                     -------------  --------------
Income before income taxes. . . . . . . . . . . . .         1,374           1,169 
Provision for income taxes. . . . . . . . . . . . .          (504)           (430)
                                                     -------------  --------------
Net income. . . . . . . . . . . . . . . . . . . . .           870             739 
                                                     -------------  --------------

Other comprehensive income, net of tax:
  Unrealized net gain on investments available for
   sale, net of income taxes of $30 and ($3). . . .            45              (7)
                                                     -------------  --------------
Comprehensive income. . . . . . . . . . . . . . . .  $        915   $         732 
                                                     =============  ==============

Per share data:
   Basic. . . . . . . . . . . . . . . . . . . . . .  $        .30   $         .26 
   Diluted. . . . . . . . . . . . . . . . . . . . .  $        .26   $         .24 
Average shares outstanding:
   Basic. . . . . . . . . . . . . . . . . . . . . .     2,882,446       2,820,000 
   Diluted. . . . . . . . . . . . . . . . . . . . .     3,406,918       3,036,000 

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>


<TABLE>
<CAPTION>

                                      SUMMIT FINANCIAL CORPORATION
                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                            FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                              (Unaudited)
                                         (Dollars in Thousands)


                                                                     Accum-
                                                                     ulated
                                                Addi-                 other        Non-        Total
                                                tional               compre-      vested       share-
                                      Common   paid-in   Retained    hensive    restricted    holders'
                                       stock   capital   earnings    income       stock        equity
                                      -------  --------  ---------  ---------  ------------  ----------
<S>                                   <C>      <C>       <C>        <C>        <C>           <C>
Balance at December 31, 1996 . . . .  $ 1,335  $ 10,254  $      48         -             -   $  11,637 
Net income for the six months
 ended June 30, 1997 . . . . . . . .        -         -        739         -             -         739 
Change in unrealized net gain
 on investment securities available
 for sale. . . . . . . . . . . . . .        -         -          -        (7)            -          (7)
Employee stock options exercised . .        7        39          -         -             -          46 
                                      -------  --------  ---------  ---------  ------------  ----------
Balance at June 30, 1997 . . . . . .  $ 1,342  $ 10,293  $     787       ($7)  $         0   $  12,415 
                                      =======  ========  =========  =========  ============  ==========


Balance at December 31, 1997 . . . .  $ 1,438  $ 12,346          -  $     90         ($505)  $  13,369 
Net income for the six months
 ended June 30, 1998 . . . . . . . .        -         -        870         -             -         870 
Amortization of nonvested restricted
 stock . . . . . . . . . . . . . . .        -         -          -         -            51          51 
Change in unrealized net gain
 on investment securities available
 for sale. . . . . . . . . . . . . .        -         -          -        45             -          45 
Employee stock options exercised . .        5        38          -         -                        43 
                                      -------  --------  ---------  ---------  -----------   ----------
Balance at June 30, 1998 . . . . . .  $ 1,443  $ 12,384  $     870  $    135         ($454)  $  14,378 
                                      =======  ========  =========  =========  ============  ==========

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>



<TABLE>
<CAPTION>

                               SUMMIT FINANCIAL CORPORATION
                           CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (Dollars in Thousands)
                                        (Unaudited)


                                                              For the Six Months Ended
                                                                      June 30,
                                                             -------------------------
                                                                 1998            1997
                                                             -------------  --------------
<S>                                                          <C>            <C>
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . .  $        870   $         739 
Adjustments to reconcile net income to net cash
 provided by operating activities:
    Provision for loan losses . . . . . . . . . . . . . . .           101             211 
    Depreciation and amortization . . . . . . . . . . . . .           220             167 
    Gain on sale of fixed assets. . . . . . . . . . . . . .             -             (20)
    Gain on sale investments available for sale . . . . . .            (1)             (1)
    Net amortization (accretion) of net premium
     (discounts) on  investments. . . . . . . . . . . . . .             5             (12)
    Amortization of deferred compensation on
     restricted stock . . . . . . . . . . . . . . . . . . .            51               - 
    Decrease (increase) in other assets . . . . . . . . . .           123            (153)
    Increase in other liabilities . . . . . . . . . . . . .           122             371 
                                                             -------------  --------------
Net cash provided by operating activities . . . . . . . . .         1,491           1,302 
                                                             -------------  --------------

Cash flows from investing activities:
  Purchases of securities available for sale. . . . . . . .        (4,105)         (7,145)
  Proceeds from maturities of securities available for sale         4,108           2,002 
  Proceeds from sales of securities available for sale. . .           951           2,991 
  Purchases of Federal Home Bank Stock. . . . . . . . . . .           (84)            (58)
  Net increase in loans . . . . . . . . . . . . . . . . . .          (818)        (11,418)
  Purchases of net finance loans receivable . . . . . . . .             -            (499)
  Purchases of fixed assets . . . . . . . . . . . . . . . .          (343)           (101)
  Proceeds from sale of fixed assets. . . . . . . . . . . .             -              22 
                                                             -------------  --------------
Net cash used in investing activities . . . . . . . . . . .          (291)        (14,206)
                                                             -------------  --------------

Cash flows from financing activities:
  Net increase in deposit accounts. . . . . . . . . . . . .         4,551          13,414 
  Net increase in securities sold under . . . . . . . . . .            21              20 
   repurchase agreements
  Advances from other borrowings. . . . . . . . . . . . . .         6,500           1,000 
  Repayment of other borrowings . . . . . . . . . . . . . .        (2,500)            (50)
  Proceeds from stock issuance pursuant
    to employee stock option plan . . . . . . . . . . . . .            43              46 
                                                             -------------  --------------
Net cash provided by financing activities . . . . . . . . .         8,615          14,430 
                                                             -------------  --------------
Net increase (decrease) in cash and cash equivalents. . . .         9,815           1,526 
Cash and cash equivalents, beginning of period. . . . . . .         9,361           9,026 
                                                             -------------  --------------
Cash and cash equivalents, end of period. . . . . . . . . .  $     19,176   $      10,552 
                                                             =============  ==============

SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest. . . . . . . . . .  $      3,649   $       2,772 
Cash paid during the period for income taxes. . . . . . . .  $        283   $         485 
Change in market value of investment securities
 available for sale, net of income taxes. . . . . . . . . .  $         45             ($7)

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>



SUMMIT FINANCIAL CORPORATION
CONDENSED  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
JUNE 30, 1998

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  two  full  service branch locations in Greenville, South
Carolina.    The  Bank is currently in process of renovating a leased facility
for  a  third  branch  location also in Greenville, South Carolina.  The third
branch  is expected to commence operations in the fourth quarter of 1998.  The
Finance  Company  commenced operations in November 1994 and makes and services
small  installment  loans  to individuals from its 11 offices throughout South
Carolina.

     The  unaudited  consolidated  financial statements of the Company at June
30,  1998  and  for  the periods ended June 30, 1998 and 1997 were prepared in
accordance  with  the  instructions  for  Form  10-Q  and,  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,  1998,  and the results of operations and cash flows for the periods ended
June 30, 1998 and 1997 have been included.  The results for the quarter or six
month period ended June 30, 1998 are not necessarily indicative of the results
that  may  be  expected  for  the  full  year  or  any  other  interim period.

     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, 1997 included in the Company's
1997  Annual  Report  on  Form  10K.

NOTE  2  -  CASH  FLOW  INFORMATION:
     The  Company  considers  those  amounts  included  in  the  balance sheet
captions  "Cash  and interest-bearing deposits" and "Federal funds sold" to be
cash  and  cash equivalents, which totaled $19,176,000 and $10,552,000 at June
30,  1998 and 1997, respectively.  Cash includes currency and coin, cash items
in  process  of  collection  and  due  from  banks.  Included in cash and cash
equivalents are overnight investments and short-term investments with original
maturities  of  less  than  six  months.

NOTE  3  -  COMPREHENSIVE  INCOME:
     Effective  January  1,  1998,  the  Company  adopted  the  provisions  of
Statement  of  Financial  Accounting  Standards  ("SFAS")  No. 130, "Reporting
Comprehensive  Income".    In  accordance with the provisions of SFAS No. 130,
comparative  financial  statements  presented  for  earlier  periods have been
reclassified  to  reflect  the  provisions  of  this Statement.  Comprehensive
income  is  the  change  in  the  Company's  equity  during  the  period  from
transactions  and  other  events  and  circumstances.  Comprehensive income is
divided  into net income and other comprehensive income.  The Company's "other
comprehensive  income" for the quarters and six months ended June 30, 1998 and
1997 and "accumulated other comprehensive income" as of June 30, 1998 and 1997
are  comprised solely of unrealized gains and losses on certain investments in
debt  and  equity  securities.

NOTE  4  -  PER  SHARE  INFORMATION:
     Effective  August 24, 1998, the Company issued a two-for-one stock split.
The  split  was issued to all shareholders of record as of August 10, 1998 and
will  result  in  the  issuance  of  1,443,410  shares  of common stock of the
Company.    All  average and per share data have been restated to reflect this
stock  split  as  of  the  earliest  period  presented.


<PAGE>


SUMMIT FINANCIAL CORPORATION

PART  I.  FINANCIAL  INFORMATION

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


     Summit  Financial  Corporation  (the  Company) is a financial institution
holding  company headquartered in Greenville, South Carolina.  The Company has
a  wholly-owned  bank  subsidiary,  Summit  National  Bank  (the  Bank)  and a
wholly-owned  consumer  finance company subsidiary, Freedom Finance, Inc. (the
Finance  Company).

     During  the quarter ended June 30, 1998, the Company's net income totaled
$455,000  or  $.27  per  diluted  share.    This  is compared to net income of
$400,000 or $.26 per diluted share for the same quarterly period of 1997 or an
increase  of  14%.   For the first six months of 1997 the Company reported net
income  of $870,000 or $.51 per diluted share, an improvement of approximately
$131,000  compared  to  the  net  income  for  the first six months of 1997 of
$739,000  or  $.48  per  diluted  share.

     Total assets increased approximately $9.7 million or 6% from December 31,
1997  to  June  30, 1998.  Deposits increased approximately $4.6 million or 3%
during  the  period.    The increase in deposits, combined with the $4 million
(133%)  increase  in  other  borrowings,  funded gross loan growth of $778,000
(.7%),  and  the  $8  million (275%) increase in federal funds sold during the
same  period.

RESULTS  OF  OPERATIONS  -  COMPARISON OF THE QUARTERS ENDED JUNE 30, 1998 AND
1997

GENERAL
     The  Company  reported consolidated net income for the quarter ended June
30, 1998 of $455,000, compared to net income of $400,000 for the quarter ended
June  30,  1997,  or  an  improvement  of  approximately  $55,000 or 14%.  The
increase  in  consolidated  earnings  for  the  1998  period  is  primarily
attributable  to  (1)  a $100,000 or 6% increase in the Company's net interest
income  related  to  the higher level of earning assets in 1998 as compared to
the  prior  year;  (2)  a  reduction  in the provision for loan losses for the
second  quarter  of  1998  as compared to the prior year due to the lower loan
originations  for  the  1998 quarter; and (3) an increase of $130,000 in other
income  related  to  higher  insurance and nondeposit product commission fees.
The  increases  are  somewhat  offset  by  higher  other operating expenses of
approximately  17%.

     Summit  National  Bank  recorded net earnings of $472,000 for the quarter
ended  June  30, 1998 which was a 22% increase from the second quarter of 1997
earnings of $387,000.  The increase in net income for this subsidiary resulted
primarily  from  a  $128,000  (92%) increase in the Bank's net interest income
which  was  related to the higher level of earning assets, combined with a 71%
reduction  in the allowance for loan losses and a 68% increase in other income
for  the  1998  quarter  as  compared  to  the  prior  year.

     The  Company's  consumer  finance  subsidiary,  Freedom  Finance,  Inc.,
recorded  net  losses  for  both  the  second  quarter  of  1998  and  1997 of
approximately  $(30,000)  and  $(9,000), respectively.  The lower net interest
income  due  to  the reduction in earning assets between the second quarter of
1997  and  1998  is  the primary contributor to the higher loss in the current
year's  quarter.

NET  INTEREST  INCOME
     Net  interest  income  is  the  difference between the interest earned on
assets and the interest paid for the liabilities used to support those assets.
It  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,
1998, the Company recorded consolidated net interest income of $1.9 million, a
6% increase from the net interest income of $1.8 million for the quarter ended
June  30,  1997.    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 15% each, offset by the 28 basis point decline in net interest
margin  for  the  Company.

     For the quarters ended June 30, 1998 and 1997, the Company's consolidated
net  interest  margin  was  4.84%  and  5.12%, 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 decrease in the average yield on loans, combined with
the  shift  of  earning  assets  to  lower  yielding  federal  funds  sold and
short-term  interest-bearing  deposits  as  the  loan  growth  continued to be
somewhat  slow  in  the  second  quarter  of  1998.

INTEREST  INCOME
     For  the  quarter  ended  June  30,  1998,  the  Company's earning assets
averaged  $158  million  and  had an average yield of 9.24%.  This compares to
average  earning  assets  of  $138  million  for  the  second quarter of 1997,
yielding  9.56%.   Thus, the contributor to the increase in interest income of
$318,000  or  10%  between  the  quarters  ended June 30, 1997 and 1998 is the
increase  in  volume  of  earning  assets  of 15% offset by the 32 basis point
reduction  in  average  yield.

     Consolidated  loans  averaged  approximately 75% of the Company's average
earning  assets  for  the second quarter of 1998 compared to 80% for the prior
year.    The  majority  of  the  Company's  loans  are  tied to the prime rate
(approximately  62%  of  the  Bank's  portfolio  is  at floating rates), which
averaged  8.5% for both the quarters ended June 30, 1998 and 1997.  During the
second  quarter  of  1998, the Bank's loans averaged $117 million, yielding an
average rate of 9.19%, compared to $108.5 million, yielding an average of rate
9.25%  for  the second quarter of 1997.  The reduction in the average yield on
the  Bank's  loans  is  primarily  related  to  competitive  pricing  on  loan
originations  during  1997 and into 1998.  A decrease in yield on the loans of
the  Finance Company contributed to the lower consolidated average yield.  The
7%  higher  level of average loans, offset by the reduction in yield, resulted
in  an  increase  in  consolidated interest income on loans of $152,000 or 5%.

     Investment  securities  averaged  $27.5 million or 17% of average earning
assets  and  yielded 6.37% (tax equivalent basis) during the second quarter of
1998, compared to average securities of $19.9 million also yielding 6.37% (tax
equivalent  basis)  for  the quarter ended June 30, 1997.  The 38% increase in
average  securities  resulted  in  the  $80,000 increase in interest income on
investment  securities.

INTEREST  EXPENSE
     The  Company's  interest  expense for the quarter ended June 30, 1998 was
$1.7 million.  The increase of 14% from the comparable quarter in 1997 of $1.5
million  was  directly  related  to  the  15%  increase  in  average volume of
interest-bearing  liabilities.    Interest-bearing  liabilities  averaged $133
million  for  the  second quarter of 1998 with an average rate of 5.22%.  This
compares  to  average  interest-bearing  liabilities  of  $116 million with an
average  rate  of  5.25%  for  the  quarter ended June 30, 1997.  There was no
significant  change  in  the  average  rate  on liabilities between the second
quarter of 1997 and 1998 due to the relative stability of the general interest
rate  environment  for  those  two  periods.

PROVISION  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 potential losses 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;  projected  collateral  values;  general
economic  conditions;  and  management's  assessment of potential losses based
upon internal credit grading of the loans and periodic reviews and assessments
of  credit  risk  associated  with  particular  loans.

     While  it  is  the  Company's  policy to charge-off in the current period
loans  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.  Management uses the best information available to
make  evaluations,  however,  future  adjustments  to  the  allowance  may  be
necessary  if  economic  conditions  differ substantially from the assumptions
used  in  making  evaluations.    The  Company  is  also subject to regulatory
examinations and determinations as to the adequacy of the allowance, which may
take  into  account  such  factors  as  the  methodology used to calculate the
allowance  for  loan  losses  and the size of the allowance in comparison to a
group  of  peer  companies  identified  by  the  regulatory  agencies.

     Included  in  the  net  income  for  the quarter ended June 30, 1998 is a
provision  for  loan losses of $51,000 compared to a provision of $124,000 for
the second quarter of 1997.  The Company had net loan growth for the first six
months  of  1998 of .7% compared to 12% for the same period of 1997.  Based on
the  lower  loan  growth  for  1998, the required provision decreased from the
comparable  period  of  1997.

     At  June  30,  1998,  the consolidated allowance for loan losses was $1.8
million  or  1.50% of total loans net of unearned income.  This compares to an
allowance  of  $1.7  million or 1.48% of total loans net of unearned income at
June  30, 1997.  For the quarter ended June 30, 1998, the Company reported net
charge-offs  of  $3,000,  which  is  a  result  of  the  Finance  Company  net
charge-offs  of  $29,000  (3.89%  annualized  of  average loans of the Finance
Company) combined with the Bank's net recovery position for the second quarter
of  1998  of  $(26,000).   This is compared to consolidated net charge-offs of
$29,000 for the comparable quarter of 1997.  There were no loans on nonaccrual
status  at  either  June 30, 1998 or 1997.  Loans past due 90 days and greater
totaled  $81,000  or 0.07% of gross loans at June 30, 1998 and $80,000 or .07%
of  gross  loans  at June 30, 1997.  Generally loans of the Bank are placed on
nonaccrual status at the earlier of when they are 90 days past due or when the
collection of interest becomes doubtful.  Loans of the Finance Company are not
classified  as  nonaccrual,  but  are  charged-off  when  they become 150 days
contractually  past  due  or earlier if the loan is deemed uncollectible.  The
allowance for loan losses at June 30, 1998 represents management's estimate of
potential  losses  in  the  loan  portfolio  at  that  date.


OTHER  INCOME  AND  EXPENSES
     Other 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 $384,000 for the quarter ended June
30,  1998  compared to $254,000 for the second quarter of 1997, or an increase
of  51%.    Increases  in  Bank  branch related income due to higher volume of
transactions  and  number  of accounts ; higher mortgage loan referral fees in
1998;  and  increases  in  nondeposit  sale transactions generating commission
income were responsible for the increase in other income the second quarter of
1998  as  compared  to  1997.

     For  the  quarter  ended June 30, 1998, total overhead expenses were $1.5
million  which  is an increase of 17% over the amount incurred for the quarter
ended  June  30,  1997 of $1.3 million.  The most significant item included in
other  expenses is salaries, wages and benefits which amounted to $807,000 for
the  quarter ended June 30, 1998 as compared to $649,000 for the quarter ended
June  30,  1997.    The  increase of $158,000 or 24% is a result of (1) normal
annual  raises;  (2)  additional  staff added at the Bank between the 1997 and
1998  comparable  periods;  (3)  higher commission expense paid and associated
payroll  taxes  related  to  the higher nondeposit product sales in the second
quarter  of  1998;  (4)  amortization  of  the compensation expense related to
restricted  stock  grants  in  late 1997; and (5) additional bonus and benefit
accruals  pursuant  to  the  Bank's  compensation  program.

     The  21% ($23,000) increase in furniture, fixtures, and equipment ("FFE")
between  the  second  quarters of 1998 and 1997 is primarily related to higher
depreciation  and  associated  expenses  at  the  Bank, primarily software and
hardware  related  to  technology  upgrades  and  furnishings and equipment in
anticipation  of  the  new  branch  facility  opening  later  in  1998.

     Included  in  the  line  item "other operating expenses", which increased
$38,000  or  10%  from  the  comparable  quarter  of 1997, are charges for OCC
assessments;  property  and  bond  insurance; Relay/Cirrus switch fees; credit
card  expenses; professional services; education and seminars; advertising and
public relations; and other branch and customer related expenses.  These items
are  related  directly  to  the  normal operations of the Bank and increase in
relation  to  the  increase in assets, the higher level of transaction volume,
and the larger number of customer accounts.  The Bank's activity accounted for
a  majority  of  the  increase  and accounted for $27,000, and, in addition to
normal volume-related activity had increases in advertising in anticipation of
the  new  branch  and  in  education  related  to  the  technology  upgrades.

     Also  included in the line item "other operating expenses" is activity of
the  Finance  Company which includes charges for credit reports, license fees,
acquisition  premium  amortization, and office support.  These items increased
5%  between  the second quarter of 1998 and 1997 related to normal activity of
the  branches.

INCOME  TAXES
     For  the  quarter  ended  June 30, 1998, the Company reported $269,000 in
income  tax  expense,  or  an  effective tax rate of 37%.  This is compared to
income  tax  expense of $231,000 for the same quarter of the prior year, or an
effective  tax  rate  of  36.5%.


RESULTS  OF  OPERATIONS - COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1998 AND
1997

GENERAL
     The  Company  reported  consolidated  net income for the six months ended
June  30,  1998  of  $870,000,  compared to net income of $739,000 for the six
months  ended  June  30,  1997, or an improvement of approximately $131,000 or
18%.    The increase in consolidated earnings for the 1998 period is primarily
attributable  to  (1)  a $304,000 or 9% increase in the Company's net interest
income  related  to  the higher level of earning assets in 1998 as compared to
the prior year; (2) a reduction in the provision for loan losses for the first
six  months of 1998 as compared to 1997 due to the lower net loan originations
in  1998; and (3) the 55% increase in other income related to higher insurance
and  nondeposit commission fees and mortgage referral fees.  The increases are
somewhat  offset  by  a  19%  increase  in  other  operating  expenses.

     Summit National Bank recorded net earnings of $858,000 for the six months
ended  June  30,  1998  which was an 21% increase from the first six months of
1997  earnings  of  $709,000.   The increase in net income for this subsidiary
resulted  primarily  from a $342,000 (13%) increase in the Bank's net interest
income  which  was  primarily  related  to the higher level of average earning
assets,  combined  with  increase  in  other  income  and  a  reduction in the
provision  for loan losses.  This increase was offset somewhat by increases in
other  operating  expenses  between  the  two periods.  The Company's consumer
finance  subsidiary,  Freedom  Finance, Inc., recorded net losses for both the
first  six  months  of 1998 and 1997 of approximately $(10,000) and $(11,000),
respectively.

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, 1998, the Company recorded consolidated net interest income of
$3.7  million,  a 9% increase from the net interest income of $3.4 million for
the  six  months ended June 30, 1997.  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 16% each, offset somewhat by the 20 basis
point  decrease  in  the  consolidated  net  interest  margin  for the period.

     For  the  six  months  ended  June  30,  1998  and  1997,  the  Company's
consolidated  net  interest margin was 4.94% and 5.14%, 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 decrease in the average yield on loans,
combined with the shift of earning assets to lower yielding federal funds sold
and  short-term  interest-bearing  deposits as the loan growth continued to be
somewhat  slow  in  the  second  quarter  of  1998.

INTEREST  INCOME
     For  the  six  months  ended  June 30, 1998, the Company's earning assets
averaged  $156 million and had an average tax-equivalent yield of 9.36%.  This
compares to average earning assets of $134 million for the first six months of
1997,  yielding approximately 9.54%.  Thus, the significant contributor to the
increase  in  interest  income of $808,000 or 13% between the six months ended
June  30,  1998  and  1997 is the increase in volume of earning assets of 16%,
offset  somewhat  by  the  20  basis  point  decrease  in  yield.

     Consolidated  loans  averaged  approximately 76% of the Company's average
earning  assets for the first six months of 1998 compared to 80% for the prior
year.    The  majority  of  the  Company's  loans  are  tied to the prime rate
(approximately  62%  of  the  Bank's  portfolio  is  at floating rates), which
averaged  8.50%  and  8.38%  for  the six months ended June 30, 1998 and 1997,
respectively.   During the first six months of 1997, the Bank's loans averaged
$116 million, yielding an average of 9.14%, compared to $105 million, yielding
an average of 9.13% for the first six months of 1997.  The decrease in average
yield  of  the  Finance  Company  loans  contributed to the lower consolidated
average  yield  on  loans  which dropped to 10.31% for the first six months of
1998  from  10.47%  for  the  first  six  months of 1997.  The higher level of
average loans, offset by the decrease in average rate, resulted in an increase
in  consolidated  interest  income  on  loans  of  $488,000  million  or  9%.

     Investment  securities  averaged  $27.8 million or 18% of average earning
assets and yielded 6.60% (tax equivalent basis) during the first six months of
1998,  compared  to  average  securities  of $18.9 million yielding 6.35% (tax
equivalent basis) for the six months ended June 30, 1997.  The increase in the
average  yield  of the investment portfolio is related to the timing, maturity
distribution  and  types  of  securities  (primarily  longer  term municipals)
purchased  during  the  latter  half  of  1997 and into 1998.  The increase in
average  securities combined with the increase in average rate resulted in the
increase  of  interest  income  on  securities  of  $235,000  or  40%.

INTEREST  EXPENSE
     The Company's interest expense for the six months ended June 30, 1998 was
$3.4  million.   The increase of 17% from the comparable six months in 1997 of
$2.9  million  was  related  to  the  16%  increase  in  average  volume  of
interest-bearing  liabilities, combined with the increase in average rate of 5
basis  points.    Interest-bearing  liabilities  averaged $131 million for the
first  six  months of 1998 with an average rate of 5.25%.  This is compared to
average  interest-bearing  liabilities of $113 million with an average rate of
5.20%  for  the  six  months  ended  June  30,  1997.

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  potential  losses  in  the  loan  portfolio.

     Included  in  the  net income for the six months ended June 30, 1998 is a
provision  for loan losses of $101,000 compared to a provision of $211,000 for
the  first  six  months  of  1997.   The decrease in the provision required is
related  to  the  lower net originations experienced by the Company during the
first  six  months  of  1998  as  compared  to  the  same  period  of  1997.

     At  June  30,  1998,  the consolidated allowance for loan losses was $1.8
million  or  1.50% of total loans net of unearned income.  This compares to an
allowance  of  $1.7  million or 1.48% of total loans net of unearned income at
June  30,  1997.  For the six months ended June 30, 1998, the Company reported
net  charge-offs  of  $40,000,  which  is  a result of the Finance Company net
charge-offs  of  $66,000  (4.23%  annualized  of  average loans of the Finance
Company) combined with the Bank's net recovery position for 1998 of $(26,000).
This is compared to consolidated net charge-offs of $26,000 for the comparable
period  of  1997.

OTHER  INCOME  AND  EXPENSES
     Other 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 $765,000 for the six months ended
June  30,  1998  compared  to $494,000 for the first six months of 1997, or an
increase of 55%.  Increases in Bank branch related income due to higher volume
of  transactions and number of accounts; higher mortgage loan referral fees in
1998;  and  increases  in  nondeposit  sale transactions generating commission
income  were  responsible  for  the increase in other income the first half of
1998  as  compared  to  1997.

     For  the  six months ended June 30, 1998, total overhead expenses were $3
million  which  is  an  increase  of  19% over the amount incurred for the six
months  ended  June  30,  1997  of  $2.5  million.   The most significant item
included  in  other expenses is salaries, wages and benefits which amounted to
$1.6  million  for  the  six  months  ended  June 30, 1998 as compared to $1.3
million  for  the six months ended June 30, 1997.  The increase of $303,000 or
23% is a result of (1) normal annual raises; (2) additional staff added at the
Bank  between  the  1997  and  1998  comparable periods; (3) higher commission
expense  paid  and  associated  payroll taxes related to the higher nondeposit
product sales in 1998; (4) amortization of the compensation expense related to
restricted  stock  grants  in  late 1997; and (5) additional bonus and benefit
accruals  pursuant  to  the  Bank's  compensation  program.

     The  28% ($61,000) increase in furniture, fixtures, and equipment ("FFE")
between  the  first six months of 1998 and 1997 is primarily related to higher
depreciation  and  associated  expenses  at  the  Bank, primarily software and
hardware  related  to  technology  upgrades  and  furnishings and equipment in
anticipation  of  the  new  branch  facility  opening  later  in  1998.

     Included  in  the  line  item "other operating expenses", which increased
$127,000  or  17%  from the comparable six months of 1997, are charges for OCC
assessments;  property  and  bond  insurance; Relay/Cirrus switch fees; credit
card  expenses; professional services; education and seminars; advertising and
public relations; and other branch and customer related expenses.  These items
are  related  directly  to  the  normal operations of the Bank and increase in
relation  to  the  increase in assets, the higher level of transaction volume,
and the larger number of customer accounts.  The Bank's activity accounted for
$100,000  or  78%  of  the  increase and, in addition to normal volume-related
activity,  had  increases  in  advertising  in  anticipation of the new branch
opening,  higher  professional  and outside service fees related to additional
technology  consulting  engagements  during  1998,  and increases in education
expenses  related  to  the  software  upgrades  and  new  technology.

     Also  included in the line item "other operating expenses" is activity of
the  Finance  Company which includes charges for credit reports, license fees,
acquisition  premium  amortization, and office support.  These items increased
6%  between the comparable periods of 1997 and 1998 related to normal activity
of  the  branches.


INCOME  TAXES
     For  the six months ended June 30, 1998, the Company reported $504,000 in
income  tax  expense,  or  an  effective tax rate of 37%.  This is compared to
income tax expense of $430,000 for the same six months of the prior year, also
for  an  effective  tax  rate  of  37%.



LIQUIDITY
     Liquidity  management  involves meeting the cash flow requirements of the
Company.  The Company 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 repurchase agreements, 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.  The Company's primary liquid assets at June
30,  1998  and 1997, accounted for approximately 20% and 15%, respectively, of
average  assets.    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 borrowing on a
short-term  basis  from the Federal Home Loan Bank and Federal Reserve System,
purchasing  federal  funds  from  other financial institutions, and increasing
deposits  by  raising  rates  paid.

     The Company's core deposits consist of consumer non-jumbo (i.e. less than
$100,000)  time  deposits,  and  consumer and commercial savings accounts, NOW
accounts,  money  market  accounts, and checking accounts.  Although such core
deposits are becoming increasingly more costly and interest sensitive for both
the  Company  and  the  industry  as  a  whole, such core deposits continue to
provide  the  Company  with  a  large and stable source of funds.  The Company
closely  monitors  its  reliance  on  certificates  of  deposits  greater than
$100,000,  which  are  generally considered less stable and more interest rate
sensitive  than core deposits.  Certificates of deposit in excess of $100,000,
which  represented  19%  and  21% of total deposits at June 30, 1998 and 1997,
respectively,  are  held  primarily by customers in the Company's service area
who  have  dealt with the Company for an extended period of time.  The Company
has  no  brokered  deposits.

     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  $1.3  million in available liquidity remaining from its initial
public  offering  and  the  retention  of earnings.  All of this liquidity was
advanced  to  the  Finance Company to fund its operations as of June 30, 1998.
In  addition,  Summit  Financial has an available line of credit totaling $2.2
million with an unaffiliated financial institution, all of which was available
at  June  30,  1998.  Finally, several individuals have provided term loans to
Summit  Financial  to provide liquidity for funding operating needs of Freedom
Finance.  At June 30, 1998, these term loans totaled $500,000 and have various
maturities  throughout  1998.    Additional  sources  of  liquidity for Summit
Financial  include  management  fees  and  debt  service which are paid by its
subsidiary  on  a  monthly  basis.

     Liquidity  needs  of  Freedom  Finance, primarily for the funding of loan
originations,  acquisitions,  and  operating  expenses, have been meet 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
     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 believes that the rate of asset growth will not
negatively  impact  the capital base.  Total equity at June 30, 1998 was $14.4
million.

     On  April  22,  1998,  the  Company  entered into an agreement to lease a
facility for a branch location in Greenville, South Carolina.  The facility is
approximately 8,000 square feet and has an initial term of 7 years.  The lease
requires  initial  monthly rent payments of $5,900 for a period of 4 years, at
which  time  the rent increases to $6,492 per month.  The agreement includes a
renewal option for an additional 7 year period at substantially the same terms
of  the  initial lease and for a monthly rent of $6,492 throughout the renewal
period.    The  Company  anticipates opening the branch facility by the fourth
quarter  of  1998.    Management  believes  the  current capital resources are
adequate  to  meet  the  needs for the anticipated branch facility and related
furnishings  and  equipment.

     The  Company  has  no  other  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.

     Quantitative  measures  established  by  regulation  to  ensure  capital
adequacy  require  the  Company  and  the Bank to maintain minimum amounts and
ratios  (set forth in the table below) of total and Tier 1 capital (as defined
in  the  regulation) to risk-weighted assets (as defined) and to total assets.
Management  believes,  as of June 30, 1998, that the Company and the Bank meet
all capital adequacy requirements to which they are subject.  At June 30, 1998
and  1997, the Company and the Bank are both categorized as "well capitalized"
under  the  regulatory  framework  for  prompt  corrective  action.    To  be
categorized  as  "well  capitalized",  the  Company and the Bank must maintain
minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set
forth  in  the  table  below.   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, 1998 as well as the
minimum  calculated  amounts  for  each  regulatory  defined  category.


<TABLE>
<CAPTION>

                        RISK-BASED CAPITAL CALCULATIONS


                                                 FOR              TO BE
                                               CAPITAL         CATEGORIZED
                                              ADEQUACY             WELL-
                             ACTUAL           PURPOSES          CAPITALIZED
                         Actual   Ratio    Amount    Ratio    Amount    Ratio
<S>                      <C>      <C>     <C>        <C>     <C>        <C>
Total Capital to Risk-
Weighted Assets
     Company. . . . . .  $15,578  12.07%  $  10,323   8.00%  $  12,904  10.00%
     Bank . . . . . . .  $14,230  11.26%  $  10,112   8.00%  $  12,640  10.00%

Tier I Capital to Risk-
Weighted Assets
     Company. . . . . .  $13,965  10.82%  $   5,161   4.00%  $   7,742   6.00%
     Bank . . . . . . .  $12,650  10.01%  $   5,056   4.00%  $   7,584   6.00%

Tier I Capital to
Average Assets
     Company. . . . . .  $13,965   8.53%  $   6,549   4.00%  $   8,186   5.00%
     Bank . . . . . . .  $12,650   7.72%  $   6,556   4.00%  $   8,195   5.00%

</TABLE>


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.  Over 50%
of  the  Company's liabilities are issued with fixed terms and can be repriced
only  at maturity.  During periods of rising interest rates, as experienced in
1997,  the  Company's  assets  reprice faster than the supporting liabilities.
This  causes  an  increase  in  the  net  interest margin until the fixed rate
deposits  mature  and  are  repriced  at  higher  current  market  rates, thus
narrowing the difference between what the Company earns on its assets and what
it  pays  on  its  liabilities.  Given  the  Company's  current  balance sheet
structure, the opposite effect (that is, a decrease in net interest income) is
realized  in  a  falling  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.

     Unlike most other 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 a financial institution's
performance  than  does  the  effect  of  inflation.


ACCOUNTING,  REPORTING  AND  REGULATORY  MATTERS
     In  June  1997,  the Financial Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standards ("SFAS") No. 131, "Disclosures
about  Segments  of  an  Enterprise  and Related Information".  This statement
establishes standards for the way public enterprises are to report information
about  operating  segments  in  annual financial statements and requires those
enterprises to report selected information about operating segments in interim
financial  reports  issued  to  shareholders.   Statement 131 is effective for
financial  statements  for  periods beginning after December 15, 1997.  In the
initial  year  of application, comparative information for earlier years is to
be  restated,  unless  it is impractical to do so.  It is not anticipated that
the  adoption  of  this statement will materially effect the Company's current
method  of  financial  reporting.


YEAR  2000
     The  Company  recognizes  that  there  is a business risk in computerized
systems  as  the  calendar rolls into the next century.  The Federal Financial
Institutions  Examination Council ("FFIEC") issued an interagency statement on
May  5,  1997, providing an outline for institutions to effectively manage the
Year  2000  challenges.  The Company has developed an ongoing plan designed to
ensure  that  its  operational  and  financial  systems  will not be adversely
affected  by year 2000 software failures due to processing errors arising from
calculations using the year 2000 date.  The Company has an internal task force
assigned  to  this  project  and  the Board of Directors and management of the
Company  have established year 2000 compliance as a strategic initiative.  The
Company is well into the assessment phase of the project in which all critical
applications  are  identified  and  programing  issues  determined.  While the
Company  believes  that  it  has  available  resources  to  assure  year  2000
compliance,  it  is  to  some  extent  dependent  on  vendor  cooperation.

     At  the  present  time, the Company expects its most critical application
software  vendors  to  have all systems compliant by year end 1998 and testing
will  be  completed by early 1999.  The Company has established time-lines for
testing  all  noncritical  software  and  ancillary systems, such as telephone
systems  and security devices by mid-year 1999.  At this time, the Company has
not  determined  the  cost  of  making  modifications to correct any year 2000
problems;  however,  equipment  and  software  expenses  are  not  expected to
materially  differ from historical levels.  The Company routinely upgrades and
purchases  technologically advanced software and hardware on a continual basis
and  expects  to  specifically  evaluate and test such purchases for year 2000
compliance.    The  Company  is  also  in  the  process of addressing any loan
relationships it believes could be materially effected by the year 2000 issue.



      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 change in interest rates 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  Company's  profitability  is  affected  by  fluctuations in interest
rates.  Management's goal is to maintain a reasonable balance between exposure
to interest rate fluctuations and earnings.  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  Bank's  Asset  Liability  Management Committee ("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.  Interest rate risk exposure is
measured  using  interest rate sensitivity analysis to determine the Company's
change  in  NPV  in  the  event  of  hypothetical  changes  in interest rates.
Further,  interest  rate  sensitivity  gap  analysis  is used to determine the
repricing  characteristics  of the Bank's assets and liabilities.  The ALCO is
charged  with  the  responsibility to maintain the level of sensitivity of the
Bank's  net  portfolio  value  within  Board  approved  limits.

     Interest  rate  sensitivity  analysis  is  used  to measure the Company's
interest  rate  risk  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  - 400 basis points increase or decrease in the market interest
rates.    The  Company's  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, 1998, 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, 1997.  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, 1997 included in the
Company's  1997  Annual  Report  on  Form  10K.




SUMMIT FINANCIAL CORPORATION

PART  II.  OTHER  INFORMATION



Item  1.          Legal  Proceedings.

The  Corporation  and  its  subsidiaries  from  time to time and currently are
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:

     27.1  Financial  Data  Schedule

     (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  5,  1998

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


Dated:    August  5,  1998

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