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,  2003

              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  by  check  mark  whether  the  registrant  is an accelerated filer (as
defined  in  Rule  12b-2  of  the  Exchange  Act).       YES  [  ]  NO  [X]


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  23,  2003,  4,056,090 shares of $1.00 par value common stock were
outstanding.


<PAGE>


<TABLE>
<CAPTION>

                               SUMMIT FINANCIAL CORPORATION
                        FORM 10-Q FOR QUARTER ENDED MARCH 31, 2003
                   TABLE OF CONTENTS OF INFORMATION REQUIRED IN REPORT

<S>                                                                                    <C>
PART I. FINANCIAL INFORMATION
Item 1.
Consolidated Balance Sheets
     March 31, 2003 and December 31, 2002 . . . . . . . . . . . . . . . . . . . . . .   3
Consolidated Statements of Income
     Three months ended March 31, 2003 and 2002 . . . . . . . . . . . . . . . . . . .   4
Consolidated Statements of Shareholders' Equity and Comprehensive Income
     Three months ended March 31, 2003 and 2002 . . . . . . . . . . . . . . . . . . .   5
Consolidated Statements of Cash Flows
     Three months ended March 31, 2003 and 2002 . . . . . . . . . . . . . . . . . . .   6
Condensed Notes to Consolidated Financial Statements March 31, 2003 . . . . . . . . .   7

Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations  11

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

Item 4.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24

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

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

SECTION 302 CERTIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27

Exhibit 99.1 SECTION 906 CEO CERTIFICATION. . . . . . . . . . . . . . . . . . . . . .  29

Exhibit 99.2 SECTION 906 CFO CERTIFICATION. . . . . . . . . . . . . . . . . . . . . .  30


</TABLE>

<PAGE>

<TABLE>
<CAPTION>

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

                                                       March 31,    December 31,
                                                         2003           2002
                                                      -----------  --------------
<S>                                                   <C>          <C>
ASSETS
Cash and due from banks. . . . . . . . . . . . . . .  $   11,332   $       6,929
Interest-bearing bank balances . . . . . . . . . . .       4,584           2,176
Federal funds sold . . . . . . . . . . . . . . . . .       8,543           2,491
Investments available for sale . . . . . . . . . . .      70,952          63,464
Investment in Federal Home Loan Bank and other stock       2,623           2,418
Loans, net of unearned income and net of
 allowance for loan losses of $3,545 and $3,369. . .     215,879         215,431
Premises and equipment, net. . . . . . . . . . . . .       4,151           4,197
Accrued interest receivable. . . . . . . . . . . . .       1,303           1,418
Other assets . . . . . . . . . . . . . . . . . . . .       3,855           3,682
                                                      -----------  --------------
                                                      $  323,222   $     302,206
                                                      ===========  ==============
  LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Noninterest-bearing demand. . . . . . . . . . . . .  $   35,597   $      33,342
 Interest-bearing demand . . . . . . . . . . . . . .      25,941          24,943
 Savings and money market. . . . . . . . . . . . . .      70,814          73,933
 Time deposits, $100,000 and over. . . . . . . . . .      58,092          48,791
 Other time deposits . . . . . . . . . . . . . . . .      58,799          49,506
                                                      -----------  --------------
                                                         249,243         230,515
Federal Home Loan Bank advances. . . . . . . . . . .      41,700          40,600
Accrued interest payable . . . . . . . . . . . . . .         791           1,006
Other liabilities. . . . . . . . . . . . . . . . . .       1,750           1,343
                                                      -----------  --------------
                                                         293,484         273,464
                                                      -----------  --------------
Shareholders' equity:
 Common stock, $1.00 par value; 20,000,000
  shares authorized; issued and
  outstanding 4,055,257 and 4,013,486 shares . . . .       4,055           4,013
 Additional paid-in capital. . . . . . . . . . . . .      21,482          21,322
 Retained earnings . . . . . . . . . . . . . . . . .       3,771           2,862
 Accumulated other comprehensive income, net of tax.         479             600
 Nonvested resticted stock . . . . . . . . . . . . .         (49)            (55)
                                                      -----------  --------------
     Total shareholders' equity. . . . . . . . . . .      29,738          28,742
                                                      -----------  --------------
                                                      $  323,222   $     302,206
                                                      ===========  ==============
<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,
                                               ----------------------
                                                  2003        2002
                                               ----------  ----------
<S>                                            <C>         <C>
Interest Income:
 Loans. . . . . . . . . . . . . . . . . . . .  $    3,572  $    3,768
 Taxable investment securities. . . . . . . .         527         462
 Nontaxable investment securities . . . . . .         170         174
 Federal funds sold . . . . . . . . . . . . .          20          21
 Other. . . . . . . . . . . . . . . . . . . .          40          40
                                               ----------  ----------
                                                    4,329       4,465
                                               ----------  ----------
Interest Expense:
 Deposits . . . . . . . . . . . . . . . . . .         951       1,210
 Federal Home Loan Bank advances. . . . . . .         415         392
 Other borrowings . . . . . . . . . . . . . .           2           9
                                               ----------  ----------
                                                    1,368       1,611
                                               ----------  ----------
     Net interest income. . . . . . . . . . .       2,961       2,854
Provision for loan losses . . . . . . . . . .         173         125
                                               ----------  ----------
     Net interest income after
      provision for loan losses . . . . . . .       2,788       2,729
                                               ----------  ----------

Noninterest Income:
 Service charges and fees on deposit accounts         137         127
 Credit card service fees and income. . . . .          95         112
 Insurance commission fee income. . . . . . .          98         219
 Gain on sale of investment securities. . . .         174          16
 Other income . . . . . . . . . . . . . . . .         257         208
                                               ----------  ----------
                                                      761         682
                                               ----------  ----------
Noninterest Expense:
 Salaries, wages and benefits . . . . . . . .       1,314       1,367
 Occupancy. . . . . . . . . . . . . . . . . .         169         160
 Furniture, fixtures and equipment. . . . . .         160         182
 Other operating expenses . . . . . . . . . .         580         564
                                               ----------  ----------
                                                    2,223       2,273
                                               ----------  ----------
Income before income taxes. . . . . . . . . .       1,326       1,138
Income taxes. . . . . . . . . . . . . . . . .         417         365
                                               ----------  ----------
Net income. . . . . . . . . . . . . . . . . .  $      909  $      773
                                               ==========  ==========

Net income per share:
   Basic. . . . . . . . . . . . . . . . . . .  $      .23  $      .19
   Diluted. . . . . . . . . . . . . . . . . .  $      .20  $      .18
Average shares outstanding:
   Basic. . . . . . . . . . . . . . . . . . .   4,012,072   3,964,137
   Diluted. . . . . . . . . . . . . . . . . .   4,553,725   4,409,277
<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, 2003 AND 2002
                                                    (Dollars in Thousands)
                                                         (Unaudited)

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

Balance at December 31, 2002. . . . . . . . .  $ 4,013  $    21,322  $   2,862  $          600         ($55)  $       28,742
Net income for the three months
 ended March 31, 2003 . . . . . . . . . . . .        -            -        909               -            -              909
Other comprehensive loss:
 Unrealized holding losses arising during
  the period, net of tax of ($8). . . . . . .        -            -          -             (13)           -                -
 Less: reclassification adjustment for gains
  included in net income, net of tax of ($66)        -            -          -            (108)           -                -
                                                                                ---------------
 Other comprehensive loss . . . . . . . . . .        -            -          -            (121)           -             (121)
                                                                                ---------------               ---------------
Comprehensive income. . . . . . . . . . . . .        -            -          -               -            -              788
                                                                                                              ---------------
Stock options exercised . . . . . . . . . . .       42          160          -               -            -              202
Amortization of deferred
 compensation on restricted stock . . . . . .        -            -          -               -            6                6
                                               -------  -----------  ---------  ---------------  -----------  ---------------
Balance at March 31, 2003 . . . . . . . . . .  $ 4,055  $    21,482  $   3,771  $          479         ($49)  $       29,738
                                               =======  ===========  =========  ===============  ===========  ===============

<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,
                                                              --------------------
                                                                 2003       2002
                                                               ---------  --------
<S>                                                            <C>        <C>
Cash flows from operating activities:
 Net income . . . . . . . . . . . . . . . . . . . . . . . . .  $    909   $   773
Adjustments to reconcile net income to net cash
 provided by operating activities:
    Provision for loan losses . . . . . . . . . . . . . . . .       173       125
    Depreciation and amortization . . . . . . . . . . . . . .       111       135
    Gain on sale of investments available for sale. . . . . .      (174)      (16)
    Net amortization of net premium on investments. . . . . .        65        51
    Amortization of deferred compensation on restricted stock         6        32
    Decrease in other assets. . . . . . . . . . . . . . . . .        55        15
    Increase in other liabilities . . . . . . . . . . . . . .       192       259
    Deferred income taxes . . . . . . . . . . . . . . . . . .       (39)      (73)
                                                               ---------  --------
Net cash provided by operating activities . . . . . . . . . .     1,298     1,301
                                                               ---------  --------

Cash flows from investing activities:
  Purchases of securities available for sale. . . . . . . . .   (28,602)   (5,057)
  Proceeds from maturities of securities
   available for sale . . . . . . . . . . . . . . . . . . . .     8,410     2,376
  Proceeds from sales of securities available for sale. . . .    12,618     2,489
  Purchases of investments in FHLB and other stock. . . . . .      (205)     (350)
  Net increase in loans . . . . . . . . . . . . . . . . . . .      (621)   (2,321)
  Purchases of premises and equipment . . . . . . . . . . . .       (65)      (27)
                                                               ---------  --------
Net cash used in investing activities . . . . . . . . . . . .    (8,465)   (2,890)
                                                               ---------  --------

Cash flows from financing activities:
  Net increase in deposit accounts. . . . . . . . . . . . . .    18,728     9,282
  Proceeds from Federal Home Loan Bank advances . . . . . . .     7,000     4,000
  Repayments of Federal Home Loan Bank advances . . . . . . .    (5,900)        -
  Proceeds from employee stock options exercised. . . . . . .       202        19
                                                               ---------  --------
Net cash provided by financing activities . . . . . . . . . .    20,030    13,301
                                                               ---------  --------
Net increase in cash and cash equivalents . . . . . . . . . .    12,863    11,712
Cash and cash equivalents, beginning of period. . . . . . . .    11,596    10,449
                                                               ---------  --------
Cash and cash equivalents, end of period. . . . . . . . . . .  $ 24,459   $22,161
                                                               =========  ========

SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest. . . . . . . . . . .  $  1,583   $ 1,885
Cash paid during the period for income taxes. . . . . . . . .  $     45   $    37
Change in market value of investment securities
 available for sale, net of income taxes. . . . . . . . . . .     ($121)    ($497)

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

                          SUMMIT FINANCIAL CORPORATION
     CONDENSED  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
                                 MARCH 31, 2003

NOTE  1  -  BASIS  OF  PRESENTATION:
     The  unaudited  consolidated  financial  statements include the accounts of
Summit  Financial Corporation (the "Company"), a South Carolina corporation, and
its  wholly-owned  subsidiaries, Summit National Bank (the "Bank"), a nationally
chartered  bank,  and  Freedom Finance, Inc. (the "Finance Company"), a consumer
finance  company.  Also included are the accounts of Summit Investment Services,
Inc.  (the "Investment Company") which is a wholly-owned subsidiary of the Bank.
All significant intercompany items related to the consolidated subsidiaries have
been  eliminated.

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

     The  significant  accounting  policies  followed by the Company for interim
reporting  are  consistent  with  the  accounting  policies  followed for annual
financial  reporting.  The  unaudited  consolidated  financial statements of the
Company  at  March 31, 2003 and for the three month periods ended March 31, 2003
and  2002  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,  2003,  and  the results of operations and cash flows for the periods
ended  March 31, 2003 and 2002 have been included.  The information contained in
the  footnotes  included  in the Company's latest annual report on Form 10-K for
the  year  ended  December 31, 2002 should be referred to in connection with the
reading  of  these unaudited interim consolidated financial statements.  Certain
interim  2002  amounts  have  been  reclassified  to  conform with the statement
presentations  for  the  interim 2003 period and to reflect the effect of the 5%
stock  dividend  paid  in  December  2002.

The  results for the three month period ended March 31, 2003 are not necessarily
indicative  of  the  results that may be expected for the full year or any other
interim  period.

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  $24,459,000 and
$22,161,000  at  March  31,  2003  and  2002,  respectively.

NOTE  3  -  NONPERFORMING  ASSETS:
     Loans past due in excess of 90 days and still accruing interest amounted to
approximately  $171,000,  $187,000, and $116,000 at March 31, 2003, December 31,
2002,  and  March  31,  2002, respectively.  Non-accrual loans at March 31, 2003
totaled  $604,000  compared  to  $293,000  at  December 31, 2002.  There were no
non-accrual loans at March 31, 2002.  There were no impaired loans or other real
estate  acquired  in  full or partial satisfaction of loans outstanding at March
31,  2003,  December  31,  2002  or  March  31,  2002.

NOTE  4  -  STOCK  COMPENSATION  PLANS:
     At  March 31, 2003, the Company had three stock-based employee and director
option  plans,  which  are  described  more  fully  in  Note  14 of the Notes to
Consolidated  Financial  Statements  included  in the Company's Annual Report on
Form  10-K  for December 31, 2002.  The Company reports stock-based compensation
using  the  intrinsic  value  method  prescribed  in Accounting Principles Board
("APB")  Opinion  25, "Accounting for Stock Issued to Employees", which measures
compensation  expense  as  the excess, if any, of the quoted market price of the
Company's stock at the date of the grant over the amount an employee must pay to
acquire  the  stock.  SFAS  123,  "Accounting  for  Stock-Based  Compensation",
encourages  but  does  not  require  companies  to  record compensation cost for
stock-based  compensation  plans  at  fair  value.  The  Company  follows  the
disclosure-only  provisions  of SFAS 123.  Accordingly, no compensation cost has
been  recognized  for  the stock-based option plans as all options granted under
the  plans  had  an  exercise  price equal to the market value of the underlying
common  stock  on the date of grant.  The following table illustrates the effect
on  net  income and earnings per share if the Company had applied the fair value
recognition  provisions  of  SFAS  123  to stock-based employee and non-employee
compensation.

<TABLE>
<CAPTION>


                                         For the Quarter
                                               Ended
                                             March 31,
(dollars, except per share, in thousands)  2003   2002
<S>                                        <C>    <C>

Net income, as reported . . . . . . . . .  $ 909  $ 773
Less - total stock-based employee
 compensation expense determined under
 fair value based method, net of taxes. .     42     54
                                           -----  -----
Proforma net income . . . . . . . . . . .  $ 867  $ 719
                                           =====  =====
Earnings per share:
   Basic - as reported. . . . . . . . . .  $0.23  $0.19
   Basic - proforma . . . . . . . . . . .  $0.22  $0.18
   Diluted - as reported. . . . . . . . .  $0.20  $0.18
   Diluted - proforma . . . . . . . . . .  $0.19  $0.16
</TABLE>


NOTE  5  -  INTANGIBLE  ASSETS:
     As  of  January  1, 2002, the Company adopted SFAS 142, "Goodwill and Other
Intangible  Assets".  SFAS 142 requires that goodwill and intangible assets with
indefinite  useful  lives  no  longer  be  amortized,  but instead be tested for
impairment at least annually in accordance with the provisions of SFAS 142.  The
Company's  intangible  assets  consist  of  goodwill  resulting from the Finance
Company's  branch  acquisitions  and  are  included  in  "Other  assets"  on the
accompanying  consolidated balance sheets.  The balance of goodwill at March 31,
2003  and  December  31,  2002  was $187,000.  There was no amortization expense
charged  in  any  period  presented.


NOTE  6  -  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,  2003  and  2002.  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,
                                   2003        2003        2002        2002
                                  BASIC      DILUTED      BASIC      DILUTED
                                ----------  ----------  ----------  ----------
<S>                             <C>         <C>         <C>         <C>
Net Income . . . . . . . . . .  $  909,000  $  909,000  $  773,000  $  773,000
                                ----------  ----------  ----------  ----------
Average shares outstanding . .   4,012,072   4,012,072   3,964,137   3,964,137
Effect of Dilutive Securities:
    Stock options. . . . . . .           -     536,096           -     423,940
    Unvested restricted stock.           -       5,557           -      21,200
                                ----------  ----------  ----------  ----------
                                 4,012,072   4,553,725   3,964,137   4,409,277
                                ==========  ==========  ==========  ==========
Per-share amount . . . . . . .  $     0.23  $     0.20  $     0.19  $     0.18
                                ==========  ==========  ==========  ==========

</TABLE>


NOTE  7  -  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,  2003

                              Bank    Finance    Corporate    Total
<S>                         <C>       <C>       <C>          <C>
Interest income. . . . . .  $  3,844  $    492         ($7)  $  4,329
Interest expense . . . . .     1,368        39         (39)     1,368
                            --------  --------  -----------  --------
Net interest income. . . .     2,476       453          32      2,961
Provision for loan losses.       110        63           0        173
Noninterest income . . . .       685        91         (15)       761
Noninterest expense. . . .     1,860       355           8      2,223
                            --------  --------  -----------  --------
Income before income taxes     1,191       126           9      1,326
Income taxes . . . . . . .       366        48           3        417
                            --------  --------  -----------  --------
Net income . . . . . . . .  $    825  $     78  $        6   $    909
                            ========  ========  ===========  ========
Net loans. . . . . . . . .  $213,528  $  2,946       ($595)  $215,879
                            ========  ========  ===========  ========
Total assets . . . . . . .  $319,031  $  3,435  $      756   $323,222
                            ========  ========  ===========  ========
</TABLE>


<TABLE>
<CAPTION>

            At  and  for  the  three  months  ended  March  31,  2002

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

<PAGE>


                          SUMMIT FINANCIAL CORPORATION

                       PART  I.  FINANCIAL  INFORMATION

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

     The  following information presents management's discussion and analysis of
the  financial  condition  and  results  of  operations  of  Summit  Financial
Corporation  ("the Company" or "Summit Financial"), a financial holding company,
and its wholly-owned subsidiaries, Summit National Bank ("the Bank" or "Summit")
and Freedom Finance, Inc. ("the Finance Company" or "Freedom").  The Bank, which
is  the  principal  subsidiary,  owns  all  the  outstanding  shares  of  Summit
Investment  Services,  Inc.  Throughout  this  discussion and analysis, the term
"the  Company"  refers  to  Summit  Financial  Corporation and its subsidiaries.

     This  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,  2002.  Certain  reclassifications  have been made to prior
years' financial data to conform to current financial statement presentations as
well  as  to  reflect the effect of the 5% stock dividend paid in December 2002.
Results  of  operations  for the three month period ended March 31, 2003 are not
necessarily  indicative  of  results  to  be  attained  for  any  other  period.

FORWARD-LOOKING  STATEMENTS
     Certain  statements  contained  herein  are  "forward-looking  statements"
identified  as  such  for purposes of the safe harbor provided in Section 27A of
the  Securities  Act  of  1933,  as  amended,  and Section 21E of the Securities
Exchange Act of 1934, as amended.  These forward-looking statements include, but
are  not  limited  to,  statements  as  to  industry  trends,  future results of
operations  or  financial  position,  borrowing  capacity  and future liquidity,
future  investment results, future credit exposure, future loan losses and plans
and  objectives  for  future operations, and other statements that do not relate
strictly  to  historical  facts.  These statements are not historical facts, but
instead  are  based on current expectations, estimates and projections about the
Company,  are  subject  to  numerous  assumptions,  risks and uncertainties, and
represent  only  management's  belief regarding future events, many of which, by
their  nature,  are inherently uncertain and outside the Company's control.  Any
forward-looking  statements  made  speak  only  as  of  the  date  on which such
statements  are  made.  The  Company  disclaims  any  obligation  to  update any
forward-looking  statements.  Forward-looking  statements  are not guarantees of
future performance and it is possible that actual results and financial position
may  differ,  possibly  materially,  from  the anticipated results and financial
condition  indicated  in  or  implied  by  these  forward-looking  statements.

     Factors  that  could cause actual results to differ from those indicated by
any  forward-looking  statements include, but are not limited to, the following:

 - Inflation,  interest  rates,  market  and  monetary  fluctuations;
 - Geopolitical  developments  and  any  future acts or threats of war or
terrorism;
 - The effects of, and changes in trade, monetary and fiscal policies and
laws,  including  interest  policies  of  the  Federal  Reserve;
 - A decline in general economic conditions and the strength of the local
economies  in  which  the  Company  operates;
 - The  financial  condition  of  the  Company's  borrowers and potential
deterioration  of  credit  quality;
 - Competitive  pressures  on  loan  and  deposit  pricing  and  demand;
 - Changes  in  technology  and their impact on the marketing of products
and  services;
 - The  timely  development  and  effective  marketing of competitive new
products  and  services;
 - The  impact  of  changes  in  financial  service laws and regulations,
including  laws  concerning  taxes,  banking,  securities  and  insurance;
 - Changes  in  accounting  principles,  policies,  and  guidelines;
 - The  Company's success at managing the risks involved in the foregoing
as  well  as  other  risks and uncertainties detailed from time to time in press
releases  and  other  public  filings.

CRITICAL  ACCOUNTING  POLICIES
     The preparation of consolidated financial statements requires management to
make  estimates  and assumptions in the application of certain of its accounting
policies  about  the  effect  of  matters  that are inherently uncertain.  These
estimates  and  assumptions  affect  the  reported  amounts  of  certain assets,
liabilities,  revenues  and expenses.  Different amounts could be reported under
different  conditions,  or if different assumptions were used in the application
of  these accounting policies.  The Company considers its policies regarding the
allowance  for  loan losses to be its most critical accounting policy due to the
significant degree of management judgment involved.  This significant accounting
policy is detailed in the "Allowance for Loan Losses" section of this discussion
and  analysis  and  in  Note 1 of the Notes to Consolidated Financial Statements
included  in  the  Company's  10-K  for  December  31,  2002.

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.

BALANCE  SHEET  ACTIVITY
     Total  assets increased $21.0 million or 7% from December 31, 2002 to March
31,  2003  to  total  $323.2  million.  Deposits  increased  approximately $18.7
million  or  8%  during  the  period to total $249.2 million.  A majority of the
increase  in  deposits  was in the time deposit categories which increased $18.6
million.  The  increase  in  deposits  funded  the  $7.5  million  increase  in
investment  securities  and  the  $8.5  million  in  federal  funds  sold  and
interest-bearing  deposits  during  the  same  period.

ALLOWANCE  FOR  LOAN  LOSSES  AND  NON-PERFORMING  ASSETS
     The allowance for loan losses is established through charges in the form of
a  provision  for  loan  losses based on management's periodic evaluation of the
loan  portfolio.  Loan losses and recoveries are charged or credited directly to
the  allowance.  The amount of the allowance reflects management's opinion of an
adequate level to absorb probable losses inherent in the loan portfolio at March
31, 2003.  The amount charged to the provision and the level of the allowance is
based  on  management's  judgment  and  is  dependent  upon  growth  in the loan
portfolio,  the  total  amount  of past due loans and nonperforming loans, known
loan  deteriorations, and concentrations of credit.  Other factors affecting the
allowance  are  trends in portfolio volume, maturity and composition, collateral
values,  and  general  economic conditions.  Finally, management's assessment of
probable  losses  based  upon  internal credit grading of the loans and periodic
reviews  and  assessments  of  credit  risk  associated with particular loans is
considered  in  establishing  the  allowance  amount.  The Company considers its
policies  regarding  the  allowance  for  loan  losses  to  be its most critical
accounting policy due to the significant degree of management judgment involved.

In  assessing  the  adequacy  of  the  allowance  and  the amount charged to the
provision,  management  relies  predominately  on its ongoing review of the loan
portfolio,  which is undertaken both to ascertain whether there are losses which
must  be charged-off, and to assess the risk characteristics of the portfolio in
the  aggregate as well as the credit risk associated with particular loans.  The
Company's  methodology  for  evaluating  the  adequacy of the allowance for loan
losses  incorporates  management's current judgments about the credit quality of
the  loan portfolio through a disciplined and consistently applied process.  The
methodology  includes  segmentation  of  the  loan  portfolio  into  reasonable
components  based  on loan purpose for calculation of the most accurate reserve.
Appropriate  reserve estimates are determined for each segment based on a review
of  individual  loans,  application of historical loss factors for each segment,
and  adjustment factors applied as considered necessary.  The adjustment factors
are  applied  consistently  and are quantified for consideration of national and
local  economic  conditions;  exposure  to  concentrations that may exist in the
portfolio; impact of off-balance sheet risk; alterations of lending policies and
procedures;  the  total  amount  of  and  changes  in  trends of past due loans,
nonperforming  loans,  problem  loans  and  charge-offs; the total amount of and
changes  in  trends  of  the  Bank's  internally graded "watch list" loans which
include  classified  loans  and  OAEM;  variations  in  the  nature,  maturity,
composition,  and  growth of the loan portfolio; changes in trends of collateral
value;  entry  into  new markets; and other factors which may impact the current
credit  quality  of  the  loan  portfolio.

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

     The  allowance  for  loan  losses  totaled  $3.5 million, or 1.62% of total
loans,  at March 31, 2003.  This is compared to an allowance of $3.4 million, or
1.54%  of  total  loans,  at December 31, 2002.  For the quarter ended March 31,
2003,  the  Company  reported  net recoveries of previously charged-off loans of
$2,000  due  primarily  to the recovery of one significant loan, compared to net
charge-offs  of  $67,000,  or  0.13%  (annualized)  of  average  loans,  for the
comparable  quarter  of  2002.

          The  Company's  nonperforming  assets  consist  of loans on nonaccrual
basis,  loans which are contractually past due 90 days or more on which interest
is still being accrued, and other real estate owned ("OREO").  Loans past due 90
days  and  greater  at  March  31,  2003,  December 31, 2002, and March 31, 2002
totaled  $171,000,  or  0.08% of gross loans, $187,000, or 0.09% of gross loans,
and  $116,000  or 0.06% of gross loans, respectively.  Total nonaccrual loans at
March  31,  2003  were $604,000 or 0.28% of gross loans, compared to $293,000 or
0.13%  of  gross  loans  at December 31, 2002.  Generally, loans of the Bank are
placed on non-accrual status at the earlier of when they are 90 days past due or
when  the collection of the loan becomes doubtful.  Loans of the Finance Company
are  not classified as nonaccrual, but are charged-off when such become 150 days
contractually  past  due  or  earlier  if  the  loan  is  deemed  uncollectible.

     There  were no loans considered to be impaired under Statement of Financial
Accounting  Standards  114 and no other real estate owned acquired in partial or
total  satisfaction  of  problem  loans ("OREO") at March 31, 2003, December 31,
2002,  or  March  31,  2002.

          Management  maintains a list of potential problem loans which includes
non-accrual  loans, loans past due in excess of 90 days which are still accruing
interest,  and  other  loans  which  are  credit  graded  (either internally, by
independent  review or regulatory examinations) as "substandard", "doubtful", or
"loss".  A  loan  is  added  to  the  list  when  management  becomes  aware  of
information about possible credit problems of borrowers that causes doubts as to
the  ability  of such borrowers to comply with the current loan repayment terms.
The  total  amount  of  loans  outstanding  at  March  31, 2003 determined to be
potential  problem loans based upon management's internal designations, was $4.2
million  or  2.0%  of  the  loan  portfolio  at March 31, 2003, compared to $3.1
million  or 1.4% of the loan portfolio at December 31, 2002, and $1.3 million or
0.6%  of  the loan portfolio at March 31, 2002.  The amount of potential problem
loans  at  March  31, 2003 does not represent management's estimate of potential
losses  since  the  majority  of such loans are considered adequately secured by
real estate or other collateral.  The increase in the amount of classified loans
in  2002 and the first quarter of 2003 is primarily related to the deterioration
of  general  economic  conditions  during that period and management's proactive
approach  to  more  closely  monitor  credits.  Management  believes  that  the
allowance for loan losses as of March 31, 2003 was adequate to absorb any losses
related  to the nonperforming loans and potential problem loans as of that date.
Management  continues  to  monitor  closely  the  levels  of  nonperforming  and
potential  problem  loans,  and  will address the weaknesses in these credits to
enhance  the  amount of ultimate collection or recovery on these assets.  Should
increases  in  the  overall  level  of nonperforming and potential problem loans
accelerate  from  the  current trend, management will adjust the methodology for
determining  the  allowance  for loan losses and will increase the provision for
loan  losses  accordingly.  This  would  likely  decrease  net  income.


EARNINGS  REVIEW  FOR  THE  THREE  MONTHS  ENDED  MARCH  31,  2003  AND  2002

GENERAL
     The  Company  reported  consolidated  net income for the three months ended
March  31,  2003  of  $909,000, compared to net income of $773,000 for the three
months ended March 31, 2002, or an improvement of approximately $136,000 or 18%.
Contributors  to  increased  earnings for the first quarter of 2003 were the 10%
growth  in  average earning assets, the 15% reduction in interest expense due to
lower  cost of funds, the 12% increase in noninterest income which was primarily
related  to  gains  on  sales  of investment securities, and the 2% reduction in
overhead  expenses.  The  increases  in  income  were somewhat offset by the 38%
increase  in  the  provision  for  loan  losses  due to the trends of increasing
nonaccrual  and  classified  loans.

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,  2003,  the  Company  recorded  net  interest  income  of $3.0 million, a 4%
increase from the net interest income of $2.9 million for the three months ended
March 31, 2002.  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  10.4% and 10.1% respectively, offset by the 29 basis point decrease
in  the  net  interest  margin  for  the  Company.

     For  the  three  months  ended  March  31, 2003 and 2002, the Company's net
interest  margin  was 4.23% and 4.52%, respectively.  The net interest margin is
calculated  as  annualized  net  interest income divided by year-to-date average
earning  assets. The decrease in net interest margin is related primarily to the
86  basis  point  reduction  in  the  average  yield  on  assets  related to the
decreasing  interest  rate  environment  throughout 2003.  The lower yields were
offset  somewhat  by  the  67 basis point reduction in the average cost of funds
related  to maturity of higher priced deposits and borrowings which were renewed
at  lower  current market rates.  During the period between the first quarter of
2002  and 2003, the average prime rate decreased 50 basis points resulting in an
average  prime rate of 4.25% for the first quarter of 2003 compared to 4.75% for
the  first  quarter  of  the  prior  year.

INTEREST  INCOME
     For  the  three  months  ended March 31, 2003, the Company's earning assets
averaged  $292.0  million  and  had an average yield of 6.13%.  This compares to
average  earning  assets  of  $264.4 million for the first three months of 2002,
yielding  approximately  6.99%.  Thus,  the  10%  increase  in volume of average
earning assets, offset by the 86 basis point decrease in average yield, accounts
for  the $136,000 (3%) decrease in interest income between the first quarters of
2002  and  2003.

     Gross  loans  comprised  approximately 75% of the Company's average earning
assets  for  the  first  three  months of 2003 and compared to 78% for the first
quarter of 2002.  The majority of the Company's loans are tied to the prime rate
(over  60% of the Bank's loan portfolio is at floating rates at March 31, 2003),
which  averaged  4.25%  and  4.75% for the three months ended March 31, 2003 and
2002,  respectively.  During  the  first  three  months  of 2003, loans averaged
$218.5  million,  yielding  an  average  of  6.63%,  compared to $207.5 million,
yielding  an  average of 7.37% for the first three months of 2002.  The 74 basis
point  decrease  in  the  average  yield  on  loans  is  directly related to the
reductions in the general interest rate environment and lower prime lending rate
during  2002.  The  higher level of average loans (which increased 5%), was more
than  offset  by  the  lower  average  yields  and  resulted in the reduction in
interest  income  on  loans  of  $196,000  or  5%.

     Investment  securities  averaged  $59.9  million  or 20% of average earning
assets and yielded 5.32% (tax equivalent basis) during the first three months of
2003,  compared  to  average  securities  of  $47.0  million yielding 6.25% (tax
equivalent  basis)  for  the three months ended March 31, 2002.  The decrease in
the average yield of the investment portfolio is related to the general declines
in  market  interest  rates, the portfolio mix, and the timing of security calls
and  maturities  which were reinvested at lower current market rate instruments.
The  27%  increase  in  average  securities,  offset somewhat by the decrease in
yield,  resulted  in the increase of interest income on securities of $61,000 or
10%.

INTEREST  EXPENSE
     The  Company's  interest  expense for the three months ended March 31, 2003
was  $1.4  million.  The  decrease in interest expense of $243,000, or 15%, from
the comparable three months in 2002 of $1.6 million was related primarily to the
67  basis  point decrease in the average rate on liabilities, offset somewhat by
the  10.1%  increase  in  the  level  of  average  interest-bearing liabilities.
Interest-bearing  liabilities averaged $246.3 million for the first three months
of  2003  with  an  average  rate  of  2.25%.  This  is  compared  to  average
interest-bearing liabilities of $223.7 million with an average rate of 2.92% for
the  three  months  ended  March  31,  2002.  The  decrease  in  average rate on
liabilities  is  directly  related  to the general reductions in market interest
rates  and  the  maturities  of  fixed  rate  deposits and borrowings which were
renewed  at  lower  current  market  rates.

PROVISION  FOR  LOAN  LOSSES
     The  provision  for loan losses was $173,000 for the first quarter of 2003,
compared  to  $125,000  for the comparable period of 2002.  As discussed further
under the "Allowance for Loan Losses" section above, in addition to the level of
net  originations, other factors influencing the amount charged to the provision
each  period include (1) trends in and the total amount of past due, classified,
nonperforming, and "watch list" loans; (2) trends in and the total amount of net
chargeoffs,  (3)  concentrations  of  credit risk in the loan portfolio, and (4)
local  and  national  economic  conditions  and  anticipated  trends.  Thus,  in
addition  to  the  general  economic  uncertainty throughout 2002 and into 2003,
factors  contributing to the higher provision each for the first quarter of 2003
included  increases in nonperforming assets which amounted to 0.28% and 0.22% of
gross  loans  at March 31, 2003 and December 31, 2002, respectively.  There were
no  nonperforming  assets  at  March 31, 2002.  Further, the Bank's total "watch
list" loans, which include classified loans, non-accrual loans, and other assets
especially  mentioned  ("OAEM") in the Bank's internal credit grading procedures
and  periodic  reviews,  have  fluctuated  from 8.1% of gross loans at March 31,
2002,  to  7.9%  of  gross  loans at December 31, 2002, and 8.2% as of the first
quarter  end  of  2003.  Estimates  charged to the provision for loan losses are
based  on  management's  judgment  as  to  the amount required to cover probable
losses in the loan portfolio and are adjusted as necessary based on a calculated
model  quantifying  the  estimated  required  balance  in  the  allowance.

NONINTEREST  INCOME  AND  EXPENSES
     Noninterest  income,  which  is  primarily  related  to  service charges on
customers'  deposit accounts; credit card merchant discount fees; commissions on
nondeposit  investment  product  sales  and  insurance  product  sales; mortgage
origination  fees; and gains on sales of investment securities, was $761,000 for
the  three  months ended March 31, 2003 compared to $682,000 for the first three
months  of  2002,  or  an increase of 12%.  The increase is primarily related to
higher  levels  of  transactions  in the available for sale investment portfolio
generating  gains  on sales.  The higher levels of gains were offset somewhat by
reductions  in  nondeposit  insurance product sales commissions based on a lower
level  of  activity  in  2003.

     For  the  three  months  ended March 31, 2003, noninterest expense was $2.2
million  which is a decrease of 2% from the amount incurred for the three months
ended  March  31,  2002  of $2.3 million.  The most significant item included in
other  expenses  is  salaries, wages and benefits which totaled $1.3 million for
the  three months ended March 31, 2003 as compared to $1.4 million for the three
months  ended  March  31,  2002.  The  decrease  of $53,000 or 4% is primarily a
result of lower commission on nondeposit product sales due to the reduced volume
of  activity  and  lower bonus accrual for 2003.  These decreases were partially
offset  by  normal  annual  raises  and  annual increases in the cost of benefit
plans.

     Occupancy and furniture, fixtures, and equipment ("FFE") expenses decreased
a  total  of $13,000 or 4% between the first three months of 2002 and 2003.  The
decrease  was  primarily related to lower depreciation as numerous assets became
fully depreciated in 2002.  There were no significant changes in or additions to
property  and  premises  between  the  two  quarterly  periods.

     Included  in  the  line  item  "other  operating expenses", which increased
$16,000  or  3%  from  the  comparable  period  of  2002,  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.  Increases in advertising and
consultant  and professional fees were offset by lower legal and loan collection
expenses  in  2003  and  reductions in merchant expense.  These fluctuations and
others  related  to  deposit related expenses are a result of normal activity of
the  Company  and  normal  changes  in  the  volume  and nature of transactions.

INCOME  TAXES
     For the three months ended March 31, 2003, the Company reported $417,000 in
income  tax  expense,  or  an  effective tax rate of 31.4%.  This is compared to
income  tax  expense  of  $365,000  for the same period of the prior year, or an
effective  tax  rate  of  32.1%.  The  slight reduction in effective tax rate is
primarily  related to the level of tax-free municipal securities in each period.


     CAPITAL  MANAGEMENT
          The  Company's  capital  serves  to  support  asset growth and provide
protection  against  loss  to  depositors and creditors.  The Company strives to
maintain  an  optimal  level  of capital, commensurate with its risk profile, on
which  an attractive return to shareholders will be realized over both the short
and  long-term,  while  serving  depositors',  creditors'  and regulatory needs.
Total  shareholders'  equity amounted to $29.7 million, or 9.2% of total assets,
at  March 31, 2003.  This is compared to $28.7 million, or 9.5% of total assets,
at  December  31,  2002.  The  $1 million increase in total shareholders' equity
resulted principally from retention of earnings and stock issued pursuant to the
Company's stock option plans, offset somewhat by the decrease in unrealized gain
on  investment  securities  available  for sale during the year.  Book value per
share at March 31, 2003 and December 31, 2002 was $7.33 and $7.16, respectively.
Tangible  book value per share at March 31, 2003 and December 31, 2002 was $7.29
and  $7.11,  respectively.  Tangible  book  value  was less than book value as a
result  of  the purchase premiums associated with branch acquisitions of Freedom
Finance.

     On  December  5, 2002, the Company issued its eleventh consecutive 5% stock
dividend  to  shareholders  of  record  as  of November 22, 2002.  This dividend
resulted  in the issuance of approximately 190,000 shares of the Company's $1.00
par  value  common  stock.  Weighted  average  share and per share data has been
restated  to  reflect  all  stock  dividends  issued.

     To  date,  the  capital  needs  of  the  Company  have been met through the
retention  of  earnings,  from  the  proceeds  of its initial offering of common
stock,  and  from  the  proceeds of stock issued pursuant to the Company's stock
option  plans.  The  Company  believes  that  the  rate of asset growth will not
negatively impact the capital base.  The Company has no commitments or immediate
plans  for  any significant capital expenditures outside of 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.  The purpose of these
regulations  is  to quantitatively measure capital against risk-weighted assets,
including  certain  off-balance  sheet  items.  These  regulations  define  the
elements  of  total  capital  and  establish minimum ratios for capital adequacy
purposes.  To  be  categorized  as "well capitalized", as defined in the Federal
Deposit  Insurance  Corporation  Improvement  Act  of  1991  ("FDICIA"),  Summit
Financial  and  its  banking subsidiary must maintain a risk-based Total Capital
ratio  of  at least 10%, a risk-based Tier 1 Capital ratio of at least 6%, and a
Tier 1 Leverage ratio of at least 5%, and not be subject to a written agreement,
order,  or capital directive with any of its regulators.  At March 31, 2003, the
Company  and  the  Bank exceeded all regulatory required minimum capital ratios,
and  satisfied  the requirements of the well capitalized category established by
FDICIA.  There  are  no  current  conditions  or events that management believes
would  change  the  Company's  or  the  Bank's  category.  The  following  table
summarizes  capital  ratios  for  the Company and the Bank at March 31, 2003 and
December  31,  2002.


<TABLE>
<CAPTION>

                              RISK-BASED CAPITAL CALCULATION

                                                             TO BE            TO BE
                                                          CATEGORIZED       CATEGORIZED
                                                           "ADEQUATELY        "WELL
                                            ACTUAL         CAPITALIZED"     CAPITALIZED"
                                        ---------------  ---------------  --------------
                                        AMOUNT   RATIO   AMOUNT   RATIO   AMOUNT   RATIO
<S>                                     <C>      <C>     <C>      <C>     <C>      <C>
AS OF MARCH 31, 2003
THE COMPANY
Total capital to risk-weighted assets.  $32,132  13.41%  $19,170   8.00%  N.A.
Tier 1 capital to risk-weighted assets  $29,121  12.15%  $ 9,585   4.00%  N.A.
Tier 1 capital to average assets . . .  $29,121   9.49%  $12,281   4.00%  N.A.

THE BANK
Total capital to risk-weighted assets.  $27,988  11.82%  $18,936   8.00%  $23,670  10.00%
Tier 1 capital to risk-weighted assets  $25,025  10.57%  $ 9,468   4.00%  $14,202   6.00%
Tier 1 capital to average assets . . .  $25,025   8.24%  $12,141   4.00%  $15,176   5.00%

AS OF DECEMBER 31, 2002
THE COMPANY
Total capital to risk-weighted assets.  $30,946  13.20%  $18,754   8.00%  N.A.
Tier 1 capital to risk-weighted assets  $28,010  11.95%  $ 9,377   4.00%  N.A.
Tier 1 capital to average assets . . .  $28,010   9.70%  $11,555   4.00%  N.A.

THE BANK
Total capital to risk-weighted assets.  $27,099  11.69%  $18,543   8.00%  $23,179  10.00%
Tier 1 capital to risk-weighted assets  $24,199  10.44%  $ 9,271   4.00%  $13,907   6.00%
Tier 1 capital to average assets . . .  $24,199   8.48%  $11,411   4.00%  $14,263   5.00%

</TABLE>

LIQUIDITY
          Liquidity  risk  is  defined  as  the  risk  of  loss arising from the
Company's  inability  to  meet  known  near-term and projected long-term funding
commitments  and  cash  flow  requirements.  The  objective  of  liquidity  risk
management  is  to  ensure  the  ability  of  the  Company to meet its financial
obligations.  These  obligations  are  the  payment  of deposits on demand or at
their  contractual  maturity;  the  repayment  of borrowings as they mature; the
payment  of  lease  obligations  as they become due; the ability to fund new and
existing  loan and other commitments; the payment of operating expenses; and the
ability  to take advantage of new business opportunities.  Liquidity is achieved
by  the  maintenance  of  assets which can easily be converted to cash; a strong
base  of core customer deposits; maturing short-term assets; the ability to sell
marketable  securities;  and  access  to  borrowed  funds  and  capital markets.
Liquidity  is  measured  and monitored frequently at both the parent company and
the  Bank  levels, allowing management to better understand and react to balance
sheet  trends.  A  comprehensive  liquidity  analysis  provides  a  summary  of
anticipated  changes  in  loans, core deposits, and wholesale funds.  Management
also  maintains  a detailed liquidity contingency plan designed to respond to an
overall  decline  in the condition of the banking industry or a problem specific
to  the  Company.

     Liquid  assets  consist  primarily  of  cash  and  due  from  banks,
interest-bearing deposits at banks, federal funds sold, and unpledged investment
securities available for sale, which accounted for 18% and 16%, respectively, of
average  assets for each of the quarterly periods ended March 31, 2003 and 2002.
Investment  securities  are  an  important  tool  to  the  Company's  liquidity
management.  Securities classified as available for sale may be sold in response
to  changes  in  interest  rates, liquidity needs, and/or significant prepayment
risk.  The  Company's  primary  sources  of  liquidity  include  cash  flow from
operations,  core  deposits,  borrowings,  and  short-term  liquid  assets.  In
management's  opinion,  the  Company  maintains  adequate levels of liquidity by
retaining sufficient liquid assets and assets which can be easily 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, 2003, based on its approved line of credit equal to
20%  of  total assets and eligible collateral available, the Bank had additional
available  credit of approximately $18 million from the FHLB.  Further, the Bank
had  short-term  lines  of  credit  to  purchase  unsecured  federal  funds from
unrelated  correspondent banks with available balances of $17.5 million at March
31,  2003.

          Summit  Financial,  the  parent holding company, has limited liquidity
needs  required to pay operating expenses and to provide funding to its consumer
finance  subsidiary,  Freedom  Finance.  Summit Financial has approximately $3.6
million  in  available  liquidity remaining from its initial public offering and
the  retention  of  earnings.  A  total  of  $2.2  million of this liquidity was
advanced  to  the  Finance Company, in the form of an intercompany loan, to fund
its  operations  as  of  March 31, 2003.  Summit Financial also has an available
line of credit totaling $2.5 million from an unaffiliated financial institution,
all  of  which was available at March 31, 2003.  Additional sources of liquidity
for Summit Financial include borrowing funds from unrelated correspondent banks,
borrowing  from  individuals,  and payments for management fees and debt service
which  are  made  by  the  Company's  subsidiary  on  a  monthly  basis.

     Liquidity  needs  of  Freedom  Finance,  primarily  for the funding of loan
originations,  paying  operating  expenses, and servicing debt, have been met to
date  through  the  initial  capital  investment  of  $500,000  made  by  Summit
Financial,  retention  of earnings, borrowings from unrelated private investors,
and  line  of credit facilities provided by Summit Financial and Summit National
Bank.  The  Company's  management believes its liquidity sources are adequate to
meet  its  operating  needs.


OFF-BALANCE  SHEET  COMMITMENTS
          The  Company  is party to financial instruments with off-balance sheet
risk in the normal course of business to meet the liquidity, credit enhancement,
and  financing  needs  of  its  customers.  These  financial instruments include
legally  binding  commitments to extend credit and standby letters of credit and
involve, to varying degrees, elements of credit and interest rate risk in excess
of  the  amount  recognized  in the balance sheet.  Credit risk is the principal
risk  associated  with  these  instruments.  The  contractual  amounts  of these
instruments  represent the amount of credit risk should the instruments be fully
drawn  upon  and  the  customer  defaults.

     To  control  the  credit risk associated with entering into commitments and
issuing  letters of credit, the Company uses the same credit quality, collateral
policies, and monitoring controls in making commitments and letters of credit as
it  does  with  its  lending  activities.  The Company evaluates each customer's
creditworthiness on a case-by-case basis.  The amount of collateral obtained, if
deemed  necessary  by  the  Company  upon  extension  of  credit,  is  based  on
management's  credit  evaluation.

     Legally  binding  commitments  to extend credit are agreements to lend to a
customer  as  long  as there is no violation of any condition established in the
contract.  Commitments  generally  have  fixed  expiration  dates  or  other
termination  clauses  and  may  require  payment  of  a  fee.  Since many of the
commitments may expire without being drawn upon, the total commitment amounts do
not  necessarily  represent future cash requirements.  Standby letters of credit
obligate the Company to meet certain financial obligations of its customers, if,
under the contractual terms of the agreement, the customers are unable to do so.
The  financial  standby letters of credit issued by the Company are irrevocable.
Payment  is  only  guaranteed  under these letters of credit upon the borrower's
failure  to  perform  its obligations to the beneficiary.  As such, there are no
"stand-ready  obligations" in any of the letters of credit issued by the Company
and  the  contingent  obligations  are  accounted for in accordance with SFAS 5,
"Accounting  for  Contingencies".

     At  March  31,  the  Company's total contractual amounts of commitments and
letters  of  credit  are  as  follows:

<TABLE>
<CAPTION>


(dollars in thousands)                           2003     2002
----------------------------------------------  -------  -------
<S>                                             <C>      <C>
Legally binding commitments to extend credit:
   Commercial and industrial . . . . . . . . .  $16,810  $20,466
   Residential real estate, including prime
     equity lines. . . . . . . . . . . . . . .   18,091   15,767
   Construction and development. . . . . . . .   15,462    8,451
   Consumer and overdraft protection . . . . .    2,359    2,512
                                                -------  -------
                                                 52,722   47,196
Standby letters of credit. . . . . . . . . . .    4,095    5,503
                                                -------  -------
Total commitments. . . . . . . . . . . . . . .  $56,817  $52,699
                                                =======  =======
</TABLE>

EFFECT  OF  INFLATION  AND  CHANGING  PRICES
     The consolidated financial statements have been prepared in accordance with
accounting  principles  generally accepted in the United States of America which
require the measurement of financial position and results of operations in terms
of  historical  dollars,  without  consideration  of  changes  in  the  relative
purchasing  power over time due to inflation.  Unlike most industries, virtually
all  of  the  assets  and liabilities of a financial institution are monetary in
nature.  As a result, interest rates generally have a more significant effect in
the  financial  institution's  performance  than  does  the effect of inflation.

     The  yield  on  a  majority  of  the  Company's  earning  assets  adjusts
simultaneously  with  changes in the general level of interest rates.  Given the
Company's  asset-sensitive  balance  sheet  position, assets reprice faster than
liabilities,  which generally results in decreases in net interest income during
periods  of  declining  interest  rates.  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.


MARKET  RISK  AND  ASSET-LIABILITY  MANAGEMENT
          The  Company's  primary  earnings  source  is its net interest income;
therefore, the Company devotes significant time and has invested in resources to
assist  in  the management of market risk.  The Company's net interest income is
affected  by  changes in market interest rates, and by the level and composition
of earning assets and interest-bearing liabilities.  The Company's objectives in
its  asset-liability  management  are  to  utilize  its  capital effectively, to
provide adequate liquidity and enhance net interest income, without taking undue
risks  or  subjecting  the  Company  unduly  to interest rate fluctuations.  The
Company  takes  a  coordinated  approach  to  the  management  of  its  capital,
liquidity,  and  interest  rate  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,  investment,  deposit,  and  borrowing  activities.
Management actively monitors and manages its interest rate risk exposure.  Other
types  of  market risks, such as foreign currency exchange rate risk, and equity
and  commodity  price  risk,  do not arise in the normal course of the Company's
business.

     Interest  rate  risk  is  the exposure to changes in market interest rates.
The  major  source  of the Company's interest rate risk is the difference in the
maturity  and  repricing  characteristics  between  core  banking  assets  and
liabilities - loans and deposits.  This difference, or mismatch, poses a risk to
net  interest income.  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  or  decrease  in  interest rates may adversely impact the
Company's  earnings  to the extent that the interest rates on earning assets and
interest-bearing  liabilities  do  not  change  at  the  same speed, to the same
extent,  or  on  the  same  basis.

          The  Company  monitors  the  interest  rate sensitivity of its balance
sheet  position  and controls this risk by identifying and quantifying exposures
in its near-term sensitivity through the use of simulation and valuation models,
as well as its long-term gap position, reflecting the known or assumed maturity,
repricing,  and  other cash flow characteristics of assets and liabilities.  The
Company's  simulation analysis involves dynamically modeling interest income and
expense  from  current assets and liabilities over a specified time period under
various  interest  rate  scenarios  and  balance  sheet structures, primarily to
measure the sensitivity of net interest income over relatively short (e.g., less
than  2-year)  time  horizons.  As  the  future path of interest rates cannot be
known  in advance, management uses simulation analysis to project earnings under
various  interest  rate scenarios including reasonable or "most likely", as well
as  deliberately  extreme  and  perhaps unlikely, scenarios.  Key assumptions in
these  simulation analyses relate to the behavior of interest rates and spreads,
changes in the mix and volume of assets and liabilities, repricing and/or runoff
of  deposits,  and,  most importantly, the relative sensitivity of the Company's
assets  and  liabilities  to  changes  in  market interest rates.  This relative
sensitivity  is important to consider as the Company's core deposit base has not
been  subject to the same degree of interest rate sensitivity as its assets, the
majority  of  which  are  based  on  external indices and change in concert with
market  interest  rates.  According  to  the  model,  the  Company  is presently
positioned  so  that  net  interest  income  will  increase in the short-term if
interest  rates  rise  and  will  decrease  in  the short-term if interest rates
decline.

     A  traditional  gap  analysis  is  also  prepared based on the maturity and
repricing characteristics of earning assets and interest-bearing liabilities for
selected  time  bands.  The  mismatch  between repricings or maturities within a
time  band is commonly referred to as the "gap" for that period.  A positive gap
(asset  sensitive)  where  interest  rate  sensitive assets exceed interest rate
sensitive  liabilities  generally  will  result  in  the  net  interest  margin
increasing  in  a  rising  rate  environment  and  decreasing  in a falling rate
environment.  A  negative  gap  (liability  sensitive)  will  generally have the
opposite  result  on net interest income.  However, the traditional gap analysis
does not assess the relative sensitivity of assets and liabilities to changes in
interest  rates  and  other  factors  that could have an impact on interest rate
sensitivity  or net interest income, and is thus not, in management's opinion, a
true  indicator  of  the  Company's  interest  rate  sensitivity  position.

     The  Company's  balance  sheet  structure is primarily short-term in nature
with  a  substantial portion of assets and liabilities maturing within one year.
The  Company's  gap  analysis  indicates a negative 12 month gap as of March 31,
2003  of  $30.2  million.  However,  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 asset sensitive over a 12 month period and the
entire  repricing lives of the assets and liabilities.  This is primarily due to
the  fact  that  in  excess  of 60% of the loan portfolio moves immediately on a
one-to-one  ratio  with  a  change  in the prime lending rate, while the deposit
rates do not increase or decrease as much or as quickly relative to a prime rate
movement.  The  Company's  asset  sensitive  position  means that assets reprice
faster  than  the  liabilities, which causes a decrease in the short-term in the
net  interest income and net interest margin in periods of declining rates until
the  fixed  rate  deposits  mature and are repriced at then lower 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, an increase in net interest
income  and  net interest margin) is realized in the short-term in a rising rate
environment.

          The  Company  monitors  and  considers  methods  of  managing the rate
sensitivity  and  repricing  characteristics  of the balance sheet components in
order  to minimize the impact of sudden and sustained changes in interest rates.
Accordingly, the Company also performs a valuation analysis involving projecting
future  cash flows from current assets and liabilities to determine the Economic
Value  of  Equity  ("EVE")  which  is  the  estimated net present value of those
discounted  cash  flows.  EVE represents the market value of equity and is equal
to  the  market  value  of  assets  minus  the market value of liabilities, with
adjustments  made  for  certain off-balance sheet items, over a range of assumed
changes  in  market  interest  rates.  The  sensitivity of EVE to changes in the
level of interest rates is a measure of the sensitivity of long-term earnings to
changes  in  interest  rates,  and  is used primarily to measure the exposure of
earnings  and  equity to changes in interest rates over a relatively long (e.g.,
greater  than  2  years)  time  horizon.

     The  Company's  market  risk  exposure  is  measured  using  interest  rate
sensitivity  analysis  by  computing  estimated changes in EVE 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  Company's  Board  of  Directors  has  adopted an interest rate risk
policy  which  establishes  maximum allowable decreases in EVE in the event of a
sudden  and  sustained  increase  or  decrease  in  market  interest  rates.

     At  December  31,  2002, the Company's estimated changes in EVE were within
the  limits  established  by  the  Board.  As  of  March  31, 2003, 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, 2002.  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,
2002  included  in  the  Company's  2002  Annual  Report  on  Form  10-K.


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

     In  November  2002,  the  FASB  issued  Interpretation No. 45, "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of  Others"  ("FIN 45").  FIN 45 elaborates on the
disclosure  to  be  made  by  a  guarantor  in  its interim and annual financial
statements  about  its  obligations under certain guarantees that it has issued.
It also clarifies that a guarantor is required to recognize, at the inception of
a  guarantee,  a  liability  for  the fair value of the obligation undertaken in
issuing  the  guarantee.  FIN  45  clarifies  that  a  guarantor  is required to
disclose  (a)  the  nature of the guarantee; (b) the maximum potential amount of
future  payments  under the guarantee; (c) the carrying amount of the liability;
and (d) the nature and extent of any recourse provisions or available collateral
that would enable the guarantor to recover the amounts paid under the guarantee.
FIN 45 also clarifies that a guarantor is required to recognize, at inception of
a  guarantee,  a  liability  for the obligation it has undertaken in issuing the
guarantee  at its inception.  The Company adopted FIN 45 with no material effect
on  the  Company.

     In  January  2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable  Interest  Entities"  ("FIN  46"),  which  addresses  consolidation  by
business  enterprises of variable interest entities. Under FIN 46, an enterprise
that  holds  significant  variable interest in a variable interest entity but is
not  the  primary beneficiary is required to disclose the nature, purpose, size,
and activities of the variable interest entity, its exposure to loss as a result
of the variable interest holder's involvement with the entity, and the nature of
its  involvement  with  the  entity  and  date  when the involvement began.  The
primary  beneficiary  of  a variable interest entity is required to disclose the
nature,  purpose,  size,  and  activities  of  the variable interest entity, the
carrying  amount  and  classification of consolidated assets that are collateral
for  the  variable  interest  entity's  obligations, and any lack of recourse by
creditors  (or  beneficial interest holders) of a consolidated variable interest
entity  to  the  general  creditors  (or  beneficial  interest  holders)  of  a
consolidation  variable  interest  entity  to  the general credit of the primary
beneficiary.  FIN  46  is  effective for the first fiscal year or interim period
beginning  after  June  15,  2003.  The  impact  to the Company upon adoption is
currently  not  known.


<PAGE>


28

ITEM  3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     See  "Market  Risk  and Asset-Liability Management" in Item 2, Management's
Discussion  and  Analysis  of  Financial Condition and Results of Operations for
quantitative and qualitative disclosures about market risk, which information is
incorporated  herein  by  reference.


ITEM  4.  CONTROLS  AND  PROCEDURES

(a)  Evaluation  of  Disclosure  Controls  and  Procedures

     The  Company  maintains  controls  and  procedures  designed to ensure that
information  required  to  be disclosed in the reports that the Company files or
submits  under  the  Securities  Exchange  Act  of  1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of  the Securities and Exchange Commission ("SEC").  Based upon their evaluation
of  those controls and procedures performed within 90 days of the filing date of
this  report, the chief executive officer and the chief financial officer of the
Company  concluded  that  the  Company's disclosure controls and procedures were
adequate  and  effective  in  timely alerting management to material information
relating to the Company (including its consolidated subsidiaries) required to be
included  in  the  Company's  periodic  SEC  filings.

(b)  Changes  in  Internal  Controls

     The  Company  made  no  significant changes in its internal controls or, to
management's  knowledge,  other  factors  that  could significantly affect these
controls subsequent to the date of the evaluation of those controls by the chief
executive  officer  and  chief  financial  officer.

<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
first  quarter  of  2003.

Item  5.     Other  Information.

     None.

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

(a)     Exhibits:

     None

     (b)     Reports  on  Form  8-K:

On  April  23,  2003, the Company filed a Form 8-K related to the earnings press
release  dated  April  22,  2003, which included selected financial data for the
quarter  ended  March  31,  2003  and  for  other  selected  periods.


<PAGE>

                 SUMMIT  FINANCIAL  CORPORATION

                          SIGNATURES



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

SUMMIT  FINANCIAL  CORPORATION


Dated:  May  7,  2003

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


Dated:  May  7,  2003

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

<PAGE>


                                  CERTIFICATION


I,  J.  Randolph  Potter,  certify  that:
1.     I  have  reviewed  this quarterly report on Form 10-Q of Summit Financial
Corporation;
2.     Based  on my knowledge, this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;
3.     Based  on  my  knowledge,  the  financial statements, and other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;
4.     The  registrant's  other  certifying  officers  and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  have:
a)  designed  such  disclosure  controls  and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  quarterly  report  is  being  prepared;
b)  evaluated  the  effectiveness  of  the  registrant's disclosure controls and
procedures  as  of  a  date  within  90  days  prior  to the filing date of this
quarterly  report  (the  "Evaluation  Date");  and
c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on  our  evaluation as of the
Evaluation  Date;
5.     The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board  of  directors  (or  persons  performing  the equivalent
functions):
a)  all significant deficiencies in the design or operation of internal controls
which  could  adversely  affect  the  registrant's  ability  to record, process,
summarize  and  report  financial  data and have identified for the registrant's
auditors  any  material  weaknesses  in  internal  controls;  and
b)  any  fraud,  whether  or  not  material,  that  involves management or other
employees who have a significant role in the registrant's internal controls; and
6.     The  registrant's  other certifying officers and I have indicated in this
quarterly  report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the  date  of  our most recent evaluation, including any corrective actions with
regard  to  significant  deficiencies  and  material  weaknesses.

Date:  May  7,  2003

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


<PAGE>


                                  CERTIFICATION


I,  Blaise  B.  Bettendorf  certify  that:
1.     I  have  reviewed  this quarterly report on Form 10-Q of Summit Financial
Corporation;
2.     Based  on my knowledge, this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;
3.     Based  on  my  knowledge,  the  financial statements, and other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;
4.     The  registrant's  other  certifying  officers  and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  have:
a)  designed  such  disclosure  controls  and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  quarterly  report  is  being  prepared;
b)  evaluated  the  effectiveness  of  the  registrant's disclosure controls and
procedures  as  of  a  date  within  90  days  prior  to the filing date of this
quarterly  report  (the  "Evaluation  Date");  and
c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on  our  evaluation as of the
Evaluation  Date;
5.     The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board  of  directors  (or  persons  performing  the equivalent
functions):
a)  all significant deficiencies in the design or operation of internal controls
which  could  adversely  affect  the  registrant's  ability  to record, process,
summarize  and  report  financial  data and have identified for the registrant's
auditors  any  material  weaknesses  in  internal  controls;  and
b)  any  fraud,  whether  or  not  material,  that  involves management or other
employees who have a significant role in the registrant's internal controls; and
6.     The  registrant's  other certifying officers and I have indicated in this
quarterly  report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the  date  of  our most recent evaluation, including any corrective actions with
regard  to  significant  deficiencies  and  material  weaknesses.

Date:  May  7,  2003

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