FORM  10-Q

        SECURITIES  AND  EXCHANGE  COMMISSION
               Washington,  D.C.  20549

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

     For  The  Quarterly  Period  Ended  June  30,  1999

             Commission  File  Number  000-19235

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


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

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

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


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

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

As  of  July  31,  1999,  3,051,904  shares of $1.00 par value common stock were
outstanding.


<PAGE>
<TABLE>
<CAPTION>

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


                                                     June 30,    December 31,
                                                       1999          1998
                                                    ----------  --------------
<S>                                                 <C>         <C>
ASSETS
Cash and due from banks                             $   5,930   $       5,377
Interest-bearing bank balances                            614             623
Federal funds sold                                      2,220             400
Investments available for sale                         25,233          27,102
Loans, net of unearned income and net of
 allowance for loan losses of $2,050 and $1,827       139,575         128,842
Premises and equipment, net                             2,980           3,101
Accrued interest receivable                             1,148           1,132
Other assets                                            4,005           3,908
                                                    ----------  --------------
                                                    $ 181,705   $     170,485
                                                    ==========  ==============
  LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Noninterest-bearing demand                         $  19,827   $      20,877
 Interest-bearing demand                                9,840           8,541
 Savings and money market                              60,252          50,047
 Time deposits, $100,000 and over                      17,449          17,801
 Other time deposits                                   46,194          42,977
                                                    ----------  --------------
                                                      153,562         140,243
Federal funds purchased and repurchase agreements           -           3,566
Other short-term borrowings                               500             820
FHLB advances                                           9,000           8,000
Accrued interest payable                                1,015           1,052
Other liabilities                                       1,215           1,130
                                                    ----------  --------------
                                                      165,292         154,811
                                                    ----------  --------------
Shareholders' equity:
 Common stock, $1.00 par value; 20,000,000
  shares authorized; issued and
  outstanding 3,049,878 and 3,038,706 shares            3,050           3,039
 Additional paid-in capital                            12,757          12,726
 Retained earnings                                      1,149               -
 Accumulated other comprehensive (loss)
  income, net of tax                                     (189)            313
 Nonvested resticted stock                               (354)           (404)
                                                    ----------  --------------
     Total shareholders' equity                        16,413          15,674
                                                    ----------  --------------
                                                    $ 181,705   $     170,485
                                                    ==========  ==============
<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

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

                                                 For the Quarters Ended
                                                       June 30,
                                                  1999         1998
                                               -----------  -----------
<S>                                            <C>          <C>
Interest Income:
 Loans                                         $    3,301   $    3,023
 Taxable investment securities                        232          289
 Nontaxable investment securities                     124           97
 Federal funds sold                                    10          122
 Other                                                 23           56
                                               -----------  -----------
                                                    3,690        3,587
                                               -----------  -----------
Interest Expense:
 Deposits                                           1,430        1,642
 Other                                                154           89
                                               -----------  -----------
                                                    1,584        1,731
                                               -----------  -----------
     Net interest income                            2,106        1,856
Provision for loan losses                            (129)         (51)
                                               -----------  -----------
     Net interest income after
      provision for loan losses                     1,977        1,805
                                               -----------  -----------
Other Income:
 Service charges and fees on deposit accounts          58           58
 Credit card service fees and income                   82           76
 Insurance commission fee income                       62           80
 Gain on sale of securities                             -            -
 Other income                                         188          170
                                               -----------  -----------
                                                      390          384
                                               -----------  -----------
Other Operating Expenses:
 Salaries, wages and benefits                         852          807
 Occupancy                                            142          109
 Furniture, fixtures and equipment                    157          130
 Other expenses                                       399          419
                                               -----------  -----------
                                                    1,550        1,465
                                               -----------  -----------
Income before income taxes                            817          724
Provision for income taxes                           (235)        (269)
                                               -----------  -----------
Net income                                     $      582   $      455
                                               ===========  ===========

Net income per share:
   Basic                                       $      .19   $      .15
   Diluted                                     $      .16   $      .13
Average shares outstanding:
   Basic                                        3,048,000    3,029,000
   Diluted                                      3,595,000    3,604,000

<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 Six Months Ended
                                                       June 30,
                                                  1999         1998
                                               -----------  -----------
<S>                                            <C>          <C>
Interest Income:
 Loans                                         $    6,483   $    6,032
 Taxable investment securities                        468          635
 Nontaxable investment securities                     246          182
 Federal funds sold                                    12          190
 Other                                                 45           98
                                               -----------  -----------
                                                    7,254        7,137
                                               -----------  -----------
Interest Expense:
 Deposits                                           2,825        3,273
 Other                                                278          144
                                               -----------  -----------
                                                    3,103        3,417
                                               -----------  -----------
     Net interest income                            4,151        3,720
Provision for loan losses                            (210)        (101)
                                               -----------  -----------
     Net interest income after
      provision for loan losses                     3,941        3,619
                                               -----------  -----------

Other Income:
 Service charges and fees on deposit accounts         106           98
 Credit card service fees and income                  159          152
 Insurance commission fee income                      122          181
 Gain on sale of securities                            22            1
 Other income                                         374          333
                                               -----------  -----------
                                                      783          765
                                               -----------  -----------
Other Operating Expenses:
 Salaries, wages and benefits                       1,694        1,644
 Occupancy                                            287          220
 Furniture, fixtures and equipment                    311          274
 Other expenses                                       820          872
                                               -----------  -----------
                                                    3,112        3,010
                                               -----------  -----------
Income before income taxes                          1,612        1,374
Provision for income taxes                           (463)        (504)
                                               -----------  -----------
Net income                                     $    1,149   $      870
                                               ===========  ===========

Net income per share:
   Basic                                       $      .38   $      .29
   Diluted                                     $      .32   $      .24
Average shares outstanding:
   Basic                                        3,046,000    3,026,000
   Diluted                                      3,592,000    3,577,000

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                  SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                 FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                                              (Dollars in Thousands)
                                                   (Unaudited)

                                                                             Accumulated
                                                                                Other                      Total
                                                      Additional            comprehensive    Nonvested     share-
                                               Common   paid-in   Retained      (loss)      restricted    holders'
                                                stock   capital   earnings    income, net      stock      equity
                                               -------  --------  ---------  -------------  -----------  --------
<S>                                            <C>      <C>       <C>        <C>            <C>          <C>
Balance at December 31, 1997                   $ 2,875  $ 10,909          -  $         90        ($505)  $13,369
Net income for the six months
 ended June 30, 1998                                 -         -        870             -            -       870
Other comprehensive income:
Unrealized holding gains on securities
  arising during the period, net of
  tax of $30                                         -         -          -            45            -        45
                                                                                                         --------
Comprehensive income                                 -         -          -             -            -       915
                                                                                                         --------
Employee stock options exercised                    12        31          -             -            -        43
Amortization of deferred
 compensation on restricted stock                    -         -          -             -           51        51
                                               -------  --------  ---------  -------------  -----------  --------
Balance at June 30, 1998                       $ 2,887  $ 10,940  $     870  $        135        ($454)  $14,378
                                               =======  ========  =========  =============  ===========  ========


Balance at December 31, 1998                   $ 3,039  $ 12,726          -  $        313        ($404)  $15,674
Net income for the six months
 ended June 30, 1999                                 -         -      1,149             -            -     1,149
Other comprehensive income:
Unrealized gain on securities:
 Unrealized holding losses arising during
  the period, net of tax of ($307)                   -         -          -          (486)           -         -
 Less: reclassification adjustment for gains
  included in net income, net of tax of $6           -         -          -           (16)           -         -
                                                                             -------------
 Other comprehensive loss                            -         -          -          (502)           -      (502)
                                                                             -------------               --------
Comprehensive income                                 -         -          -             -            -       647
                                                                                                         --------
Employee stock options exercised                    11        31          -             -            -        42
Amortization of deferred
 compensation on restricted stock                    -         -          -             -           50        50
                                               -------  --------  ---------  -------------  -----------  --------
Balance at June 30, 1999                       $ 3,050  $ 12,757  $   1,149         ($189)       ($354)  $16,413
                                               =======  ========  =========  =============  ===========  ========

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

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

                                                      For  the  Six  Months  Ended
                                                                    June 30,
                                                                 1999       1998
                                                               ---------  --------
<S>                                                            <C>        <C>
Cash flows from operating activities:
 Net income                                                    $  1,149   $   870
Adjustments to reconcile net income to net cash
 provided by operating activities:
    Provision for loan losses                                       210       101
    Depreciation and amortization                                   252       220
    Gain on sale of equipment and vehicles                          (26)        -
    Gain on sale securities available for sale                      (22)       (1)
    Net amortization of net premium on investments                   44         5
    Amortization of deferred compensation on restricted stock        50        51
    Decrease in other assets                                         33       123
    Increase in other liabilities                                   355       122
                                                               ---------  --------
Net cash provided by operating activities                         2,045     1,491
                                                               ---------  --------

Cash flows from investing activities:
  Purchases of securities available for sale                     (2,888)   (4,105)
  Proceeds from maturities of securities available for sale       2,905     4,108
  Proceeds from sales of securities available for sale            1,021       951
  Purchases of investments in FHLB and other stock                 (146)      (84)
  Net increase in loans                                         (10,943)     (818)
  Purchases of premises and equipment                              (155)     (343)
  Proceeds from sale of equipment and vehicles                       49         -
                                                               ---------  --------
Net cash used in investing activities                           (10,157)     (291)
                                                               ---------  --------

Cash flows from financing activities:
  Net increase in deposit accounts                               13,320     4,572
  Net decrease in federal funds purchased                        (3,566)        -
  Repayment of other short-term borrowings                         (320)        -
  Proceeds from FHLB advances                                    10,550     6,500
  Repayments of FHLB advances                                    (9,550)   (2,500)
  Proceeds from employee stock options exercised                     42        43
                                                               ---------  --------
Net cash provided by financing activities                        10,476     8,615
                                                               ---------  --------
Net increase in cash and cash equivalents                         2,364     9,815
Cash and cash equivalents, beginning of period                    6,400     9,361
                                                               ---------  --------
Cash and cash equivalents, end of period                       $  8,764   $19,176
                                                               =========  ========

SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest                       $  3,140   $ 3,649
Cash paid during the period for income taxes                   $    525   $   283
Change in fair market value of investment securities
 available for sale, net of income taxes                          ($502)  $    45

<FN>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
</TABLE>


<PAGE>

                          SUMMIT FINANCIAL CORPORATION
     CONDENSED  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
                                  JUNE 30, 1999

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

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

     The  accompanying consolidated financial statements include the accounts of
the  Company  and  its  subsidiaries.  All significant intercompany accounts and
transactions  have been eliminated in consolidation.  The unaudited consolidated
financial  statements  of the Company at June 30, 1999 and for the three and six
month  periods ended June 30, 1999 and 1998 were prepared in accordance with the
instructions  for  Form  10-Q.  In  the  opinion  of management, all adjustments
(consisting  only  of  items  of a normal recurring nature) necessary for a fair
presentation  of  the  financial  position  at June 30, 1999, and the results of
operations and cash flows for the periods ended June 30, 1999 and 1998 have been
included.  The results for the three or six month period ended June 30, 1999 are
not necessarily indicative of the results that may be expected for the full year
or  any  other  interim  period.

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

     These  consolidated  financial  statements  do  not include all disclosures
required  by  generally  accepted  accounting  principles  and should be read in
conjunction  with  the  Company's  audited consolidated financial statements and
related  notes  for  the  year ended December 31, 1998 included in the Company's
1998  Annual  Report  on  Form  10K.

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  $8,764,000  and
$19,176,000  at  June  30,  1999  and  1998,  respectively.


<PAGE>
NOTE  3  -  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 and the six months
ended  June  30,  1999  and  1998.  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
distributions  and  the  1998  two-for-one stock split as of the earliest period
presented.  (Dollars,  except  per  share  data,  in  thousands).

<TABLE>
<CAPTION>

                                            For the Three Months Ended June 30,
                                        1999        1999        1998        1998
                                     ----------  ----------  ----------  ----------
                                        BASIC      DILUTED      BASIC      DILUTED
                                      ---------  ----------  ----------  ----------
<S>                                  <C>         <C>         <C>         <C>
Net Income                           $      582  $      582  $      455  $      455
                                     ----------  ----------  ----------  ----------
Weighted average shares
 outstanding                          3,048,461   3,048,461   3,028,824   3,028,824
Effective of Dilutive Securities:
 Stock options and restricted stock       -         546,074       -         575,274
                                     ----------  ----------  ----------  ----------
                                      3,048,461   3,594,535   3,028,824   3,604,098
                                     ----------  ----------  ----------  ----------

Per share amount                     $     0.19  $     0.16  $     0.15  $     0.13
                                     ==========  ==========  ==========  ==========

</TABLE>




<TABLE>
<CAPTION>

                                             For the Six Months Ended June 30,
                                        1999        1999        1998        1998
                                     ----------  ----------  ----------  ----------
                                        BASIC      DILUTED      BASIC      DILUTED
                                      ---------  ----------  ----------  ----------
<S>                                  <C>         <C>         <C>         <C>
Net Income                           $    1,149  $    1,149  $      870  $      870
                                     ----------  ----------  ----------  ----------
Weighted average shares
 outstanding                          3,046,206   3,046,206   3,026,568   3,026,568
Effective of Dilutive Securities:
 Stock options and restricted stock       -         546,074        -        550,696
                                     ----------  ----------  ----------  ----------
                                      3,046,206   3,592,280   3,026,568   3,577,264
                                     ----------  ----------  ----------  ----------

Per-share amount                     $     0.38  $     0.32  $     0.29  $     0.24
                                     ==========  ==========  ==========  ==========

</TABLE>


NOTE  4  -  SEGMENT  INFORMATION:
     The  Company reports information about its operating segments in accordance
with  SFAS  131,  "Disclosures  about  Segments  of  an  Enterprise  and Related
Information".  Summit  Financial  Corporation  is the parent holding company for
Summit National Bank ("Bank"), a nationally chartered bank, and Freedom Finance,
Inc.  ("Finance"),  a  consumer finance company.  The Company considers the Bank
and  the  Finance Company separate business segments.  Financial performance for
each  segment  is detailed in the following tables.  Included in the "Corporate"
column  are  amounts  for  general  corporate  activities  and  eliminations  of
intersegment  transactions.

<TABLE>
<CAPTION>

                            For  the  quarter  ended  June  30, 1999  At and for the six months ended June 30, 1999
                             Bank      Finance    Corporate     Total      Bank     Finance    Corporate    Total
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
<S>                        <C>        <C>        <C>          <C>        <C>       <C>        <C>          <C>
Interest income            $  3,309   $    403         ($22)  $  3,690   $ 6,449   $    851         ($46)  $ 7,254
Interest expense             (1,575)       (67)          58     (1,584)   (3,086)      (135)         118    (3,103)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Net interest income           1,734        336           36      2,106     3,363        716           72     4,151
Provision for loan losses      (100)       (29)           -       (129)     (140)       (70)           -      (210)
Other income                    324         78          (12)       390       641        166          (24)      783
Other expenses               (1,175)      (373)          (2)    (1,550)   (2,368)      (740)          (4)   (3,112)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Income before taxes             783         12           22        817     1,496         72           44     1,612
Income taxes                   (227)        (2)          (6)      (235)     (426)       (25)         (12)     (463)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Net income                 $    556   $     10   $       16   $    582   $ 1,070   $     47   $       32   $ 1,149
                           =========  =========  ===========  =========  ========  =========  ===========  ========
Net loans                                                                $138,075   $  2,560     ($1,060)  $139,575
                                                                        =========  =========  ===========  ========
Total assets                                                             $179,419   $  3,376     ($1,090)  $181,705
                                                                        =========  =========  ===========  ========

</TABLE>


<TABLE>
<CAPTION>

                           For  the  quarter  ended  June  30, 1998   At and for the six months ended June 30, 1998
                             Bank      Finance    Corporate     Total      Bank     Finance    Corporate    Total
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
<S>                        <C>        <C>        <C>          <C>        <C>       <C>        <C>          <C>
Interest income            $  3,237   $    366         ($16)  $  3,587   $ 6,379   $    795         ($37)  $ 7,137
Interest expense             (1,713)       (70)          52     (1,731)   (3,381)      (144)         108    (3,417)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Net interest income           1,524        296           36      1,856     2,998        651           71     3,720
Provision for loan losses       (30)       (21)           -        (51)      (60)       (41)           -      (101)
Other income                    328         68          (12)       384       638        151          (24)      765
Other expenses               (1,075)      (384)          (6)    (1,465)   (2,224)      (773)         (13)   (3,010)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Income before taxes             747        (41)          18        724     1,352        (12)          34     1,374
Income taxes                   (275)        11           (5)      (269)     (495)         2          (11)     (504)
                           ---------  ---------  -----------  ---------  --------  ---------  -----------  --------
Net income                 $    472       ($30)  $       13   $    455   $   857       ($10)  $       23   $   870
                           =========  =========  ===========  =========  ========  =========  ===========  ========
Net loans                                                               $116,194   $  2,250       ($700)   $117,744
                                                                        =========  =========  ===========  ========
Total assets                                                            $167,516   $  3,246       ($750)   $170,012
                                                                        =========  =========  ===========  ========

</TABLE>

<PAGE>

                          SUMMIT FINANCIAL CORPORATION

                       PART  I.  FINANCIAL  INFORMATION

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


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

     During  the  quarter  ended June 30, 1999, the Company's net income totaled
$582,000  or $.16 per diluted share.  This is compared to net income of $455,000
or  $.13  per diluted share for the same quarterly period of 1998 or an increase
of  23.1%.  For  the first six months of 1999 the Company reported net income of
$1,149,000  or  $.32 per diluted share, an improvement of approximately $278,000
(31.9%) from the net income for the first six months of 1998 of $870,000 or $.24
per  diluted  share.

     Total  assets  increased  approximately $11.2 million or 6.6% from December
31,  1998  to  June 30, 1999.  Deposits increased approximately $13.3 million or
9.5%  during  the  period.  The increase in deposits funded gross loan growth of
$10.9 million (8.4%), and the $1.8 million (455%) increase in federal funds sold
during  the  same  period.

RESULTS  OF OPERATIONS - COMPARISON OF THE QUARTERS ENDED JUNE 30, 1999 AND 1998

GENERAL
     The Company reported consolidated net income for the quarter ended June 30,
1999  of $582,000, compared to net income of $455,000 for the quarter ended June
30, 1998, or an improvement of approximately $126,000 or 27.8%.  The increase in
consolidated  earnings  for  the  1999  period  is primarily attributable to the
$250,000  or  13.5% increase in the Company's net interest income related to the
higher  level  of  earning  assets  in 1999 as compared to the prior year.  Also
contributing  to  the  higher  net  interest income is the 8.5% reduction in the
Company's  interest  expense resulting from the shift of the deposit mix to more
floating rate, lower costing deposits.  Net income was additionally increased by
the reduction in the effective income tax rate due to a higher level of tax-free
municipal securities.  Offsetting these items is the increase in other operating
expenses  of  approximately  5.8%  and  the  higher provision for loan losses of
$78,000  or  153%.

NET  INTEREST  INCOME
     Net interest income is the difference between the interest earned on assets
and  the  interest paid for the liabilities used to support those assets.  It is
the  largest  component  of  the  Company's  earnings and changes in it have the
greatest  impact  on net income.  Variations in the volume and mix of assets and
liabilities  and their relative sensitivity to interest rate movements determine
changes  in  net  interest  income.  During the quarter ended June 30, 1999, the
Company  recorded  consolidated  net  interest  income  of $2.1 million, a 13.5%
increase from the net interest income of $1.9 million for the quarter ended June
30,  1998.  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  5.4% and 4.2% respectively, combined with the 39 basis point increase in net
interest  margin  for  the  Company.

     For  the  quarters ended June 30, 1999 and 1998, the Company's consolidated
net  interest margin was 5.23% and 4.84%, respectively.  The net interest margin
is  calculated as annualized net interest income divided by year-to-date average
earning  assets.  The  increase  in  consolidated net interest margin is related
primarily  to  the  lower  average  cost of liabilities in 1999 as higher priced
certificates of deposit matured and were replaced with deposits of lower current
market  rates  and  floating  rates.

INTEREST  INCOME
     For  the quarter ended June 30, 1999, the Company's earning assets averaged
$166.5  million  and  had  an  average yield of 9.04%.  This compares to average
earning assets of $157.9 million for the second quarter of 1998, yielding 9.24%.
Thus,  the  5.4%  increase  in  volume of earning assets, offset by the 20 basis
point  reduction  in average yield, accounts for the $103,000 (2.9%) increase in
interest  income  between  the  second  quarter  of  1998  and  1999.

     Consolidated  loans  averaged  approximately  83%  of the Company's average
earning  assets  for  the  second  quarter of 1999 compared to 75% for the prior
year.  The  majority  of  the  Company's  loans  are  tied  to  the  prime  rate
(approximately  63%  of  the  Bank's  portfolio is at floating rates at June 30,
1999),  which  averaged  7.75% and 8.5% for the quarters ended June 30, 1999 and
1998  respectively.  During  the  second  quarter  of  1999,  consolidated loans
averaged  $137.8  million, yielding an average rate of 9.61%, compared to $118.4
million, yielding an average rate of 10.24% for the second quarter of 1998.  The
63  basis  point  decrease in the average yield on loans is primarily related to
the  lower  prime  lending rate which decreased 75 basis point during the fourth
quarter  of  1998.  The  higher  level  of average loans (which increased 16.4%)
offset  the decrease in average rate and resulted in an increase in consolidated
interest  income  on  loans  of  $279,000  or  9.2%.

     Investment  securities  averaged  $26.2  million  or 16% of average earning
assets  and  yielded  6.43%  (tax equivalent basis) during the second quarter of
1999,  compared  to  average  securities  of  $27.5  million yielding 6.37% (tax
equivalent  basis) for the quarter ended June 30, 1998.  The increase in average
yield  of  the  investment  portfolio  is  related  to the portfolio mix and the
percentage  of higher yielding tax-free municipal securities in the portfolio in
1999  as  compared  to  the prior year.  This increase partially offset the 4.8%
reduction  in average securities and resulted in the decrease of interest income
on  securities  of  $31,000.

INTEREST  EXPENSE
     The Company's interest expense for the quarter ended June 30, 1999 was $1.6
million.  The  decrease  of  8.5%  from  the  comparable quarter in 1998 of $1.7
million  was directly related to the 64 basis point reduction in average rate on
liabilities,  offset by the 5% increase in volume.  Interest-bearing liabilities
averaged  $138.6  million for the second quarter of 1999 with an average rate of
4.58%.  This  compares to average interest-bearing liabilities of $132.9 million
with an average rate of 5.22% for the quarter ended June 30, 1998.  The decrease
in  the  average rate on liabilities is the result of maturities of certificates
of  deposit that were subsequently renewed at lower current market rates and the
shift  of  deposits to a larger percentage of lower cost, floating rate deposits
which  were repriced immediately as the prime rate dropped in the fourth quarter
of  1998.  At  June  30,  1999, money market deposits accounted for 38% of total
deposits  compared  to  34%  for  the  prior  year.

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

     While  it is the Company's policy to provide for loan losses in the current
period  in  which  a  loss is considered probable, there are additional risks of
losses which cannot be quantified precisely or attributed to particular loans or
classes  of  loans.  Management  uses  the  best  information  available to make
evaluations,  however,  future  adjustments to the allowance may be necessary if
economic  conditions  differ  substantially  from the assumptions used in making
evaluations.  The  Company  is  also  subject  to  regulatory  examinations  and
determinations  as to the adequacy of the allowance, which may take into account
such  factors as the methodology used to calculate the allowance for loan losses
and  the  size  of  the  allowance  in  comparison  to a group of peer companies
identified  by  the  regulatory  agencies.

     Included  in  the  net  income  for  the  quarter  ended June 30, 1999 is a
provision for loan losses of $129,000 compared to a provision of $51,000 for the
second  quarter  of  1998.  The  higher  net loan originations for the first six
months  of  1999, which totaled $10.1 million compared to $818,000 for 1998, led
to  the  increase  in  the  provision  for  loan  losses  in  the  current year.

     At  June  30,  1999,  the  consolidated  allowance for loan losses was $2.1
million  or  1.45%  of  total loans net of unearned income.  This compares to an
allowance of $1.8 million or 1.50% of total loans net of unearned income at June
30,  1998.  For  the  quarter  ended  June  30,  1999,  the  Company  reported
consolidated  net  charge-offs  of  $23,000  or  0.07%  of  average  loans on an
annualized basis.  This is compared to consolidated net charge-offs of $3,000 or
0.01%  (annualized)  of average loans for the comparable quarter of 1998.  There
were  no loans on nonaccrual status at either June 30, 1999 or 1998.  Loans past
due  90  days  and  greater totaled $328,000 or 0.23% of gross loans at June 30,
1999  and  $81,000 or 0.07% of gross loans at June 30, 1998.  Generally loans of
the Bank are placed on nonaccrual status at the earlier of when they are 90 days
past  due  or  when  the  collection of interest becomes doubtful.  Loans of the
Finance  Company are not classified as nonaccrual, but are charged-off when they
become  150  days  contractually  past  due  or  earlier  if  the loan is deemed
uncollectible.  The  allowance  for  loan  losses  at  June  30, 1999 represents
management's  estimate of probable losses inherent in the loan portfolio at that
date.


OTHER  INCOME  AND  EXPENSES
     Other  income,  which is primarily related to service charges on customers'
deposit  accounts;  credit  card  interchange  fees;  merchant  discount  fees;
commissions  on nondeposit investment product sales and insurance product sales;
and  mortgage origination fees, was $390,000 for the quarter ended June 30, 1999
compared  to $384,000 for the second quarter of June 30, 1998, or an increase of
1.5%.  Reductions  in  the  volume  of  activity generating insurance commission
income  was  offset by increases in other income items related to gains on sales
of  available  for  sale  investment  securities  and  company  vehicles.

     For  the  quarter  ended  June  30, 1999, total overhead expenses were $1.6
million which is an increase of $86,000 or 5.8% over the amount incurred for the
quarter ended June 30, 1998 of $1.5 million.  The most significant item included
in other expenses is salaries, wages and benefits which amounted to $851,000 for
the  quarter  ended  June 30, 1999 as compared to $807,000 for the quarter ended
June 30, 1998.  The increase of $44,000 or 5.5% is a result of (1) normal annual
raises;  and  (2)  additional  staff  added at the new branch of the Bank in the
fourth  quarter  of  1998.  These  increases were offset by (1) lower commission
expense  and  associated  payroll  taxes  related to the reduction in nondeposit
product  sales  in  the  second  quarter of 1999; and (2) fewer employees at the
Finance  Company  related to a branch office which was closed in September 1998.

     The  31.0% ($34,000) increase in occupancy and the 20.6% ($27,000) increase
in  furniture,  fixtures,  and  equipment ("FFE") between the second quarters of
1999 and 1998 is directly related to normal expenses, including rent, utilities,
depreciation,  and  property  taxes  and insurance, associated with the new Bank
branch  facility  which  opened  in  the  fourth  quarter  of  1998.

     Included in the line item "other expenses", which decreased $19,000 or 4.6%
from  the  comparable quarter of 1998, are charges for OCC assessments; property
and  bond  insurance;  ATM  switch  fees;  credit  card  expenses;  professional
services;  education  and  seminars; advertising and public relations; and other
branch  and  customer  related  expenses.  The  decrease is primarily related to
reductions  in  advertising,  education, professional services, and travel which
were  incurred  in  1998  at higher levels than experienced in the 1999 quarter.

INCOME  TAXES
     For  the  quarter  ended  June  30,  1999, the Company reported $235,000 in
income  tax  expense,  or  an  effective tax rate of 28.8%.  This is compared to
income  tax  expense  of  $269,000 for the same quarter of the prior year, or an
effective  tax  rate  of 37.2%. The reduction in the effective rate is primarily
related  to  the  higher  level  of  tax-free  municipal  investments  in  1999.


RESULTS  OF  OPERATIONS  -  COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1999 AND
1998

GENERAL
     The  Company reported consolidated net income for the six months ended June
30,  1999  of  $1,149,000, compared to net income of $870,000 for the six months
ended  June 30, 1998, or an improvement of approximately $278,000 or 31.9%.  The
increase  in consolidated earnings for the 1999 period is primarily attributable
to  the  $432,000 or 11.6% increase in the Company's net interest income related
to  the  higher  level  of earning assets in 1999 as compared to the prior year.
Also contributing to the higher net interest income is the 9.2% reduction in the
Company's  interest  expense resulting from the shift of the deposit mix to more
floating rate, lower costing deposits.  Net income was additionally increased by
the reduction in the effective income tax rate due to a higher level of tax-free
municipal securities.  Offsetting these items is the increase in other operating
expenses  of  approximately  3.4%  and  the  higher provision for loan losses of
$109,000  or  108%.

NET  INTEREST  INCOME
     Net  interest  income,  the  difference  between  the  interest  earned and
interest paid, is the largest component of the Company's earnings and changes in
it  have the greatest impact on net income.  Variations in the volume and mix of
assets and liabilities and their relative sensitivity to interest rate movements
determine  changes in net interest income.  During the six months ended June 30,
1999,  the Company recorded consolidated net interest income of $4.2 million, an
11.6%  increase  from the net interest income of $3.7 million for the six months
ended  June  30,  1998.  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  4.2%  and  3.2% respectively, combined with the 38 basis point
increase  in  the  net  interest  margin  for  the  Company.

     For the six months ended June 30, 1999 and 1998, the Company's consolidated
net  interest margin was 5.32% and 4.94%, respectively.  The net interest margin
is  calculated as annualized net interest income divided by year-to-date average
earning  assets.  The  increase  in  consolidated net interest margin is related
primarily  to  the  lower  average  cost  liabilities  in  1999 as higher priced
certificates of deposit matured and were replaced with deposits of lower current
market  rates  and  floating  rates.

INTEREST  INCOME
     For  the  six  months  ended  June  30,  1999, the Company's earning assets
averaged  $162.2  million  and  had an average yield of 9.18%.  This compares to
average  earning  assets  of  $155.8  million  for the first six months of 1998,
yielding  approximately  9.36%.  Thus,  the  4.2%  increase in volume of average
earning  assets,  offset  by  the  19  basis  point  reduction in average yield,
accounts  for  the  $117,000 (1.7%) increase in interest income between 1998 and
1999.

     Consolidated  loans  averaged  approximately  83%  of the Company's average
earning  assets  for  the first six months of 1999 compared to 76% for the prior
year.  The  majority  of  the  Company's  loans  are  tied  to  the  prime  rate
(approximately  63%  of  the  Bank's  portfolio is at floating rates at June 30,
1999),  which averaged 7.75% and 8.5% for the six months ended June 30, 1999 and
1998,  respectively.  During  the  first  six months of 1999, consolidated loans
averaged  $133.9  million,  yielding  an  average  of  9.76%, compared to $118.0
million, yielding an average of 10.31% for the first six months of 1998.  The 55
basis  point  decrease in the average yield on loans is primarily related to the
lower  prime  lending  rate  which  decreased  75 basis points during the fourth
quarter  of  1998.  The  higher  level  of average loans (which increased 13.5%)
offset  the decrease in average rate and resulted in an increase in consolidated
interest  income  on  loans  of  $451,000  or  7.5%.

     Investment  securities  averaged  $26.4  million  or 16% of average earning
assets  and  yielded 6.43% (tax equivalent basis) during the first six months of
1999,  compared  to  average  securities  of  $27.8  million yielding 6.60% (tax
equivalent  basis)  for the six months ended June 30, 1998.  The decrease in the
average  yield  of  the investment portfolio is related to the portfolio mix and
the timing of higher yielding securities maturing.  This decrease, combined with
the  5.2%  reduction  in  average  securities  and  resulted  in the decrease of
interest  income  on  securities  of  $103,000.

INTEREST  EXPENSE
     The  Company's  interest expense for the six months ended June 30, 1999 was
$3.1  million.  The  decrease  of 9.2% from the comparable six months in 1998 of
$3.4 million was directly related to the 63 basis point reduction in the average
rate  on  liabilities,  offset by the 3.2% increase in volume.  Interest-bearing
liabilities  averaged  $135.4  million  for the first six months of 1999 with an
average  rate of 4.62%. This is compared to average interest-bearing liabilities
of  $131.2  million  with an average rate of 5.25% for the six months ended June
30,  1998.  The  decrease  in  the  average rate on liabilities is the result of
maturities  of certificates of deposit renewed at lower current market rates and
the  shift  of  deposits  to  a  larger  percentage of lower cost, floating rate
deposits which were repriced immediately as the prime rate dropped in the fourth
quarter  of  1998.  At June 30, 1999, money market deposits accounted for 38% of
total  deposits  compared  to  34%  for  the  prior  year.

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

     Included  in  the  net  income  for the six months ended June 30, 1999 is a
provision  for  loan  losses of $210,000 compared to a provision of $101,000 for
the first six months of 1998.  The increase in the provision required is related
to  the  higher net originations experienced by the Company during the first six
months  of  1999  as  compared  to  the  same  period  of  1998.

     At  June  30,  1999,  the  consolidated  allowance for loan losses was $2.1
million  or  1.45%  of  total loans net of unearned income.  This compares to an
allowance of $1.8 million or 1.50% of total loans net of unearned income at June
30,  1998.  For  the  six  months  ended  June  30,  1999,  the Company reported
consolidated  net  recoveries  of  ($13,000)  or  0.02%  of  average loans on an
annualized  basis.  This  is compared to consolidated net charge-offs of $40,000
or 0.07% (annualized) of average loans for the comparable period of 1998.  There
were  no loans on nonaccrual status at either June 30, 1999 or 1998.  Loans past
due  90  days  and  greater totaled $328,000 or 0.23% of gross loans at June 30,
1999  and  $81,000 or 0.07% of gross loans at June 30, 1998.  Generally loans of
the Bank are placed on nonaccrual status at the earlier of when they are 90 days
past  due  or  when  the  collection of interest becomes doubtful.  Loans of the
Finance  Company are not classified as nonaccrual, but are charged-off when they
become  150  days  contractually  past  due  or  earlier  if  the loan is deemed
uncollectible.  The  allowance  for  loan  losses  at  June  30, 1999 represents
management's  estimate of probable losses inherent in the loan portfolio at that
date.

OTHER  INCOME  AND  EXPENSES
     Other  income,  which is primarily related to service charges on customers'
deposit  accounts;  credit  card  interchange  fees;  merchant  discount  fees;
commissions  on nondeposit investment product sales and insurance product sales;
and  mortgage  origination  fees, was $783,000 for the six months ended June 30,
1999  compared  to  $765,000 for the first six months of 1998, or an increase of
2.3%.  Reductions  in  the  volume  of  activity generating insurance commission
income  was  offset by increases in other income items related to gains on sales
of  available  for  sale  investment  securities  and  company  vehicles.

     For  the  six months ended June 30, 1999, total overhead expenses were $3.1
million which is an increase of 3.4% over the amount incurred for the six months
ended  June  30,  1998  of  $3.0 million.  The most significant item included in
other  expenses  is  salaries, wages and benefits which amounted to $1.7 million
for  the  six months ended June 30, 1999 as compared to $1.6 million for the six
months  ended June 30, 1998.  The increase of $51,000 or 3.1% is a result of (1)
normal  annual  raises;  and (2) additional staff added at the new branch of the
Bank  in  the  fourth quarter of 1998.  These increases were offset by (1) lower
commission  expense  and  associated  payroll  taxes related to the reduction in
nondeposit  product sales in the second quarter of 1999; and (2) fewer employees
at  the Finance Company related to a branch office which was closed in September
1998.

     The  30.4% ($67,000) increase in occupancy and the 13.5% ($37,000) increase
in  furniture,  fixtures,  and equipment ("FFE") between the first six months of
1999 and 1998 is directly related to normal expenses, including rent, utilities,
depreciation,  and  property  taxes  and insurance, associated with the new Bank
branch  facility  which  opened  in  the  fourth  quarter  of  1998.

     Included in the line item "other expenses", which decreased $52,000 or 5.9%
from  the  comparable  period of 1998, are charges for OCC assessments; property
and  bond  insurance;  ATM  switch  fees;  credit  card  expenses;  professional
services;  education  and  seminars; advertising and public relations; and other
branch  and  customer  related  expenses.  The  decrease is primarily related to
reductions  in  advertising,  education, professional services, and travel which
were  incurred  in  1998  at  higher  levels  than  experienced  in  1999.

INCOME  TAXES
     For  the  six  months ended June 30, 1999, the Company reported $463,000 in
income  tax  expense,  or  an  effective tax rate of 28.7%.  This is compared to
income  tax  expense  of  $504,000  for the same period of the prior year, or an
effective  tax  rate  of 36.7%. The reduction in the effective rate is primarily
related  to  the  higher  level  of  tax-free  municipal  investments  in  1999.


LIQUIDITY
     Liquidity  management  involves  meeting  the cash flow requirements of the
Company.  The  Company  must maintain an adequate liquidity position in order to
respond  to  the  short-term  demand  for  funds  caused by the withdrawals from
deposit  accounts, maturities of repurchase agreements, extensions of credit and
for  the  payment  of  operating  expenses.  Maintaining  an  adequate  level of
liquidity  is  accomplished  through a combination of liquid assets (those which
can  easily  be  converted into cash) and access to additional sources of funds.
The  Company's  primary liquid assets are cash and due from banks, federal funds
sold,  unpledged  investment  securities  available  for  sale, other short-term
investments and maturing loans.  The Company's primary liquid assets at June 30,
1999 and 1998, accounted for approximately 12% and 20%, respectively, of average
assets.  In  management's  opinion,  the  Company  maintains  adequate levels of
liquidity  by  retaining  liquid assets and assets which can easily be converted
into  cash  and  by maintaining access to various sources of funds.  The primary
sources  of  funds  available through the Bank include borrowing on a short-term
basis  from  the  Federal  Home Loan Bank and Federal Reserve System, purchasing
federal  funds  from  other  financial  institutions, and increasing deposits by
raising  rates  paid.

     Summit  Financial  Corporation  ("Summit  Financial"),  the  parent holding
company,  has  limited  liquidity needs.  Summit Financial requires liquidity to
pay  limited  operating expenses, to service its debt, and to provide funding to
its  consumer  finance  subsidiary,  Freedom  Finance.  Summit  Financial  has
approximately  $1.6  million  in  available liquidity remaining from its initial
public  offering  and  the  retention  of  earnings.  All  of this liquidity was
advanced  to the Finance Company to fund its operations as of June 30, 1999.  In
addition, Summit Financial has an available line of credit totaling $2.5 million
with  an  unaffiliated financial institution, all of which was available at June
30,  1999.  Additional  sources  of  liquidity  for  Summit  Financial  include
unsecured  borrowings  from  individuals, management fees and debt service which
are  paid  by  its  subsidiaries.

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

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

CAPITAL  RESOURCES
     Total  equity  at  June 30, 1999 was $16.4 million or 9.0% of total assets.
This is compared to $14.4 million or 8.5% of total assets at June 30, 1998.  The
$2.0  million increase in total shareholders' equity resulted from the retention
of  earnings  and  stock issued pursuant to the Company's incentive stock option
plan.

     To  date,  the  capital  needs  of  the  Company  have been met through the
retention  of net income and from the proceeds of its initial offering of common
stock.  The  Company  has  no commitments or immediate plans for any significant
capital  expenditures  outside  the  normal  course  of business.  The Company's
management  does not know of any trends, events or uncertainties that may result
in  the  Company's  capital  resources  materially  increasing  or  decreasing.

     The  Company  and  the  Bank  are  subject  to  various  regulatory capital
requirements  administered  by  the  federal  banking agencies.  Failure to meet
minimum  capital  requirements  can  initiate  certain  mandatory  and  possibly
additional discretionary actions by regulators that, if undertaken, could have a
material  effect on the financial statements.  Under capital adequacy guidelines
and  the  regulatory framework for prompt corrective action, the Company and the
Bank must meet specific capital guidelines that involve quantitative measures of
the  Company's  and the Bank's assets, liabilities and certain off-balance sheet
items  as  calculated  under regulatory accounting practices.  The Company's and
the  Bank's  capital  amounts and classification are also subject to qualitative
judgments  by  the  regulators  about  components,  risk  weightings,  and other
factors.

     The  Company  and  the  Bank  are  required to maintain minimum amounts and
ratios  of total risk-based capital, Tier 1 capital, and Tier 1 leverage capital
as  set forth in the table following.  Management believes, as of June 30, 1999,
that  the  Company  and the Bank meet all capital adequacy requirements to which
they  are  subject.  At June 30, 1999 and 1998, the Bank is categorized as "well
capitalized" under the regulatory framework for prompt corrective action.  There
are  no  current  conditions or events that management believes would change the
Company's  or  the  Bank's  category.

     The  following  table  presents the Company's and the Bank's actual capital
amounts  (dollars  in  thousands)  and  ratios  at  June 30, 1999 as well as the
minimum  calculated  amounts  for  each  regulatory  defined  category.


<TABLE>
<CAPTION>

                              RISK-BASED CAPITAL CALCULATION

                                                        FOR CAPITAL      TO BE CATEGORIZED
                                            ACTUAL    ADEQUACY PURPOSES  "WELL-CAPITALIZED"

                                        AMOUNT   RATIO   AMOUNT   RATIO   AMOUNT   RATIO
                                        -------  ------  -------  ------  -------  ------
<S>                                     <C>      <C>     <C>      <C>     <C>      <C>
AS OF JUNE 30, 1999
THE COMPANY
Total capital to risk-weighted assets   $18,253  12.18%  $11,989   8.00%       N.A.
Tier 1 capital to risk-weighted assets  $16,380  10.93%  $ 5,994   4.00%       N.A.
Tier 1 capital to average assets        $16,380   9.50%  $ 6,898   4.00%       N.A.
THE BANK
Total capital to risk-weighted assets   $16,590  11.26%  $11,790   8.00%  $14,737  10.00%
Tier 1 capital to risk-weighted assets  $14,773  10.02%  $ 5,895   4.00%  $ 8,842   6.00%
Tier 1 capital to average assets        $14,773   8.68%  $ 6,808   4.00%  $ 8,510   5.00%

AS OF JUNE 30, 1998
THE COMPANY
Total capital to risk-weighted assets   $15,578  12.07%  $10,323   8.00%       N.A.
Tier 1 capital to risk-weighted assets  $13,965  10.82%  $ 5,161   4.00%       N.A.
Tier 1 capital to average assets        $13,965   8.53%  $ 6,549   4.00%       N.A.
THE BANK
Total capital to risk-weighted assets   $14,230  11.26%  $10,112   8.00%  $12,640  10.00%
Tier 1 capital to risk-weighted assets  $12,650  10.01%  $ 5,056   4.00%  $ 7,584   6.00%
Tier 1 capital to average assets        $12,650   7.72%  $ 6,556   4.00%  $ 8,195   5.00%
</TABLE>


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

     The  yield  on  a  majority  of  the  Company's  earning  assets  adjusts
simultaneously  with  changes  in  the  general  level  of  interest  rates.
Approximately  41% of the Company's liabilities at June 30, 1999 had fixed terms
that  can  be  repriced  only at maturity.  During periods of declining interest
rates,  as  experienced in the latter half of 1998, the Company's assets reprice
faster  than  the  supporting liabilities.  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.  Given the Company's
current  balance  sheet  structure, the opposite effect (that is, an increase in
net  interest  income)  is 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.


ACCOUNTING,  REPORTING  AND  REGULATORY  MATTERS
     In  June  1998,  the  Financial  Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standards  ("SFAS")  133,  "Accounting for
Derivative  Instruments  and Hedging Activities."  SFAS 133 changes the previous
accounting definition of a derivative and discusses the appropriateness of hedge
accounting  for  various  forms of hedging activities.  Under this standard, all
derivatives  are  measured  at  fair  value  and  recognized in the statement of
financial position as assets or liabilities.  This standard is effective for all
fiscal  quarters of all fiscal years beginning after June 15, 2000, with earlier
adoption  permitted,  as  amended  by  SFAS  137.  Because  the  Company  has no
derivative  activity at this time, management does not expect that this standard
will  have  a  significant  effect  on  the  Company.


YEAR  2000
     The  Company  recognizes  that  there  is  a  business risk in computerized
systems  as  the  calendar  rolls  into the next century.  The Federal Financial
Institutions  Examination  Council  ("FFIEC") issued an interagency statement on
May  5,  1997,  providing  an outline for institutions to effectively manage the
Year  2000  ("Y2K")  challenges.  The  Company  has  developed  an  ongoing plan
designed  to  ensure  that  its  operational  and  financial systems will not be
adversely  affected  by  Y2K  software failures due to processing errors arising
from  calculations  using  dates  after  December  31, 1999.  The Company has an
internal  task  force  assigned  to  this project and the Board of Directors and
management  of  the Company have established Year 2000 compliance as a strategic
initiative.

     The  Company has completed the assessment phase of the project in which all
critical  applications  are  identified  and  programming issues determined.  In
conjunction  with  this  phase,  the  Company  inventoried  all of its hardware,
software,  and  environmental or other non-computerized systems.  Each inventory
item  (equipment,  application, or service provider system) has been prioritized
and  evaluated  as  to its Y2K compliance.  Currently, all systems identified as
"mission critical" have been certified as Y2K compliant by the vendors providing
the  software  applications or hardware.  The Company has successfully completed
its  testing  phase  for both the mission critical applications as well as other
inventoried  items.  The  Company  has  also  completed both its remediation and
business  resumption  contingency  plans  and is in the validation phase for the
resumption  plan.  In  the  business  resumption  contingency plan, all possible
scenarios have attempted to be addressed, including the resources and procedures
necessary  to manually process transactions in the event the core systems do not
function  on  January 1, 2000.  While the Company believes that it has available
resources  to  assure  Y2K  compliance, it is to some extent dependent on vendor
cooperation.  Accordingly,  management  is  in constant contact with its various
vendors  and  is  monitoring  their  Y2K  efforts  on  an  on-going  basis.

     In  addition to the internal processing risks associated with the Year 2000
issue,  the  Company has made every attempt to address external risks, primarily
credit  and  liquidity,  associated with our major customers and their Year 2000
remediation  efforts.  The way that these material customers approach and comply
with  Y2K  readiness  will have a potentially significant impact on the Company.
In  an  effort  to  identify  and manage the risks posed by those customers, the
Company  has  (1)  identified  material customers; (2) evaluated their Year 2000
preparedness through questionnaires and interviews; (3) assessed their Year 2000
risk  to  the  Company;  and  (4) implemented appropriate controls to manage and
mitigate  their Year 2000 related risk to the Company.  The controls implemented
may  include  ongoing monitoring of a customer's Y2K remediation efforts, review
and  adjustment  of  credit  maturities,  obtaining  additional  collateral,  or
including  specific  Year  2000  language  in  loan  agreements, as appropriate.
Management  is  also  addressing all new relationships for Y2K risk.  Currently,
there  are  no  significant customers which are rated as a "high" Year 2000 risk
and  which  the Company believes a risk of loss is present.  Other components of
the  Company's  Year  2000 Customer Awareness Program include questionnaires for
major  customers,  hosting  seminars  for customers, employee training seminars,
distributing  the  Company's  "Year  2000 Position Statement" which contains the
initiatives and status of the Company's Y2K efforts, and informative mailers and
brochures  describing  the  Year  2000 challenges in general as well as specific
information  related  to  the  Company.

     At  this  time,  the  Company  believes the cost of making modifications to
correct  any  Y2K  issues  will be nominal.  Corrections and "fixes" to software
provided  by  third-party vendors is covered in the annual maintenance fees paid
by  the  Company  on  a  regular  basis.  In  addition,  equipment  and software
acquisition  expenses  are  not  expected  to  materially differ from historical
levels  as the Company routinely upgrades and purchases technologically advanced
software  and hardware on a continual basis and expects to specifically evaluate
and  test  such  purchases  for  Y2K  compliance.  There has been no significant
change  to  the Company's existing technology plans due to any Year 2000 issues.

     The Company's management believes it has adequately addressed the Year 2000
issue  and  has  adequate resources and personnel executing the Year 2000 Action
Plan  to  ensure compliance in accordance with the timeframes established in the
plan  and  as  mandated by the regulatory agencies which oversee the Company and
its subsidiaries.  The Company's bank subsidiary has already been subject to and
will  undergo  additional  examinations  of  its Year 2000 initiatives to ensure
compliance  with  all  regulatory requirements.  Management does not know of any
trends,  events,  or  uncertainities  related  to  the  Year 2000 issues that it
believes  may  result in a significant adverse effect on the Company's financial
position.

INTEREST  RATE  SENSITIVITY
     Achieving  consistent  growth in net interest income is the primary goal of
the Company's asset/liability function.  The Company's profitability is affected
by  fluctuations in interest rates.  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.  The Company seeks to accomplish this goal while
maintaining  adequate  liquidity and capital.  A sudden and substantial increase
in interest rates may adversely impact the Company's earnings to the extent that
the  interest  rates on interest-earning assets and interest-bearing liabilities
do  not  change at the same speed, to the same extent or on the same basis.  The
Company's  asset/liability  mix  is  sufficiently balanced so that the effect of
interest rates moving in either direction is not expected to be significant over
time.

     The  Company's  Asset/Liability Committee ("ALCO") uses a simulation model,
among other techniques, to assist in achieving consistent growth in net interest
income  while managing interest rate risk.  The model takes into account, over a
12 month period or longer if necessary, interest rate changes as well as changes
in  the  mix  and  volume  of  assets  and liabilities.  The model simulates the
Company's  balance  sheet  and  income  statement  under  several different rate
scenarios  and  rate  shocks.  The  model's  inputs  (such as interest rates and
levels  of  loans  and deposits) are updated as necessary throughout the year in
order  to  maintain  a current forecast as assumptions change.  According to the
model,  the  Company  is  presently  positioned so that net interest income will
increase  slightly  if  interest  rates  rise in the near term and will decrease
slightly  if  interest  rates  decline  in  the  near  term.

     The Company also uses interest rate sensitivity gap analysis to monitor the
relationship  between  the maturity and repricing of its interest-earning assets
and  interest-bearing  liabilities.  Interest rate sensitivity gap is defined as
the  difference  between  the  amount  of  interest-earning  assets  maturing or
repricing  within  a  specific  time  period  and the amount of interest-bearing
liabilities  maturing  or  repricing  within  the  same time period.  The static
interest  sensitivity  gap  position,  while  not a complete measure of interest
sensitivity, is also reviewed periodically to provide insights related to static
repricing  structure  of  assets  and  liabilities.  At  June  30,  1999,  on  a
cumulative  basis  through  12  months,  rate-sensitive  liabilities  exceed
rate-sensitive  assets,  resulting  in  a  12  month  period liability sensitive
position  at  the  date  of $26.8 million.  When the effective change ratio (the
historical  relative  movement of each asset's and liability's rates in relation
to  a  100  basis point change in the prime rate) is applied to the interest gap
position, the Company is actually in an asset sensitive position over a 12 month
period  and  the  entire repricing lives of the assets and liabilities.  This is
primarily  due  to  the  fact that approximately 63% of the loan portfolio moves
immediately  on  a  one-to-one  ratio with a change in the prime rate, while the
deposit  accounts  do  not increase or decrease as much relative to a prime rate
movement.

     The  Company's  asset  sensitive  position means that assets reprice faster
than  the  liabilities, resulting in increases in the net interest income during
periods  of  rising rates and decreases in net interest income when market rates
decline.  In  the  fourth  quarter  of  1998, interest rates dropped, leading to
declines  in  the  average  yield  on assets for the first six months of 1999 as
compared  to  1998.  However,  the Company was able to increase the net interest
margin between the two periods due to the reduction in the overall cost of funds
based  primarily  on (1) the higher percentage of floating rate deposits in 1999
as  compared  to  1998  which  allowed  the Company to respond to the prime rate
drops;  and  (2)  the  maturities  of  higher  priced  certificates  of  deposit
throughout  1998  which were replaced with CDs at lower current rates during the
year.



       ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

     The  Company's  exposure  to  interest  rate risk is reviewed on a periodic
basis  by  the  Board  of  Directors  and  the  ALCO  which  is charged with the
responsibility  to maintain the level of sensitivity of the Bank's net portfolio
value  within  Board  approved  limits.  Interest rate risk exposure is measured
using  interest  rate sensitivity analysis by computing estimated changes in NPV
of  its  cash flows from assets, liabilities, and off-balance sheet items in the
event  of  a  range  of assumed changes in market interest rates.  This analysis
assesses the risk of loss in market risk sensitive instruments in the event of a
sudden  and  sustained 100 - 400 basis points increase or decrease in the market
interest  rates.  The  Company's Board of Directors has adopted an interest rate
risk policy which establishes maximum allowable decreases in NPV in the event of
a  sudden  and  sustained  increase  or  decrease  in  market  interest  rates.

     As of June 30, 1999, 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, 1998. 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, 1998 included in the Company's 1998
Annual  Report  on  Form  10-K.




<PAGE>
                          SUMMIT FINANCIAL CORPORATION

                         PART  II.  OTHER  INFORMATION



Item  1.     Legal  Proceedings.

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

Item  2.     Changes  in  Securities.

     None.

Item  3.     Defaults  Upon  Senior  Securities.

     None.

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

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

Item  5.     Other  Information.

     None.

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

(a)     Exhibits:

     27.1  Financial  Data  Schedule

     (b)     Reports  on  Form  8-K:

     None.



<PAGE>
                       SUMMIT  FINANCIAL  CORPORATION

                               SIGNATURES



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

SUMMIT  FINANCIAL  CORPORATION


Dated:  August  10,  1999

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


Dated:  August  10,  1999

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